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FIFTH
SECTION
CASE OF KOZACHEK v. UKRAINE
(Application
no. 29508/04)
JUDGMENT
STRASBOURG
7
December 2006
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 Kozachek v. Ukraine,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Mr P. Lorenzen, President,
Mrs S.
Botoucharova,
Mr K. Jungwiert,
Mr V. Butkevych,
Mrs M.
Tsatsa-Nikolovska,
Mr R. Maruste,
Mr M. Villiger, judges,
and
Mrs C. Westerdiek, Section Registrar,
Having
deliberated in private on 13 November 2006,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 29508/04) 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 national, Mr Viktor Dmitriyevich
Kozachek (“the applicant”), on 15 July 2004.
- The
Ukrainian Government (“the Government”) were represented
by their Agent, Mr Y. Zaytsev.
- On
5 December 2005 the Court decided to give notice of the
application to the Government. Under the provisions of Article 29 §
3 of the Convention, it decided to examine the merits of the
application at the same time as its admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1948 and lives in the village of Kovsharivka,
the Kharkiv Region.
A. First decision in the applicant's favour
- On
24 July 1997 the labour disputes commission of the Joint Stock
Company “Kupyanskiy Lyvarniy Zavod” (“the KLZ”),
in which the State held 66.18% of the share capital, ordered the
company to pay the applicant UAH 1,017
in salary arrears.
- In
August 1997 the Kupyansk Town Bailiffs' Service instituted
enforcement proceedings.
- On
14 December 2004 the Bailiffs' Service informed the applicant that
the judgment could not be enforced due to the moratorium on the
forced sale of property belonging to State enterprises introduced by
the Law of 29 November 2001 and the debtor's lack of funds.
- On
3 February 2006 the decision of 24 July 1997 was enforced
in full.
B. Second decision in the applicant's favour
- On
24 September 2003 the Kupyansk Town Court ordered the Joint Stock
Company “Kupyanskiy Chavunolyvarniy Zavod”, in which the
KLZ held 49% of the share capital, to pay the applicant UAH 920.16
in salary arrears.
- On
28 November 2003 the same court rejected the applicant's request for
leave to appeal against the judgment of 24 September 2003 for failure
to comply with procedural formalities. On 20 February 2004 the court
rejected the applicant's appeal in cassation on the ground that the
judgment was not appealed against under the ordinary appeal
procedure.
- The
applicant did not apply to the Bailiffs' Service for the execution of
the judgment of 24 September 2003. It remains unenforced.
II. RELEVANT DOMESTIC LAW
A. Law of Ukraine of 21 April 1999 “on Enforcement
Proceedings”
12. Article 18 § 1 (1)
of the Law of Ukraine of 21 April 1999 “on
Enforcement Proceedings” provides that a creditor must apply to
the Bailiffs' Service with a writ of execution to enable the latter
to initiate enforcement proceedings in respect of the decision given
in the creditor's favour.
B. Law of 29 November 2001 “on the
Introduction of a Moratorium on the Forced Sale of Property”
- The
Law aims at protecting State interests on the sale of assets
belonging to undertakings in which the State holds at least 25% of
the share capital. A moratorium on the enforcement of judgment debts
has been introduced until such time as the mechanism for the forced
sale of the property of such undertakings has been improved. No
time-limit has been set.
- Under
Article 2, the moratorium applies to immovable property and
other capital (fixed) assets, which ensure the production, as well as
to the shares which belong to the State.
THE LAW
I. ADMISSIBILITY
A. Complaint about the length of the non-enforcement of
the decisions of 24 July 1997 and 24 September 2003
- The
applicant complained about the State authorities' failure to enforce
the decision of the labour disputes commission of 24 July 1997 and
the judgment of the Kupyansk Town Court of 24 September 2003 in due
time and, in respect of the latter decision, in full. He invoked
Article 6 § 1 of the Convention and Article 1
of Protocol No. 1, which provide, insofar as relevant, as
follows:
Article 6 § 1
“In the
determination of his civil rights and obligations ... everyone is
entitled to a fair and public hearing within a reasonable time by an
independent and impartial tribunal established by law. ...”
