Tetyana Mykhaylivna DOVGAL v Ukraine - 50726/06 [2009] ECHR 1886 (20 October 2009)

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The European Court of Human Rights (Fifth Section), sitting on 20 October 2009 as a Chamber composed of:

Peer Lorenzen, President,
Renate Jaeger,
Karel Jungwiert,
Rait Maruste,
Mark Villiger,
Isabelle Berro-Lefèvre, judges,
Mykhaylo Buromenskiy, ad hoc judge,
and Stephen Phillips, Deputy Section Registrar,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

The applicant, Ms Tetyana Mykhaylivna Dovgal, is a Ukrainian national who was born in 1953 and lives in Kryvyy Rig, Dnipropetrovsk region, Ukraine. The Ukrainian Government (“the Government”) were represented by their Agent, Mr Y. Zaytsev.

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

By decree of 21 May 1981 the Kryvyy Rig City Executive Committee ordered all the buildings in the specified area, including the applicant’s house, to be demolished. The Committee also transferred the titles to the plots of land under these buildings and adjacent thereto to the Pivdenny Girnycho-Zbagachuvalny Kombinat (“the Company”), a publicly owned company at that time.

In the period between April and June 2002 the Company, which by that time had been reorganised into a joint stock company 25.78% of whose shares belonged to the State (ВАТ “Південний гірничо-збагачувальний комбінат”), implemented the above decree and demolished the applicant’s house.

On 27 March 2003 the Dnipropetrovsk Commercial Court (Господарський суд Дніпропетровської області, “the Commercial Court”) instituted insolvency proceedings against the Company.

By a judgment of 2 April 2004 the Inguletsky District Court of Kryvyy Rig (Інгулецький районний суд м. Кривого Рогу; “the District Court”) allowed the applicant’s claim for damages and awarded her the total amount of 46,532.02 Ukrainian hryvnias (UAH) (about 7,259.07 euros (EUR) at the material time), to be paid by the Company.

By order of 27 May 2004 the Cabinet of Ministers of Ukraine approved the privatisation of the Company and instructed the relevant authorities to make the necessary arrangements. By August 2004, according to the Government, the State’s share in the Company had been sold.

On 10 September 2004, after the judgment had become final, the State Bailiffs’ Service instituted enforcement proceedings.

On 16 October 2004 the State Bailiffs’ Service suspended the enforcement proceedings in view of the insolvency proceedings pending against the Company before the Commercial Court.

Subsequently the insolvency proceedings against the Company were terminated and reopened, and the State Bailiffs’ Service resumed and suspended the enforcement proceedings accordingly. Apparently, the applicant did not try to register as a creditor in any of the insolvency proceedings against the debtor Company.

On 16 November 2006 the Commercial Court adopted an amicable agreement between the creditors and the Company, under which the creditors’ claims against the Company, including the claims of those who were not registered in the insolvency proceedings but sought payment of the debts within the enforcement proceedings only, were deemed to be paid off. Accordingly, the insolvency proceedings against the Company were terminated.

On 12 March 2007 the State Bailiffs’ Service terminated the enforcement proceedings relating to the judgment in the applicant’s favour, referring to the amicable agreement adopted on 16 November 2006.

On 18 April 2007 the applicant challenged the bailiff’s decision of 12 March 2007 before the District Court. On 6 July 2007 the court dismissed her complaint as time-barred. The applicant did not appeal against the latter decision.

On 29 January 2008 the Commercial Court terminated the amicable agreement because of the Company’s failure to comply with its terms, and resumed the insolvency proceedings against the Company.

On 29 February 2008 the applicant instituted proceedings in the District Court against the State Bailiffs’ Service, challenging the decision of 12 March 2007. On 6 June 2008 the court dismissed the applicant’s claim because of the applicant’s repeated failure to appear before the court. The applicant did not appeal against the latter decision.

On 26 January 2009 the State Bailiffs’ Service, having resumed the enforcement proceedings, suspended them in view of the insolvency proceedings against the Company.

