FIRST SECTION

CASE OF KHODORKOVSKIY AND LEBEDEV v. RUSSIA

(Applications nos. 11082/06 and 13772/05)

JUDGMENT

STRASBOURG

25 July 2013

FINAL

25/10/2013

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Khodorkovskiy and Lebedev v. Russia,

The European Court of Human Rights (Chamber), sitting as a Chamber composed of:

Isabelle Berro-Lefèvre, President, Khanlar Hajiyev, Mirjana Lazarova, Linos-Alexandre Sicilianos, Erik Møse, Ksenija Turković, Dmitry Dedov, judges, and Søren Nielsen, Section Registrar,

Having deliberated in private on 2 July 2013,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in two applications (nos. 11082/06 and 13772/05) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Russian nationals, Mr Mikhail Borisovich Khodorkovskiy (“the first applicant”) and Mr Platon Leonidovich Lebedev (“the second applicant”) on 16 March 2006 and on 28 March 2005 respectively.

2. Each applicant was represented by a group of lawyers. The legal team for the first applicant included Mrs K. Moskalenko and Mr A. Drel, lawyers practising in Moscow, Mr N. Blake QC, Lord D. Pannick QC, and Mr J. Glasson, lawyers practising in London, and Dr W. Peukert, a lawyer practising in Germany. The second applicant’s legal team included Ms Y. Liptser and Mr Y. Baru, lawyers practising in Moscow, as well as Dr W. Peukert, the late Prof A. Cassese, and Prof Ch. Tomuschat. The Russian Government (“the Government”) in the two cases were represented by Mr P. Laptev and Mrs V. Milinchuk, the former Representatives of the Russian Federation at the European Court of Human Rights, and subsequently by Mr G. Matyushkin, the Representative of the Russian Federation at the European Court of Human Rights.

3. The applicants complained, in particular, about their criminal conviction for tax evasion and fraud, as well as about other events related to the criminal proceedings against them. They alleged, in addition, that their prosecution was motivated by political reasons, in breach of Article 18 of the Convention.

4. By decisions of 27 May 2010 (in the second applicant’s case) and 8 November 2011 (in the first applicant’s case), the Court declared the applications partly admissible.

5. The applicants and the Government each filed further written observations on the merits (Rule 59 § 1 of the Rules of Court). The Chamber having decided, after consulting the parties, that no hearing on the merits was required (Rule 59 § 3 in fine ), the parties replied in writing to each other’s observations.

6. On 2 July 2013 the Chamber decided to join the two cases, pursuant to Rule 42 § 1 of the Rules of Court.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

7. Mr Khodorkovskiy (the first applicant) was born in 1963. He is currently serving a prison sentence in a penal colony in the Karelia Region. Mr Lebedev (the second applicant) was born in 1956 and is now serving a prison sentence in the Yamalo-Nenetskiy Region.

A. Introductory summary

9. The second applicant was the first applicant’s business partner and a close friend. In 1990s the second applicant was the chief executive of the Menatep bank and a top-manager of the Rosprom holding. From 1998 the second applicant worked as a one of the directors of Yukos-Moskva Ltd. He was also one of the major shareholders of Yukos.

10. Yukos was created as a result of the mass privatisation of the State oil and mining industry which took place in the mid-1990s. Following privatisation, new management techniques were introduced and the companies acquired by Yukos were reorganised. In particular, sales of the producing companies were re-directed to new trading companies. As a result, Yukos became one of the most successful businesses in Russia, and the first applicant was mentioned in the press as one of the richest persons in Russia.

11. Amongst other acquisitions by Yukos in the course of the privatisation were 20 per cent of the shares of a large mining company, Apatit Plc (hereinafter referred to as “Apatit”), a major supplier of the apatite concentrate in the country. The acquisition of Apatit shares gave rise to litigation in which the State Property Fund opposed Yukos. The former claimed that Yukos had failed to meet its obligations under the privatisation agreement. That litigation ended in 2002 with a friendly settlement: the State Property Fund accepted a termination fee while acknowledging the rights of Yukos to 20 per cent of Apatit shares.

12. Most of the Yukos produce was sold abroad. However, Yukos did not trade directly with foreign firms but sold its output to several Russian companies (“trading companies”) registered in the zones with special tax regime, in particular in the town of Lesnoy, situated in the Sverdlovsk region in the Urals (also referred to as the “ZATO”, an abbreviation translated as “closed administrative territorial formation”). Special taxation in Lesnoy was established by the Federal Law “On Closed Administrative-Territorial Entities” of 14 July 1992 (the “ZATO Act”). The ZATO Act was supposed to attract investors to economicly depressed areas and foster economic growth there.

13. Such mode of operation persisted for several years; Yukos trading companies were operating on the basis of “preferential taxation agreements” with the administration of the Lesnoy town. Those agreements were renewed every year since 1998. Thus, for example, on 28 January 2000 the town administration concluded a preferential tax agreement with Business Oil Ltd (hereinafter referred to as “Business Oil”), the main trading company of Yukos in Lesnoy, providing it, amongst other tax cuts, a 75 per cent reduction of the “local” part of the corporate income tax (i.e. of the part destined for the local budget). Under that agreement Business Oil was supposed to transfer a certain amount of money to the town budget (5 per cent of the amount of tax cuts obtained). A major part of the profits of Business Oil and other trading companies were later transferred on a gratuitous basis in the form of investments in the “fund for financial support for production development”, which was founded within Yukos on the basis of a resolution of the Board of Directors.

14. In addition to obtaining tax cuts, the trading companies registered in the low-tax zones paid some of their taxes not with money but with promissory notes issued by Yukos. Those notes were accepted by the local authorities as a method of payment of taxes and were later honoured by Yukos. The trading companies also enjoyed VAT exemption in respect of the oil they were selling abroad. VAT was reimbursed in monetary form from the State budget to the bank accounts of those companies. Tax audits carried out in 1999 confirmed the eligibility of Business Oil for tax cuts.

15. The applicants’ personal income consisted of the salaries they received from Yukos and the dividends from the Yukos shares they owned. In addition, both applicants earned substantial amounts of money as self-employed contractors (or “individual entrepreneurs”, in the Russian terminology), by providing consulting services to foreign firms. As “individual entrepreneurs” the applicants were entitled to preferential taxation under the Law “On Simplified Form of Taxation, Accounting and Reporting for Small Businesses” (No. FZ-222, 29 December 1995, the “Small Business Act”).

18 . In parallel with criminal proceedings against the applicants the Russian Tax Service [1] in 2004 lodged a claim for tax arrears owed by Yukos, which led to proceedings before the Moscow Commercial Court. Those proceedings concerned the operation of the “tax-minimisation scheme” using trading companies, described above. In the following months more claims concerning the tax situation of Yukos and its affiliates were lodged. The commercial courts granted most of the Tax Service’s claims. As a result Yukos had to declare itself insolvent and bankruptcy proceedings were started, which ended up by a forced sale of its assets and, finally, by the liquidation of the company on 12 November 2007. The company ceased to exist, leaving over RUB 227.1 billion (around 9.2 billion US dollars (USD)) in unsatisfied liabilities. For further details on the tax claims and Yukos bankruptcy see the statement of facts in the case of OAO Neftyanaya kompaniya YUKOS v. Russia (no. 14902/04, judgment of 20 September 2011), hereinafter referred to as the Yukos case.

19. In 2004 and in the following years similar tax claims (related to the operation of trading companies in various low-tax zones within Russia) were lodged against at least three other major oil companies, namely Lukoil, Sibneft, or TNK-BP. However, in respect of those companies the Government ultimately accepted a settlement; tax claims were dropped in exchange of considerable amounts paid by those companies to the State budget, which allowed those companies to survive.

B. Events preceding criminal prosecution of the two applicants

20. The applicants alleged that the criminal proceedings against them, described below, had been politically and economically motivated. In support of that assertion they referred to a large number of events which preceded the criminal proceedings against them and their partners. Those facts, in so far as relevant, are summarised below.

1. Business projects of Yukos

21 . In 2002-2003 Yukos began to pursue a number of ambitious business projects which would make it one of the strongest players on the market and independent of the State. In particular, Yukos challenged the official Russian petroleum policy of tacit alignment with the OPEC policy of reducing oil production. Yukos sought instead to maximise its oil production and market share. Further, from 2003 Yukos was in the process of merging with Sibneft, another large Russian oil company. The merger was supposed to take place in two steps: firstly, completion of the deal on paper, and then unification of the new company’s management structures. The first aspect of the deal was finalised in October 2003; the second was supposed to be implemented by January 2004. Yukos was also engaged in merger talks with the US-based Exxon Mobil and Chevron Texaco companies. According to the applicants, Chevron Texaco was considering the purchase of 25 per cent of Yukos shares, while Exxon Mobil planned to buy at least 40 per cent of the future Yukos Sibneft company.