Article 1 of Protocol No. 1
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest ....”
- The
Court notes that the above complaints concern the length of the
non-enforcement of two decisions, one of which was submitted to the
Bailiffs' Service for execution, while the other was not. Thus, the
complaints about the length of the non-enforcement of each decision
should be examined separately.
1. The applicant's complaint about the non-enforcement
of the decision of 24 July 1997
- The
Court notes that the Government have not raised any objection as to
the admissibility of this part of the application.
- The
Court considers that this part of the application raises issues of
fact and law under the Convention, the determination of which
requires an examination of the merits. It finds no ground for
declaring it inadmissible.
2. The applicant's complaint about the non-enforcement
of the judgment of 24 September 2003
- The
Government contended that the applicant had not exhausted domestic
remedies as he had failed to lodge with the Bailiffs' Service an
application, or an execution writ, for the initiation of enforcement
proceedings in respect of the judgment of the Kupyansk Town Court of
24 September 2003. They further stated that the State was not
responsible for the enforcement of that judgment.
- The Court recalls that, in some cases, it held it
inappropriate to require an individual who has obtained a judgment
against the State at the end of legal proceedings to then bring
enforcement proceedings to obtain satisfaction (see Karahalios v.
Greece (dec.), no. 62503/00, 26 September 2003). These
considerations can be equally pertinent to the enforcement of
judgments against the companies, which did not enjoy sufficient
institutional and operational independence from the State or in
respect of which the ban on the attachment of
property was applied (see, for instance, Mykhaylenky and
Others v. Ukraine, nos. 35091/02 and others, § 44,
ECHR 2004-..., and Rudenko v. Ukraine, no. 11412/02, § 25,
29 November 2005). In the latter cases, the Court held that the
enforcement of judgments was hindered because of the State's failure
to take some budgetary or legislative measures, rather then by
shortcomings in the enforcement procedure (see Romashov, no.
67534/01, § 31, 27 July 2004).
- On
the other hand, the Court has held on a number of occasions that the
State could not be considered responsible for the lack of funds of a
private company and its responsibility extended no further then the
involvement of State bodies in the enforcement proceedings (see
Shestakov v. Russia (dec.), no. 48757/99, 18 June 2002).
In such cases, Article 35 of the Convention required the
applicants to institute enforcement proceedings against the debtor,
who failed to honour his judgment debt, and also to challenge
before the courts the lawfulness of actions and alleged omissions of
the State Bailiffs' Service in these proceedings, as well as to claim
damages from that Service for the delays in the enforcement (see
Kukta v. Ukraine (dec.), no. 19443/03, 22 November
2005).
- In view of the above, the Court notes that the issues
of the responsibility of the State for enforcement of a judicial
decision and the exhaustion of domestic remedies are interdependent
and, thus, must be examined together.
- Turning
to the circumstances of the present case, the Court observes the
Joint Stock Company “Kupyanskiy Chavunolyvarniy Zavod”
was a separate legal entity, in which the State held around 30% of
the share capital through another company which was also partially
owned by the State (see paragraphs 5 and 9). Therefore, as
such, this company attracted the application of the Law “on the
Introduction of a Moratorium on the Forced Sale of Property”,
barring the attachment and sale of the company's real
estate property and capital assets (see paragraphs 13-14 above).
The Court further notes that in the Ukrainian legal
system neither the courts nor the bailiffs have power to overrule the
law or to compel the State to amend its Budget laws. Even assuming
that the applicant instituted the enforcement proceedings, the
execution of the judgment against that debtor company would be
substantially impeded due to the
above Law (see Solovyeva v. Ukraine,
no. 32547/03, § 25, 13 December 2005).
