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FIFTH
SECTION
CASE OF FIRMA VERITAS, TOV v. UKRAINE
(Application
no. 2217/07)
JUDGMENT
STRASBOURG
15
May 2012
This
judgment is final but it may be subject to editorial revision.
In the case of Firma Veritas,
TOV v. Ukraine,
The
European Court of Human Rights (Fifth Section), sitting as a
Committee composed of:
Boštjan M. Zupančič,
President,
Ann Power-Forde,
Angelika Nußberger,
judges,
and Stephen Phillips,
Deputy
Section Registrar,
Having
deliberated in private on 17 April 2012,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 2217/07) against Ukraine
lodged with the Court under Article 34 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Ukrainian company, Firma Veritas, TOV (“the
applicant company”), on 29 November 2006.
- The
applicant company was represented by Mr Valeriy Andrusenko, a lawyer
practising in Dnipropetrovsk. The Ukrainian Government (“the
Government”) were represented by their Agents, Mr Nazar
Kulchytskyy and Ms Valeria Lutkovska, of the Ministry of Justice.
- On
21 March 2011 the application was communicated to the Government. In
accordance with Protocol No. 14, the application was allocated to a
Committee of three Judges.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant company, Firma Veritas, TOV, is a Ukrainian limited
liability company registered in Dnipropetrovsk.
A. The first set of proceedings
- In
June 2005 the applicant company lodged a claim with the
Dnipropetrovsk Regional Commercial Court (“the Commercial
Court”) against company E., seeking the recovery of debts owed
for legal services.
- On
22 August 2005 the above court allowed the claim. On 17 October
2005 the Dnipropetrovsk Commercial Court of Appeal (“the Court
of Appeal”) partly amended the above judgment. On 14 February
2006 the Higher Commercial Court upheld the latter decision. On 30
May 2006 the Supreme Court quashed the above decisions and remitted
the case for fresh consideration.
- The
hearing of 30 May 2006 took place in the presence of company E.’s
representatives and in the absence of the applicant company’s
representative, who allegedly had not been informed thereof. The
applicant company states that prior to the hearing of 30 May 2006
company E. sent a letter to the Supreme Court asking it to consider
the case “with special attention”.
- On
30 May 2007 the Commercial Court partly allowed the applicant
company’s claim and ordered company E. to pay the applicant
company a sum comprised of debts owed, losses adjusted for inflation,
a penalty and court fees.
- On
19 September 2007 the Court of Appeal amended that judgment, having
allowed the applicant company’s claim in full.
- On
13 February 2008 the Higher Commercial Court upheld the above
decision.
- On
an unspecified date company E. lodged an appeal in cassation with the
Supreme Court against the decision of 13 February 2008 along with a
request for an extension of procedural time-limits for lodging that
appeal, stating that it had received a copy of the above decision
only on 13 March 2008 and could not, therefore, appeal against
it on time.
- On
10 April 2008 the Supreme Court opened the cassation proceedings. On
13 May 2008 it quashed the decisions of 19 September 2007 and
13 February 2008 on the grounds that the courts’ findings
had been unfounded and erroneous, and upheld the judgment of 30 May
2007. It stated, in particular, as follows:
“Pursuant to the provisions of Articles 6 and 8 of
the Constitution of Ukraine, ... the Supreme Court does not consider
it necessary to remit the case for fresh consideration to the
first-instance court, because that would contradict Articles 125 and
129 of the Constitution of Ukraine, Sections 2 and 39 of the
Judiciary Act governing the status of the Supreme Court and its tasks
of ensuring the legitimacy in the administration of justice, and
would entail quashing of the legitimate judgment of 30 May 2007,
which would be contrary to the Constitution. Thus, the list of the
consequences of the examination of an appeal in cassation against a
decision of the Higher Commercial Court, as envisaged by Article
111-18 of the Code of Commercial Procedure, is not a procedural
impediment to the upholding by ... the Supreme Court of the judgment
... of 30 May 2007”.
- The
applicant company states that prior to the hearing of 13 May 2008 it
requested the Supreme Court to conduct audio-recording of that
hearing and sought the withdrawal of some of its judges, but its
requests were not examined.
