CEDH · PRESS;CHAMBERJUDGMENTS;ENG — 25 juillet 2002

.s800EAC49 { font-size:12pt } .s5FFF0A77 { margin-top:0pt; margin-bottom:0pt; font-size:1pt } .sBB9EE52A { font-family:Arial } .sFE10DC93 { margin-top:0pt; margin-bottom:0pt; text-align:center } .s29100277 { font-family:Arial; font-weight:bold } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .s94935B0F { width:389.85pt; display:inline-block } .s7ED160F0 { text-decoration:none } .s33165EBA { font-family:Arial; font-size:8pt; vertical-align:super; color:#0069d6 } .s4DDA3AA3 { font-family:Arial; font-weight:bold; font-style:italic } .sCB9E0544 { margin-top:0pt; margin-bottom:0pt; text-align:left } .sA36B60A1 { font-family:Arial; font-style:italic } .s76CF415B { page-break-before:always; clear:both } .sADADF4A7 { font-family:Arial; text-decoration:underline } .sCB27B9E { width:16.66pt; display:inline-block } .s23A41E03 { width:36pt; display:inline-block } .sF6A12959 { width:33%; height:1px; text-align:left } .s2EB42ED2 { margin-top:0pt; margin-bottom:0pt; font-size:10pt } .s3133A7C8 { font-family:Arial; color:#0069d6 }   EUROPEAN COURT OF HUMAN RIGHTS     391   25.7.2002   Press release issued by the Registrar   CHAMBER JUDGMENT IN THE CASE OF SOVTRANSAVTO HOLDING v. UKRAINE   The European Court of Human Rights has today notified in writing a judgment [1] in the case of Sovtransavto Holding v. Ukraine (application no. 48553/99). The Court held: ● unanimously that there had been a violation of Article 6 § 1 (right to a fair trial) of the European Convention on Human Rights as regards the applicant company’s right to a fair hearing by an independent and impartial tribunal; ● by six votes to one that there had been a violation of Article 1 of Protocol No. 1 (protection of property) to the Convention; ● unanimously that it was unnecessary to examine the complaint under Article 14 (prohibition of discrimination) of the Convention; ● unanimously that the question of the application of Article 41 (just satisfaction) of the Convention was not ready for decision. (The judgment is in French only.)   1.     Principal facts   The applicant, Sovtransavto Holding, is a Russian public company formed in 1993 whose activity is international transport. Its registered office is in Moscow. It held 49% of the shares in a Ukrainian public company, Sovtransavto-Lougansk.   On 3 January 1996 a meeting of the shareholders of Sovtransavto-Lougansk passed a resolution to alter its memorandum and articles of association and to convert it into a private company. That decision was ratified on 23 January 1996 by the Lougansk Executive Council ( виконавчий комітет ). On 26 December 1996, 11 August 1997 and 20 October 1997 the managing director of Sovtransavto-Lougansk increased the company’s share capital three times, thereby reducing the applicant company’s shareholding from 49% to 20.7%. The increases were ratified. As a result of the changes, the directors of Sovtransavto-Lougansk were able to assume sole control of the company’s management and assets. The applicant company alleges that Sovtransavto-Lougansk was thus able to sell part of its assets to various undertakings set up by its managing director.   The applicant company lodged a complaint with the Lougansk Region Arbitration Tribunal against Sovtransavto-Lougansk and the Executive Council seeking a declaration that the changes to the form of the company and the decisions ratifying them were unlawful. However, the Arbitration Tribunal dismissed its claims. On 6 March 1998 the Ukraine Supreme Arbitration Tribunal set aside those decisions and remitted the case to the Kiev Region Arbitration Tribunal.   In the meantime the President of Ukraine had written a letter to the President of the Supreme Arbitration Tribunal on 3 February 1998 urging him to “defend the interests of Ukrainian nationals”. He reiterated the need to defend the State’s interests in a resolution of 19 May 1998. In a separate development, the Ukrainian Securities Exchange Commission ( Державна Комісія з цінних паперів та фондового ринку ) ruled that Sovtransavto-Lougansk’s resolutions and decisions were unlawful.   The Kiev Region Arbitration Tribunal dismissed all the applicant company’s applications. The company appealed to the Supreme Arbitration Tribunal of Ukraine, but to no avail. It then unsuccessfully asked the Attorney-General’s Office to intervene in the proceedings as a guarantee of their legality and requested the President of the Supreme Arbitration Tribunal to lodge an objection ( protest ) under the supervisory review procedure ( протест у порядку нагляду ) for a reconsideration of all the decisions in the cases.   On 8 July 1999 a meeting of Sovtransavto-Lougansk’s shareholders resolved to place the company into liquidation. Its assets were transferred to a new entity, a public company called Trans King.   