AKTOPLOIKES GRAMMES THIRAS v. UKRAINE
Inadmissible
Aleš Pejchal;André Potocki;Angelika Nußberger;Ganna Yudkivska;Mark Villiger;Vincent A. De Gaetano
The applicant, Aktoploikes Grammes Thiras Société Maritime, is a Greek private company. It is represented before the Court by Mr P. Bitsaxis, a lawyer practising in Athens. The Ukrainian Government (“the Government”) were represented by their Agent, most recently Ms N. Sevostianova, of the Ministry of Justice of Ukraine. The facts of the case, as submitted by the parties, may be summarised as follows. In November 2000 the applicant company entered into a contract with a Ukrainian joint-stock company, P. Under the contract, P. was to carry out repair work on a vessel owned by the applicant company. The work was to be done in a Ukrainian port. All disputes arising out of this contract were to be settled by arbitration in the Court of Foreign Commercial Arbitration at the Chamber of Commerce and Industry in Kyiv. I., a senior executive of P., was in charge of all customs formalities relating to the vessel’s temporary stay in Ukraine. On 17 January 2001 P. filled in a customs declaration on a one-year temporary stay of the vessel on the customs territory of Ukraine. The vessel had to be removed from the customs territory of Ukraine by 17 January 2002. On 17 January 2002 a customs declaration on removal of the vessel was signed but the vessel was not removed. On 30 January 2002, the customs service seized the vessel because of a violation of customs regulations. It was noted in the seizure act that the vessel’s customs value was UAH 319,164 (at the material time around EUR 70,000). By a decision of 3 April 2002, the Leninskyy District Court terminated the administrative offence proceedings against I. as time-barred but ordered confiscation of the vessel as an object with which customs regulations were violated. I. did not attend the court hearing and submitted a request that the case be examined in his absence. The court found that the vessel should have been removed from the customs territory of Ukraine by 17 January 2002. The applicant company’s representatives stated that the weather conditions had been unfavourable so the vessel had not left the customs territory of Ukraine and they had requested an extension of its stay in the Ukrainian port. The court found that the weather conditions between 10 and 20 January 2002 had been fine but the vessel had not been removed. There was also no evidence that an application for extension of its temporary stay had been lodged. The decision of 3 April 2002 was final and at the material time it was not subject to appeal. On 21 June 2002 the State Bailiffs’ Service put the vessel on the seizure list and prohibited it to leave the port. On 15 July 2002 the applicant company instituted proceedings against the bailiffs. It complained that on 5 July 2002 a bailiff Z. had arrived on the vessel in question but had refused to produce any enforcement documents. The applicant company stated that in its decision of 3 April 2002 the Leninskyy District Court had failed to specify that it was the applicant company’s vessel that had to be confiscated. It further stated that the enforcement proceedings had been instituted unlawfully and that the applicant company had not been mentioned as a party of the enforcement proceedings. The applicant company referred to Article 48 of the Law “On Property”, which provided for general protection of property rights, and requested the court “to stop actions which breach the company’s property rights”. Later it amended its claims and requested, without any particular specification, that its property rights over the vessel be recognised, that the vessel be removed from the seizure list and the use of the vessel not be hindered. On 17 July 2002 the Sevastopol Commercial Court rejected the applicant company’s claim since it ought to have been considered by a court of general jurisdiction. On 2 September 2002 the Sevastopol Commercial Court of Appeal quashed that decision and remitted the case for fresh consideration. The court noted that the applicant requested “protection of property rights” and an alleged breach of such rights consisted in that on 5 July 2002 the bailiffs visited the vessel without “any legal grounds”. Since the applicant was not a party to the enforcement proceedings, it had a right to lodge a claim for its property rights protection under the Commercial Procedure Code in a commercial court. On 2 December 2002 the Sevastopol Commercial Court rejected the applicant company’s claim. It held that, under section 59 of the Bailiffs Service Act, a person who stated that the seized property belonged to him or her, could lodge a claim with the court asking for his or her rights over the property to be recognised and for the property to be excluded from the seizure list. The creditor and the debtor could be defendants in such a case. In the present case the vessel was to be confiscated by the State. The bailiffs’ service was not a proper defendant in this case. The applicant company appealed stating that the bailiffs’ actions were unlawful. The applicant company reiterated that the court decision had not specified it as a party to the enforcement proceedings. On 13 February 2003 the Sevastopol Commercial Court of Appeal quashed that decision and found for the applicant company. On its own initiative the court replaced the defendant in the case by the Balaklava District State Tax Inspectorate. The court further held that the vessel was owned by the applicant company and since the latter had not breached customs regulations there had been no legal ground for the vessel’s confiscation. The court further noted that according to Article 149 of the Customs Code of Ukraine in case of impossibility to confiscate the object of the breach of customs rules a person responsible for such breach should pay the cost of such object and that “the analysis of the existing legal provisions enable[d] the court to conclude that only an object owned by an offender could be confiscated”. By letters of 5 and 27 August 2003 the Ministry of Justice of Ukraine informed the Greek Embassy in Ukraine that the enforcement proceedings in the case had been stayed following the decision of 19 August 2002 of the Balaklavskyy District Court. No copy of this decision was submitted by the parties. On 11 November 2003 the Higher Administrative Court of Ukraine quashed the decision of 13 February 2003 and upheld the decision of 2 December 2002. The court held that the applicant company’s property right to the vessel had never been disputed, since the vessel had been confiscated not as property of I., but as the object with which customs regulations had been violated. The confiscation of the vessel was carried out in connection with proceedings relating to an administrative offence. By finding for the applicant company the Sevastopol Commercial Court of Appeal had actually reviewed the decision of 3 April 2002, which was beyond its competence. The applicant company appealed stating that by adopting the decision of 3 April 2002 the Leninskyy District Court had breached the law and the Convention provisions. On 10 January 2004 the Supreme Court of Ukraine refused a request by the applicant company for leave to appeal on points of law. The applicant company sought in the commercial court to terminate the enforcement proceedings but by a decision of 6 April 2004 upheld by higher courts this request was rejected as falling outside the commercial court’s jurisdiction. According to the applicant company, the vessel was sold at an auction to an unknown person. The applicant company did not institute any proceedings, either against the P. company or I., seeking compensation for the damage incurred. Article 287 of the Code on Administrative Offences, in force at the material time, provided that decisions imposing an administrative sanction could be appealed, except for decisions given by the first-instance court. The latter were final and were not subject to the ordinary appeal procedure. According to Article 149 of the Customs Code of Ukraine, in force at the material time, the bailiffs were in charge of enforcement of the court’s decisions on confiscation of property in cases on breach of customs regulations. In case of impossibility of confiscation the offender had to pay its value. According to Article 29 of this Code an item could be confiscated only if it belonged to an offender, “unless otherwise provided for by the laws of Ukraine”.