6.  The applicant was born in 1951 and lives in Saku, Harju County. He served as the acting Director General of the Estonian Privatisation Agency (erastamisagentuur) (“the Agency”) at the material time. 7.  On 25 February 1999 the Estonian Parliament (Riigikogu) decided that AS Eesti Raudtee (“ER”), a public limited company in possession of the Estonian railways, was to be privatised in accordance with the Privatisation Act (Erastamisseadus). The privatisation process was accompanied by considerable political debate as well as by pressure from various stakeholders on the persons conducting the privatisation. The company was in a difficult economic situation and in need of investment. Under the Privatisation Act, it was the responsibility of the Agency to carry out the privatisation of state assets. 8.  On 11 January 2000 the Government approved the plan for the privatisation of certain state assets in 2000. According to the plan, the Agency had to dispose of the majority shareholding in ER (51 to 66% of the shares) to a strategic investor. In order to increase its capacity and competitiveness, investments in the railway infrastructure were established as supplementary conditions. The public call for tenders was to be announced by April 2000 so that the privatisation could be carried out in the course of the year 2000. 9.  On 17 April 2000 the Agency announced an international two-stage tender procedure with preliminary negotiations for the privatisation of 66% of shares in ER. 10.  On 11 July 2000 the Government designated T. J., the Minister of Transport and Communications, as the person responsible for privatisation negotiations. T. J. was also a member of the Board of the Privatisation Agency (“the Board”). 11.  By resolution of the Board dated 16 August 2000, four bidders were invited to participate in the second stage of the tender procedure. The Board also established supplementary conditions with regard to the second stage of the procedure, including the submission of a business plan. 12.  By 20 November 2000 – the date on which the submission of final bids was due – three bidders had submitted their bids. According to the decision of the Board of 13 December 2000, the bid of Rail Estonia ApS was deemed the best one. The bid submitted by Baltic Rail Services OÜ (“BRS”) was deemed the second-best bid. 13.  Since Rail Estonia ApS refused to enter into the privatisation agreement and to pay the purchase price for the shares of ER in accordance with its bid by the due date prescribed by the Agency (end of February 2001), BRS was invited to sign the privatisation agreement. 14.  On 30 April 2001 the agreement for privatisation of 66% of the shares in ER was signed between the Republic of Estonia, BRS and ER. According to the agreement, BRS assumed the obligation to pay 1,000,000,000 Estonian kroons (EEK) (approximately corresponding to 64,000,000 euros (EUR)) for the shares as well as to invest at least EEK 2,566,145,000 (EUR 164,000,000) in the next five years. Simultaneously with the privatisation agreement a shareholders’ agreement of ER was signed between the Republic of Estonia and BRS. The applicant, as the acting Director General of the Agency, signed the privatisation agreement and T. J., as the Minister of Transport and Communications, signed the shareholders’ agreement on behalf of the State. 15.  The agreed transaction of the privatisation of 66% of shares in ER was completed by 31 August 2001. By the same date BRS had furnished the required warranties for performance of the privatisation agreement and transferred to the State the agreed purchase price for the shares. 16.  At the time when the application to the Court was lodged (10 March 2005), ER was, in the applicant’s submission, a successful company in which the State earned ten times more for its 34% shareholding than it had previously done with a 100% stake. Moreover, before the conclusion of the agreement for the privatisation of ER, the company had been in a pre-insolvency situation where short-term obligations (such as the payment of salaries) had been financed by means of bank loans. Failure to conclude the privatisation agreement could have had extremely serious consequences for the Estonian economy as a whole (in particular, the insolvency of the railway company and the loss of large transit flows and of expected tax revenues). 17.  The privatisation agreement contained a section concerning representations and warranties, including “Representations and Warranties of the State”. The criminal charges brought against the applicant related to the confirmations given by the State in respect of possible claims of AS Valga Külmvagunite Depoo, an insolvent public limited company, and in connection with the purchase of locomotives of Russian origin.