The objection was heard by the Praesidium of the Supreme Arbitration Tribunal, which on 21   April 2000 set aside the decisions of the Kiev Region Arbitration Tribunal and the second judgment of the Supreme Arbitration Tribunal and remitted the cases to the Kiev Region Arbitration Tribunal for a rehearing. The Arbitration Tribunal found partly in favour of the applicant company but, following an objection by the Attorney-General’s Office, the Kiev Economic Court of Appeal set aside that judgment on 24 January 2002. An appeal on points of law by the applicant company against that judgment was dismissed by the Economic Supreme Court on 2 April 2002 on the ground that it had failed to produce evidence that it had paid the court fee payable on the examination of appeals. The applicant company was invited to comply with that requirement and to lodge a fresh appeal. However, when it did so, the appeal was dismissed on 26 April 2002, as being outside the one-month time-limit.     2.     Procedure and composition of the Court   The application was lodged on 11 May 1999 and declared admissible on 27 September 2001.   Judgment was given by a Chamber of 7 judges, composed as follows:   Georg Ress (German), President , Ireneu Cabral Barreto (Portuguese), Volodymyr Butkevych (Ukrainian), Nina Vajić (Croatian), John Hedigan (Irish), Matti Pellonpää (Finnish), Snejana Botoucharova (Bulgarian), judges ,   and also Vincent Berger , Section Registrar .   3.     Summary of the judgment [2]   Complaints   The applicant company complained under Article 6 § 1 (right to a fair trial) of the excessive length of the proceedings, that the courts and tribunals that had heard its case were not impartial and independent and that certain hearings had not been held in public. It further alleged violations of Article 1 of Protocol No. 1, contending that it had lost control over the management and assets of Sovtransavto-Lougansk following the ratification of the resolutions passed by its shareholders and that the compensation it had received after the liquidation was not commensurate with its original share in Sovtransavto-Lougansk’s share capital. Lastly, it complained of discrimination in breach of Article 14 (prohibition on discrimination), as the Ukrainian authorities had sought to protect the interests of their nationals.   Decision of the Court   Preliminary objection   The Government had contended that the Court had no jurisdiction to examine the applicant company’s complaints, as they concerned events that had taken place prior to the date the Convention had entered into force in respect of Ukraine. Ukraine had recognised the right of individual petition on 11 September 1997 and some of the matters complained of in the application had occurred prior to that date.   As regards the complaint under Article 6 § 1, the Court noted that the proceedings in issue had begun in June 1997. It decided to assume jurisdiction for all the proceedings commencing with the decision of 14 October 1997, while taking into account earlier events when examining the complaints.   The Court noted that the complaint under Article 1 of Protocol No. 1 concerned the applicant company’s loss of control over the activity and assets of Sovtransavto-Lougansk. The devaluation of the shares had been a lengthy process, and the third resolution for an increase in share capital had been ratified on 18 November 1997. The Court considered that that sequence of events taken as a whole had created a continuing situation which remained unresolved for the applicant company, as it had not received adequate compensation. Thus, although the Court considered it had jurisdiction to examine the complaint under Article   1 of Protocol No. 1 only from 18 November 1997 onwards, it decided to take events prior to 11   September 1997 into account.   The Court consequently decided unanimously to dismiss the Government’s preliminary objection.   Article 6 § 1   The Court noted that at the material time the Code of Arbitration Procedure empowered the President of the Supreme Arbitration Tribunal, State Counsel and their deputies to challenge final judgments under the supervisory review procedure by lodging an objection ( protest ). That power was discretionary, such that final judgments were liable to review indefinitely, in breach of the principle of legal certainty. The Court noted that in the case before it, following an initial objection, the applicant company had been afforded a fresh opportunity to have its case re-examined, but subsequently, notably following an objection by Ukraine State Counsel’s office (which was not a party to the initial proceedings) all the applicant company’s claims had been dismissed. As matters stood, none of its demands had been recognised and the applicant company had been definitively deprived of any possibility of obtaining a hearing of its claims by a tribunal. The Court considered that judicial systems characterised by the objection ( protest ) procedure and therefore by the risk of final judgments been set aside repeatedly, were ipso facto incompatible with the principle of legal certainty that was one of the fundamental aspects of the rule of law for the purposes of Article 6 § 1.   Further, the Court found the different and on occasion conflicting approaches that had been taken by the Ukrainian courts in the application and interpretation of the domestic law surprising: the Supreme Arbitration Tribunal had twice overturned decisions of the tribunals below on the grounds that they had failed to apply the relevant law correctly or to conduct a proper examination of the facts and the applicant company’s arguments. The Court noted also that the arbitration tribunals to which the case had been remitted did not appear to have complied with the Supreme Arbitration Tribunal’s instructions, despite being required to do so by Ukrainian law.   