22. Yukos was also planning to build a liquid gas pipeline to the Arctic Ocean in order to export natural gas to the western part of Europe without passing through the State-controlled pipelines. Similar plans existed in respect of China; here the applicants advocated building an oil pipeline along an alternative route to that favoured by the Presidential Administration.

23. Finally, Yukos and the State-owned company Rosneft were involved in a public struggle for control over certain oil fields. Yukos was successfully competing with Gazprom, another State-owned company, on the natural gas market.

2. Political activities of the first applicant

25. In 2001 the first applicant founded a non-profit NGO, the “Open Russia Foundation”. Its annual budget in 2003 amounted to approximately USD 200 million. This NGO cooperated with other Russian human rights NGOs, such as Memorial, the Moscow Helsinki Group, etc., and was involved in a number of humanitarian and educational projects across the country.

26 . From at least 2002 the first applicant openly funded opposition political parties, namely Yabloko and the SPS (Union of Right Forces). He also made certain public declarations criticising anti-democratic trends in Russian internal politics. A number of his close friends and business partners became politicians. Thus, Mr Dubov and Mr Yermolin were members of the Duma (the lower chamber of the Russian parliament); Mr Shakhnovskiy, Mr Nevzlin, Mr Guryev and Mr Bychkov were all at various times members of the upper chamber, the Federation Council.

3. First inquiries into business activities of Yukos in 2002-2003

(a) The GPO inquiry of 2002

28. On 6 March 2001 Business Oil, the main trading company of Yukos in the Lesnoy town at the time, terminated its operations and was removed from the register of taxpayers of the Lesnoy town. Sales of Yukos oil were henceforth conducted through other trading companies registered in other low-tax zones.

29. In July 2001 the Tax Service of the Sverdlovsk Region inspected the activities of the Lesnoy Tax Inspectorate. On 8 July 2001 it issued a report which established that tax cuts granted to Business Oil were lawful.

30 . In 2002 the administration of the Lesnoy town commissioned an economic study from the Urals Branch of the Russian Academy of Sciences which concerned operations of the trading companies registered in the town. The report (called “legal and economic expert review”) came to a conclusion that the impugned trading companies were all lawfully entitled to claim tax exemptions under the federal law relating to taxation in closed administrative territories. The experts also concluded that the refund of tax overpayments by Yukos promissory notes did not inflict economic loss on the budget and that the trading companies were entitled to pay tax in advance. Finally, the experts concluded that the Lesnoy town administration was entitled to accept tax payments by way of promissory notes in 1999.

31. On 29 March 2002 a case was opened to investigate the acceptance by the Lesnoy town administration of tax payment by way of promissory notes from Yukos. That case was closed on 29 August 2002. The reasons why the case was closed were summarised by the GPO in July 2003 in the following terms:

“According to the conclusions of a legal and economic expert review of the case, there were no losses caused to the federal budget and municipal budget of Lesnoy town as a result of granting tax privileges, receiving taxes in the form of Yukos promissory notes and fulfilling the investment programme. Detected violations of the legislation by conducting these financial operations may be regarded as the subject matter of administrative and economic legislation. The receipt of taxes by way of promissory notes issued by Yukos was registered in the municipal budget for the 1999-2000 fiscal year, the federal budget received payment only in the monetary form”.

It is unclear whether the “legal and economic expert review” referred to by the GPO was the same as the report by the Urals Branch of the Russian Academy of Sciences prepared at the request of the town administration (see paragraph 30 above), or whether a different study was made at the request by the GPO.

(b) Presidential Directive No. Pr-2178

32. In November 2002 governors of several Russian regions wrote a letter to the then General Prosecutor of the Russian Federation, Mr Ustinov. In that letter they complained that Apatit was abusing its dominant position on the apatite concentrate market and boosting prices of phosphate fertilisers, which, in turn, increased food prices. They also alleged that Apatit was using various schemes to evade or minimise taxes. They urged General Prosecutor Ustinov to return Apatit to State control and to apply anti-trust measures in order to make Apatit reduce prices.

33. In December 2002 the governor of the Pskov Region wrote to the then President of the Russian Federation, Mr Putin. He drew the President’s attention to the friendly settlement in respect of the Apatit shares (see paragraph 11 above) and claimed that its terms were contrary to the interests of the State, since the amount received by the State in pursuance to that settlement was significantly lower than the market price of the shares.

34. On 16 December 2002 President Putin issued Directive No. Pr ‑ 2178 requiring reports to be obtained in relation to whether there had been “violations of the existing legislation committed during the sale of shares of the Apatit and whether the State had suffered any loss as a consequence of the friendly settlement that had been approved by the Moscow Commercial Court in 2002”. The directive was addressed to Prime Minister Kasyanov and General Prosecutor Ustinov.

36. On 27 April 2003 the first applicant met President Putin to discuss the merger between Sibneft and Yukos. According to Mr Dubov, the applicant’s business partner, Mr Putin approved the merger but warned the first applicant against political activity, namely funding the Communist Party.

37. On 28 April 2003 General Prosecutor Ustinov reported to the President that there was no basis for a criminal case in relation to the circumstances surrounding the acquisition of a 20 per cent block of shares of Apatit. The inquiry had not established that Apatit had been abusing its position on the market or that the amount of the friendly settlement reached with the State privatisation agency had been unfair. The terms of the friendly settlement had been approved by the Prime Minister, Mr Kasyanov. Apatit’s tax payments had been constantly monitored by the Tax Service; although Apatit and its affiliates had been subjected to various penalties and financial sanctions in the past, and a new audit was underway, the GPO did not see any reason to start criminal proceedings in this respect. At the same time the Government insisted on the expediency of entering into an agreement with Yukos in order to settle the matter.

38. On 29 April 2003 Prime Minister Kasyanov wrote to President Putin informing him that the law enforcement agencies had stated that they would not commence a criminal prosecution as there was no corpus delicti in relation to the circumstances surrounding the acquisition of a 20 per cent block of shares of Apatit.

(c) The cases of Mr Pichugin and other senior managers of Yukos

39. In one of his interviews in April 2003 the first applicant stated publicly that he intended to leave business and go into politics, and confirmed his funding of the SPS and Yabloko parties. He also said that some major Yukos shareholders supported the Communist Party.

40. On 19 June 2003 a Yukos senior security official, Mr Pichugin, was arrested and charged with murder in an unrelated case. This arrest led to Mr Pichugin’s trial and conviction for murder (for a more detailed description of the facts of the case, see Pichugin v. Russia , no. 38623/03, 23 October 2012).

C. Arrest of the two applicants. Detention on remand of the second applicant during the trial

43. On 27 June 2003 the second applicant (Mr Lebedev) was summoned for questioning within the Apatit case. The questioning was scheduled for 10 a.m. on 2 July 2003.

44 . On 2 July 2003 the second applicant was admitted to Vishnevskiy Hospital in connection with his chronic diseases. At 9.50 a.m. Mr Drel, the second applicant’s lawyer, called the investigator and informed him that his client had been urgently hospitalised in an ambulance car. According to a certificate from the hospital the applicant was admitted there at 12.56 p.m. On the same day the GPO investigator accompanied by armed FSS (Federal Security Service) officers arrived at the hospital. At 3.20 p.m., the doctors, at the request of the investigator, examined the applicant. The doctors observed an improvement of his condition and described his condition as “satisfactory”. The second applicant was arrested as a suspect in the criminal case concerning the privatisation of Apatit and brought to the Lefortovo remand prison. According to the FSS officers present during the second applicant’s arrest, he threatened the investigator with criminal liability for his unlawful prosecution. He also threatened to bring a press campaign against the GPO officials involved in his case. In the following months the second applicant’s detention was repeatedly extended. For further details on the second applicant’s detention until November 2004 see Lebedev v. Russia , no. 4493/04, partial decision on admissibility of 25 November 2004, decision on admissibility of 18 May 2006, and judgment of 25 October 2007, hereinafter referred to as the Lebedev (no. 1) judgment.

45. On 23 October 2003, whilst the first applicant was away from Moscow on a business trip to eastern Russia, chief investigator Karimov summoned him to appear in Moscow as a witness on the next day at noon. The first applicant’s staff informed the GPO that the first applicant was away from Moscow until 28 October 2003. On 24 October 2003, the first applicant having missed the appointment, the investigator Karimov ordered his enforced attendance for questioning.

46. In the early morning of 25 October 2003 a group of armed law-enforcement officers approached the first applicant’s aeroplane on an airstrip in Novosibirsk, apprehended him, and flew him to Moscow. The first applicant was charged, arrested as a suspect and later detained on remand. For more details concerning the detention on remand of the first applicant see Khodorkovskiy v. Russia, no. 5829/04, §§ 22 et seq., 31 May 2011, hereinafter referred to as the Khodorkovskiy (no. 1) judgment.

