STEBNITSKIY & Anor v Ukraine - 10687/02 [2007] ECHR 524 (29 May 2007)

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The European Court of Human Rights (Fifth Section), sitting on 29 May 2007 as a Chamber composed of:

Mr P. Lorenzen, President,
Mrs S. Botoucharova,
Mr V. Butkevych,
Mrs M. Tsatsa-Nikolovska,
Mr R. Maruste,
Mr J. Borrego Borrego,
Mrs R. Jaeger, judges,
and Mrs C. Westerdiek, Section Registrar,

The first applicant, Mr Vladimir Gennadiyevich Stebnitskiy, is a Ukrainian national who was born in 1960 and resides in the city of Donetsk, Ukraine. He is director of the “Komfort” company, a Ukrainian private enterprise, which is the second applicant (“the applicant company”).

The facts of the case, as submitted by the applicants, may be summarised as follows.

On 5 August 1999 the Lugansk Regional Commercial Court awarded the applicant company UAH 119,989.07^¹ from the “Luganskyy lyvarno-mekhanichnyy zavod” private joint-stock enterprise (Луганський ливарно-механічний завод).

In September 2000 the Artemivskyy District Bailiffs’ Service of Lugansk instituted enforcement proceedings. At the same time insolvency proceedings were initiated against the debtor.

In August 2001 the applicant company instituted proceedings in the Artemivskyy District Court of Lugansk against the Artemivskyy District Bailiffs’ Service claiming compensation for the pecuniary damage inflicted by the non-enforcement of the judgment in its favour. On 19 September 2001 the court provided the applicant company with a time-limit until 29 October 2001 to submit its complaint in accordance with the procedural requirements prescribed by law. The applicant company appealed against this decision. By letter of 3 October 2005 the applicant company requested the court to inform it about the outcome of the proceedings in the above case. The applicant company did not inform the Court about any answer received and did not submit any evidence that until October 2005 it had ever inquired about the developments in its case.

According to the applicant company, the judgment of 5 August 1999 has not been enforced.

On 13 December 1999 and 29 June 2000 the Donetsk Regional Commercial Court awarded the applicant company, respectively, UAH 27,159.11^² and UAH 30,786.83^³ from the “Yenakiyevskyy metalurgiynyy zavod” open joint-stock society (Єнакіївський металургійний завод). In November 2000 - January 2001 the Yenakiyevo Bailiffs’ Service instituted enforcement proceedings.

In December 2001 the applicant company instituted proceedings in the Donetsk Regional Commercial Court against the Yenakiyevo Bailiffs’ Service challenging its inactivity in the enforcement of the above judgments. On 18 June 2003 the court found for the applicant company and ordered the Bailiffs’ Service to enforce the judgments in its favour. On 17 September 2003 the Donetsk Commercial Court of Appeal upheld this judgment.

The judgments of 13 December 1999 and 29 June 2000 in the applicant company’s favour were enforced by November 2003.

On an unidentified date the applicant company instituted proceedings in the Donetsk Regional Commercial Court against the Yenakiyevo Bailiffs’ Service claiming UAH 11,657.42^¹ in compensation for pecuniary damage (inflation losses) caused by the lengthy non-enforcement of the judgments of 13 December 1999 and 29 June 2000 in its favour.

On 3 March 2004 the court found against the applicant company. On 18 May 2004 the Donetsk Commercial Court of Appeal upheld this judgment.

On 17 June 2004 the Higher Commercial Court of Ukraine returned the applicant company’s appeal as it had failed to pay a court fee. The applicant company appealed against this decision arguing that, in accordance with Article 86 of the Law “on Enforcement Proceedings”, the creditor was dispensed from paying court fee in cases against a legal person, entrusted with the enforcement of a judgment, for compensation for damage inflicted by the non-enforcement of a judgement.

On 3 November 2004 the Supreme Court of Ukraine rejected the applicant company’s cassation appeal as unsubstantiated.

The applicant company instituted another set of proceedings in the Donetsk Regional Commercial Court against the Yenakiyevo Bailiffs’ Service claiming UAH 29.70^² in compensation for pecuniary damage (transport expenses) caused by the lengthy non-enforcement of the judgments of 13 December 1999 and 29 June 2000 in its favour.