Moreover, the Court considered that, in view of their content and the manner in which they were made, the various interventions by the Ukrainian authorities acting at the highest level were incompatible with the notion of an “independent and impartial tribunal”. Consequently, it found that the applicant company’s concerns as to the independence and impartiality of the tribunals were legitimate. Coming, as they did, from the executive authorities of the State, such interventions revealed a lack of respect for judicial office itself.   Lastly, the Court noted that the applicant company’s appeal to the Supreme Economic Court had been dismissed on the ground that the company had failed to produce evidence that it had paid the court fee due for the examination of such appeals. Despite acknowledging that the company had in fact paid the requisite sum and although it must have been aware that the time-limit for lodging an appeal was about to expire, the Supreme Economic Court nonetheless invited the applicant company to comply with that procedural requirement and to lodge a fresh appeal, without granting it any extension of time or referring to that issue in its initial judgment.   In the light of all the foregoing, the Court considered that the applicant company’s right to a fair and public hearing by an independent and impartial tribunal had been infringed and held unanimously that there had been a violation of Article 6 § 1. It further considered that no separate examination of the complaints relating to the length of the proceedings was necessary.   Article 1 of Protocol No. 1   With regard to the applicability of Article 1 of Protocol No. 1 the Court found that the shares held by the applicant company had a financial value and constituted “possessions” within the meaning of that provision.   As regards the protection of the applicant company’s property, the Court reiterated that Article 1 of Protocol No. 1 imposed positive obligations on State parties, including an obligation to afford judicial procedures that offered the necessary procedural guarantees and enabled the domestic courts and tribunals to adjudicate effectively and fairly any disputes between private individuals. The Court had jurisdiction to verify whether the way in which domestic law was interpreted and applied by the domestic courts and tribunals was compatible with the applicant company’s right to the peaceful enjoyment of its possessions. The unfair manner in which the proceedings in issue had been conducted had had a direct impact on the applicant company’s right to peaceful enjoyment. The refusal of the tribunals of fact to comply with the Supreme Arbitration Tribunal’s instructions, coupled with the differences in interpretation of the domestic law, had created permanent uncertainty regarding the lawfulness of Sovtransavto-Lougansk’s resolutions and their subsequent ratification. That uncertainty had led to changes in the applicant company’s ability to control the management and assets of Sovtransavto-Lougansk.   Consequently, the Court found that the manner in which the proceedings in issue had been conducted and the uncertainty faced by the applicant company had upset the fair balance that had to be struck between the general interest and the need to protect the applicant company’s right to the peaceful enjoyment of its possessions. It held by six votes to one that there had been a violation of Article 1 of Protocol No. 1.     Judge Cabral Barreto expressed a partly concurring and partly dissenting opinion, which is annexed to the judgment.   ***   The Court’s judgments are accessible on its Internet site ( http://www.echr.coe.int ).   Registry of the European Court of Human Rights F – 67075 Strasbourg Cedex Contacts:   Roderick Liddell (telephone: (0)3 88 41 24 92)     Emma Hellyer (telephone: (0)3 90 21 42 15) Fax: (0)3 88 41 27 91   The European Court of Human Rights was set up in Strasbourg in 1959 to deal with alleged violations of the 1950 European Convention on Human Rights. On 1 November 1998 a full-time Court was established, replacing the original two-tier system of a part-time Commission and Court. [1] .     Under Article 43 of the European Convention on Human Rights, within three months from the date of a Chamber judgment, any party to the case may, in exceptional cases, request that the case be referred to the 17 ‑ member Grand Chamber of the Court. In that event, a panel of five judges considers whether the case raises a serious question affecting the interpretation or application of the Convention or its Protocols, or a serious issue of general importance, in which case the Grand Chamber will deliver a final judgment. If no such question or issue arises, the panel will reject the request, at which point the judgment becomes final. Otherwise Chamber judgments become final on the expiry of the three-month period or earlier if the parties declare that they do not intend to make a request to refer. [2] .     This summary by the Registry does not bind the Court.