FOURTH SECTION<\/p>\n
DECISION<\/p>\n
Application no.15883\/10
\nKALUSH NAFTOKHIM, TOV
\nagainst Ukraine<\/p>\n
The European Court of Human Rights (Fourth Section), sitting on 29\u00a0January 2019 as a Committee composed of:<\/p>\n
Georges Ravarani, President,
\nMarko Bo\u0161njak,
\nP\u00e9terPaczolay, judges,
\nand Andrea Tamietti, Deputy Section Registrar,<\/p>\n
Having regard to the above application lodged on 8 March 2010,<\/p>\n
Having deliberated, decides as follows:<\/p>\n
THE FACTS<\/p>\n
1.\u00a0\u00a0The applicant company, KalushNaftokhim, TOV, is a Ukrainian joint venture based in Kalush with legal personality under Ukrainian law.<\/p>\n
2.\u00a0\u00a0The facts of the case, as submitted by the applicant company, may be summarised as follows.<\/p>\n
3.\u00a0\u00a0A State-owned enterprise, O., had financial difficulties and, inter alia, could not repay its debt to a foreign bank. As the debt was guaranteed by the Ukrainian Government, on 10August 2000 they decided to find a private investor to help O. to pay the debt and to restart its activities by means of creating a new company whose main assets would be O.\u2019s property and a proportionate contribution of a private investor in exchange for 50% of the share capital of the newly created company.<\/p>\n
4.\u00a0\u00a0To that end, a tender process was announced. As required by the Government\u2019s decision of 10August 2000, one of the principal conditions of the tender process was that the contribution of the successful bidder had to be in two forms: firstly, a specified amount of cash and, secondly, products or equipment in kind to ensure that the new company would be profitable.<\/p>\n
5.\u00a0\u00a0In 2000 the applicant company won the tender and a new company, L., was created. In 2001 the applicant company paid the specified amount of cash as required by the tender conditions. However, instead of providing L. with products or equipment in kind as its contribution to the latter\u2019s share capital, the applicant company transferred the shares it owned in a third company to L., a transaction which was permitted by certain provisions of L.\u2019s memorandum and articles of association that had been adopted after the tender. The transfer was approved by a resolution in a general meeting of L.\u2019s shareholders on 5November 2001.<\/p>\n
6.\u00a0\u00a0In March 2008 the Deputy General Prosecutor, acting on behalf of the Government, instituted proceedings before the Ivano-Frankivsk Commercial Court, challenging the validity of the provisions of L.\u2019s memorandum and articles of association, according to which a contribution to its share capital could be made by means other than those specified in the Government\u2019s decision of 10\u00a0August\u00a02000 (see paragraph 4 above) and the tender conditions, and the validity of the related resolution of L.\u2019s general meeting of 5\u00a0November 2001 (see paragraph 5 above). The Deputy General Prosecutor also argued that the information about the provisions of the memorandum and articles of association and the resolution had only become available to the General Prosecutor\u2019s Office in February2008, when it had been checking the applicant company\u2019s compliance with the tender conditions upon a request from the Government of 13February 2008.<\/p>\n
7.\u00a0\u00a0The applicant company took part in the proceedings as a defendant and submitted its written objections, arguing, inter alia, that the Deputy General Prosecutor had missed the statutory time-limit of three years for bringing such a claim, as the Government and the Prosecutor\u2019s Office would have become aware of the disputed provisions within the memorandum and articles of association and the resolution in February 2005 at the latest.<\/p>\n
8.\u00a0\u00a0On 27June 2008 the Ivano-Frankivsk Commercial Court found for the Deputy General Prosecutor and invalidated both the disputed provisions within the memorandum and articles of association and the resolution. The court found that it had been duly established that the Deputy General Prosecutor had acted in the State\u2019s interests and that the information about the disputed provisions within the memorandum and articles of association and the resolution of 5November 2011 had only become available to the General Prosecutor\u2019s Office in February 2008. Thus, the court held that the three-year time-limit had been missed for \u201cjustifiable reasons\u201d. As to the merits, the court held that domestic law had required that L.\u2019s memorandum and articles of association, and any resolutions made at a general meeting regarding contributions to L.\u2019s share capital be in full compliance with the Government\u2019s decision of 10\u00a0August 2000 (see paragraph 4 above) and tender conditions.<\/p>\n
9.\u00a0\u00a0Ultimately, on 20November 2008 that judgment was upheld by the Higher Commercial Court. On 10December 2009 the Supreme Court rejected a cassation appeal lodged by the applicant company, which was based on arguments alleging the incorrect and inconsistent application of domestic law, as unsubstantiated. The applicant company\u2019s cassation appeal contained no argument that there had been a breach of the legal-certainty principle in that the Deputy General Prosecutor\u2019s claim had been adjudicated despite the fact that it had been lodged outside the statutory time-limit of three years. On 31December 2009 the Supreme Court\u2019s decision was dispatched to the applicant company.<\/p>\n
