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The applicant company then lodged a constitutional complaint which was rejected by the Federal Constitutional Court (Bundesver-fassungsgericht) on 10 December 1990 as being clearly unfounded. The Federal Constitutional Court considered that the decisions of the 3 -18479/ German courts complained of did not violate any fundamental rights, because, even supposing that the right to a fair hearing as guaranteed by Article 103 (1) the Basic Law (Grundgesetz) applied to arbitration proceedings, the fact alone that the applicant company had allegedly not been heard on the question of whether the arbitration proceedings could be prolonged, did not violate its right to be heard on the merits. Furthermore the Constitutional Court stated that the applicant company had not shown that it was prevented from submitting relevant arguments in the arbitration proceedings which would have justified another decision in its favour.

COMPLAINTS The applicant company first submits that it did not tacitly renounce the rights guaranteed under Article 6 of the Convention by entering voluntarily into an arbitration agreement. It considers that Article 6 para. 1 of the Convention was violated in that the German courts enforced the final arbitration award and rejected its valid objections, thereby depriving it of the adequate instruments to remedy severe breaches of the principle of a fair trial.

199216 λ, II , () ϻ

According to the applicant company, its right to a fair trial had been violated in the arbitration proceedings by lack of impartiality and independence of the arbitrator who had based his decision on evidence submitted by the plaintiff company without taking into consideration the position of the applicant company and without examining whether the evidence had not been forged. Furthermore the arbitration proceedings were unfair because the applicant company had not been given an opportunity to be heard in respect of the extensions of the time-limits for the termination of these proceedings, while, according to the ICC rules, the time-limit could only be extended exceptionally under special circumstances, but under no circumstances automatically as had been done in its case.

THE LAW The applicant company complains that the German courts acknowledged as valid and enforceable an arbitration award given against it in arbitration proceedings that had allegedly been unfair and violated Article 6 para. 1 (Art. 6-1) of the Convention which provides in its first sentence:

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.

The Commission first observes that the applicant company had voluntarily entered into an arbitration agreement and thereby renounced its right to have its civil rights determined in court proceedings for the conduct of which the State is responsible under the Convention (cf. 11960/86, Dec. 13.7.90, unpublished). 18479/91- 4 This does not mean, however, that the respondent State's responsibility is completely excluded (cf. 13258/87, Dec. 9.2.90) as the arbitration award had to be recognised by the German courts and be given executory effect by them. The courts thereby exercised a certain control and guarantee as to the fairness and correctness of the arbitration proceedings which they considered to have been carried out in conformity with fundamental rights and in particular with the right of the applicant company to be heard.

The Commission cannot find also taking into account the applicant company's submissions that the reasons given by the German courts disclose any arbitrariness which would amount to a violation of Article 6 (Art. 6) of the Convention.

It follows that the application has to be rejected as being manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

For these reasons, the Commission unanimously DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Commission President of the Commission (H.C. KRGER)(C.A. NRGAARD) 200216 λ, II , () ϻ

5. 16 2003 . 35943/ Transado-Transportes Fluviais Do Sado, S.A. v. Portugal

[TRANSLATION]...

THE FACTS The applicant company, Transado-Transportes Fluviais do Sado, S.A., is a public limited company formed under Portuguese law, whose registered office is in Setbal (Portugal). It was represented before the Court by Mr M. Mendes Carqueijeiro and Mr I. Machado, of the Lisbon Bar.

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

The applicant company is a river transport company which operated a ferry across the river Sado between Setbal and Tria under a concession contract concluded in 1976 with the Setbal port authorities ( the APS).

Clause XXXIII of the contract provided that any dispute concerning the validity, interpretation or execution of the provisions of the concession contract would in all cases be submitted to an arbitration tribunal made up of three arbitrators, the first to be appointed by the APS, the second by the applicant company and the third the president by the Setbal court.

Clause XXVI of the contract stated that on expiry of the concession the APS would become the owner of all assets and equipment, including ships. However, Transado would be entitled to compensation in respect of those assets acquired by it with the APSs agreement which had not yet been written off on expiry of the concession;

such compensation would correspond to the value that had not been written off. To this end, the applicant company and the APS were required to reach agreement on the writing-off periods for the assets in issue.

On 4 August 1981 the applicant company and the APS signed a supplementary agreement to the concession contract, fixing the length of the concession at twenty years. This period would be automatically extended for ten years unless one of the parties repudiated it at least six months prior to expiry of the contract. Negotiations were also held between the applicant company and the APS with a view to amending clause XXVI of the concession contract, particularly with regard to the formula for calculating compensation, but these came to nothing. In a letter from the APS to the applicant company, dated 14 October 1980, a concrete proposal on amending clause XXVI was put forward. However, no such amendment to the contract was agreed.

In 2001 the applicant company operated a fleet of eight conventional vessels and ferries which it had bought itself;

at least three had been purchased with the APSs authorisation.

On 29 January 2001 the APS informed the applicant company that it did not intend to renew the concession, which would therefore expire on 4 August 2001. It referred in particular to the applicant companys difficult financial situation and to the problems arising from the considerable sums which it owed to the tax and social security authorities, debts which moreover had entailed the seizure of certain vessels.