1. Extensions of the second applicant’s detention on remand by the court pending trial

47 . On 6 April 2004 the Meshchanskiy District Court decided that the second applicant should remain in detention pending trial. No reasons were given for that decision. On 15 April 2004 the District Court dismissed the application for release lodged by the defence. The court held as follows:

“[The court] takes into account that [the applicant] is accused of a number of offences, including serious ones, punishable with more than two years’ imprisonment. The combination of the seriousness of the charge and the information about the applicant’s character gives reason to suspect that, if released, the applicant may abscond from trial, interfere with the proceedings and influence witnesses. [In particular], the persons suspected of having committed the offences in concert with [the applicant] have gone into hiding. [The applicant] maintains international connections. [He] is accused of offences committed in his capacity as a manager of commercial companies. The persons with whose assistance, according to the investigating authorities, [the applicant] committed the offences, still work in the companies and depend on [him] financially and otherwise. [The applicant] may therefore influence them ...”

The District Court concluded that the second applicant should be kept in custody pending trial.

48. On 19 August 2004 the second applicant’s lawyers lodged an application for release on behalf of the second applicant, referring, in particular, to his poor health. The District Court refused to release him, on the basis that the second applicant could receive adequate medical aid in the remand prison. The court also held that the second applicant’s continuous detention was justified in view of the gravity of crimes imputed to him, and “information about [the second applicant’s] character”. The District Court also noted that the persons with whose assistance the second applicant had allegedly committed the offences still worked in the companies and depended on him.

49 . At the hearing of 10 September 2004 the prosecutor requested the court to extend the second applicant’s detention on remand until 26 December 2004, since the previous detention order would expire on 26 September 2004. After that the defence declared that they needed to study the request and asked for a one-hour adjournment. The court gave the adjournment sought. An hour later the second applicant asked for one hour more to prepare a reasoned reply to the detention request. Again, the court granted that motion. At the end of the period the defence lodged a written reply to the prosecutor’s motion. The defence objected but the court granted the request and extended the second applicant’s detention on remand as requested. The reasons given by the District Court in its decision of 10 September repeated the reasons stated in the decision of 15 April 2004.

50. The defence appealed. According to the Government, the brief of appeal against the extension order of 10 September 2004 was submitted on 20 September 2004. On 13 October 2004 the Moscow City Court upheld the decision of the lower court. The City Court noted that “the circumstances in which the imputed acts had been committed” suggested that, if released, the second applicant might pervert the course of justice by putting pressure on witnesses or otherwise influencing them, or might abscond, and that the City Court “had not discovered any reason to repeal the [lower] court’s decision as requested by the brief of appeal”.

51. At the hearing of 14 December 2004 the prosecutor again requested an extension of the second applicant’s detention until 26 March 2005. That request was made orally. The defence was given two hours to prepare written submissions. The defence produced written arguments, following which the court granted the request and extended the detention until 26 March 2005, giving the same arguments as in the detention orders of 15 April and 10 September 2004.

52. The appeal against the detention order of 14 December 2004 was lodged on 24 December 2004 and examined on 19 January 2005 when the Moscow City Court upheld it.

53. At the hearing of 2 March 2005 the State prosecutor requested a new extension of the second applicant’s detention pending trial. The prosecutor referred to the second applicant’s oral statement of 1 March 2005, when he had said that he “would haunt the prosecutor until his last day”. In reply to the request the defence did not ask for additional time to prepare their arguments. The second applicant explained, in particular, that there had been nothing new in the prosecution’s requests for detention since 2003, and that he was prepared to give his arguments immediately. The court heard the defence and granted the request extending the second applicant’s detention until 26 June 2005. That detention order repeated the reasons given in the previous detention orders.

54. The detention order of 2 March 2005 was appealed against on 11 March 2005; the first hearing was scheduled for 23 March, but the defence sought an adjournment in order to obtain a Ruling by the Constitutional Court of 22 March 2005 (no. 4-P). The appeal was therefore examined and dismissed on 31 March 2005.

2. Conditions of detention of the second applicant

55. The second applicant claimed that in the remand prison IZ–77/1 where he had been detained from 21 October 2003 until his transferral to the correctional colony on 27 September 2005, he had been deprived of all physical exercise. Thus, he constantly missed his daily walks because of the need to read the materials in the case file or participate in the hearings. On weekends and holidays, when there were no court hearings he could not go outside because he was ill. Further, the food in the prison was incompatible with his illnesses, and he only received appropriate food from his relatives or lawyers to a limited extent. It was impossible to have a hot meal at midday when there was a hearing or when he was reading the case file. During the Christmas holidays the second applicant was transferred to an overcrowded “common” cell. Despite his requests, he was not given a calculator or a magnifying glass. As a result, he was able neither to prepare for the hearings nor to have a rest.

56 . The second applicant complained to the prison doctors about his health problems. On 2 March 2004 he was examined by a panel of doctors composed of the Chief Physician of the Moscow Health Department, Deputy Medical Director of the Moscow Prisons Department, Healthcare Director of the remand prison, and an infectiologist. The panel described his state of health as follows:

“[The applicant] is suffer[ing] from neuroculatory dystonia of the hypertensive type, chronic non-complicated sub-acute hepatitis, i.e. without transformation into cirrhosis and portal hypertension.”

57 . On 18 August 2005 the second applicant was placed in a solitary confinement cell (or “isolation cell”) as a punishment, allegedly for refusing to go outside for a daily walk. The documents produced by the Government also indicated that the applicant had refused to go to the shower rooms, whereas, according to the applicant, the remand prison did not have a bath-house for inmates. According to the applicant, the cell was very small and had no natural light or ventilation. He did not receive hot meals. It was prohibited to lie or even sit on the bed between 6 a.m. and 10 p.m. The bed was very close to the toilet pan. The water for flushing, drinking and washing was available from the water-tap above the toilet pan. The second applicant spent seven days in that cell.

58 . The Government described the conditions in the isolation cell as follows. The cell in which the second applicant was placed measured 5.52 square metres, which was more than the minimal surface area established by law. The second applicant was detained in the cell alone. The cell had a folding bed, a washbasin with cold water, a toilet, a shelf for toiletries, a chair and a table. The cell was ventilated naturally, and was lit by a day-time lamp and a night-time lamp (dezhurnoye osvescheniye). In addition, the cell had a window measuring 60 x 90 cm. The cell was equipped with a cistern for boiled water which was supplied by the warders when necessary. Referring to the certificates issued by the head of the remand prison, Mr Tagiyev, dated 7 August 2008, the Government alleged that illumination, temperature and humidity in the isolation cell had corresponded to the sanitary standards. The distance between the toilet and the bed was one metre, which was explained by the small dimensions of the cell; such a distance, however, respected basic requirements of hygiene. The bed was unfolded during the night, namely between 11 p.m. and 6 a.m. During the daytime the second applicant could sit on the chair. The Government also attached a report of inspection of sanitary conditions of certain other premises of the remand prison (not apparently related to the cells where the second applicant was detained), dated January 2006, as well as two reports of the inspection of the ordinary cells where the second applicant was detained dated February 2004 and January 2005, which concluded that sanitary condition of the cells was satisfactory. The Government also produced a contract with a firm in charge of disinfestation of the remand prison, dated 15 August 2005, and several “certificates of completed work”, dated 2006 and later.

59 . Further, in the Government’s words, while in detention in the isolation cell the second applicant was provided with hot meals three times a day in accordance with the established standards. The Government produced extracts from prison’s kitchen record, describing composition of the meals served to the prisoners. The second applicant had a right to a one-hour daily walk during the daylight hours.

60 . On the hearing days the detainees were provided with dry meals; in the court building they were given hot water to prepare tea, coffee, or instant food. As follows from the documents submitted by the Government, in 2004-2005 the second applicant took part in over 160 days of hearings. However, he always refused to take the dry meal; he preferred the food he received from his relatives. The Government produced a handwritten waiver by the second applicant whereby he refused to receive dry meals. The doctors did not recommend him any special diet, so he could have eaten the same food as other prisoners.

D. Criminal prosecution of the applicants

1. Investigative actions by the GPO in 2003

61 . On 4 July 2003, soon after the arrest of the second applicant, the first applicant was summoned to the GPO and interviewed as a witness in the criminal case concerning Apatit. He appeared before the investigator and gave testimony. During the interview he was assisted by Mr Drel, one of his and the second applicant’s lawyers.

62. On an unspecified date in July 2003, the First Deputy General Prosecutor, Mr Biryukov, ordered that the case concerning tax payments of the trading companies registered in the Lesnoy town, which had been closed on 29 August 2002 (see paragraph 31 above), be re-opened and transferred to the GPO.

