CASE OF NAVALNYYE v. RUSSIA
Violation of Article 6 - Right to a fair trial (Article 6 - Criminal proceedings;Article 6-1 - Fair hearing);Violation of Article 7 - No punishment without law (Article 7-1 - Nulla poena sine lege;Criminal offence)
Alena Poláčková;Branko Lubarda;Dmitry Dedov;Georgios A. Serghides;Helen Keller;Luis López Guerra;Pere Pastor Vilanova
5. The applicants were born in 1976 and 1983 respectively. 6. The first applicant, Aleksey Navalnyy, is a political activist, opposition leader, anti-corruption campaigner and popular blogger. He lives in Moscow. The second applicant, Oleg Navalnyy, is the first applicant’s brother; he is an entrepreneur and a former employee of the Federal State unitary enterprise Russian Post. He is currently serving a three-and-a-half year sentence in a correctional colony in the Oryol Region. 7. From 2005 the second applicant worked at the Main Centre for Long Distance Mail, a subsidiary of Russian Post. On 1 December 2007 he became head of its Internal Mail department and then worked in other managerial posts in various departments and divisions of Russian Post. 8. On 17 October 2006 Russian Post concluded a contract with the limited liability company Multidisciplinary Processing (OOO Многопрофильная процессинговая компания – hereinafter “MPK”) and the telecommunications company Rostelekom, whereby MPK undertook to print Rostelekom’s telephone bills and deliver them through Russian Post to Rostelekom’s customers. 9. On 1 February 2007, under a separate contract, Russian Post leased electronic equipment from MPK. On 10 April 2007 MPK subcontracted the sorting, packing and the transfer of the equipment leased to Russian Post to a private joint-stock company, the Interregional Mail Centre (OAO Межрегиональный специализированный почтовый центр – hereinafter “MSPT”). 10. On 3 December 2007 the applicants and their parents acquired the limited liability company Alortag Management Limited, incorporated in Cyprus. 11. On 7 May 2008 MPK subcontracted the printing of the Rostelekom telephone bills to the limited liability company IPS M-City (OOO ИПС МСити – hereinafter “MCity”). 12. On 19 May 2008 Alortag Management Limited set up a Russian limited liability company, Chief Subscription Agency (ООО Главное подписное агентство – hereinafter “GPA”). Neither of the applicants held formal positions in GPA, but it appears that the second applicant was actively involved in its functioning. 13. On 16 July 2008 the chief of Russian Post’s Mail Service Directorate informed its client, the Russian subsidiary of French company Yves Rocher, the limited liability company Yves Rocher Vostok (OOO Ив Роше Восток), that from 1 October 2008 it would terminate the practice of collecting the client’s parcels from a specific distribution centre and that this service would henceforth be subject to a separate contract. Subsequently, Ms B., a manager at Yves Rocher Vostok, asked the second applicant for advice on handling the transfer of parcels from the distribution centre and he suggested that she use a private contractor, GPA. 14. On 2 August 2008 the financial director of Yves Rocher Vostok, Mr K.M., signed a freight forwarding agreement with GPA for the collection and transfer of parcels from the distribution centre at 23,600 Russian roubles (RUB) per shipment. On 10 August 2008 GPA subcontracted the freight forwarding services under that agreement to two specialist courier companies. GPA paid the couriers RUB 14,000 per shipment. GPA and its contractors provided those services to Yves Rocher Vostok until the end of 2012. 15. On 7 November 2008 the general director of MPK, Mr Sh., signed an agreement with GPA whereby the latter undertook to provide overall logistical services to MPK related to the printing, sorting, packing and distribution of telephone bills as well as the sorting, packing and transfer of electronic equipment to Russian Post. Subsequently, GPA subcontracted those services to seventeen specialist companies, including M-City. GPA and its contractors rendered the services to MPK until March 2013. 16. In the same period, the first applicant ran an increasingly public anti-corruption campaign targeting high-ranking public officials (see Navalnyy and Ofitserov v. Russia, nos. 46632/13 and 28671/14, § 15, 23 February 2016). In 2011-2012 he organised and led a number of rallies, including an assembly at Bolotnaya Square in Moscow on 6 May 2012 (see, among other sources, Frumkin v. Russia, no. 74568/12, §§ 7-65, ECHR 2016 (extracts)). 17. At the beginning of 2012 the first applicant investigated the off-duty activities of the chief of the Investigative Committee of the Russian Federation (“the Investigative Committee”), Mr Bastrykin. On 25 April 2012 the Investigative Committee, at the direct order of Mr Bastrykin, instituted criminal proceedings in embezzlement case against the first applicant (see Navalnyy and Ofitserov, cited above, hereinafter “the Kirovles case”). On 5 July 2012 Mr Bastrykin made a public statement expressing his determination to have the first applicant prosecuted. On 26 July 2012 the first applicant published an article about Mr Bastrykin, alleging in particular that his business activities and residence status were incompatible with the office he held (ibid., §§ 30-31 and 118). 18. On 4 December 2012 the general director of Yves Rocher Vostok, Mr B.L., lodged a complaint with the Investigative Committee, alleging that in 2008 unidentified persons had misled his company’s employees and had persuaded them to conclude a contract with GPA, thus depriving the company of a free choice of contractor. He stated that it was possible that the company had suffered significant damage as a result. 19. On 10 December 2012 the first applicant made a public plea for people to participate in the Freedom March, an opposition rally at Lubyanskaya Square on 15 December 2012, in defiance of a ban by the Moscow authorities. 