The relevant domestic law on enforcement proceedings is summarised in the case of Ponomaryov v. Ukraine (no. 3236/03, §§ 29-31, 3 April 2008).

The relevant provisions of the Restoration of Solvency and Declaration of Bankruptcy Act of 14 May 1992 are summarised in the case of Trykhlib v. Ukraine (no. 58312/00, §§ 25-27, 20 September 2005). In addition, the Act defines a creditor as “a legal or natural person who has a pecuniary claim against the debtor which is corroborated by documents in accordance with the prescribed procedure”.

The applicant complained that the State authorities had not enforced the judgment given in her favour in due time and that there was a lack of effective remedies in that respect, relying on Articles 6 § 1 and 13 of the Convention and Article 1 of Protocol No. 1.

Relying on numerous provisions of the national legislation, the applicant complained of the lengthy non-enforcement of the judgment in her favour. In this regard she submitted that there was no need to challenge the bailiff’s decision to suspend the enforcement proceedings as that decision was lawful under domestic law. On the other hand, she could not have registered as a creditor in the insolvency proceedings because, in her view, the judgment creditors were not “creditors” within the meaning of the Restoration of Solvency and Declaration of Bankruptcy Act. She relied on Articles 6 § 1 and 13 of the Convention and Article 1 of Protocol No. 1 which provide, insofar as relevant, as follows:

“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. ...”

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

“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 ....”

In their observations, the respondent Government submitted that the State was not responsible for the delay in the enforcement of the judgment in question, but that it was due to the lack of funds of a private company.

They further maintained that the applicant had not challenged the alleged inactivity of the State Bailiffs’ Service and had not claimed compensation before the domestic courts. In addition, the applicant had not availed herself of the opportunity to be registered as a creditor in the insolvency proceedings pending against the debtor Company. The Government therefore contended that the applicant had not exhausted, as required by Article 35 § 1 of the Convention, the remedies available to her under Ukrainian law. The Government maintained that those remedies were effective both in theory and in practice.

The Court notes that at the time the judgment in the applicant’s favour was adopted the State held 25.78% of the shares of the defendant Company. After the judgment of 2 April 2004 had become final in May 2004, that is, one month after the delivery of the judgment in the absence of an appeal, the debtor Company had been protected by the law on moratorium for a relatively short period of time – about three months – until the State’s share had been sold. After this period the responsibility of the State extended no further than the involvement of State bodies in enforcement proceedings (see, mutatis mutandis, Ponomaryov v. Ukraine, cited above, § 51).

The Court reiterates that, as it has already held in similar cases, Ukrainian legislation provides for the possibility to challenge before the courts the lawfulness of acts and omissions of the State Bailiffs’ Service in enforcement proceedings and to claim damages from that Service for delays in payment of the amount awarded (see, for instance, Kukta v. Ukraine (dec.), no. 19443/03, 22 November 2005). In the present case, the applicant failed to do so.

In so far as the present case may concern the State’s positive obligation to enforce a judgment against a private entity (see, mutatis mutandis, Fuklev v. Ukraine, no. 71186/01, §§ 68 and 84, 7 June 2005), the Court notes that the applicant did not try to register as a creditor in the insolvency proceedings pending against the debtor Company. The Court reiterates that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust domestic remedies (see, for instance, Dzizin v. Ukraine (dec.), no. 1086/02, 24 June 2003). In the circumstances of the present case, the Court cannot conclude that the applicant was absolved from doing so.

In the light of the foregoing, the applicant cannot be regarded as having exhausted the domestic remedies available to her under Ukrainian law.

It follows that this complaint must be rejected pursuant to Article 35 §§ 1, 3 and 4 of the Convention.

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You are here: BAILII >> Databases >> European Court of Human Rights >> Tetyana Mykhaylivna DOVGAL v Ukraine - 50726/06 [2009] ECHR 1886 (20 October 2009) URL: http://www.bailii.org/eu/cases/ECHR/2009/1886.html Cite as: [2009] ECHR 1886