63. On 8 July 2003 the prosecution searched the premises of the regional office of the State Property Fund, situated in Murmansk, which could have held information on the privatisation of Apatit.

64. On 9 July 2003 the investigators searched the premises of Apatit.

65. On 10 July 2003 the prosecution searched the premises of the bank Menatep Sankt-Petersburg, which was affiliated with Yukos. The search was authorised by the Deputy General Prosecutor, Mr Biryukov, in a decision of 8 July 2003.

66. On 29 July 2003 the GPO searched the premises of Russkiye Investory Plc.

67. On 7, 8 and 14 August 2003 new searches were carried out in the premises of Menatep Sankt-Petersburg.

68 . On 16 August 2003 the GPO obtained a report by two experts, Mr Yeloyan and Mr Kupriyanov. That report calculated damages allegedly suffered by Apatit as a result of the manipulation with the trading prices of apatite concentrate. It compared the net profit of Apatit during the periods when apatite concentrate was sold independently and when it was sold through intermediaries proposed by the Yukos management.

69 . On 3 October 2003, based on the warrant issued by the Deputy Prosecutor General on the same day, the investigative team, headed by investigators Mr Pletnev and Mr Uvarov, carried out the first search in Yukos’s premises and in the homes of its senior managers located in the village of Zhukovka, Moscow Region, building no. 88. In particular, the investigators searched the homes of the second applicant, the homes of Yukos vice ‑ president Mr Brudno, and the home of the applicant’s friend, Mr Moiseyev. The investigators also searched the office of Mr Dubov, a Duma Deputy. According to the applicants, the investigators entered the building and started the searches without having produced a search warrant. The searches were attended by several attesting witnesses, in particular Ms Ardatova and Ms Morozova, cleaning ladies.

70. The applicant indicated that the search had been carried out simultaneously on several floors of the building, so the attesting witnesses had been physically unable to see what materials had been seized. Furthermore, the documents found during the search were seized and packed in bulk, without detailed lists enumerating particulars of those documents. The documents seized during the search were later added to the materials of the case-file. Some of the documents and objects seized during that search were added to the case file by an order of 11 February 2004.

71 . On 9 October 2003 the investigators, based on a search warrant issued on the previous day by the Deputy Prosecutor General, searched the offices of ALM Feldmans, a law firm providing legal services to Yukos, and the offices of the applicants’ lawyer, Mr Drel, all located in the Zhukovka village. According to Mr Rakhmankulov, who testified about the circumstances of the searches later at the trial, he had asked investigator Mr Karimov whether the latter had been aware that the rooms in question had been rented by the law office of Mr Drel. Mr Karimov had replied in the affirmative. Mr Moiseyev testified that he had informed the investigators that the offices they had been searching belonged to a lawyer. At the entrance to the floor of the building there had been a sign identifying Mr Drel as a lawyer. The files seized during the search were labelled as containing lawyers’ notes related to the defence of the applicants. The search report mentioned that the seizure had been carried out “in the Moscow Region, village of Zhukovka 88a, 4th floor, rented by ALM Law Bureau ...”, and that one of the offices had a tag indicating “work papers of lawyer Mr Drel”. Some time after the start of the search Mr Drel arrived in Zhukovka. He informed the investigators that he was a lawyer with the Moscow Bar and protested against the breaking into his office. However, the investigators did not let him enter the building. At the end of the search he was allowed to make his comments on the search record. A separate sheet with comments on the procedure in which the search was carried out stated: “Lawyer Drel, who appeared at the premises around 7 p.m., despite his protests, was taken by police officers [out] of the territory on which building No. 88a was located” and notes “breaking and entering into Moscow City Bar Association lawyer Drel’s [office]”.

72. As a result of those two searches, a large number of documents were seized, as well as hard drives of several computers. The hard drives were examined by the investigators at the GPO premises in the presence of attesting witnesses and then transmitted to experts for the extraction of information contained therein. The experts drew up a list of files that had been found on the drives, but neither the drives themselves nor the list of files were attached by the GPO to the applicants’ criminal case materials. Electronic documents from those drives were presented to the trial court in the form of print-outs. The applicants claimed that there had been a discrepancy between the amount of information on hard drives of the computers seized during the search and the amount of information produced to the court. Furthermore, the applicants claimed that the hard drives seized had not been properly packed and sealed, so it was possible to add information to them while the drives were in the possession of the GPO.

73. Over the following days the GPO also searched the headquarters of the political party Yabloko and an orphanage which was under the patronage of the first applicant; they removed from the latter premises a computer server, said by the authorities to hold Yukos financial data.

74. On 10 October 2003 a GPO investigator, Mr Karimov, refused to grant the petition of the second applicant to attach official correspondence related to the inquiry conducted following Presidential Directive No. Pr ‑ 2178 (see paragraph 32 above) to the case materials.

75. On 17 October 2003 Mr Drel was summoned to the GPO for questioning in relation to the criminal cases against the second applicant. Mr Drel refused, referring to his status as advocate and his position as the second applicants’ representative in the criminal proceedings at issue. Later the Moscow City Chamber of Lawyers ruled that to answer questions in the circumstances would be a violation of the law “On the Advocacy and the Bar in the Russian Federation”.

76. On the same day the prosecution brought charges of personal tax evasion against Mr Shakhnovskiy, a close friend and business partner of the first applicant. According to the prosecution, he fraudulently reduced the amount of personal income tax due by using the “individual entrepreneur” scheme (see paragraph 15 above).

77. On 20 October 2003 the investigator ordered a seizure from Trust Investment Bank and received the sanction of First Deputy Prosecutor General, Mr Biryukov, for that measure.

78. On 21 October 2003 the Deputy General Prosecutor, Mr Kolesnikov, said in a press conference that charges might be brought against other senior managers of Yukos. On the same day the investigator again searched the premises of the Menatep Sankt-Petersburg bank.

79. On 22 October 2003 the investigator searched the premises of the Trust Investment Bank.

80. On 25 October 2003 the first applicant was arrested in Novosibirsk and transported to Moscow where GPO charged him with business fraud and tax evasion. Further, at the request of the GPO, the Basmanniy District Court of Moscow decided to detain the applicant pending the investigation. During the following months his detention was extended several times.

81. On the same day Mr Drel was summoned to the GPO to testify as a witness. He refused to testify, referring to his professional status and his position in the case of the first and second applicants.

82. On 27 October 2003 the GPO attempted to interrogate Mr Drel as a witness. He refused to testify.

83. On the same day Mr Shakhnovskiy was elected to serve as a Senator, i.e. member of the upper chamber of the Russian Parliament. Later he resigned following a request by the Prosecutor General in which the latter claimed that Mr Shakhnovskiy’s election had been irregular and thus null.

84. On 3 November 2003, as a consequence of his arrest, the first applicant resigned as chief executive of Yukos.

85. On 10 November 2003 the first applicant was formally charged by the GPO.

86. On 11 November 2003, an investigator of the GPO investigative team arrived at the Trust Investment Bank for the second time and carried out another seizure with reference to the search warrant of 20 October 2003.

87. On an unspecified date in November 2003 the Tax Service lodged, within criminal proceedings against the applicants, a civil claim against them on behalf of the State. The Tax Service claimed that the applicants, in their capacity as Yukos senior managers, caused the State damages in the amount of 17,395,449,282 Russian roubles (RUB) (taxes not paid by the trading companies) plus RUB 407,120,540 (taxes unlawfully reimbursed from the State budget). The overall amount of the civil claim was RUB 17,802,569,822 (over 510 billion euros (EUR)); these amounts corresponded to the amounts mentioned in the bill of indictment on company tax-evasion charges brought against the applicants. The statement of claim was lodged by one of the Deputy Ministers, Mr Shulgin. The text of the statement by Mr Shulgin did not contain any calculation of the amounts due by the applicants.

88. On 5 and 16 December 2003 a GPO investigator conducted a search in Tax Inspectorate no. 5 for the Central District of the City of Moscow and seized some documents. According to the applicants, no prior approval had been obtained from the General Prosecutor for that search.

89. Later in 2003 the Moscow City Tax Inspectorate No. 5 lodged additional civil claims against the applicants claiming tax arrears and penalties related to the personal tax evasion charges.

2. Essence of criminal charges against the applicants

90. The charges against the applicants formulated by the GPO may be summarised as follows:

(a) Misappropriation of Apatit shares

91. In 1994 the State privatisation authority decided to sell 20 per cent of the stock of Apatit Plc, a large mining company producing apatite concentrate. Under the conditions of the privatisation tender the buyer would be under an obligation to invest money in Apatit’s business activities.