On 19 March 2001 the applicant company submitted its request for compensation to the APS. It argued that any such compensation ought to be calculated on the basis of the provisions of clause XXVI of the concession contract, as amended by the APSs letter of 14 October 1980.

On 11 June 2001 the APS stated that compensation could be awarded only on the basis of the original wording of clause XXVI of the concession contract, and under no circumstances 201216 λ, II , () ϻ

could any such compensation be awarded on the basis of the amendment proposed on 14 October 1980, which had never been agreed.

On 22 June 2001 the applicant company requested that the arbitration tribunal provided for in clause XXXIII of the concession contract be convened, with a view to settling the dispute.

The arbitration tribunal was formed on 12 November 2001. The applicant company and the APS both submitted observations and witnesses were questioned.

The arbitration tribunal delivered a unanimous verdict on 2 April 2002, dismissing the applicant companys request for compensation. Having interpreted clause XXVI, and noting that only the original text of the concession contract could be applied, it stressed that there was nothing in the facts as established to show that the applicant company and the APS had reached agreement on the writing-off periods for the assets in issue. The compensation request could not therefore succeed.

COMPLAINTS Relying on Article 1 of Protocol 1, the applicant company complained that it had been deprived of its possessions without compensation.

Under Article 6 1 of the Convention, it also alleged that the procedure before the arbitration tribunal had been unfair.

THE LAW 1. The applicant company complained that it had been deprived of its possessions without compensation. It relied on Article 1 of Protocol 1, which states:

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.

In this respect, the applicant company claimed that it was the owner of the possessions in issue, particularly the ships, and that it had been deprived of those possessions as a result of the interpretation of a clause in the concession contract which clearly infringed its rights under this Convention provision.

The Court notes that Article 1 in substance guarantees the right of property... It comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property;

the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions;

the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property by enforcing such laws as they deem necessary in the general interest... However, the three rules are not distinct in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule... (see, among many other authorities, Honecker and Others v. Germany (dec.), nos.

53991/00 and 54999/00, ECHR 2001-XII ).

The Court must first determine whether there was interference by a public authority with the applicant companys right of property. In this regard, it notes that it is understood that, in the 202216 λ, II , () ϻ

instant case, no interference with the applicant companys right to peaceful enjoyment of its possessions can be attributed to the Portuguese authorities. The Courts role consists of ascertaining whether the arbitration tribunals interpretation of the disputed concession contract constituted interference with the applicant companys right to peaceful enjoyment of its possessions and, if so, whether such interference was justified.

On several occasions and with reference to very diverse fields, the Court has stated that it is in the first place for the national authorities, notably the courts, to interpret and apply the domestic law (see, for example, Winterwerp v. the Netherlands, judgment of 24 October 1979, Series A no. 33, p. 20, 46;

Iglesias Gil and A.U.I. v. Spain, no. 56673/00, 61, ECHR 2003-V;

and Slivenko v. Latvia [GC], no. 48321/99, 105, ECHR 2003-X). This principle, which, by definition, applies to the domestic law, is a fortiori valid in cases requiring the interpretation of a private-law clause adopted by both parties to a contract. In a case such as the instant one, the domestic courts are better placed than an international court to weigh up, in the light of local legal traditions, the particular context of the legal dispute submitted to them and the various competing rights and interests (see, for example, De Diego Nafra v. Spain, no. 46833/99, 39, 14 March 2002). Accordingly, the national authorities, and especially the courts, enjoy a wide margin of appreciation when called upon to rule in such cases.

The Court may supervise the decisions of domestic courts but, in cases such as the instant one, such supervision must be restricted to checking whether the national courts disputed interpretation was reasonable and not arbitrary.

In the instant case, the arbitration tribunal, constituted in accordance with the concession contract, interpreted clause XXVI of the contract, covering possible compensation of the applicant company, and concluded that no such compensation could be awarded in the absence of a prior agreement between the two parties to the contract regarding the writing-off periods for the assets in question. In the Courts opinion, such an interpretation cannot be described as unreasonable or arbitrary, especially since the applicant company itself recognised that no prior agreement had been concluded.

It follows that, in the instant case, there was no interference by the public authorities with the applicant companys right to peaceful enjoyment of its possessions, the deprivation of property having been the result of the interpretation of a clause in the concession contract by the arbitration tribunal. Accordingly, Article 1 of Protocol 1 is not applicable and this part of the application must be dismissed as incompatible ratione materiae with the Conventions provisions, in accordance with Article 35 3.

2. The applicant company alleged that it had not received a fair hearing in the proceedings before the arbitration tribunal. The latter had not been impartial and no appeal had lain against its decision. It relied on Article 6 1 of the Convention, which provides:

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.

The Court notes at the outset that Article 6 does not preclude the setting up of arbitration tribunals in order to settle certain disputes. Indeed, the word tribunal in Article 6 1 is not necessarily to be understood as signifying a court of law of the classic kind, integrated within the standard judicial machinery of the country (see, inter alia, Lithgow and Others v. the United Kingdom, judgment of 8 July 1986, Series A no. 102, pp. 72-73, 201).