(a)  Warranty relating to the claims of AS Valga Külmvagunite Depoo 18.  According to the applicant, the management of ER had failed to furnish sufficient information to the representatives of BRS concerning possible claims by the insolvent AS Valga Külmvagunite Depoo against ER. 19.  Since BRS had bid a certain amount of money for 66% of shares in ER and the amount of the bid could not be changed subsequently in connection with any possible obligations arising later, possible claims by AS Valga Külmvagunite Depoo constituted a material risk for BRS. Considering the possible claims which had not been disclosed on the balance sheet of ER, the amount and validity of which were unclear, the parties to the privatisation agreement agreed on certain guarantees, formulated in section 9.1.1 (p) of the agreement. Under this provision, the State undertook to provide BRS with the opportunity to examine all circumstances concerning the claims and court cases in relation to AS Valga Külmvagunite Depoo and its insolvency proceedings. If BRS were to discover risks substantially and actually affecting the value of ER that it could not have evaluated at the time of the signing of the privatisation agreement, the parties undertook to solve such questions at the latest by 29 June 2001 in good faith and by mutual agreement. For example, it was possible that the State would give BRS by 29 June 2001 an additional warranty whereby the State would take partial and limited liability for the claims of AS Valga Külmvagunite Depoo against ER under certain conditions. The State and BRS were also entitled at their sole discretion to withdraw from the privatisation agreement and to terminate it should they not reach mutual agreement concerning the claims of AS Valga Külmvagunite Depoo. 20.  According to a subsequent agreement the term of 29 June 2001 was extended to 21 August 2001. By that date, BRS was aware that the possible claims of AS Valga Külmvagunite Depoo constituted risks that substantially affected the value of ER. In view of that circumstance, on 21 August 2001 the State, represented by the Director General of the Agency pursuant to Article 29 of the Statutes of the Privatisation Agency, and BRS concluded a protocol concerning the possible claims under which the State furnished to BRS an additional warranty. Subject to certain conditions, the State undertook to indemnify ER 20% of any sums exceeding EEK 1,000,000 (EUR 64,000) that it might actually be required to pay to AS Valga Külmvagunite Depoo, up to the amount of EEK 22,407,385 (EUR 1,432,000). Furthermore, the State undertook to indemnify 100% of any sums exceeding EEK 22,407,385, up to the amount of EEK 114,261,140 (EUR 7,301,000).
(b)  Warranty relating to the purchase of locomotives of Russian origin 21.  The business plan and technical and financial plan of BRS, as accepted by the resolution of the Board on 13 December 2000, prescribed the transition to the use of locomotives of American origin and absolute termination of the use of locomotives of Soviet/Russian origin that ER had been using until then. However, the management of ER – not subordinate to the Agency – entered into an agreement with AS Hansa Liising and Intergate Company Ltd on 27 December 2000 for the acquisition of five additional locomotives of Russian origin for ER for an – allegedly unreasonably high – price of 7,000,000 United States dollars (USD) (then corresponding to approximately EUR 7,500,000). The acquisition of the new locomotives was at variance with the privatisation bid of BRS as accepted by the State and it gave rise to the danger that BRS would not be able to abide by its privatisation bid. 22.  Due to the above circumstances, the parties – the State, represented by the acting Director General of the Agency, and BRS – agreed on section 9.1.1 (s) in the privatisation agreement, containing a warranty given by the State to BRS. The State undertook to reimburse BRS for any direct damage that it might bear should ER actually acquire the five locomotives before BRS obtained control over the company. Several additional conditions were agreed upon, including an obligation on BRS to minimise the possible damage. For the fulfilment of potential obligations arising from the warranty, the Agency was obliged to maintain in the State’s bank account the sum of EEK 50,000,000 (EUR 3,195,000) until the grounds for claims regarding the warranty had ceased to exist, but in any case not for longer than seven years. The maximum potential State liability under this warranty was EEK 100,000,000 (EUR 6,390,000). The parties considered the possible direct damage covered by this warranty to be debts relating to the privatised property outside the scope of privatisation, as described in section 10(5) of the Privatisation Act. The State was entitled at its sole discretion and upon notice to BRS but at the latest by 29 June 2001 to withdraw this warranty, to withdraw from the privatisation agreement and to terminate it. 23.  The applicant was appointed acting Director General of the Agency by its Board on 27 October 1999. According to the Privatisation Act, the Director General was not a member of the Board. As the acting Director General, the applicant was responsible for execution of the principal decisions of the Government and the Board. He was entitled and obliged to manage the everyday activities of the Agency, including entering into privatisation agreements. 24.  In July 2001 the State Audit Office (Riigikontroll) gave its opinion concerning the lawfulness of the privatisation of the shares in ER to the Public Prosecutor’s Office for information and for a decision on whether criminal proceedings needed to be initiated. It was found that the applicant and the Minister of Transport and Communications had acted beyond their authority in assuming financial obligations for the State. The State Audit Office was of the view that they had done so without any legal grounds. 