CASE OF FELDMAN AND SLOVYANSKYY BANK v. UKRAINE
Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings;Article 6-1 - Access to court);Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)
André Potocki;Angelika Nußberger;Carlo Ranzoni;Sergiy Goncharenko;Yonko Grozev
5. The first applicant was born in 1958 and lives in Dnipro, Ukraine. The applicant bank was a commercial joint-stock bank based in Ukraine with its registered office in Zaporizhzhya. Its banking licence was revoked on 11 January 2001 (see paragraph 12 below). Subsequently, the applicant bank was liquidated (see paragraph 19 below). 6. The first applicant was the vice-president, founder and majority shareholder of the applicant bank. 7. In February and March 2000 the domestic authorities instituted two sets of criminal proceedings for tax evasion and abuse of office by the management of the applicant bank. 8. In March 2000 the first applicant was arrested as part of the criminal proceedings (for more details see Feldman v. Ukraine, nos. 76556/01 and 38779/04, 8 April 2010). In April 2000 the Ukrainian news agency UNIAN reported on a session of the Coordination Committee on Combating Corruption and Organised Crime. The relevant extract reads: “‘It is a matter of honour for the General Prosecutor’s Office and the State Tax Administration to bring the story of Slovyanskyy Bank to its logical conclusion,’ said the President of Ukraine during his speech at the session ... He stated that the chairs of the bank had turned it into a source of uncontrolled personal income. ‘Such moneymakers have powerful patrons, and there is great pressure on the investigation,’ stated the President.” 9. On 29 June 2000 the National Bank of Ukraine (“the NBU”) suspended the applicant bank’s licence for some of its operations, considering that its financial position had deteriorated sharply and that it had been performing risky operations which threatened its solvency. 10. In July 2000 an investigator from the tax police of the State Tax Administration, acting in the course of the criminal proceedings, ordered an attachment of the applicant bank’s securities. 11. On 18 September 2000 the NBU put the applicant bank under temporary administration, which involved suspending the functions of some of the bank’s managers. 12. On 11 January 2001 the NBU issued a resolution “On the Liquidation of Slovyanskyy Commercial Joint-Stock Bank” by which, among other things, (1) the applicant bank’s operating licence was revoked in full; (2) the powers of the board, the council and the general shareholders’ meetings were terminated; and (3) the applicant bank was ordered to be liquidated. By the same resolution the NBU approved the composition of a liquidation commission for the bank, consisting of eleven officials from the regional departments of the NBU and two members of staff from the local tax office. 13. On 5 March 2001 the first applicant, who was in detention at the time, brought a claim under the rules of Chapter 31-A of the Code of Civil Procedure of 1963 with the Pechersky District Court of Kyiv, challenging the NBU’s decision. He maintained that the impugned resolution was unlawful and that the NBU had decided to liquidate the applicant bank owing to its failure to fulfil its financial obligations, whereas that failure had been caused by the NBU itself and the tax authorities. The first applicant emphasised that after the resolution had been adopted, the applicant bank had not been able to protect its rights and interests on its own. He added that the resolution had been detrimental to the interests of the applicant bank’s shareholders, including himself. 14. On 26 June 2001 the court found that the first applicant could bring a claim, however, it had to be dismissed. The court held that the NBU had been competent to adopt the impugned resolution, that the measures taken had been lawful and that they had been made necessary by gross violations of banking legislation by the applicant bank and its difficult financial position. 15. The first applicant appealed against that decision. 16. On 5 July 2002 the Kyiv City Court of Appeal upheld the decision of 26 June 2001 in part, but changed its reasoning. It held that the NBU’s resolution of 11 January 2001 had not concerned the first applicant and it had not been established during the determination of the claim that his rights and freedoms had been violated. For those reasons the court of appeal dismissed the claim. 17. The first applicant appealed on points of law. 18. On 21 April 2005 the Supreme Court of Ukraine quashed the decisions of 26 June 2001 and 5 July 2002 and terminated the proceedings, considering that the claim was inadmissible. It found as follows: “... The first and second-instance courts have established that Mr B.M. Feldman brought a claim as a shareholder of Slovyanskyy Bank, however he did not request the protection of his own rights and freedoms but, in fact, acted in the interests of Slovyanskyy Bank, without being duly authorised [bold text in the original]. According to Articles 1 and 12 of the Code of Commercial Proceedings, disputes between a subject of entrepreneurial activities and enterprises, institutions and organisations concerning the protection of their rights and freedoms, and their disputes concerning the declaration of legal acts as invalid, should be examined by the commercial courts. Given that a shareholder is not entitled to apply to a court for the examination of such a dispute and that this case is not to be examined in accordance with civil procedure, the decisions adopted in this case should be quashed and the proceedings should be terminated, in accordance with Article 136 § 2 (1) and Article 227 § 1 of the Code of Civil Procedure ...” 19. The liquidation process of the applicant bank was completed on 30 November 2012. The bank was removed from the legal entities official database on 4 August 2014.