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FIFTH
SECTION
CASE OF VERITAS v. UKRAINE
(Application
no. 39157/02)
JUDGMENT
STRASBOURG
13
November 2008
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Veritas v. Ukraine,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Rait Maruste, President,
Karel
Jungwiert,
Volodymyr Butkevych,
Renate
Jaeger,
Mark Villiger,
Mirjana Lazarova
Trajkovska,
Zdravka Kalaydjieva, judges,
and
Claudia Westerdiek,
Section Registrar,
Having
deliberated in private on 14 October 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 39157/02) 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 legal entity “Veritas”
(“the applicant company”), on 30 September 2002.
- The
Ukrainian Government (“the Government”) were represented
by their Agent, Mr Y. Zaytsev, from the Ministry of Justice.
- On
11 September 2007 the Court decided to give notice of the application
to the Government. It also decided to examine the merits of the
application at the same time as its admissibility (Article 29 §
3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant company is registered in Dnipropetrovs'k.
- On
22 August 2001 the applicant company lodged a claim with the
Dnipropetrovs'k Regional Commercial Court against the Commercial Bank
P. (“the Bank”) seeking compensation for damages because
of the latter's failure to withdraw a sum of money from the account
of a third party, S., in the framework of enforcement proceedings
against S.
- By
decision of 13 September 2001, the court found against the applicant
company. On 6 November 2001 the Dnipropetrovs'k Regional Commercial
Court of Appeal dismissed an appeal lodged by the applicant company
and upheld the decision of the first-instance court.
- By
decision of 18 February 2002, the Higher Commercial Court, on the
applicant company's appeal, quashed the decisions of the lower courts
and found for the applicant company.
- On
4 June 2002 the Supreme Court of Ukraine, upon appeal by the Bank,
quashed the resolution of the Higher Commercial Court on the ground
that that court's findings had been unfounded and erroneous, and
upheld the decisions of the first-instance and the appellate courts.
II. RELEVANT DOMESTIC LAW
1. Constitution of Ukraine of 1996
- The
relevant provisions read as follows:
Article 6
“State power in Ukraine is exercised on the
principles of its division into legislative, executive and judicial
power.
Bodies of legislative, executive and judicial power
exercise their authority within the limits established by this
Constitution and in accordance with the laws of Ukraine.”
Article 124
“Justice in Ukraine is administered exclusively by
the courts...
The jurisdiction of the courts extends to all legal
relations that arise in the State.
Judicial proceedings are performed by the Constitutional
Court of Ukraine and courts of general jurisdiction...”
Article 125
“In Ukraine the system of courts of general
jurisdiction is formed in accordance with the territorial principle
and the principle of specialisation.
The Supreme Court of Ukraine is the highest judicial
body in the system of courts of general jurisdiction...”
Article 147
“The Constitutional Court of Ukraine is the sole
body of constitutional jurisdiction in Ukraine.
The Constitutional Court of Ukraine decides on issues of
conformity of laws and other legal acts with the Constitution of
Ukraine, and provides the official interpretation of the Constitution
of Ukraine and the laws of Ukraine.”
2. Code of Commercial Procedure
- Article
111-18 of the Code of Commercial Procedure (at the material time)
provided as follows:
Chapter XII-2
Review of judicial decisions of the Higher Commercial
Court of Ukraine by the Supreme Court of Ukraine
Article 111-18
The jurisdiction of the Supreme Court of Ukraine in
the course of a cassation review of the resolutions of the Higher
Commercial Court of Ukraine
“The Supreme Court of Ukraine, following
consideration of an appeal in cassation, or a request for review in
cassation lodged by the Prosecutor General of Ukraine against a
resolution of the Higher Commercial Court of Ukraine, shall be
entitled to:
1) leave the resolution unchanged and dismiss
the appeal (request);
2) quash the resolution and remit the case to
the first-instance court for further consideration;
3) quash the resolution and nullify the
proceedings in the case.”
- Other
relevant domestic law is summarised in the case of Sokurenko and
Strygun (see Sokurenko and Strygun v. Ukraine,
nos. 29458/04 and 29465/04, §§ 10-12, 20 July
2006).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant company complained that the Supreme Court had exceeded its
competence in upholding the decision of the appellate court and,
therefore, could not be considered “a tribunal established by
law”. In its view, the Supreme Court had violated the principle
of equality of arms by depriving the applicant company of a
possibility to present its arguments anew had the case be remitted
for fresh consideration to the lower courts. Moreover, it contended
that the Supreme Court had erroneously applied substantive law and
had not been impartial and independent. 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 the issue whether in the circumstances of the case
the Supreme Court could be considered “a tribunal established
by law” is not manifestly ill-founded within the meaning of
Article 35 § 3 of the Convention. It further notes that it is
not inadmissible on any other grounds. It must therefore be declared
admissible.
- The
Court has examined the remainder of the applicant company's
complaints and considers that, in the light of all the material in
its possession and in so far as the matters complained of were within
its competence, they do not disclose any appearance of a violation of
Article 6 § 1 of the Convention. It follows that this part of
the application is manifestly ill-founded and must be rejected in
accordance with Article 35 §§ 3 and 4 of the Convention.