25.  On 26 July 2001 the Public Prosecutor’s Office (prokuratuur) informed the Auditor General (riigikontrolör) that criminal proceedings had not been initiated. According to the Public Prosecutor’s Office, the agreements had not yet materialised; moreover, they had been concluded in accordance with the decisions of Parliament and the Government and there existed legal grounds for covering debts and obligations relating to privatised assets from the privatisation proceeds. There had been no misuse of official position or significant damage (either material or moral) to national interests within the meaning of Article 161 of the Criminal Code (Kriminaalkoodeks). 26.  In a press release from the Public Prosecutor’s Office, dated 14 August 2001, the Prosecutor General (peaprokurör) confirmed that it had not been unlawful to take certain conditional risks in the agreements concerned. According to the applicable legislation, payments could be made from privatisation proceeds without assuming any liability for the State budget. He stated that the refusal to initiate criminal proceedings against the applicant and T. J. had been well-founded and lawful. 27.  By a letter of 31 August 2001 to the Prosecutor General the Auditor General again requested that initiation of criminal proceedings in respect of the applicant be considered. He referred to the conclusion on 21 August 2001 of a protocol concerning possible claims by AS Valga Külmvagunite Depoo as a new circumstance. 28.  On 10 September 2001 the head of the Prosecution Department of the Public Prosecutor’s Office initiated criminal proceedings against the applicant. 29.  The applicant was charged with misuse of his official position in giving the representations and warranties in the privatisation agreement described above. According to the charges, he had created a situation whereby the preservation of the State’s assets might have been jeopardised. This could be considered to have caused significant damage to national interests. Moreover, by repeatedly assuming unlawful obligations for the State, the applicant had cast doubt on the legitimacy and reliability of the activity of the Agency as a state institution, thus materially impairing the authority of the State in society, and had also damaged the reputation of the Republic of Estonia as a contractual partner at international level; those acts, in aggregate, had to be considered to have caused significant damage to the State. Accordingly, he had committed an offence under Article 161 of the Criminal Code. 30.  On 17 April 2002 Parliament set up an investigation committee in order to investigate the circumstances relating to the privatisation of the railways. It was headed by a member of the Board of the Agency who had opposed the privatisation of ER. The final report of the committee was approved in February 2003. The results of the committee’s investigation, condemning the privatisation, were published by the media during the criminal investigation. 31.  On 24 March 2003 the Public Prosecutor’s Office approved the bill of indictment. The applicant was then committed for trial before the Tallinn City Court (linnakohus). 32.  The applicant was also charged with – and subsequently convicted of – misuse of his official position in connection with the privatisation of RAS Tallinna Farmaatsiatehas (the state-owned public limited company Tallinn Pharmaceutical Factory). However, he did not make any complaints before the Court in this respect. 33.  On 2 June and 9 September 2003 the applicant requested the Tallinn City Court to return the case for additional preliminary investigation because of the one-sidedness of the investigation. The court dismissed the requests, finding that the defence had in substance challenged the evidence and submitted additional evidence which the court would assess while deciding on the merits of the case. It considered that there were no obstacles to proceeding with the case before the court, the applicant having a right to make further requests in the course of the proceedings. 34.  At the hearing on 11 September 2003, after the court had had the bill of indictment read out, the applicant confirmed that he understood the charges brought against him but did not plead guilty. At the hearing V. S. (former Director General of the Agency) gave statements as a witness in respect of the charge concerning the privatisation of RAS Tallinna Farmaatsiatehas. 35.  On 25 September 2003 the applicant’s lawyer requested that T. J., Minister of Transport and Communication and member of the Board, be questioned as a witness. T. J. had been the person in charge of the negotiations for the privatisation of ER and was aware of the facts essential to the criminal case. 36.  On 6 October and 25 November 2003 the applicant’s lawyer submitted additional requests for admission of evidence. The latter request included a post scriptum remark asking the court to ensure that the summonses were indeed delivered to the witnesses. According to the defence counsel, several important witnesses, for example, M. P., V. S., G. S. and others, had not received the summonses. 37.  