CASE OF SOKUR v. UKRAINE
Violation of Art. 6-1;Pecuniary damage - claim dismissed;Non-pecuniary damage - financial award
8. The applicant was born in 1940 and lives in the village of Grodovka, the Donetsk region of Ukraine. 9. The facts of the case, as submitted by the parties, may be summarised as follows. 10. In 2001 the applicant instituted proceedings in the Novogrodivsky City Court of the Donetsk Region against the “Novogrodivska” Mining Company - a State-owned enterprise - to recover unpaid salary for the years 1998-2000. 11. On 3 May 2001 the Novogrodivsky City Court found in favour of the applicant (рішення Новогродівського міського суду Донецької області) and awarded him UAH 7,406.21 in salary arrears and compensation for devaluation. The decision became effective on 14 May 2001 and was sent for execution to the Novogrodivsky City Bailiffs’ Service (Відділ Державної виконавчої служби Новогродівського міського управління юстиції). However, the decision was not executed, allegedly due to the failure of the Bailiffs’ Service to act in not selling the property of the Mining Company. 12. In the course of the enforcement proceedings, it was established that on 19 November 1998 the Donetsk Regional Arbitration Court (Арбітражний суд Донецької області) had instituted bankruptcy proceedings against the “Novogrodivska” Mining Company. 13. The applicant instituted proceedings in the Novogrodivsky City Court of the Donetsk Region against the Novogrodivsky City Bailiffs’ Service for failure to execute the court decision in his favour. On 18 July 2001 the City Court rejected the applicant’s claim, finding no fault had been committed by that Service. The court stated that the Bailiffs’ Service had presented a decision of the Commercial Court of the Donetsk Region of 30 August 2000 to the respondent company. This decision prohibited the enforcement of judgments against the company by selling its property, due to the bankruptcy proceedings which had been initiated against it. 14. On 1 November 2001 the Appellate Court of the Donetsk Region dismissed the applicant’s appeal. On 18 February 2002 the panel of three judges of the Civil Chamber of the Supreme Court of Ukraine rejected the applicant’s request for leave to appeal. 15. On 26 December 2001 the ban on the forced sale of assets belonging to undertakings in which the State holds at least 25% of the share capital was entrenched in the Law on the Introduction of a Moratorium on the Forced Sale of Property. On 10 June 2003 the Constitutional Court found the moratorium to be compatible with the provisions of the Constitution. 16. On 12 May 2004 the full amount awarded to the applicant was transferred to his bank account, and on 13 May 2004 the enforcement proceedings were completed. 17. Under Article 12 of the Law (Закон України “Про відновлення платоспроможності боржника або визнання його банкрутом”), 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 moratorium shall be immune from any fines and other sanctions for non-fulfilment or improper fulfilment of its financial obligations during the moratorium. 18. The Law (Закон України “Про введення мораторiю на примусову реалiзацiю майна”) 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 such time as the mechanism for the forced sale of the property of such undertakings has been improved. No time-limit has been set. Article 2 of that Law provides that the prohibition on the forced sale of property includes the execution of writs by the State Bailiffs’ Service on property belonging to such companies. The Law therefore stays the execution of all writs by the State Bailiffs’ Service against the assets of or undertakings in which the State holds at least 25% of the share capital. 19. 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. 20. Under Article 2 of the Law (Закон України “Про виконавче провадження”), 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. 21. Article 11 of the Law (Закон України “Про державну виконавчу службу”) provides for the liability of bailiffs for any inadequate performance of their duties, and compensation for damages 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. 22. In its judgment, the Constitutional Court of Ukraine mentioned in particular: “The Constitutional Court considers that the Law [on the moratorium] does not violate the constitutional requirement about the binding nature of court judgments. Court judgments on the forced attachment of the property of enterprises, given both prior to and after the Law was adopted, have not been abolished by it; they remain in force, and their enforcement is suspended until the mechanism for the forced sale of property is improved. That means that the Law established an extended term of enforcement during this period.... ... the Constitutional Court of Ukraine has decided: 1. To recognise that the Law “on the Introduction of a Moratorium on the Forced Sale of Property” of 29 November 2001 complies with the Constitution of Ukraine (is constitutional). ...”