In the instant case, it was the applicant company itself which decided, in agreement with the APS, to keep out of the ordinary courts certain disputes which might arise in the course of execution of the concession contract. Indeed, such arbitration clauses are common in contracts of the type in issue in the instant case.

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The applicant company alleged, without providing further information, that the proceedings in question were unfair. For its part, the Court notes that the applicant company was able to submit those arguments which it considered relevant in full parity with the APS.

As to the tribunals partiality, the Court notes firstly that the applicant company provided no information about this complaint and limited itself to challenging the tribunals impartiality. Further, it sees nothing capable of casting doubt on the subjective impartiality of the members of the arbitration tribunal nor the latters objective impartiality. As to objective impartiality in particular, the procedure for setting up the arbitration tribunal, provided for in clause XXXIII, excludes any doubt in this area (see Lithgow and Others, cited above, p. 73, 202).

Finally, it is true that no appeal lay against the arbitration tribunals decision, but it was the applicant company itself, in agreement with the APS, which chose to insert such a clause in the concession contract. There is nothing to prevent an applicant from waiving certain rights, provided that such a waiver is, as in the instant case, lawful and unequivocal (see Pfeifer and Plankl v. Austria, judgment of 25 February 1992, Series A no. 227, pp 16-17, 37).

To sum up, there is no evidence to support the applicant companys contention that the proceedings before the arbitration tribunal were unfair. It follows that there is no appearance of a violation of Article 6 1 of the Convention, and that this part of the application is accordingly manifestly ill-founded. This complaint must therefore be dismissed in accordance with Article 3 of the Convention.

For these reasons, the Court unanimously Declares the application inadmissible.

204216 λ, II , () ϻ

6. 10 2007 .

773/03 Regent Company v. Ukraine

FIFTH SECTION DECISION AS TO THE ADMISSIBILITY OF Application no. 773/ by REGENT COMPANY against Ukraine The European Court of Human Rights (Fifth Section), sitting on 10 April 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, Having regard to the above application lodged on 12 October 2002, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant, Having deliberated, decides as follows:

THE FACTS The applicant is a privately owned commercial company Regent Engineering International Limited that is registered in Victoria, the Seychelles Islands. The companys actual address is London, the United Kingdom. It is represented before the Court by its Director, Mr Yuri Portnik, who resides in London.

A. The circumstances of the case 1. Proceedings before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of Ukraine In December 1998 a COM s.r.o. (COM), a limited liability company registered in the Czech Republic (Prague) instituted proceedings in the International Commercial Arbitration Court at the Chamber of Commerce and Industry of Ukraine (̳ - ;

the Arbitration Tribunal) against the Open Joint-Stock Company Oriana (the Oriana company) seeking an award for breach of contract. In particular, COM claimed that the Oriana company, a company with 99.9% of shares owned by the State, registered in the city of Kalush, the Ivano-Frankivsk Region, failed to comply with its contractual obligations on processing raw materials.

On 23 December 1998 the Arbitration Tribunal delivered an arbitration award (case AC no. 142y/98) ordering the Oriana company to pay COM an amount of USD 2,466,906. (2,107,868 euros (EUR)) in compensation.

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2. Enforcement proceedings instituted by COM On 19 July 1999 COM lodged a request with the Ivano-Frankivsk Regional Arbitration Court (the Regional Arbitration Court)4 seeking a ruling that COM was a creditor in relation to the Oriana company, based on the 23 December 1998 award.

On 2 August 1999 the Kalush State Bailiffs Service of the Ministry of Justice (the Bailiffs Service) instituted enforcement proceedings against OC in order to collect the debt from it as ordered by the Arbitration Tribunal. These enforcement proceedings were joined to the other enforcement proceedings that were pending against the Oriana company.

On 16 October 1999 the Regional Arbitration Court rejected the applicants request to initiate bankruptcy proceedings against the Oriana company.

On 18 and 21 October 1999 the Bailiffs Service initiated the attachment of the property owned by the Oriana company. On 13 December 1999 the Bailiffs Service quashed the decision on the attachment of the Oriana company.

On 14 December 1999 the property owned by the Oriana company was attached again. On 16 December 1999 the Bailiffs Service decided to sell some of the property that had been attached (the Oriana companys polymerization workshop).

On 20 September 2000 COM again requested the Regional Arbitration Court to institute bankruptcy proceedings against the Oriana company. It also sought a ruling to be included in the list of the Oriana companys creditors.

Between 1999 and 2003 the Bailiffs Service took a number of measures aimed at payment of the debt accumulated by the Oriana company. In particular, it sent payment orders to the debtors bank, seized its assets, prohibited unpermitted sale of property belonging to the Oriana company and attempted to sell some of its property in order to pay companys debts. It also attached the Oriana companys bank accounts and its shares (including the shares which the Oriana company owned in the Lukor company).

At the same time, the enforcement proceedings were suspended several times as the Oriana company contested the Bailiffs actions before the courts and because its numerous creditors filed applications with the court seeking the Oriana companys insolvency.

On 18 September 2002 the Ivano-Frankivsk Regional Commercial Court (formerly the Ivano-Frankivsk Regional Arbitration Court) instituted bankruptcy proceedings against the Oriana company. These proceedings are still pending.