COMPLAINTS<\/p>\n
10.\u00a0\u00a0In its original submissions lodged with the Court on 8 March 2010, the applicant company complained of a violation of Articles6\u00a71, 13 and 17 of the Convention and of Article1 of Protocol\u00a0No.1 to the Convention, essentially disagreeing with the legal assessment of the dispute by the first- and cassation-instance courts.<\/p>\n
11.\u00a0\u00a0In particular, the applicant company argued that it had complied with the tender conditions and could not have foreseen that, nine years after the termination of the tender process, its actions would be considered to be incompatible with the Government\u2019s decision of 10 August 2000 (see paragraph 4 above), which had not formed part of the tender conditions. It also argued that the authorities had unlawfully intervened in the corporate relations governed by L.\u2019s memorandum and articles of association and had restricted its right to contribute to that company\u2019s initial share capital.Furthermore, the invalidation of L.\u2019s memorandum and articles of association and the related resolution of the company made at a general meeting had resulted in a disproportionate deprivation of the applicant company\u2019s property \u2013 amounting to 42.45% (out of a total of 50%) of L.\u2019s share capital \u2013 and in its loss of indirect control of L.<\/p>\n
12.\u00a0\u00a0In its submissions of 20 May 2010, the applicant company complained under Article6\u00a71 that there had been a breach of the legal-certainty principle in that the Deputy General Prosecutor\u2019s claim had been adjudicated despite the fact that it had been lodged outside the statutory time-limit of three years.<\/p>\n
13.\u00a0\u00a0In its submissions of 25 November 2010,the applicant company essentially reiterated its original complaints and also raised a new complaint. In particular, it complained under Article6\u00a71 of the Convention and Article\u00a01 of Protocol\u00a0No.\u00a01 that the domestic courts had lacked independence and impartiality, as it had been the Prime Minister who had publicly instructed the General Prosecutor\u2019s Office to bring the civil action in this case in March 2008.<\/p>\n
THE LAW<\/p>\n
14.\u00a0\u00a0The Court notes that the applicant company\u2019s original grievances under Articles6\u00a0\u00a7\u00a01, 13 and 17 of the Convention and Article\u00a01 of Protocol\u00a0No.\u00a01 (see paragraphs 10-11 above) are principally based on its disagreement with the domestic courts\u2019 legal assessment of the dispute. In this regard, in particular in so far as this concerns Article6\u00a71, the Court reiterates that that it is primarily for the domestic courts to resolve problems of interpretation of national legislation (see Perez v.\u00a0France [GC], no.\u00a047287\/99, \u00a7 82, ECHR 2004-I). The Court notes that the contested court decisions are well-reasoned and based on a proper assessment of all the relevant facts and legal arguments. Furthermore, the applicant company did not demonstrate that those decisions had amounted to an arbitrary and disproportionate interference with its possessions. In particular, there is no evidence that it had been deprived, either formally or de facto, of its allotment of L.\u2019s share capital. Nor did it demonstrate that it had suffered pecuniary damage in connection with the outcome of the case. Consequently, even assuming that Article 1 of Protocol No. 1 is applicable to the facts of the present case, the Court rejects these complaints as being manifestly ill-founded, pursuant to Article 35 \u00a7\u00a7 3 (a) and 4 of the Convention.<\/p>\n
15.\u00a0\u00a0In so far as the applicant company complained under Article\u00a06\u00a0\u00a7\u00a01 that there had been a breach of the legal-certainty principle (see paragraph\u00a012 above), the Court notes that this complaint was not raised in the applicant company\u2019s cassation appeal (see paragraph 9 above). Thus, it must be rejected for non-exhaustion of domestic remedies, pursuant to Article35\u00a7\u00a71 and 4 of the Convention.<\/p>\n
16.\u00a0\u00a0Finally, the Court finds that the applicant company\u2019s new complaint raised in its submissions of 25 November 2010 (see paragraph 13 above) should be rejected as lodged out of time, pursuant to Article35\u00a7\u00a71 and 4 of the Convention, since the final domestic decision was dispatched to the applicant company on 31December 2009 (see paragraph 9 above), more than six months before that date.<\/p>\n
For these reasons, the Court, unanimously,<\/p>\n
Declares the application inadmissible.<\/p>\n
Done in English and notified in writing on 21 February 2019.<\/p>\n
Andrea Tamietti\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Georges Ravarani
\nDeputy Registrar\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 President<\/p>\n