On 26 December 2003 the court found that the applicant company’s claims were unsubstantiated. On 26 August 2004 the Donetsk Commercial Court of Appeal upheld this judgment. On 19 October 2004 the Higher Commercial Court of Ukraine returned the applicant company’s appeal for non-compliance with procedural formalities. On 9 December 2004 the Supreme Court of Ukraine rejected the applicant company’s cassation appeal.

On an unidentified date the Voroshylovskyy District State Tax Inspection instituted insolvency proceedings in the Donetsk Regional Commercial Court against the applicant company. The Tax Inspection stated that the applicant company had failed to pay UAH 57,840.91^¹ in tax debts and had been already in a tax lien. Moreover, the last transaction on the applicant company’s account had taken place more than a year ago and the applicant company’s location was unknown.

On 4 September 2003 the court declared the applicant company insolvent for failure to pay UAH 57,840.91 in taxes to the State budget. The Voroshylovskyy District State Tax Inspection was appointed its liquidator.

According to the applicant company, it was informed about this decision only by letter of 10 March 2004. Subsequently, the applicant company requested to fix a new time-limit for lodging an appeal against the decision of 4 September 2003. On 22 April 2004 the Donetsk Commercial Court of Appeal refused this request because, in accordance with Article 93 of the Commercial Courts Procedure Code, the relevant time-limit of three months after the date on which the appealed judgment or decision had been adopted had expired.

On 22 June 2004 the High Commercial Court of Ukraine dismissed the applicant’s appeal against the above decisions for non-compliance with procedural formalities prescribed by law.

On 3 November 2004 the Supreme Court of Ukraine rejected the applicant’s cassation appeal.

By decision of 3 April 2000 of the Donetsk State Tax Inspection, the applicant company was ordered to pay UAH 55,756^² in tax debts and financial sanctions.

The applicant company challenged this decision in the Donetsk Regional Commercial Court. On 25 July 2000 the court terminated the proceedings in the case because the Donetsk State Tax Inspection had been liquidated and the newly created Donetsk State Tax Inspection on Servicing and Supervising the Grand Taxpayers (Державна податкова інспекція з функціями безпосереднього обслуговування та контролю за великими платниками податків) could not be regarded as its successor.

The applicant company lodged several identical complaints against the State Tax Administration of Ukraine with the Higher Commercial Court and the Kyiv City Commercial Court. On 21 December 2000, 19 March and 7 May 2001, and 25 January 2002 the courts returned these complaints for non-compliance with the procedural formalities prescribed by law.

In 2004 the applicant company instituted another set of proceedings in the Donetsk Regional Commercial Court challenging the decision of the Donetsk State Tax Inspection of 3 April 2000. On 30 June 2004 the court dismissed the applicant company’s complaint because it was signed by the first applicant, who could not be the legal representative of the applicant company since on 4 September 2003 the applicant company had been declared insolvent (see Insolvency proceedings). The court also noted that no documents had been submitted to substantiate the complaint.

On 19 August and 16 November 2004 the Donetsk Commercial Court of Appeal and the Higher Commercial Court of Ukraine, respectively, upheld the decision of 30 June 2004.

On 13 January 2005 the Supreme Court of Ukraine rejected the applicant’s cassation appeal.

At the end of 2001 the applicant company instituted proceedings in the Donetsk Regional Commercial Court against the Voroshylovskyy District State Tax Inspection claiming compensation for non-pecuniary damage on account of the fact that the Tax Inspection had lodged a request with the court to declare the applicant company insolvent and, according to the applicant company, this had seriously damaged its reputation.

On 9 January 2002 the court rejected the applicant company’s claim as unsubstantiated.

On 25 March, 20 May and 3 July 2002 the Higher Commercial Court of Ukraine returned the applicant company’s appeals for non-compliance with different procedural requirements.

In 2002 the first applicant instituted proceedings in the Voroshylovskyy District Court against the Voroshylovskyy District State Tax Inspection with the same claims.

On 19 June 2002 the court rejected the first applicant’s claim as unsubstantiated.

On 29 August 2002 and 14 February 2003 the Donetsk Regional Court of Appeal and the Supreme Court of Ukraine upheld this judgment.

In April 2000 the tax police instituted criminal proceedings against the first applicant for non-payment of taxes. On an unidentified date the case was transferred to the court.

On 7 May 2003 the Voroshylovskyy District Court of Donetsk remitted the case for an additional investigation.

On 4 July 2003 the Donetsk Regional Court of Appeal quashed this decision and remitted the case to the District Court for consideration on the merits.