92. In order to participate in the privatisation tender, the applicants, together with their subordinates and friends, created several sham companies: Volna, Malakhit, Flora, and Intermedinvest. The director of Volna was Mr Kraynov. Further, the second applicant, as head of the Menatep bank, issued indemnity bonds on behalf of Menatep, guaranteeing the capacity of the first three companies to pay. The fourth company produced a fake indemnity bond from the European Union Bank. As a result, the four companies were admitted by the State privatisation authority for participation in the tender. The applicants delegated several people working in the Menatep bank and affiliated companies to participate in the privatisation tender on behalf of the sham companies.

93. At the tender on 30 June ‑ 1 July 1994 Intermedinvest offered the best conditions (RUB 19,900,000 in the form of investment obligations), but then revoked its bid. Other companies participating in the tender did the same. As a result, Volna, which had submitted the lowest bid, obtained the privatisation contract.

94. Under that contract Volna acquired 415,803 shares in Apatit (or 20 per cent of its capital) from the State for a nominal price of RUB 415,803,000 (pre-1998 devaluation). According to the prosecution, the real price of the shares at the time was RUB 563,170,000,000 or USD 283,142,283. In addition, Volna accepted an obligation to invest RUB 79,600,000 in Apatit within one month, and RUB 394,219,000 by 1 July 1995. However, that condition was not met within the time-limits specified in the privatisation contract.

95. On 29 November 1994 the prosecutor, acting on behalf of the State privatisation authority, brought proceedings against Volna before the Commercial Court of Moscow seeking nullification of the privatisation contract and the return of the Apatit shares. The prosecutor indicated that Volna had failed to fulfil its investment obligations under the privatisation contract.

96. In 1995 Volna transferred the amount stipulated in the privatisation contract to Apatit’s bank account and submitted a bank transfer order confirming this to the Commercial Court. Consequently, on 16 August 1995 the Commercial Court adopted a judgment rejecting the claims against Volna on the ground that the money stipulated in the privatisation contract had been duly paid. However, on the same day the amount received by Apatit was transferred back to Volna’s bank accounts by the director of Apatit. Therefore, de facto the money due under the privatisation contract was not paid. The prosecution qualified this episode as business fraud.

(b) Failure to comply with the court decision concerning Apatit

97. On 12 February 1998 the judgment of 16 August 1995 was quashed. The Commercial Court of Moscow, sitting as a court of appeal, declared the privatisation contract null and void and ordered that the Apatit shares be returned to the State. However, by that time Volna had already sold the Apatit shares to a number of other legal entities created and controlled by the applicants. As a result, the decision of the Commercial Court of Moscow of 1998 remained unenforced and the enforcement proceedings were discontinued.

98. In March 2002 the second applicant proposed a friendly settlement of the dispute and the State Property Fund (the body in charge of the privatisation deal) accepted his offer. On 19 November 2002 the friendly settlement was concluded. Under that settlement Volna paid the State USD 15,130,000 and the State withdrew its claim to the Apatit shares. The above amount was calculated by the audit firm BC-Otsenka, and was accepted by the Commercial Court of Moscow as the market price for the shares. On 22 November 2002 the Commercial Court of Moscow endorsed the friendly settlement agreement and closed the case. However, according to the prosecution, the real market price of the shares at the relevant time was USD 62,000,000. It referred to the audit report of 19 August 2003, commissioned by the investigator (the report by Mr Yeloyan and Mr Kuprianov), and a report by the consulting firm Rusaudit, Dorhoff, Yevseyev and Partners, dated December 2002, commissioned by the Government of the Russian Federation. Thus, the decision of the Commercial Court had been based on false evidence. As a result, the decision of 12 February 1998 remained non-enforced through the applicants’ fault. The prosecution qualified this episode as intentional avoidance of execution of a court judgment.

(c) Embezzlement of Apatit’s profits and assets in 1997 – 2002

99. By 1995 the applicants owned, through affiliated companies, a controlling stake of Apatit’s shares (including the 20 per cent acquired through the privatisation tender). On 1 December 1995 the applicants, as major shareholders, appointed a group of managers and assigned to them all of Apatit’s sales operations. As a result, all sales went through a number of sham companies controlled by the applicants and located in low-tax zones. The apatite concentrate was bought by those companies at a lower price and then re-sold at the market price. The companies controlled by the applicants thus accumulated Apatit’s profits; the difference between the “internal” and “external” prices was accumulated in foreign bank accounts controlled by the applicants. As a result, the minority shareholders of Apatit (including the State, which retained a block of shares in that company) suffered pecuniary losses. The prosecution qualified this episode as embezzlement.

(d) Misappropriation of NIUIF shares

100. In 1995 the State privatisation authority decided to sell at tender 44 per cent of the shares in NIUIF Plc, a Moscow-based research institute. To that end the authority issued an invitation to tender. One of the conditions of the privatisation tender was that the winner would have to invest a certain amount of money to support NIUIF’s on-going activities.

101. According to the prosecution, the applicants were interested in obtaining the rights to one of the main assets of NIUIF – an office building in Moscow. In order to take part in the privatisation tender the applicants, acting through their subordinates, in the Menatep bank, created two sham companies: Polinep and Walton. Further, the second applicant issued two indemnity bonds on behalf of Menatep in the amount of USD 25,000,000, guaranteeing those companies’ capacity to pay. As a result, they were authorised by the State privatisation authority to participate in the tender.

102. At the privatisation auction Polinep proposed that it would invest USD 50,000,000 in NIUIF; this was the highest bid, so Polinep was declared to have won. However, Polinep immediately withdrew its bid. Walton made a bid of USD 25,000,000; this was the highest investment bid, so on 12 September 1995 Walton obtained the privatisation contract. On 21 September 1995 the State sold 44 per cent of the shares in NIUIF to Walton at the nominal price of RUB 130,900,000. According to the prosecution, the market price of the shares acquired by Walton was RUB 5,236,000,000.

103. On 28 December 1995 Walton transferred the investment money to NIUIF’s account in the Menatep bank. Mr Klassen, the then director of NIUIF, reported to the State privatisation authority that Walton had fulfilled its obligations under the privatisation contract. On the following day he transferred the money back to Walton’s account in Menatep. As a result the conditions of the privatisation contract were not met de facto . The prosecution qualified this episode as fraud.

(e) Failure to comply with the court decision concerning NIUIF

104. In February 1996 Walton sold the NIUIF shares to another three sham companies created by the applicants: Khiminvest, Metaksa, and Alton. Under the sale contract those companies received the shares but were free from any investment obligations vis-à-vis NIUIF. Mr Klassen confirmed to those companies in writing that NIUIF would not have any pecuniary claims against the buyers of the shares. Mr Klassen also reported to the State privatisation authority that Walton had fulfilled its investment obligations under the privatisation contract.

105. Further, in order to control the activities of NIUIF, the applicants delegated several employees from the Menatep bank to the NIUIF board of directors. As a result, the board of directors approved the sale of NIUIF’s main asset – its office buildings in Moscow – to Pender Limited, an offshore company controlled by the applicants and registered in the Isle of Man. That company acted through persons who worked in the Menatep bank or the Rosprom holding and were thus affiliated with the applicants. The applicants also delegated their staff to the NIUIF management in order to oversee that company’s day-to-day activities.

106. In 1997 the State Property Fund (the privatisation authority) learned that Walton had failed to discharge its main obligation under the privatisation contract, namely to invest in NIUIF. The State Property Fund brought proceedings against Walton, seeking the return of the shares. As a result, on 24 November 1997 the Commercial Court of Moscow quashed the privatisation contract of 1995 and ordered the seizure of the shares from Walton.

107. However, by this time the NIUIF shares had already been sold by Walton, so that decision could not be executed. In January 1998 the shares were re-sold to several other sham companies, which had also been created by and were controlled by the applicants (Danaya, Galmet, Fermet, Status, Elbrus, Triumph, Leasing, Renons, Izumrud, Topaz). As a result, the decision of the Commercial Court of Moscow could not be enforced because of the applicants’ manipulations with the NIUIF shares. The prosecution qualified this episode as intentional avoidance of execution of a court judgment.

(f) Company tax evasion: unlawful tax cuts

108. Under Article 199 of the Criminal Code (“Evading Payment of Taxes ... Collectible from Organisations”) the GPO forwarded two distinct charges against the applicants: one related to unlawful tax cuts and another related to payment of taxes with promissory notes. According to the prosecution, the overall amount of unpaid taxes under these two heads in 1999-2000 amounted to (post 1998 devaluation) RUB 17,395,449,282.

109. As to the first episode, according to the prosecution, the applicants through their subordinates registered a number of sham companies in the Lesnoy town, namely Business Oil, Forest Oil, Vald Oil and Mitra. Those companies were not formally affiliated with the applicants or Yukos, but were controlled by them de facto . Those companies claimed to operate in Lesnoy, and, on that ground, they qualified for tax cuts. However, those companies did not actually have any business activities in Lesnoy but were controlled and administered from Moscow. As a result, the profits from the oil trade were concentrated in those companies. Some of the profits of the sham companies were later returned to Yukos bank accounts by means of a series of complex financial transactions involving the exchange of promissory notes. The industrial group’s overall fiscal burden was thus significantly lightened.