- Therefore,
the Court finds that, in the particular circumstances of this case,
the applicant should not have been required to lodge with the
Bailiffs' Service an application, or an execution writ, for the
initiation of enforcement proceedings. On
the same grounds, the Court finds that such state of affairs engaged
the responsibility of the State for enforcement of the judgment.
- In
view of the above considerations, the applicant cannot be reproached
for not using the remedies invoked by the Government and has
therefore complied with the requirements of Article 35 § 1.
Accordingly, the Court dismisses the Government's contentions.
- The
Court concludes that this part of application 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.
B. Other complaints
- The
applicant further complained about a violation of Articles 1 and
4 of the Convention on account of the non-enforcement of the
decisions in his favour.
- The
Court finds that this part of the application is unsubstantiated and
must therefore be rejected pursuant to Article 35 §§ 3 and
4 of the Convention.
II. MERITS
- In
their observations on the merits of the applicant's complaint about
the length of the non-enforcement of the decision of the labour
disputes commission of 24 July 1997, the Government put forward
arguments similar to those in the cases of Romashov v. Ukraine
and Voytenko v. Ukraine, contending that there had been
no violation of either Article 6 § 1 of the
Convention or Article 1 of Protocol No. 1 (see
Romashov, cited above, § 37, and Voytenko v. Ukraine,
no. 18966/02, 29 June 2004, § 37). The Government did
not comment on the merits of the applicant's complaint about the
non-enforcement of the judgment of the Kupyansk Town Court of
24 September 2003.
- The
applicant generally disagreed.
- The
Court notes that the decision of the labour disputes commission of 24
July 1997 remained unenforced for around eight years and six months.
The Court further notes that, to date, the judgment of the Kupyansk
Town Court of 24 September 2003 has remained unenforced for
around three years.
- The
Court recalls that it has already found violations of Article 6 § 1
of the Convention and Article 1 of Protocol No. 1
in cases raising issues similar to the present application (see, for
instance, Romashov, cited above, §§ 42-46, and
Voytenko, cited above, §§ 53-55).
- Having
examined all the material submitted to it, the Court considers that
the Government have not put forward any fact or convincing argument
capable of persuading it to reach a different conclusion in the
present case. There has, accordingly, been a violation of
Article 6 § 1 of the Convention and Article 1 of
Protocol No. 1.
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 submitted that he suffered pecuniary damage because of the
length of the non-enforcement of the decisions in his favour, but he
failed to specify the amount of his claim in this respect. He claimed
UAH 2,535
in respect of non-pecuniary damage.
- The
Government maintained that the applicant had not substantiated his
claims and submitted that the finding of a violation would constitute
sufficient just satisfaction.
- The
Court considers that the Government should pay the applicant the
amount awarded to him by the judgment of the Kupyansk Town Court of
24 September 2003 in settlement of his pecuniary damage.
- As
to the applicant's claim in respect of non-pecuniary damage, the
Court, making its assessment on an equitable basis, as required by
Article 41 of the Convention, awards the applicant the requested
amount of EUR 421.
B. Costs and expenses
- The
applicant did not submit any claim under this head. The Court
therefore makes no award.
C. Default interest
- The
Court considers it appropriate that the default interest 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 applicant's complaints under
Article 6 § 1 of the Convention and Article 1
of Protocol No. 1 about the length of the non enforcement
of the decision of the labour disputes commission of 24 July 1997
admissible, and the remainder of the application inadmissible;
- Holds that there has been a violation of
Article 6 § 1 of the Convention;
- Holds that there has been a violation of
Article 1 of Protocol No. 1;
- Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final according to
Article 44 § 2 of the Convention, EUR 421
(four hundred and twenty one euros) in respect of non-pecuniary
damage, plus any tax that may be chargeable, to be converted into the
currency of the respondent State at the rate applicable on 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;
5. Dismisses the
remainder of the applicant's claim for just satisfaction.
Done in English, and notified in writing on 7 December 2006, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Peer Lorenzen
Registrar President