On 22 January 2003 COM requested the Ivano-Frankivsk Regional Commercial Court to be included in the list of creditors of the Oriana company.

3. Enforcement proceedings instituted by the applicant On 10 February 2003 the applicant concluded a contract with COM concerning the transfer of the latters right to claim the debt awarded by the Arbitration Tribunal on 23 December 1998.

On 8 June 2004 the applicant and COM requested that the Arbitration Tribunal recognise the applicant as the creditor in the arbitration proceedings against the Oriana company on the basis of the above contract. On 21 June 2004 the President of the Arbitration Tribunal dismissed their request, stating that the Arbitration Tribunal was dissolved after having delivered the award of 23 December 1998.

On 9 July 2004 the applicant and COM requested that the Ivano-Frankivsk Regional Court of Appeal (the Court of Appeal) declare the applicant to be the legal successor to the debt awarded to COM by the Arbitration Tribunal on 23 December 1998.

On 16 July 2004 the applicant and COM requested with the Bailiffs Service to change the creditor in the enforcement proceedings on the basis of the contract.

.AStatecourtdealingwitheconomic/commerciallawmatters.AftersmalljudicialreformofJune2001 arbitrationcourtswererenamedtocommercialcourts. 206216 λ, II , () ϻ

On 9 September 2004 the applicant and COM requested that the Court of Appeal declare that the applicant be the Oriana companys creditor and to change the applicant for COM as a party to the enforcement proceedings on the same grounds as above.

On 10 September 2004 the Court of Appeal allowed the applicants request. It declared the applicant to be the Oriana companys creditor in respect of the debt of USD 2,466,906.47 (EUR 2,023,049) under the arbitration award of 23 December 1998.

On 18 November 2004 the applicant and COM requested the Bailiffs Service to substitute the applicant for COM in the enforcement proceedings against the Oriana company.

On 9 December 2004 the Bailiffs Service substituted the applicant for the original creditor in the enforcement proceedings on the basis of the ruling of 10 September 2004.

On 29 December 2005 the Ivano-Frankivsk Regional Commercial Court (the Regional Commercial Court) ruled that the Bailiffs Service discontinued the enforcement proceedings.

On 30 December 2005 the Bailiffs Service discontinued the enforcement proceedings and transferred the enforcement writs to the Oriana companys property administrator ( ).

On 23 January 2006 the applicant requested that the Regional Commercial Court amend the list of the Oriana companys creditors and to include him in this list on the basis of the contract of 10 February 2003 and the ruling of the Court of Appeal of 10 September 2004.

On 6 February 2006 the Regional Commercial Court allowed the applicants request and ordered that the administrator of the Oriana companys property introduce the relevant amendments to the list of creditors.

On 27 February 2006 the applicant requested to be informed whether the Bailiffs Service had replaced COM by the applicant in the list of creditors in the enforcement proceedings against the Oriana company.

The enforcement proceedings are still pending.

B. The applicable domestic law and practice 1. Law of 14 May 1992 On the Restoration of a Debtors Solvency or the Declaration of Bankruptcy

Under Article 12 of the Law ( ), a commercial court is entitled to order a moratorium on debt recovery from a company which is the subject of bankruptcy proceedings.

The moratorium implies a prohibition on the Bailiffs Service to execute judgments against such a company. The same Article provides that the company protected by the moratorium shall be immune from any fines and other sanctions for non-fulfilment or improper fulfilment of its financial obligations during the moratorium.

2. Law of 29 November 2001 On the Introduction of Moratorium on the Forced Sale of Assets

The Law ( i ii ) 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 the mechanism for the forced sale of the property of such undertakings is improved. No time-limit has been set.

Article 2 of that Law provides that the prohibition on the forced sale of assets includes the execution of writs by the State Bailiffs Service on the assets belonging to such companies. The Law therefore stays the execution of all writs by the State Bailiffs Service against the assets of the undertakings in which the State holds at least 25% of the share capital.

207216 λ, II , () ϻ

3. Relevant provisions of the Civil Code and the Ownership Act Under Article 214 of the Civil Code, in case of delay in the fulfilment of its financial obligations, the debtor must, upon a claim by the creditor, pay the amount of the debt, plus any interest payable at an officially established inflation rate during the default period.

Chapter 40 Compensation for Damages of the Civil Code provides for compensation for damages and establishes the grounds for such compensation. Chapter VII Protection of Property of the Ownership Act guarantees protection of property and allows for court action in this respect. Also, Articles 197-202 of Chapter 17 Reassignment of Debts of the Civil Code allow for the conclusion of cession contracts and transfer of rights to claim debt recovery.

4. Law of 21 April 1999 On Enforcement Proceedings

Under Article 2 of the Law ( ), the enforcement of judgments is entrusted to the State Bailiffs Service. Under Article 85 of the Law, the creditor may file a complaint against actions or omissions of the State Bailiffs Service with the head of the competent department of that Service or with a local court. Article 86 of the Law entitles the creditor to institute court proceedings against a legal person entrusted with the enforcement of a judgment for the inadequate enforcement or non-enforcement of that judgment, and to receive compensation.