20. On the same day the Investigative Committee decided to open a criminal file on the basis of material severed from the Kirovles case. The new file concerned suspicions of fraud by the applicants against Yves Rocher Vostok and the laundering of the proceeds of illegal transactions, offences set out in Articles 159.4 and 174.1 § 2 (a) and (b) of the Criminal Code. 21. On 20 December 2012 charges of fraud and money laundering were brought against the applicants under Articles 159.4 and 174.1 § 2 (a) and (b) of the Criminal Code in connection with acts allegedly committed against MPK and Yves Rocher Vostok. 22. On 13 February 2013 the second applicant requested that five Yves Rocher Vostok employees be questioned as witnesses, including the general director Mr B.L. and the manager Ms B., but the investigator rejected the request on 18 February 2013. It appears that the witnesses were questioned during the investigation, but the applicants were not informed of that fact or given the opportunity to have a formal faceto-face confrontation with them. 23. On 18 July 2013 the Leninskiy District Court of Kirov found the first applicant guilty of organising large-scale embezzlement in the Kirovles case and gave him a suspended prison sentence of five years. The Court subsequently found that those proceedings had been conducted in violation of Article 6 of the Convention (see Navalnyy and Ofitserov, cited above, §§ 102-21). 24. On 11 February 2013 the financial director of Yves Rocher Vostok, Mr K.M., submitted an internal audit report to the investigator stating that the company had not sustained any damage or loss of profits due to its agreement with GPA; it had been established by the auditors that GPA had charged the market price for its services. 25. On 28 February 2014 the Basmannyy District Court ordered that the first applicant be placed under house arrest. This preventive measure was maintained until 5 January 2015. 26. On 14 August 2014 the Zamoskvoretskiy District Court began hearing the applicants’ criminal case. 27. On 14 November 2014 the applicants requested that the court call and examine the general director of Yves Rocher Vostok, Mr B.L., the manager, Ms B. and several employees of Russian Post as witnesses. They also asked the court to obtain certain internal documents relating to the structure and functioning of Russian Post. The court dismissed those requests. 28. On 9 December 2014 the applicants asked the court to summon six witnesses, again including Mr B.L. and Ms B. 29. On 15 December 2014 the court, at the request of the prosecutor, issued a warrant compelling Mr B.L. to appear, however, it was not executed. The court subsequently allowed statements that he and Ms B. had given during the investigation to be read out. 30. On 19 December 2014 the court concluded the trial and said it would deliver a judgment on 15 January 2015. 31. At about 4 p.m. on 29 December 2014 the applicants and their defence counsel were summoned by telephone to appear in court at 9 a.m. on 30 December 2014 for delivery of the judgment, which had been brought forward from 15 January 2015 for unknown reasons. 32. On 30 December 2014 the court delivered the introductory and operative parts of the judgment. The applicants were found guilty of money laundering and of defrauding MPK and Yves Rocher Vostok and were convicted under Articles 159.4 §§ 2 and 3 and 174.1 § 2 (a) and (b) of the Criminal Code. The first applicant received a suspended sentence of three and a half years and the second applicant a prison sentence of the same duration, to be served in a correctional colony. They were also fined RUB 500,000 each and had to pay jointly RUB 4,498,546 in damages to MPK. The court ordered that the first applicant should remain under house arrest and that the second applicant be placed in “pre-trial detention”, with his term of imprisonment running from that day. Delivery of the judgment in full was adjourned until 12 January 2015. 33. The second applicant appealed against his detention the same day. 34. The first applicant appealed against the extension of his house arrest on 31 December 2014. 35. On 12 January 2015 the applicants appealed against the judgment of 30 December 2014 on the merits. They received the full text of the judgment on the same day, which included the reasons for finding the applicants guilty of fraud. The court found that the applicants had set up a “fake company”, GPA, with the intention to use it as an intermediary to offer services to two clients of Russian Post, MPK and Yves Rocher Vostok. It held that the second applicant had taken advantage of insider information that Russian Post had ceased to provide the companies with certain services for lack of operational capacity and had convinced those clients to use GPA as a substitute; that he had misled the clients about GPA’s pricing policy and its relationship with Russian Post, thus depriving them of the freedom of choice of service providers; that he had promoted his company’s services while knowing that it would have to subcontract the work to other companies; and that GPA had retained the difference in price between what MPK and Yves Rocher Vostok paid for its services and what GPA paid to its subcontractors. The court concluded that the latter margin had been stolen from MPK and Yves Rocher Vostok by the applicants through GPA. The court further established that the amounts in question constituted the proceeds of crime, and that using that money to pay GPA’s office rent, legal services, dividends to the applicants and for transfers to affiliated companies had constituted money laundering. 36. On 19 January 2015 the Moscow City Prosecutor’s Office appealed against the first-instance judgment on the grounds that the sentence given to both applicants had been too lenient. 37. On 28 January 2015 the applicants challenged the accuracy of the verbatim records of the first-instance hearing. Only a few of their corrections were accepted. 38. On 11 February 2015 the applicants lodged additional points of appeal and a request that six witnesses be called and examined, including Mr B.L. and Ms B. 39. On 17 February 2015 the Moscow City Court upheld the firstinstance judgment, except for the part imposing a fine and awarding damages to MPK, which was reversed. 40. On 27 April 2015 the applicants lodged a cassation appeal. 41. On 26 June 2015 the Moscow City Court refused leave to lodge a cassation appeal.