110. According to the bill of indictment, Business Oil avoided payment to the Lesnoy town budget of RUB 1,217,622,799 in 1999 on account of unlawfully obtained tax cuts, and RUB 1,566,046,683 in 2000 (or RUB 2,783,669,482 in aggregate). The prosecution qualified this scheme as tax evasion.

(g) Company tax evasion: payment of taxes with promissory notes

111. The second charge concerned the method of payment of the remaining taxes (after the tax cuts) by the sham companies. In addition to obtaining tax cuts, the sham companies registered in Lesnoy did not pay taxes in monetary form. Instead, they obtained promissory notes from Yukos and then transferred them to the Lesnoy town Tax Inspectorate. The value of the promissory notes was later offset from the tax debt of the sham companies. Thus, in 1999 the four sham companies (Business Oil, Forest Oil, Vald Oil and Mitra) transferred to the Lesnoy town budget promissory notes in the amount of RUB 5,315,535,283; in 2000 the sham companies transferred promissory noted worth of RUB 10,381,901,191.

112. Over the following years the promissory notes were paid off, but only in part: in 2000 promissory notes amounting to RUB 1,048,391,487 had not yet been honoured. The prosecution qualified payment of taxes by promissory notes by the sham companies as another count of tax evasion.

(h) Unlawful tax refund

113. Since the value of some promissory notes was higher than the tax debt, the sham companies obtained a tax refund from the State in monetary form. Thus, in 2000-2001 the Federal Treasury paid the sham companies the difference between the tax debt and the value of the promissory notes, or deducted that difference from the amounts of taxes to be paid by those companies.

114. In 2001, when the regional tax authority started a tax audit of the sham companies registered in Lesnoy, those companies formally discontinued their activities in Lesnoy and merged with another sham company registered in the town of Aginskiy, another low-tax zone. Later those companies were again re-registered in the Chita Region. Each new company received a part of the claims which the liquidated companies had had against the State budget on account of the hypothetical overpayment of taxes. According to the prosecution, in 1999-2001 the applicants, through the sham companies, received RUB 407,120,540 from the budget on account of “tax overpayments”. The prosecution qualified that situation as embezzlement of the budget funds and qualified it under Article 159 of Criminal Code (“Fraud”).

(i) Money transfers to Mr Gusinskiy’s companies

115. In 1999 and 2000 the first applicant allegedly misappropriated assets belonging to the Yukos group. Thus, important sums of money were transferred from the accounts of Yukos and two other companies affiliated with Yukos (Mitra Limited and Greis Limited) to the bank accounts of companies belonging to Mr Gusinskiy, a mass-media tycoon, namely Media-Most, Delf, Byron, Sard, Osmet, GM-2, NTV-Mir Kino, and Most Bank. Those transfers had no business purpose and thus caused damage to Yukos shareholders. According to the prosecution, Mr Gusinskiy received RUB 2,649,906,620 from the applicant. The prosecution qualified those transfers as fraud.

(j) Personal income tax evasion

116. Over the period 1998-2000 the applicants registered themselves as self-employed entrepreneurs. In the registration form they indicated that they were private consultants for several foreign firms, and that their income consisted of fees for consulting services. This status permitted the applicants to pay a fixed amount of imputed income tax (or the cost of a “patent” – a licence obtained for the consulting services), defined by the Small Business Act, instead of paying personal income tax and making social-security contributions (as they would do if they declared their benefits as their “salary”).

117. In order to prove their eligibility for the status of “self-employed entrepreneur”, the applicants concluded and produced fake agreements on consulting services (“consultancy agreements”) for foreign companies, namely Status Services Limited and Hinchley Limited, situated in the Isle of Man. The consultancy agreements of the first applicant with Status Services were agreements of 2 March 1998, 5 October 1998, 30 November 1998, and 20 April 1999.

118. The second applicant was the chief executive of Status Services. On that particular point the bill of indictment (p. 532) stated that “according to American Express corporate cards, which were seized during a search at [the second applicant’s house and added to the case file], on 6 June 2000 the said cards were sent to him as the head of Status Services Limited”. The second company was controlled by Mr Moiseyev, a close friend of both applicants. Under that agreement the applicants received money in the guise of payment for consulting services; however, in reality the money was a wage for their work in Yukos and affiliated firms. As a result, they paid much lower taxes than if they had received the same sum as their salaries. According to the prosecution, the unpaid personal income tax (together with social security contributions) amounted in 1998-1999 to RUB 54,532,186 for the first applicant and in 1998-2000 to RUB 7,269,276 for the second applicant. The prosecution qualified that scheme as personal tax evasion.

3. Preparation of the defence for the trial

(a) Access to the materials of the case files before the trial

119 . At the pre-trial stage the criminal cases of the two applicants were investigated separately. On 22 August 2003, the pre-trial investigation in the second applicant’s case was over and materials of his criminal case were presented to him and to his lawyers for familiarisation (the “period of trial preparation”). On 25 August 2003 the second applicant’s lawyers, Mr Baru and Mr Drel, signed a form attesting that they had received 146 volumes of the criminal case and thirteen audiotapes with questionings. Later the prosecution supplemented the materials of the case with additional volumes (see paragraph 126 and 127 below).

120 . On 25 November 2003 the pre-trial investigation in the first applicant’s case was over. The first applicant and his lawyers were given access to 227 volumes of the criminal case file, containing approximately 55,000 pages.

121 . The applicants studied the materials of their respective case files in the remand prison, with or without their lawyers. As follows from the forms produced by the Government, the applicants’ lawyers and the applicants studied the materials on an almost daily basis. Each defence team was given access to one copy of their respective case files. The applicants were entitled to read their respective case files in the remand prison in the presence of the investigator. The applicants were not permitted to make photocopies of the documents, but they could take handwritten notes. When the applicants wished to discuss the documents in private with their lawyers the investigator removed the documents. On 17 October 2003 the second applicant asked the investigator to allow him photocopying in the remand prison, but this was refused. The second applicant also complained that the schedule for studying the materials of the case was not respected, and that he had been given only about three hours per day to study the case.

122 . In the course of 2003, as from August and November, respectively, the defence lawyers were able to study the materials of the case files separately from their clients in the premises of the GPO, and to make photocopies of documents from those case files that they had pre ‑ selected. However, there was only one official copy of the materials of the case, so if a particular volume of the case file was in the premises of the GPO, it was not available for examination at the remand prison. The defence lawyers could pass photocopies to the applicants, but after the perusal by the administration of the remand prison. According to the applicants, they were unable to keep any significant amount of documents in their cells, since the cells had not been designed for that purpose.

123. At some point in January 2004 both case files were transported to the remand prison and remained there. On 27 January 2004 Mr Krasnov, one of the lawyers for the second applicant, complained to the investigator that although the defence lawyers wanted to study the materials in the GPO premises, this had become impossible since the whole file remained in the remand prison. On 2 February 2004 Mr Krasnov repeated that complaint. On 3 February 2004 the lawyer Mr Gridnev wrote a complaint in similar terms, but the case file remained in the remand prison.

124. On 15 January 2004 the second applicant wrote a complaint about the refusal of the investigator to allow him to make a copy of the materials of the case file for his own use.

125. On 6 February 2004 the second applicant asked the investigator to allow him use of a magnifying glass and a calculator. However, this was refused. In the following months the second applicant repeatedly refused to study the case file without those objects.

126. On 16 February 2004 new charges were brought against the second applicant, and 16 further volumes of the case file were presented to him and his defence for familiarisation. The total number of volumes in the second applicant’s case file thus grew to 162. The defence asked to be given a possibility to study those materials in the premises of the GPO, since it was impossible to make photocopies or use cameras in the remand prison. On 25 February 2004 one of the investigators replied to the second applicant’s lawyer, Mr Baru, that it was impossible to examine the materials of the case file in the GPO premises.

128 . On 24 March 2004 the newspaper Komsomolskaya Pravda published an interview with Mr Biryukov, the First Deputy Prosecutor General. In that interview he stated as follows:

“The defendants [Mr Khodorkovskiy and Mr Lebedev] are taking their time before the trial; they know that after [their] conviction they will not have an opportunity to appeal to the public and complain about injustice, but will have to endure a well ‑ deserved punishment. ... They knew it long before we charged them. They knew it when they were committing those crimes! Yukos is like a viral infection, quickly spreading across the country and covering it with pockets of contamination. Here is the map of the epidemic: Samara, Volgograd, Mordoviya. ... They left dirty marks everywhere in the country.”

129. On 25 March 2004 the lead investigator decided to withdraw the case files from the applicants and submit it to the court. It appears, however, that the case files were not withdrawn on that date.