Under the Law on Enforcement Proceedings awards given by the Arbitration Tribunals ( ) shall be subject to enforcement by the State Bailiffs Service (Article 3 1 of the Law) and are therefore equated to the judgments delivered by domestic courts.

5. Law of 24 March 1998 on the State Bailiffs Service

Article 11 of the Law ( ) provides for the liability of bailiffs for any inadequate performance of their duties, and compensation for the damage caused by a bailiff when enforcing a judgment. Under Article 13 of the Law, acts and omissions of the bailiff can be challenged before a superior official or the courts.

6. Relevant resolutions of the Cabinet of Ministers and the State Property Fund report There were several resolutions of the Cabinet of Ministers in relation to the financial situation of the Oriana company:

- no. 1650 of 19 October 1998 (on measures aimed at preventing the Oriana companys bankruptcy and transfer of the companys management to Shelton enterprise);

- no. 1280 of 16 July 1999, which quashed the previous resolution on the Oriana company (it also related to measures aimed at financial and economic well-being of the Oriana company and restructuring of its debts);

- resolution no. 800 of 10 May 1998 (on the approval of the list of enterprises exempt from land tax payment in 1999), - no. 92-p of 19 February 2000 (on privatisation of the Oriana company);

- no. 314-p of 10 August 2000 (on payment of the Oriana companys debts for the loans it received);

- no. 810-p of 28 October 2004 (suspending privatisation of the Oriana company, on sale of 47.93% of shares of the Oriana company in CJSC Lukor, a closed joint stock company founded by the Oriana company and Lukoil, Russia).

On 3 August 2000 the Cabinet of Ministers adopted the procedure for payment of the Oriana companys debts before the State budget that amounted to USD 34,115,000.

On a number of occasions the Government included the Oriana company into the list of State-owned companies, which had strategic importance for Ukraines economic well-being and security that were to be excluded from privatisation (see for instance resolutions nos. 1346 and 1734 of the Cabinet of Ministers of 29 August 2000 and 23 December 2004).

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The Government also undertook to fund compensation for environmental damage caused by the Oriana companys operation (resolution no. 593 of the Cabinet of Ministers of 18 July 2005).

In its resolution of 19 August 2002 the Cabinet of Ministers adopted an action plan providing for the elimination of environmental damage caused by the operation of the Kaliyny Zavod belonging to the Oriana company. The action plan provided for allocation of UAH 33,800,000 from the State budget for necessary environmental works during the period from 2003 to 2012.

In its decision no. 308-p of 3 August 2005 the Prime Minister ordered the Cabinet to examine the financial problems of the Oriana company and to take steps necessary for its economic development.

Also, it ensues from the Report of the State Property Fund of 15 December 2004 that the State, and in particular the State Property Fund, managed the Oriana companys corporate rights (its corporate investments). In particular, on 26 May 2006 the State Property Fund appointed the States representative to the Supervisory Board of the Oriana company and ordered that the relevant structural department of the State Property Fund should issue a letter of authority for the representative enabling him to manage the Oriana companys shares belonging to the State.

7. Judgment of 10 June 2003 of the Constitutional Court in the case on the moratorium on the forced sale of property In its judgment, the Constitutional Court found that the Law On the Introduction of a Moratorium on the Forced Sale of Property of 29 November 2001 complied with the Constitution of Ukraine. It also held that the Law at issue did not violate the constitutional principle of the binding nature of court judgments. Court judgments requiring the forced sale of the property of enterprises, given both prior to and after the Law was adopted, had not been set aside;

they remained in force, and their enforcement were merely suspended until the mechanism for the forced sale of property was improved. That meant that the Law extended the term for enforcement of judgments during that period [period of legislative improvement].

8. The relevant provisions of Chapter VIII the Law On International Commercial Arbitration [International Commercial Arbitration Act] of 24 February 1994, in so far as they relate to the recognition and enforcement of awards The relevant provisions of the Law read as follows:

Article Extent of Court Intervention In matters governed by the present Law, no court shall intervene except where so provided in the present Law.

Article Authority for Certain Functions of Arbitration Assistance and Control 1. The functions referred to in articles 11(3), 11(4), 13(3) and 14 shall be performed by the President of the Ukrainian Chamber of Commerce and Industry.

2. The functions referred to in articles 16(3) and 34(2) shall be performed by the Appeal Court of the Autonomous Republic of Crimea, regional Appeal Courts, Appeal Courts of cities of Kyiv and Sevastopol depending on where the arbitration takes place. (On 6 September 2005 the Verkhovna Rada amended this provision and allowed the local district courts of first instance to perform these functions).

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Article Recognition and Enforcement 1. An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36.

2. The party relying on an award or applying for its enforcement shall supply the duly authenticated original award or a duly certified copy thereof, and the original arbitration agreement referred to in article 7 or a duly certified copy thereof. If the award or agreement is made in a foreign language, the party shall supply a duly certified translation thereof into the Ukrainian or Russian language.

9. The Rules of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (as approved by the decision of the Presidium of the Ukrainian Chamber of Commerce and Industry from August, 25, 1994 Protocol no.

