CASE OF OAO PLODOVAYA KOMPANIYA v. RUSSIA
No violation of P1-1;No violation of Art. 6-1;No separate issue under Art. 13 and 14
Christos Rozakis
6. In 1966 the Ministry of Foreign Trade of the USSR created a State Export and Import Agency “Soyuzplodoimport” (Всесоюзное экспортно-импортное объединение «Союзплодоимпорт»). Its assets included the trademarks to a number of brands of alcohol (such as Vodka Stolichnaya, Vodka Moskovskaya and their derivatives). 7. On 5 January 1990 the agency was reorganised into the State Foreign Trade Agency “Soyuzplodoimport” (Всесоюзное внешнеэкономическое объединение «Союзплодоимпорт»). 8. On 20 January 1992 the applicant company was set up in the form of a closed joint-stock company. It was called the “Foreign Trade Stock Company 'Soyuzplodoimport'” (Внешнеэкономическое акционерное общество закрытого типа «Союзплодоимпорт», VAO “Soyuzplodoimport”), and was registered with the relevant state agency, namely the Moscow Registration Chamber. According to its memorandum of association, it was set up by several founders, including the State Foreign Trade Agency “Soyuzplodoimport”, which held 3,880 of its 17,000 shares. The memorandum of association provided that the applicant company was a “successor” to the State Foreign Trade Agency “Soyuzplodoimport”. 9. In 1998 the applicant company converted into an open joint-stock company. 10. On 24 December 1999 the general shareholders' meeting of the applicant company adopted a new memorandum of association. The company name was changed to OAO “Plodovaya Kompaniya” (ОАО «Плодовая компания»). The new memorandum of association contained a declaration that the applicant company was the successor of the State Foreign Trade Agency “Soyuzplodoimport”. 11. In the above period the applicant company notified the trademark registration authority that the trademarks of the State Foreign Trade Agency “Soyuzplodoimport” had changed ownership through succession and consequently obtained trademark certificates in its own name. It subsequently used the trademarks as collateral in a number of commercial transactions with third parties. 12. On 31 October 2000 the Deputy Prosecutor General challenged the applicant company's new memorandum of association, particularly the declaration of succession, before the Commercial Court of Moscow. 13. On 21 December 2000 the Commercial Court of Moscow declared the provision on succession null and void. It held that the applicant company had had no legal grounds to claim succession to the State Foreign Trade Agency “Soyuzplodoimport”. The applicant company had been set up as a new company and not converted from an existing one. It held that a mere declaration by the applicant company in its founding memorandum of association was insufficient to enable it to become the successor of another company. Likewise, it found that, although the applicant company had de facto acted as a successor before the trademark registration authorities and courts of arbitration, this was irrelevant to the establishment of corporate succession. 14. On 19 February 2001 the Appellate Board of the Commercial Court of Moscow examined the applicant company's appeal. Without entering into the merits it quashed the first-instance judgment and terminated the proceedings on the ground that the prosecutor's office did not have standing to bring proceedings. This decision entered into force on the same day. It was not appealed against either by a cassation appeal or by a separate appeal. 15. On 18 April 2001 the Moscow Registration Chamber registered the change of name of the State Foreign Trade Agency “Soyuzplodoimport”. Its new name was the Federal State Unitary Enterprise “Soyuzplodoimport” (Федеральное государственное унитарное предприятие «Внешнеэкономическое объединение Союзплодоимпорт»). 16. On 13 June 2001 the Deputy Prosecutor General submitted a request for supervisory review of the decision of 19 February 2001. 17. The applicant company was summoned to the hearing before the supervisory instance, but those summons were not served on it because it could not be found at its official address. The representatives of the applicant company learned about the hearing, however, submitted written comments on the merits of the case and attended the hearing. 18. On 16 October 2001 the Presidium of the Supreme Commercial Court of Russia examined the case in supervisory review proceedings. The applicant company was represented by the company's president, who made oral submissions before the Presidium. 19. The Presidium quashed the decision of 19 February 2001 and reinstated the first-instance judgment of 21 December 2000. On the procedural point, it held that the prosecutor's office was entitled by law to represent the State in proceedings before commercial courts where public or State interests were involved. It found that the proceedings at issue concerned State property, and that this provided sufficient grounds for the prosecutor to intervene. As to the merits of the case, the Presidium upheld the finding that the applicant company was not entitled to claim succession to the State Foreign Trade Agency “Soyuzplodoimport” because there had been no decision on the latter's conversion, and the applicant company itself had been created as a new entity and not as a result of any reorganisation of an existing legal person. Accordingly, the provisions on succession made in its memorandums of association were null and void. This decision entered into force on the same day and was not subject to further appeal. 20. The Civil Code of the Russian Federation provides that a legal person may be reorganised or liquidated upon a decision of its founders or its management body as authorised in its constitutional documents, or by a competent court in the circumstances provided for by law (Articles 57 and 61). In the event of reorganisation in a form of merger, conversion or accession, the assets of the legal person that ceases to exist are transferred pursuant to an act of transfer to a newly created legal person and, in the latter case – to an existing legal person. In the event of reorganisation in a form of division or separation, the assets of the reorganised legal person are divided and transferred pursuant to a separation balance sheet (Article 58). In the event of liquidation the legal person ceases to exist without succession (Article 61). 21. The Code of Commercial Procedure (no. 70-FZ of 5 May 1995, in force at the material time) established that final judgments and decisions of all commercial courts of the Russian Federation were amenable to supervisory review initiated on an application by the President of the Supreme Commercial Court or his deputy or by the Prosecutor General of the Russian Federation or his deputy (Articles 180 and 181). The Code did not list the grounds for lodging an application for supervisory review: it merely specified that it could be lodged “also in connection with a request by a party to the proceedings” (Article 185 § 1). The summoning of parties to the hearing before the Presidium of the Supreme Commercial Court was to be at the discretion of the Presidium (Article 186 § 2). There was no time-limit for lodging an application for supervisory review, and, in principle, such applications could be lodged at any time after a judgment had become final.