At the hearing on 16 December 2003 the court granted the defence counsel’s requests to admit supplementary evidence and to summon witness T. J. Witnesses K. (an official of the Agency) and V. S. were examined at the hearing. Subsequently, the court adjourned the hearing in order to summon witness T. J. and other witnesses on whom it had not been possible to serve summonses. 38.  At the hearing on 22 December 2003 G. S. (deputy chairperson of the management board of BRS at the material time) was heard as a witness. The defence counsel withdrew its request to examine T. J. The prosecutor asked for disclosure of the statements of all the witnesses who had submitted in writing that they would maintain their statements given earlier, during the preliminary investigation. It does not appear from the record of the court hearing that the defence disagreed with the disclosure of the written materials from the case file. As the parties did not object to closing the examination of evidence, they proceeded to legal argument. 39.  On 30 January 2004 the court heard the closing statement by the applicant. The parties made no requests. On the same day, the court delivered the operative part of the judgment, by which the applicant was convicted as charged and sentenced to two years’ imprisonment; eighteen months of the sentence were suspended. 40.  The City Court in its judgment referred to the statements from witnesses V. S., K. (erroneously described as a member of the Board) and G. S., who had been heard at the hearings. It also relied on statements from witnesses P. J. (chairperson of the management board of ER at the material time), G. (a member of Parliament whose company had at the material time given legal advice to ER) and H. P. (bankruptcy trustee of AS Valga Külmvagunite Depoo), given during the preliminary investigation, and on several items of documentary evidence. The court found that the obligations undertaken by the applicant on the State’s behalf to reimburse BRS the possible costs relating to the Russian locomotives and the claim of AS Valga Külmvagunite Depoo had no basis in law. These obligations had not been excluded from the privatisation and they had been known to the parties before the privatisation agreement had been concluded. The court noted that although on 13 December 2000 the Board had accepted the business plan of BRS, it had not made a decision to give warranties on behalf of the State. 41.  The City Court found, on the basis of the minutes of the Board’s meetings, that the Board had become aware of the obligations assumed by the applicant in the privatisation agreement only retrospectively and through the media. Moreover, the court noted that even if the Board had been aware of the applicant’s acts, it was the applicant and not the Board who had committed the offence. The court observed that a bid could not be conditional. If BRS had discovered, after making the bid, circumstances reducing substantially the value of shares in ER, it could have refused to conclude the agreement without any penalty. In such a case, neither of the parties could have brought any claims against the other. 42.  The City Court concluded that the applicant, assuming obligations in the sum of EEK 196,135,232 (EUR 12,533,000) on behalf of the State, had created a situation where the preservation of the State’s assets had been at stake. This was to be considered to have caused substantial damage to the interests of the State. The court considered it irrelevant that the threat to the preservation of the property of the State had not materialised and that the State had not sustained any real damage; the existence of the threat itself was sufficient for it to find that the offence had been committed. Furthermore, the court noted that the applicant, as a high-ranking public servant, had also caused non-pecuniary damage to the State. By disregarding the laws, he had put in doubt the lawfulness and reliability of the Agency as a State institution, thereby causing substantial damage to the authority of the State within society and also damaging the reputation of the Republic of Estonia as a contractual partner internationally. 43.  The applicant lodged an appeal with the Tallinn Court of Appeal (ringkonnakohus). He alleged that in considering whether the Board had been aware of the disputed warranties in the privatisation agreement the City Court had not heard the relevant witnesses. Only a limited number of minutes of the Board’s meetings had been examined by the court. 44.  Moreover, the applicant referred to the statements made by witnesses T. J. (Minister of Transport and Communications and a member of the Board at the material time) and V. S. (former Director General of the Agency), according to whom the privatisation of ER had been carried out in a manner similar to the earlier privatisation of several other enterprises and no criminal proceedings had been initiated before. The applicant referred to numerous items of evidence which the court had failed to take into account or even to analyse. 45.  The applicant complained that all but three of the witnesses had not been heard by the City Court. Nevertheless, the court had to a significant extent relied on the statements of witnesses P. J., G. and H. P. By disclosing the statements of these and other witnesses at the hearing without the defence having had an opportunity to put questions to them, the City Court had violated Article 6 §§ 1 and 3 (d) of the Convention. Moreover, the court had failed to summon M. P., Chairperson of the Board, a very important witness for the defence. The defence had also requested the court to summon T. J. and had informed the court of his whereabouts; however, he had not been summoned. These facts also amounted to a violation of the procedural rules by the City Court. 