107(3) with amendments made by the Decision of the Presidium of the Ukrainian Chamber of Commerce and Industry of 26 September 2001) The relevant extracts from the Rules of the International Commercial Arbitration Court provide as follows:

V. Recourse Against an Arbitral Award ... 9.1. Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraph 2 and 3 of the Article 9 of the present Rules.


9.2. An arbitral award may be set aside according to the Article 6.2 of the Law of Ukraine On International Commercial Arbitration by the Shevchenkivsky District Court of Kyiv only if:

1) the party making the application for setting aside furnishes proof that:

a party to the arbitration agreement referred to in Article 1.2 of the Rules was under some incapacity;

or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of Ukraine;

or a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or were otherwise unable to present their case;

or the award was made regarding a dispute not contemplated by or not falling within the terms of the submission to arbitration, or where it contains decisions on matters beyond the scope of the submission to arbitration, provided that the decisions on the matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside;

or the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Law of Ukraine On International Commercial Arbitration [International Commercial Arbitration Act] from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law;

or 2) the court finds that:

the subject-matter of the dispute is not capable of settlement by arbitration under the Law of Ukraine;

or the award is in conflict with the public policy of Ukraine.

9.3. An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if the 210216 λ, II , () ϻ

request had been made under Articles 8.16-8.18 of the present Rules, from the date on which that request had been disposed of by the Arbitral Tribunal.

VI. Recognition and Enforcement of an Arbitral Award 10.1. An award of the Arbitration Court shall be final. It shall be carried out by the parties voluntarily within the time-limit indicated by the Arbitration Court.

If the award does not indicate any time-limit, it shall be carried out immediately.

10.2. An arbitral award shall be recognised as binding and in a case of refusal from its voluntary execution shall be enforced depending on the respondents location.

If the debtor is in Ukraine, the award of the International Commercial Arbitration Court at the UCCI shall be enforced upon the application in writing to the competent court at the place of the debtors location in accordance with the Law of Ukraine On International Commercial Arbitration and the Rules of Civil Procedure of Ukraine.

If the debtor is abroad, the claimants application in writing shall be communicated to the competent court of the country where the debtor is located and in accordance with Article III of the New-York Convention On the Recognition and Enforcement of Foreign Arbitral Awards /1958/ or interstate agreement the state court of the contracting state shall recognise and enforce awards of the International Commercial Arbitration Court in accordance with the Rules of procedure of the territory where the award is relied upon.

10.3. To obtain the recognition and enforcement of the award, the party applying for recognition and enforcement shall, at the time of the application, supply to the competent state court the duly authenticated original award or a duly certified copy thereof, and also the original arbitration agreement referred to in Article 1.2 of the Rules or a duly certified copy thereof. If the said application, award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language in two copies. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agency.

COMPLAINTS The applicant complained under Articles 6 1 of the Convention and Article 1 of Protocol 1 about the non-enforcement of the arbitration award of 23 December 1998 of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, which from its point of view resulted in violation of its right to a fair hearing and the right to respect for private property. In particular, it alleged that the judgment remained unenforced due to the omission of the State Bailiffs Service and the adoption of the Law of 29 November 2001, no. 2864-III On the Introduction of a Moratorium on the Forced Sale of Property.

The applicant company also alleged that it suffered discrimination on account of the non enforcement of the award. It referred to Article 14 of the Convention, claiming that the creation of another company by the State with the assets of the debtor company prevented the payment of debts due to the applicant. Furthermore, it complained about the moratorium that placed immunity on the debts of the companies owned by the State.

THE LAW 211216 λ, II , () ϻ

The applicant complained under Articles 6 1 of the Convention and Article 1 of Protocol 1 about the non-enforcement of the arbitration award of 23 December 1998. These provisions read as follows:

Article 6 In the determination of his civil rights and obligations..., everyone is entitled to a fair... hearing... by [a]... tribunal...

Article 1 of Protocol 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 applicant also complains that it was discriminated against in relation to other creditors of the Oriana company. It referred to Article 14 of the Convention, which provided as follows:

Article The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

A. Preliminary considerations 1. The applicant companys standing in the proceedings before the Court (a) The parties submissions The Government maintained that the application was signed by a person who presented no confirmation that he was authorised to do so. The application also contained no information of the existence of the applicant company and therefore should be struck out of the list of cases as it had not been introduced by a victim of a violation of the Convention or duly authorised representative (see Fitzmartin and others v. United Kingdom (dec.), nos. 34953/97 and others, 21 January 2003).


The applicant disagreed.

(b) The Courts assessment Article 34 of the Convention reads:

The Court may receive applications from any person, non-governmental organisation or group of individuals claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto...

Rule 36 of the Rules of Court reads, in relevant part:

1. Persons, non-governmental organisations or groups of individuals may initially present applications under Article 34 of the Convention themselves or through a representative.

... (a) The representative acting on behalf of the applicant pursuant to paragraphs and 3 of this Rule shall be an advocate authorised to practise in any of the Contracting Parties and resident in the territory of one of them, or any other person approved by the President of the Chamber.