On 13 January 2004 the Supreme Court of Ukraine rejected the applicant’s cassation appeal against the decisions of 7 May and 4 July 2003.

On 17 March 2004 the Voroshylovskyy District Court again remitted the case for an additional investigation.

On 5 May 2005 the Supreme Court of Ukraine rejected the first applicant’s appeal in cassation on the ground that such decisions could not be appealed in cassation.

The first applicant did not inform the Court whether the proceedings are still pending.

In accordance with paragraph 1 of Article 86 of the Law “on Enforcement Proceedings”, the creditor is entitled to institute court proceedings against a legal person, entrusted with the enforcement of a judgment, for non-enforcement of a judgment due to the fault of this legal person. In this case the creditor is dispensed from paying court fee.

Paragraph 2 of the same Article provides that compensation for damage inflicted by the State Bailiff in enforcement proceedings is to be paid in accordance with the procedure prescribed by law, in particular with the Decree on Court Fee.

In accordance with Article 93 of the Code of Commercial Procedure the time-limit for lodging an appeal against the judgment of the first instance commercial court shall be renewed only during three months from the date of adoption of the relevant judgment.

In accordance with Article 3 § 2 (g) of the Decree in property related commercial cases a court fee paid for consideration of a cassation appeal is 50 % of the rate which is calculated on the basis of the claimed amount.

The applicants complained under Articles 6 § 1 and 13 of the Convention that the court proceedings in their civil cases had been unfair and exceeded the “reasonable time” requirement. In particular, the applicant company complained under Article 6 § 1 of the Convention about the failure of the national courts to consider its complaints against the Bailiffs’ Service.

The applicant company complained under Article 1 of Protocol No. 1 about the lengthy non-enforcement of the judgments in its favour and about the refusal of the national courts to award compensation for damage inflicted by the Bailiffs’ Service. It further complained under the same Article that the State Tax Administration had interfered with its right to peaceful enjoyment of its property, in particular, in respect to the insolvency proceedings instituted against the applicant company.

The first applicant complained under Article 6 § 1 of the Convention about an unfair trial and the length of proceedings in the criminal case against him. He further complained under Article 6 § 3 (d) that his right to question witnesses had been violated.

The first applicant also invoked a number of Articles of the European Social Charter.

The first applicant complained under Article 6 § 1 of the Convention about the length of the criminal proceedings against him.

The applicant company complained under Article 6 § 1 of the Convention about the alleged unfairness in the third and fifth sets of proceedings.

The applicant company further complained under Article 1 of Protocol No. 1 about the lengthy non-enforcement of the judgments of 13 December 1999 and 29 June 2000 and about the failure of the national courts to award compensation for damage inflicted by the Bailiffs’ Service (third set of proceedings). The applicant company also complained under the same Article about the insolvency proceedings by the State Tax Administration.

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

“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 or to secure the payment of taxes or other contributions or penalties.”

The Court considers that it cannot, on the basis of the case file, determine the admissibility of these complaints and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of the Court, to give notice of this part of the application to the respondent Government.

The Court, having examined the remainder of the applicants’ complaints, considers that, in the light of all the materials in its possession and in so far as the matters complained of were within its competence, they did not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

Decides to adjourn the examination of the complaints under Article 6 § 1 of the Convention concerning the length of the criminal proceedings against the first applicant and the unfair hearings in the applicant company’s cases (the third and fifth sets of proceedings); and the complaints under Article 1 of Protocol No. 1 about the non-enforcement of the judgments of 13 December 1999 and 29 June 2000 in the applicant company’s favour, about the refusal of the national courts to award compensation for damage inflicted by the Bailiffs’ Service (third set of proceedings) and about the insolvency proceedings instituted against it;

1. At the material time approximately 24,998.90 euros (EUR)

2. At the material time approximately EUR 4,967.37

3. At the material time approximately EUR 5,906.71

1. At the material time approximately EUR 1,837.85

2. At the material time approximately EUR 5

1. At the material time approximately EUR 10,140.40

2. At the material time approximately EUR 10,570.05

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You are here: BAILII >> Databases >> European Court of Human Rights >> STEBNITSKIY & Anor v Ukraine - 10687/02 [2007] ECHR 524 (29 May 2007) URL: http://www.bailii.org/eu/cases/ECHR/2007/524.html Cite as: [2007] ECHR 524