46.  Furthermore, the applicant argued that the City Court’s judgment had been poorly reasoned, basing his conviction on the reproduction of a list of documents and a reference to “other material in the case file” without having properly analysed the evidence and having completely disregarded most of it. For example, the applicant submitted that the City Court’s conclusion that the Board had become aware of the obligations assumed by the applicant in the privatisation agreement only retrospectively and through the media was based only on a statement from L. as reflected in the minutes of the Board’s meeting. However, L. had not been heard by the court. 47.  The applicant alleged that the City Court had been wrong in concluding that the Board had made no decision concerning the obligations taken by the applicant. He argued that, after the Board had accepted the business plan on 13 December 2000, he had been obliged to conclude the privatisation agreement in accordance with it. The disputed provisions had been included in the privatisation agreement precisely because the Board had accepted the bid of BRS. Furthermore, the applicant argued that there had been no causal link between his acts and the legal consequences which had ensued, as required by the case-law relating to Article 161 of the Criminal Code. Not only had the Board been aware of the content of the privatisation agreement, both before its conclusion and thereafter, but the agreement had been approved in substance by the Board. 48.  The applicant disputed the City Court’s conclusion that the obligations relating to the Russian locomotives and the claim of AS Valga Külmvagunite Depoo had not been excluded from the privatisation agreement. He insisted that the notion “excluded from the privatisation agreement” had to be interpreted as meaning that the exclusion was specifically contained in the agreement itself. He also maintained that the exact amount and nature of these obligations had not been known to the Agency and BRS at the time of the conclusion of the privatisation agreement. In fact, these obligations had never materialised; accordingly, they could not possibly have existed before the privatisation agreement had been signed and even less so in any defined nature or exact amount. 49.  The applicant argued that he had not assumed obligations on behalf of the State, he had, rather, agreed on certain representations and warranties. In the situation where the Privatisation Act did not clearly regulate privatisation agreements and the Soviet Civil Code of 1964 could not be applied in the privatisation process, the State undoubtedly had to follow internationally recognised norms and practices. In the case of an international tender procedure it was not conceivable that an agreement would be concluded without any representations or warranties from the seller. The applicant argued that he had acted lawfully and in accordance with section 10(5) of the Privatisation Act, section 2(2) of the Use of Privatisation Proceeds Act (Erastamisest laekuva raha kasutamise seadus) and points 6 and 7 of the Government regulation concerning the Procedure for Covering Debts Relating to Privatised Assets and Expenses Relating to Privatisation of Assets (Erastatud varaga seotud võlgade ja vara erastamisega seotud kulude katmise kord). 50.  The applicant insisted that he had neither caused any damage to the State nor created a situation where the preservation of the State’s assets had been jeopardised. Moreover, no claims had been made against the State under the disputed warranties in the privatisation agreement. He also challenged the City Court’s conclusion concerning the damage to the reputation of the State, arguing that the court had not paid attention to the excerpts from numerous international and Estonian newspapers indicating that the conclusion of the privatisation agreement and the subsequent successful performance of ER had received positive media coverage. These showed that the privatisation had had a positive impact on the reputation of the Republic of Estonia. Moreover, the City Court had failed to analyse what would have been the financial effects if the privatisation agreement had not been concluded, taking into account the fact that ER had been in a pre-insolvency situation and that its insolvency could have had serious effects on the economy of the whole country. 51.  Finally, the applicant alleged that the charges against him had been politically motivated. The privatisation of 66% of shares in ER had been decided by Parliament, the Government and the Board, whose decisions the applicant had been bound to follow. However, charges had been brought only against the applicant. Moreover, the Public Prosecutor’s Office had repeatedly refused to initiate criminal proceedings against the applicant, finding that his acts had been lawful. Nevertheless, the Public Prosecutor’s Office had initiated, only a few days later and under strong political and public pressure, a criminal case against him, whereas no charges had been brought against T. J. or other participants in the privatisation process. In a whole series of analogous privatisation agreements, the agreement concerning the privatisation of ER had been the only one in respect of which a criminal investigation had been initiated. 52.  The applicant requested that the Court of Appeal re-examine all the evidence in the case.