Rule 45 3 of the Rules of Court reads:

Where applicants are represented in accordance with Rule 36, a power of attorney or written authority to act shall be supplied by their representative or representatives.

Article 37 of the Convention reads:

212216 λ, II , () ϻ

1. The Court may at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to the conclusion that (a) the applicant does not intend to pursue his application;

or (b) the matter has been resolved;

or (c) for any other reason established by the Court, it is no longer justified to continue the examination of the application.

However, the Court shall continue the examination of the application if respect for human rights as defined in the Convention and the Protocols thereto so requires...

The Court notes that where applicants choose to be represented by a solicitor under Rule 36 of the Rules of Court, rather than to introduce their application themselves, it is a requirement, under Rule 45 3 of the Rules of Court, that a power of attorney or written authority to act shall be supplied by their representatives (see Fitzmartin and others v. United Kingdom (dec.), nos. 34953/97 and others, 21 January 2003). However, in the present case, it was Mr Mr Yuri (Iouri) Portnik, acting on behalf of the applicant company who been in contact with the Court directly.

The Court notes that in the present case the applicant company provided proof that it was registered in the Seychelles and its postal and actual address was in the United Kingdom. In particular, it submitted the following documents:

- the applicant companys memorandum and articles of association of 22 March 1995;

- the decision on appointment of Mr Yuri (Iouri) Portnik for a position of the applicants director and its secretary of 24 May 1996;

- the minutes of the companys meeting of 6 February 1998 concerning Mr Portniks appointment as the applicants director, - the certificate of the applicant companys incorporation in the Seychelles of 22 March 1999 and apostilled on 28 July 1999 by the Seychelles High Commission;

- the certificate of incumbency of 6 January 2006 (certified by a notary and apostilled by the registrar of the Supreme Court of Seychelles) issued by the applicant companys registered agent stating that the applicant was duly incorporated and registered in Seychelles as from March 1995;

that Mr Yuri (Iouri) Portnik was the applicant companys director and secretary;

and that the applicant companys operational address was in the United Kingdom;

- the proof of registered agent services and the proof of its registered office and its permanent operational address.

The Court considers these documents are sufficient to conclude that the applicant company exists and that Mr Yuri (Iouri) Portnik, in his capacity as the applicant companys director, is authorised to represent it in the proceedings before the Court. In the absence of any proof to the contrary, the Governments objection to the lack of standing should therefore be dismissed.

2. The applicant companys victim status (a) The parties submissions The Government noted that Arbitration Tribunal delivered an arbitration award ordering Oriana company to pay COM certain amounts in damages. They further mentioned that the enforcement proceedings in respect of this award were initiated by the State Bailiffs Service in 1999. Thus, the award issued by the Arbitration Tribunal in favour of COM had no bearing for the applicant company. They also maintained that the applicant was not a party to the proceedings before the arbitration tribunal and therefore could not demand enforcement of the award. The Government stated that there was no proof provided by the applicant that the claims with regard to the Oriana companys debts were transferred to the applicant company.

Furthermore, neither the Bailiffs Service nor the domestic courts were aware of such an award and the applicants entitlement to this debt. They further submitted that the applicant was not 213216 λ, II , () ϻ

recognised as a creditor by the domestic courts in the insolvency proceedings against the Oriana company. It could not therefore claim the sums allegedly belonging to it on the basis of the arbitration award of 23 December 1998. The Government concluded therefore that the applicant could not be regarded as a victim of a violation of Article 6 1 of the Convention and Article of Protocol 1.

The applicant company disagreed. It submitted that it was the legal successor to COM, which had been the party to the proceedings before the Arbitration Tribunal. This company had been transferred its right to recover the debt owed to COM from the Oriana company, under the contract concluded on 10 February 2003 the validity of which was confirmed by the domestic courts in their final and binding rulings of 10 September 2004 and 6 February 2006.

(b) The Courts assessment The Court notes that the word victim denotes the person directly affected by the act or omission which is in issue (see Marckx v. Belgium, judgment of 13 June 1979, Series A no. 31, 27, and Dudgeon v. the United Kingdom, judgment of 22 October 1981, Series A no. 45, 41).

The Court reiterates that Article 34 of the Convention requires that an applicant must claim to have been actually affected by the alleged violation.

The Court observes that in the instant case the applicant acquired the right to the debt in question by a contract concluded with COM on 10 February 2003. The applicants right to claim the sums due under the Arbitration Tribunals award of 23 December 1998 was acknowledged by the ruling of the Ivano-Frankivsk Regional Court of Appeal on 10 September 2004 and later by the ruling of the Ivano-Frankivsk Regional Commercial Court on 6 February 2006. These rulings were not appealed against and became final.

The Court, taking into account the findings of the domestic courts as to the facts of the case, considers that the applicant can claim to be a victim in relation to the alleged violations of Article 6 1 and Article 1 of Protocol 1 to the Convention.

3. Exhaustion of domestic remedies The Government claimed that the applicant failed to exhaust all domestic remedies available to it under Ukrainian law, as it did not complain about the actions or omission of the Bailiffs Service to the domestic courts.