B. The second set of proceedings
- In
June 2005 the applicant company lodged another claim with the
Commercial Court against company E. for the recovery of debts owed
for legal services.
- On
22 August 2005 the above court allowed the claim. On 17 October
2005 the Court of Appeal partly amended the above judgment. On 7
February 2006 the Higher Commercial Court upheld the latter decision.
On 30 May 2006 the Supreme Court quashed the above decisions and
remitted the case for fresh consideration.
- The
hearing of 30 May 2006 took place in the presence of company E.’s
representatives and in the absence of the applicant company’s
representative, who allegedly had not been informed thereof. The
applicant company states that prior to the hearing of 30 May 2006
company E. sent a letter to the Supreme Court asking it to consider
the case “with special attention”.
- Following
the reconsideration of the case, on 13 December 2007 the Commercial
Court delivered a judgment having allowed the claim in part. On 1
October 2008 the Court of Appeal quashed that judgment and rejected
the claim as unsubstantiated. On 23 February 2009 the Higher
Commercial Court upheld the latter decision.
C. The third set of proceedings
- In
June 2005 the applicant company lodged yet another claim with the
Commercial Court against company E. for the recovery of debts owed
for legal services.
- On
12 December 2005 the above court delivered a judgment. On 7 June
2006 the Higher Commercial Court quashed it and remitted the case for
fresh consideration.
- On
29 November 2011 the applicant company informed that, following the
reconsideration of the case, its claim had eventually been allowed in
part, the final decision having been given by the Higher Commercial
Court on 15 October 2008.
II. RELEVANT DOMESTIC LAW
- The
relevant domestic law is summarized in the cases of Sokurenko and
Strygun v. Ukraine (nos. 29458/04 and 29465/04, §§
10-12, 20 July 2006) and Bazalt Impex, Tov v. Ukraine
(no. 39051/07, §§ 10-12, 1 December 2011).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant company complained that in the first set of proceedings the
Supreme Court was not “a tribunal established by law”, as
it exceeded its competence in upholding the judgment of 30 May 2007
after quashing the decisions of 19 September 2007 and 13 February
2008. It relied on Article 6 § 1 of the Convention, which reads,
in so far as relevant, as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair ... hearing ... by an
independent and impartial tribunal established by law.”
A. Admissibility
- The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 (a) of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
- The
Government admitted that, by quashing the decisions of the Court of
Appeal and the Higher Commercial Court and by upholding the judgment
of the Commercial Court, the Supreme Court had exceeded its
competence as envisaged by Article 111-18 of the Code of Commercial
Procedure and had acted contrary to that provision. However, they
considered that the principle of the rule of law, enshrined in
Article 8 of the Constitution and the tasks entrusted to the Supreme
Court under Section 2 of the Judiciary Act required the exceptional
course of action taken by the Supreme Court in the present case. The
Government referred to the Sokurenko and Strygun case, where
the Court had acknowledged that in exceptional circumstances the
highest judicial body competent to interpret the law could take a
decision which was not strictly provided by the law. They further
reiterated the reasoning given by the Supreme Court in its decision
of 13 May 2008. Finally, the Government observed that the relevant
domestic legislation had been changed in July 2010 and that the
Supreme Court was no longer competent to review the commercial cases
as a second-instance court of cassation, this fact having rectified
the situation and dispensed the State of liability.
25. The
applicant company considered that there had been no exceptional
circumstances in the present case which would warrant the Supreme
Court’s deviation from the provisions of the Code of Commercial
Procedure, stating that after the delivery by the Court of its
judgment in the Sokurenko
and Strygun
case, the Supreme Court had continued its practice until July 2010,
when the relevant legislation had been changed.
- The
Court recalls that in the case of Sokurenko and Strygun it
noted that the Supreme Court’s competence under the Code of
Commercial Procedure was limited to review of the decisions of the
Higher Commercial Court, as it could only have quashed the resolution
of the latter court, remitted the case for fresh consideration or
nullified the proceedings. Instead, the Supreme Court upheld the
decision of the Court of Appeal, without giving any reasons for
exceeding its jurisdiction, when no such course of action was
provided for in the Code of Commercial Procedure. The Court concluded
that the Supreme Court had acted contrary to Article 6 §
1 of the Convention, not as a “tribunal established by law”,
as it overstepped the limits of its jurisdiction, which were clearly
laid down in the aforementioned Code (see Sokurenko and Strygun,
cited above, §§ 26 28).