130. On 20 April 2004 the prosecution filed a petition with the court, seeking to limit the period for trial preparation with the case materials granted to the applicants. On 23 April 2004 the Basmanniy District Court of Moscow gave the defence teams until 15 May 2004 to finalise preparations for the trial. The defence challenged that decision, claiming that the applicants needed more time. The first applicant indicated that he had been studying the case-file according to the established schedule, without lunch breaks, and was prepared to study it on Saturdays, so that it was not his fault that the preparation for the trial was taking so long. However, on 25 May 2004 the Moscow City Court upheld the lower court’s ruling.

131. According to the Government, on 7 May 2004 the second applicant obtained access to the records of the court hearings of 15, 16 and 20 April 2004. On 12 May 2004 he was given access to the record of the court hearing and volumes 157 and 158 of his case file.

132 . On 13 May 2004 the GPO withdrew the case file from the defence. On the same day the second applicant signed a statement in which he confirmed that he had read all the materials in the case file. However, on 17 May 2004 he withdrew that statement.

133. On 14 May 2004 the prosecution submitted the applicants’ cases to the Meshchanskiy District Court of Moscow for trial.

(b) Communication of the applicants with their lawyers before the trial

134. At the pre-trial stage each applicant was defended by his own defence team, each comprised of several lawyers. Although formally there was no cooperation between the two defence teams, it appears that they pursued the same strategy, enjoyed the same procedural rights and were subjected to the same limitations during the investigation proceedings.

135. According to the applicants, the lawyers’ documents were routinely examined by the prison staff both before entry to the meeting rooms and on exit from it. As attested by one of the lawyers on behalf of the second applicant, Mr Mkrtychev, the prison administration insisted on inspecting all written correspondence between the applicants and their lawyers. Furthermore, the applicants’ own paper notebooks were inspected before and after the meetings with the lawyers. The applicants also indicated that all meetings could only take place in specific consultation rooms (even if that meant that the defence team had to wait for one of them to become free whilst other rooms were available). The applicants inferred that those meeting rooms had been equipped with secret listening devices.

136 . On 11 November 2003 a lawyer for the first applicant, Ms Artyukhova, was searched as she was leaving the applicant’s remand prison. A report dated 11 November 2003 by a prison officer who had participated in the search indicated that the search had been ordered by inspector Mr B., who had ordered the search because he had had sufficient grounds to believe that Ms Artyukhova was carrying prohibited objects. A report by another prison officer, inspector Mr F., to his superiors stated that he had seen that the first applicant and Ms Artyukhova “exchanged a notebook with some notes, and also made notes in it” during their meeting. The documents which she was carrying were seized and a piece of paper allegedly written by the applicant was removed and sent to the prosecution. All of the seized documents were added to the case materials and later used by the prosecution before the Basmanniy District Court of Moscow in support of its requests for extensions of the applicant’s detention, as proof that he was planning to intimidate prosecution witnesses. The applicant claimed that the note was in Ms Artyukhova’s own handwriting and that it had been compiled before her visit to prison and not during it. That note read as follows:

“- Kodirov [the applicant’s cellmate]: expects a second visit by the lawyer Solovyev;

- to work on the question of sanctions concerning violation of rules on keeping in custody SIZO (active <-> passive forms of behaviour (ex. hunger strike);

- to work on the question of receiving money for consultancy fees on the purchase of shares by various companies involved in investment activities;

- expert analysis of signatures, to work on this question because the documents submitted are not the originals but photocopies (expert analysis of photocopies of signatures of M.B.);

- to work through questions with witnesses Dondonov, Vostrukhov, Shaposhnikov (questioning on 06.11.03 - according to circumstances);

- concerning participation in RTT Lebedev must give negative (indecisive) answer;

- prerogatives of executives of Rosprom and Menatep - to show the scope of their prerogatives, how promotions are made;

- check witnesses of the defence (former managers and administration of Rosprom, Menatep position about 100, the essence of testimonies

1) absence of intention;

2) absence of instructions, advise on methods of investment and tax activity;

It is necessary to work on testimonies of witnesses Fedorov, Shaposhnikov, Michael Submer, tax people;

Other - to conduct, by Western audit and law firms, audit of personal fortune, in the following context ‘I have right to receive income in accordance with decision of meeting of shareholders ‘ counsel. ... in the case ...”

137 . On 4 December 2003 the second applicant met with one of his lawyers, Mr Baru. According to the Government, a prison officer who supervised the meeting noted that the second applicant gave Mr Baru a handwritten note which was not a part of any “procedural document”. Mr Baru tore the note to pieces and hid the shreds in the pocket of his trousers. At the end of the meeting the prison officer informed Mr Baru that all written complaints and requests addressed to the lawyer must first be inspected by the administration of the remand prison and then forwarded to the lawyer within three days. Mr Baru was invited to hand over the “prohibited object” but he refused. Prison officers then searched Mr Baru’s clothes and discovered the shreds of the note. Those shreds were seized.

138. According to the handwritten explanations by Mr Baru made on the same day he had indeed had in his pocket shreds of the notes he had made during the meeting with his client. Those shreds were seized by a prison officer with reference to section 34 of the Detention on Remand Act. On 5 December 2003 the shreds of the note were sent by the remand prison administration to the investigator. It contained handwritten sketchy notes which mentioned the names of General Prosecutor Mr Ustinov and his deputy Mr Biryukov, press campaign in the mass media, names of the lawyers, reference to the European Court, some allusions to the current political situation, etc.

139 . On 11 March 2004 documents were seized from the first applicant’s lawyer Mr Shmidt as he left the detention facility after a consultation with the first applicant. The inspector at the first control post demanded that Mr Shmidt should hand over to her for inspection a transparent plastic paper-case that he had with him. Mr Shmidt refused, explaining that it was his lawyer’s file. In response, the inspector forcibly seized the papers from him. According to the first applicant, the seized document itself comprised two sheets. The first sheet was written by Mr Simonov, the head of the Glasnost Defence Foundation. It was in Mr Simonov’s own handwriting and was a rough draft of a proposed letter in support of the applicant - that letter was published some time later. The second sheet was in Mr Shmidt’s own handwriting. Both notes were written quite some time before the 11 March visit to the applicant. On 13 March 2004 Mr Karimov, the lead investigator, wrote to Mr Denisov at the Ministry of Justice stating that the note seized “contained an instruction on counteraction to the investigation by way of influencing the investigation through mass media”. Mr Denisov then wrote on 26 March 2004 to the head of the Main Directorate of the Ministry of Justice requesting measures to be taken against Mr Shmidt. On 7 May 2004 the Ministry of Justice Main Directorate wrote to the St Petersburg Bar Association requesting that disciplinary proceedings be started against Mr Shmidt for breach of professional ethics. Mr Shmidt was subsequently exonerated at the disciplinary proceedings, where it was determined that Mr Shmidt had been entitled to take the document into and out of the remand prison and that it was legally privileged.

140. The Government produced a report by Mr Ms., a remand prison officer, dated 15 July 2010. In his handwritten deposition he testified that there had been no seizures of computers or documents from the lawyers of the second applicant. A similar written declaration was made by Mr Sl., and Mr Zkh., remand prison officers.

4. Trial of Mr Shakhnovskiy

141. On 5 February 2004 Mr Shakhnovskiy was convicted by the Meshchanskiy District Court, presided by Judge Kolesnikova, for personal income-tax evasion. In those proceedings Mr Shakhnovskiy did not plead guilty; however, he had reimbursed to the State the amounts of outstanding taxes and penalties as calculated by the Tax Service. Execution of the sentence was conditionally suspended by the Judge.

142 . Judge Kolesnikova found that Mr Shakhnovskiy had deliberately included false information into his personal tax declarations by stating that he had received payments from Status Services for some “consulting services”, although he had been aware that de facto he had received the aforesaid amounts for his work in Yukos (pages 22-23 of the judgment). In support of those findings Judge Kolesnikova referred, inter alia, to an internal memo addressed to the first applicant and written by Ms Kantovich, one of the employees of Yukos-Moskva, on behalf of Mr Aleksanyan, the then head of the legal department of Yukos. That memo analysed various methods of tax minimisation, in particular the “individual entrepreneur” scheme. The Judge also referred to identical contracts concluded between Status Services and other Yukos senior managers, including the second applicant, and to the corporate credit cards in the name of the second applicant sent to him as the head of Status Services and seized during the search in Zhukovka on 3 October 2003.

5. Start of the trial of the applicants. Conditions in which the parties presented their cases

143. On 8 June 2004 Judge Kolesnikova ruled that the case of the first applicant should be tried jointly with the cases of the second applicant and of Mr Kraynov (director of Volna, a firm which had participated on behalf of Menatep in the privatisation of Apatit). Upon the joinder of the cases the first applicant was given a copy of the second applicant’s case-file (165 volumes). The second applicant was given a copy of the first applicant’s case file (227 volumes). The case thus ran to 392 volumes in all at the start of the trial. Subsequently the applicant’s legal teams made copies of those case files for their use.