The applicant disagreed. In particular, it noted that the remedies referred to by the Government were neither effective nor accessible. Furthermore, the applicant company maintained that it had performed all necessary actions to recover the debt. In particular, the applicant had successfully applied to the Ivano-Frankivsk Regional Court of Appeal and the Ivano-Frankivsk Commercial Court, which acknowledged its right to claim enforcement of the arbitration award of 23 December 1998 as well as decided to include it in the list of the Oriana companys creditors.

The Court observes that the Oriana company is a State-owned and managed company. It notes that it had already dismissed the Governments contentions in similar cases (see, for instance, Garkusha v. Ukraine, no. 4629/03, 18-19, 13 December 2005) and finds no reason to reach a different conclusion in the instant case. It therefore finds that the application cannot be rejected for the exhaustion of domestic remedies.

214216 λ, II , () ϻ

B. The applicants complaints under Article 6 1 of the Convention 1. Applicability of Article 6 1 of the Convention The Government recalled that the Arbitration Tribunal was a court of arbitration founded on the basis of the parties agreement to arbitrate contained in the arbitration clause concluded between them. The Government further stated that Article 6 1 of the Convention was not applicable to arbitration proceedings. They stated that the parties to the instant arbitration renounced full application of Article 6 1 of the Convention which consequently was not applicable to the enforcement of the final arbitration award of 23 December 1998 given by that tribunal. The Government also maintained that there was no relationship between the arbitration proceedings in the case and the ensuing enforcement proceedings, since the applicant allegedly acquired the debt pursuant to the contract of 10 February 2003 and not in accordance with the arbitration award. They concluded that Article 6 1 of the Convention was not applicable and the application was incompatible ratione materiae.

The applicant disagreed. It stated that Article 6 1 of the Convention was applicable to the proceedings at issue.

The Court considers that the parties submissions on the issue of the applicability of Article 6 are closely linked to the merits of the applicants complaints and should therefore be joined to the merits.

2. The substance of the applicants complaints under Article 6 1 of the Convention and Article 1 of Protocol (a) Article 6 1 of the Convention The Government submitted that there was no breach of Article 6 1 of the Convention in respect of the applicant. In particular, the Government mentioned that the arbitration award at issue was final only in respect of the parties to the dispute and was binding for execution only in relation to the real creditor of the Oriana company, but not the applicant who had acquired the arbitration award debt indirectly.

The applicant submitted that Article 6 1 of the Convention had been breached by the State authorities in that the arbitration award of 23 December 1998 was not enforced within a reasonable time and in full.

(b) Article 1 of Protocol 1 to the Convention The Government stated that there was no breach of Article 1 of Protocol 1. In particular, the State was not accountable for the debts of the Oriana company which was a separate legal entity. They also submitted that the contract of cession of 10 February 2003 was not a valid ground to demand the enforcement of the arbitration award given in favour of another entity.

The applicant disagreed. In particular, it stated that the State failed to comply with its obligations under Article 1 of Protocol 1 in that it has not ensured that award was timely enforced and did not undertake necessary and adequate measures to ensure that the applicant company effectively enjoys its property rights.

(c) Courts assessment The Court considers, in the light of the parties submissions, that the complaints under Article 6 1 of the Convention and Article 1 of Protocol 1 raise issues of fact and law, the determination of which requires an examination on the merits. The Court concludes therefore 215216 λ, II , () ϻ

that it is not manifestly ill-founded within the meaning of Article 35 3 of the Convention. No other ground for declaring it inadmissible has been established.

3. Complaints under Article 14 of the Convention The applicant also complained that the Law of 29 November 2001 On the Introduction of a Moratorium on the Forced Sale of Assets placed an immunity on the debts of the companies owned by the State. Furthermore, the creation of another company by the State with the assets of the debtor company prevented the payment of debts due to the applicant in accordance with the arbitration award of 23 December 1998. From the applicants point of view this resulted in discrimination in comparison with the Oriana companys other creditors, contrary to Article of the Convention.

The Government did not comment.

The Court considers that the fact that the domestic authorities, including the Bailliffs Service, failed to enforce the award given in the applicants favour does not, as such, raise an issue under Article 14 of the Convention (see Berezovskiy v. Ukraine (dec.), no. 70908/01, 15 June 2004). Furthermore, the Article 14 prohibits difference in treatment in the enjoyment of the substantive rights under the Convention. However, the Court finds, after careful examination of the applicants submission, that there is no indication that the applicant has been subject to any difference in treatment in the present case in comparison with other creditors. It also considers that these complaints are not supported by the facts of the case (see Des Fours Walderode v. Czech Republic (dec.), no. 40057/98, 4 March 2003).

This part of the application should therefore be rejected as being manifestly ill-founded, pursuant to Article 35 3 and 4 of the Convention (see Naumenko v. Ukraine (dec.), no.

41984/98, 14 October 2003;

Kositsina v. Ukraine (dec.), no. 35157/02, 22 May 2006).

For these reasons, the Court unanimously Declares admissible, without prejudging the merits, the applicants complaints concerning Article 6 1 of the Convention and Article 1 of Protocol 1;

Declares inadmissible the remainder of the application.

Claudia WESTERDIEK Peer LORENZEN Registrar President 216216

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