- In
the Court’s view, the factual and legal circumstances of the
present case are identical to those already examined by the Court in
the above case (see also Veritas v. Ukraine, no. 39157/02,
13 November 2008, and Bazalt Impex, Tov, cited above).
The Court sees no reasons which would justify departure from its
previous case-law.
- As
regards the Government’s arguments concerning the exceptional
nature of the Supreme Court’s actions in overstepping
procedural rules, the Court observes that in Sokurenko and Strygun
the Government acknowledged that taking such decisions had become
usual practice for the Supreme Court (see Sokurenko and Strygun,
cited above, §§ 19 and 27). The Court further considers
that the reasoning given by the Supreme Court in the present case
(see paragraph 12 above) did not justify its departure from the
procedural rules (see also Bazalt Impex, Tov, cited above, §
24).
- Finally,
the Government’s argument that the State could be dispensed of
liability for a violation of the applicant company’s rights
under Article 6 of the Convention once measures had been taken to
remedy the situation does not demonstrate in what way the legislative
changes, made more than two years after the impugned decision in the
applicant company’s case had been given, could remedy the
company’s individual situation such that it could no longer
claim to be a victim.
- In
view of the above, the Court concludes that there has been a
violation of Article 6 § 1 of the Convention in the present
case.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- The applicant company also complained that the Supreme
Court had not been independent and impartial because its decisions of
30 May 2006 had allegedly been influenced by company E., because it
had not examined the applicant company’s requests related to
the hearing of 13 May 2008 and because it had not given reasons
for allowing the company E.’s request for admission of its
appeal in cassation against the decision of 13 February 2008. It also
complained that the proceedings before the Supreme Court had not been
adversarial and in breach of the principle of equality of arms, as
its hearings of 30 May 2006 had taken place in the absence of the
applicant company’s representative. It further complained that
the Supreme Court and the Higher Commercial Court had breached the
principle of legal certainty, having quashed the lower courts’
decisions during the first examination of the cases, and that the
length of proceedings had been unreasonable. The applicant company
invoked Article 6 § 1 of the Convention in respect of the above
complaints. Lastly, it complained under Article 1 of Protocol No. 1
about a breach of its property rights in relation to the proceedings.
Subsequently the applicant company withdrew the complaints in respect
of the Higher Commercial Court.
- Having
carefully examined the applicant company’s submissions in the
light of all the material in its possession and in so far as the
matters complained of are within its competence, the Court finds that
they do not disclose any appearance of a violation of the rights and
freedoms set out in the Convention. It follows that this
part of the application must be declared inadmissible as being
manifestly ill-founded, pursuant to Article 35 §§ 3 (a) and
4 of the Convention.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicant company claimed 253,767 and 20,000 euros (EUR),
respectively, for pecuniary and non-pecuniary damage.
- The
Government contested these claims.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged; it therefore rejects this claim. On
the other hand, it awards the applicant company EUR 1,500 in respect
of non-pecuniary damage.
B. Costs and expenses
- The
applicant company did not make any claims under this head.
Accordingly, the Court makes no award.
C. Default interest
- The
Court considers it appropriate that the default interest rate should
be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint under Article 6 § 1
of the Convention that the Supreme Court was not “a tribunal
established by law” during the fresh consideration of the case
in the first set of proceedings admissible and the remainder of the
application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
- Holds
(a) that
the respondent State is to pay the applicant company EUR 1,500 (one
thousand five hundred euros), plus any tax that may be chargeable, in
respect of non-pecuniary damage, to be converted into Ukrainian
hryvnia at the rate applicable at the date of settlement;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant
company’s claim for just satisfaction.
Done in English, and notified in writing on 15 May
2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Stephen
Phillips Boštjan M. Zupančič
Deputy
Registrar President