(b)  The Court of Appeal’s judgment 53.  The Tallinn Court of Appeal heard the case on 13 April 2004. In the course of legal argument, after the prosecutor had dealt with the issue of the disclosure of witness statements, the applicant’s counsel noted that the issue of witnesses was not of primary importance. On the same date the Court of Appeal delivered the operative part of its judgment. 54.  By the judgment of 13 April 2004 the Court of Appeal upheld the City Court’s judgment. It found that the witnesses who had not appeared before the City Court had informed the court that they were unable to attend the hearing. In accordance with the law of criminal procedure, their statements made during the pre-trial investigation had been read out in the City Court. Moreover, the Court of Appeal noted that the statements of witness M. P. had not been used by the City Court against the applicant. He had changed his place of residence during the proceedings and the summons previously sent to him had been returned to the court. The applicant’s lawyer had agreed to terminate the judicial examination without making any requests to the court. In respect of witness T. J., whose attendance the applicant’s lawyer had requested, the Court of Appeal noted that, according to the record of the City Court hearing, the defence lawyer had withdrawn his request. Moreover, in his appeal the applicant had not set out the names and addresses of the persons whom he wished to have examined by the Court of Appeal, as required by Article 8 § 3 of the Code of Criminal Court Appeal and Cassation Procedure (Apellatsiooni ja kassatsiooni kriminaalkohtumenetluse seadustik). Neither had such a request been made at the appeal court’s hearing. The Court of Appeal also noted that it was undisputed that the applicant had concluded the agreements concerned. The only issue at stake was the legal status of the applicant’s acts and in this context the statements of witnesses were irrelevant. 55.  In respect of the initial refusal of the Public Prosecutor’s Office to initiate criminal proceedings against the applicant, the Court of Appeal noted that this had concerned only one of the two warranties, as the other one had not yet been given at that time. Moreover, according to Article 5 § 1 of the Code of Criminal Procedure (Kriminaalmenetluse koodeks), the refusal to initiate criminal proceedings did not preclude criminal proceedings concerning the same facts being initiated later. 56.  The Court of Appeal noted that it had been irrelevant whether the Board had become aware of the obligations taken in the privatisation agreement before or after it had been signed by the applicant, as such awareness did not render his acts lawful. The Court of Appeal found that by its decision of 13 December 2000 the Board had accepted the business plan of BRS. However, this had not meant that the Agency had to reimburse BRS the costs relating to the purchase of Russian locomotives, but only that the Agency would not object to the use of American locomotives. 57.  Furthermore, the Court of Appeal held that the disputed obligations had not been excluded from the privatisation agreement, as such an exclusion should already have been made in the tender documents. The witnesses G. S. and V. S. had submitted that no obligations or debts had been excluded. The Court of Appeal found that the parties had been aware of the possible obligations and that these obligations had been sufficiently clearly established for the bidders to be able to assess the probable risks and the scope of the obligations and make their bids accordingly. 58.  The appeal court found that no legal basis had existed for the assumption of the obligations concerned. On the contrary, the City Court had referred to several provisions of law which the applicant had violated in assuming the obligations. 59.  The Court of Appeal noted that the danger to the preservation of the State’s assets had constituted independent damage, and not merely a precondition for the occurrence of damage, in the present case. 60.  The court considered that the statements by witness G. S., the letters from ER and BRS, indicating that they had no claims against the State, and the excerpts from newspapers could not be taken into account when assessing the significance of the damage caused to the interests of the State. A court had no obligation to give its opinion on what had been published in the press. The Court of Appeal observed that the applicant had been a high-ranking state official who had been working in a field attracting great public interest both nationally and internationally. It continued:
“It is understandable that the commission of the acts of which [the applicant] was convicted by the judgment of the City Court is not in compliance with the general sense of justice. Thus [the applicant’s] acts in his capacity as an acting Director General of the Privatisation Agency, which disrespected the laws, put in doubt the lawfulness and reliability of the activities of the Privatisation Agency as a State institution, thus materially impairing the authority of the State in society, and also damaged the reputation of the Republic of Estonia as a contractual partner on the international level, so that those acts, in aggregate, had to be considered to have caused significant moral damage to the interests of the State.” 61.  The Court of Appeal did not agree with the argument that the failure to conclude the privatisation agreement could have had extremely serious consequences for the Estonian economy as a whole. It noted that, even if the agreements could not have been concluded without the disputed provisions, this did not exclude the unlawfulness of the applicant’s acts or his guilt. Although the State would not have received the money for the privatisation of the shares in ER had the privatisation agreement not been concluded, it would have retained shares of the same value. 62.  Finally, the Court of Appeal noted that the applicant had not been convicted in respect of the privatisation as such but rather of assuming certain obligations on behalf of the State. He had personally agreed to such obligations and was personally responsible for them. 63.  The applicant appealed against the judgment of the Court of Appeal. In addition to the arguments already raised in his appeal against the City Court’s judgment, he emphasised that the Court of Appeal had not analysed several items of evidence in his favour and had limited its analysis only to the inculpating evidence. He also argued that only three witnesses had been heard before the City Court, whereas witnesses P. J., G. and H. P. had not been heard, although the applicant’s conviction had been based to a considerable extent on the statements of these witnesses. Moreover, witnesses M. P. and T. J., who had been important from the defence’s perspective, had not been heard. The sole reason why the defence had withdrawn the request to have T. J. heard in the City Court had been to avoid prolonging the proceedings. In fact, the City Court had adjourned a hearing in order to summon T. J.; however, despite the fact that the defence had provided the court with his address, the court had not sent summonses to the witness. 64.  The applicant called into question the Court of Appeal’s argument that the statements of the witnesses P. J., G. and H. P. had, in fact, been irrelevant. He asked why it had been necessary to summon these witnesses if their evidence had been irrelevant. 65.  The applicant argued that not only had the State sustained no damage in connection with the warranties concerning the claim of AS Valga Külmvagunite Depoo, but in fact such a claim had never existed. Thus, the Court of Appeal had wrongly considered that the claim had been sufficiently clearly established. Neither had any claims been made in connection with the warranty concerning the Russian locomotives. Moreover, from 30 April 2004 the possibility of any claims being made against the State in the future had been excluded, since the liability of the State under the representations and warranties expired three years after the date of signing the agreement. 66.  The applicant insisted that, as the Board had been aware of the warranties and as it had not used its opportunity to withdraw from the agreement, it had to be concluded that, in substance, the Board had approved the warranties. 67.  In respect of the non-pecuniary damage allegedly caused to the State, the applicant noted that the Court of Appeal’s reasoning had repeated almost literally the wording of the bill of indictment. The court had failed to consider the evidence submitted by the defence. 68.  The applicant challenged his conviction on the basis of “the general sense of justice”, arguing that such a ground for conviction was incompatible with the principle of the rule of law. 69.  Moreover, he argued that the appeal court had been wrong in finding that, had the shares in the ER not been sold, the State would have retained shares to the value of the sale price. He was of the opinion that this finding was in conflict with economic logic, as the price of the shares in an enterprise had no fixed value and the shares in an insolvent company cost nothing. He concluded that the State had sustained no damage and there had been no threat to the preservation of the property of the State. 70.  The applicant insisted that he had had a right to interpret the legislation in the same manner as the Public Prosecutor’s Office, which had refused to initiate criminal proceedings against him since there had been no breach of law. As the Public Prosecutor’s Office had considered the applicant’s acts lawful before he had signed the protocol concerning the possible claims of AS Valga Külmvagunite Depoo, he had legitimately expected that he could rely on the prosecution’s interpretation according to which his acts, including the conclusion of the protocol, were lawful. He was of the opinion that his conviction had been based on laws that were not clear and understandable, as even the highest officials in the Public Prosecutor’s Office, including the Prosecutor General, had considered his acts lawful. 71.  On 15 September 2004 the Supreme Court (Riigikohus) refused the applicant leave to lodge his appeal.