B. Merits
1. Submissions of the parties
a. Government
- The
Government referred to the dissenting opinions in the case of
Sokurenko and Strygun v. Ukraine (cited above). They
maintained that the scope of the requirement “established by
law” was more limited than a requirement that a tribunal should
act “in accordance with the law” or in a manner
“prescribed by law”. In their view, the term could not be
understood to mean that a tribunal, in order to be considered
“established by law”, should also comply with all
national requirements concerning the carrying out of its functions.
- The
Government further maintained that according to the Court's case-law
a court could not be considered as a tribunal in the sense of the
Convention if it was deprived of the competence “to resolve a
dispute” as required by Article 6 § 1.
- The
Government considered that, as the highest judicial body in the
system of courts of general jurisdiction, the Supreme Court of
Ukraine was competent to assess all judicial decisions in a
commercial case and to express its agreement or
disagreement with each court decision in
the case. Therefore, in the applicant
company's case the Supreme Court, having found that the Higher
Commercial Court had erred in its decision, had no other choice under
the law than to remit the case for fresh consideration to the court
of first instance, irrespective of whether the decision of the
first-instance court was correct or not.
- The
Government considered that upholding the first-instance court's
decision in the present case was in substance equivalent to remitting
the case for fresh consideration, but was time-saving. Therefore, the
Supreme Court had also avoided unnecessary delay in the proceedings.
Furthermore, according to the Government a fresh consideration of the
case in such circumstances would be a pure formalism, given than the
commercial courts of all instances would have to follow the position
of the Supreme Court as to correct resolution of the dispute, which
it would express in its decision on the remittal of the case under
Article 111-18 of the Code of Commercial Procedure.
- The
Government maintained that the Code of Commercial Procedure did not
provide the Supreme Court directly with the wherewithal to decide the
applicant company's case, that is to say, to fulfil its primary
function which was inherent in the very notion of
a "tribunal" under the Convention.
- The
Government stressed that in delivering the decision in the applicant
company's case the Supreme Court, therefore, having applied the
provisions of the Convention and the rule of law principle, had
filled a formal gap in the legislation. It had acted as a tribunal
established by law whose task was to decide a dispute. Accordingly,
that competence which the Supreme Court, as the highest judicial
body, applied in this case could not be called specific as the Court
called it in the case of Sokurenko and Strygun v. Ukraine
(cited above, § 26) since by acting in this
very way the Supreme Court in corpore
had ensured the right to a tribunal that was lawfully established,
competent in this kind of case and had decided the dispute.
- Accordingly,
the Government considered that the applicant company's right to a
fair trial guaranteed by Article 6 § 1 of the Convention had not
been violated.
b. Applicant
- The
applicant company maintained that to be considered “a tribunal
established by law” the Supreme Court had to comply with the
legal norms that regulated its competence to render decisions. In its
case the Supreme Court did not have the power to uphold the decisions
of the first-instance and appellate courts in commercial cases.
- It
recalled that the object of the term “established by law”
in Article 6 of the Convention was to ensure “that the judicial
organisation in a democratic society [did] not depend on the
discretion of the Executive, but that it [was] regulated by law
emanating from Parliament” (see Zand v. Austria,
application no. 7360/76, Commission's report of 12 October 1978,
Decisions and Reports (DR) 15, pp. 70 and 80).
- The
applicant company further objected to the Government's argument as to
the Supreme Court's competence to review decisions of all lower
courts in commercial cases. It indicated that Chapter XII of the Code
of Commercial Procedure, under which the Supreme Court exercised its
competence in commercial cases, clearly provided for the Supreme
Court of Ukraine to review judicial decisions of the Higher
Commercial Court of Ukraine. In its opinion, therefore, it was clear
that the competence of the Supreme Court was limited to decisions of
the Higher Commercial Courts and did not include examination of the
merits of first-instance and appellate commercial court decisions.
- In
the applicant company's opinion the Government's arguments as to the
necessity for the Supreme Court to decide the dispute and avoid delay
in the proceedings disregarded the more important fact that this made
it impossible to establish the truth, as only the lower courts were
authorised to establish the circumstances of the case.
- The
applicant company further maintained that by overstepping its
competence foreseen by the Code of Commercial Procedure the Supreme
Court had not filled any gap in the legislation but had seriously
breached the legal norms by trying to assume the functions of the
legislative body.
2. Court's assessment
- In
the case of Sokurenko and Strygun v. Ukraine (cited above,
§ 26), the Court 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 Higher Commercial Court, remitted the
case for fresh consideration or nullified the proceedings (see
paragraph 10 above). 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 under
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 Code of Commercial Procedure (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
judgment of Sokurenko and Strygun (cited above). The Court
sees no reasons which would justify departure from its previous
case-law and concludes that there has also been a violation of
Article 6 § 1 of the Convention in the present
case.
II. 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.”
- The
applicant company did not submit a claim for just satisfaction.
Accordingly, the Court considers that there is no call to award it
any sum on that account.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning the issue
whether in the circumstances of the case the Supreme Court could be
considered “a tribunal established by law” admissible and
the remainder of the application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention.
Done in English, and notified in writing on 13 November 2008,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Rait Maruste
Registrar President