144. The trial court in the joint case was composed of three judges: Ms Kolesnikova (president, a professional judge), Ms Klinkova and Ms Maksimova (lay assessors, non-professional judges). The court was assisted by seven secretaries who kept a summary record of the hearings. No verbatim record was made; however, the defence made an audio recording over the course of the trial. The prosecution was represented by Mr Shokhin and Mr Arkhipov. The united defence team was composed of Mr Aleksanyan, Mr Baru, Mr Drel, Mr Gridnev, Mr Krasnov, Ms Liptzer, Ms Lvova, Mr Mkrtychev, Ms Moskalenko, Mr Padva, Mr Rivkin, Mr Shmidt (who died in 2012), and several others.

145. The hearings were public. They took place in a courtroom which held, according to the applicants, up to thirty people. The defence made an application for the case to be heard in a larger courtroom, but the court did not respond. Further requests were made by the defence for the trial to be televised or audio-recorded. However, no external media transmission of the hearings was allowed. A number of journalists were present in the courtroom.

146. On 16 June 2004 the court held the first hearing, which was immediately adjourned due to the illness of one of the defence lawyers.

147. On 23 June 2004, at the second hearing, the first applicant requested the court to grant him more time to study the materials in the second applicant’s case. That request was supported by the first applicant’s defence lawyers who stated they also needed more time. The defence claimed that they needed at least one more month to become conversant with the additional case materials. The court gave the defence time until 12 July 2004.

148. On 12 July 2004, Ms Moskalenko (one of the defence lawyers for the first applicant) complained to the court about the insufficiency of the time granted. She indicated that in the time allocated by the court she had succeeded to familiarise herself with only 72 volumes of the second applicant’s criminal case. The Meshchanskiy District Court refused to give more time.

149. Before the prosecution started presenting its case, the court discussed the arrangements for the future trial. The court indicated that the hearings would start at 11 a.m. and that it would not sit on Wednesdays, which would thereby assist the parties in the preparation for the trial. Those arrangements persisted during the first phase of the trial when the prosecution was presenting its case (July – November 2004).

150. The two applicants were held in a barred dock resembling a metal cage, guarded by armed escorts. The third co-defendant, Mr Kraynov, who was not detained on remand, had a place in the courtroom outside the cage. The applicants were able to communicate with the defence lawyers through the bars. The conversations were always within the hearing of the escort officers and sometimes of the prosecutors, and the escort officers prevented the applicants and their lawyers from exchanging any documents.

151 . On 23 August 2004 the defence lawyers complained to the court that they were unable to show the defendants case materials in the courtroom and were unable to discuss the case confidentially with them. The escort officers required that the lawyers did not approach closer than 50 cm to the cage where the applicants were detained. Mr Padva, the lead lawyer for the first applicant, explained that he had to speak very loudly to his client to be heard at such a distance. The first applicant, in his turn, asked the court to be shown instructions or rules which fixed that distance and, more generally, defined the conditions of the communication between a defendant and his lawyer in the courtroom. The prosecutor replied that the defendants had to solve the matter not with the judge but with the administration of the remand prison or the escort service. Judge Kolesnikova then explained to the parties that she was not against them communicating during the breaks. However, in her words, the question of transmitting documents between the defence lawyers and the applicants did not belong to the competence of the court; the defendants were detained on remand and all questions related to the exchange of documents were within competence of the respective institution, in particular the escort service, and were regulated by the internal rules. If the exchange of the documents was compatible with those rules, the court would not be against it.

152 . At the hearing of 26 August 2004 Mr Padva again asked the court to allow him to show documents to his client. He agreed that he would submit to the judge all documents he would show to his client. According to him, the remand prison administration did not object to such a method of communication, provided that it satisfied the judge. The judge checked that information with the chief escort officer and then ruled that the court would review all the documents which the defence lawyers wanted to show to their clients. Mr Padva agreed that if those documents existed in a computer format, he would print them out and show them to the court in advance.

153. On 27 August 2004 the defence lawyers once again complained that it was impossible to communicate effectively with the applicants during the questioning of witnesses, emphasising that if an adjournment was announced every time one or other question had to be discussed with the applicants in the court session, the trial would progress very slowly. The court responded by asserting that the discussion of any questions whatsoever with the applicants was possible only during the adjournments.

154 . On 31 August 2004 the first applicant personally complained to the court about the difficulties he was facing. He explained that his lawyers had initially been permitted to stand about 50 centimetres away from his cage but that that situation had changed and they were now required to stand about one metre away, while additional guards had recently been placed between the lawyers and the cage. The applicant explained that it was now impossible to have any confidential discussions at all with his lawyers whilst in the courtroom. In response, the head of the escort guards referred to a “security plan” which necessitated these arrangements.

155 . Over the following months the defence submitted several requests seeking to facilitate contact with the applicants in the courtroom, but the court refused to change the security arrangements. Thus, on three occasions (on 28 December 2004, 14 February 2005 and 15 February 2005) the first applicant prepared draft written testimony. On each occasion his lawyers were able to review the testimony only after the court had reviewed the drafts.

156. On 28 September 2004 Ms Leutheusser-Schnarrenberger, the Special Rapporteur appointed by the Parliamentary Assembly of the Council of Europe, visited the Meshchanskiy District Court. She asked the court, through the first applicant’s lawyers, to allow her to speak to the first applicant. However, the court refused permission.

157 . In November 2004 the court moved on to the examination of the evidence submitted by the defence. On 11 November 2004 the court changed its working schedule and decided that it would start the hearings at 9.30 a.m. instead of 11 a.m. As a result, the duration of the time spent by the applicants in the court increased.

158 . At the end of 2004 the trial arrangements changed again. On 31 December 2004 the Meshchanskiy Court ruled that it would no longer observe Wednesdays as a non-court day. On 18 January 2005 the defence tried to obtain adjournments of the Wednesday hearings, but the request to that end was refused. The judge however explained to the parties that they could ask for an adjournment at any moment. The defence used that opportunity successfully at least twice: on 25 January and 22 February 2005.

159. On 9 March 2005 the defence lodged an application for the judges to withdraw on the basis that their decisions to date had been in violation of Russian and international law. They referred to the one-sided treatment of evidence, serious limitations on contact between the applicants and their lawyers, the unfair denial of adequate time to prepare the case, etc. That application was dismissed.

6. Position of the defence on some points of the accusation

160. The applicants pleaded not guilty. The defence maintained, firstly, that the whole case had been politically driven and that the GPO was acting in bad faith. Further, they challenged the admissibility of evidence relied upon by the prosecution, in particular as regards those documents which had been seized during the searches in Zhukovka, in Mr Drel’s offices and at the second applicant’s home in 2003.

161. As to the charges concerning company income tax evasion in connection with the Lesnoy trading companies, the applicants claimed that they had had no relation to those companies, that they had never heard of them, directed their operations or participated in their creation.

162. Alternatively, the defence claimed that all tax cuts had been obtained by the trading companies in a lawful manner, that the law at the time allowed payment of taxes with promissory notes and that all the promissory notes had been eventually honoured, so the State budget had suffered no losses. Even if some of the financial operations described in the bill of indictment and impugned to the applicants had taken place, they did not amount to a criminal offence. The law, as applied at the relevant time, regarded those financial practices as perfectly legal or at least tolerated them. In support of those claims the defence sought to adduce a large number of documents, expert opinions and witness testimonies.

163. As to the personal income tax evasion charge, the first applicant insisted that he had rendered services to Status Services and Hinchley; however, he refused to give more details on this point, referring to his right to remain silent provided by Article 51 of the Constitution. He was unable to give details concerning the conclusion of the service agreements with these two firms, and did not explain when and where exactly he had been providing services to them. The second applicant gave evidence in similar terms. In addition, he contested the allegation of the prosecution authorities that he had been a chief executive of Status Services. At the trial the first applicant testified that he decided to obtain a licence and become a self ‑ employed entrepreneur at the advice of his lawyers.

7. Presentation of evidence by the prosecution

(a) Written expert opinions

164. The prosecution sought to rely on expert evidence dealing variously with an analysis of business transactions involving the applicants and the companies affiliated with them and tax payments and tax procedures at the relevant times. The experts for the prosecution were all appointed by the investigator at the preliminary stage of the investigation, and their written reports were submitted to the Meshchanskiy District Court together with the bill of indictment.

165 . Thus, Mr Yeloyan and Mr Kuprianov prepared three reports in all: a first report dealing with the evaluation of Apatit’s net profit for 2000-2002 and January-September 2002 from the sale of the apatite concentrate (see paragraph 68 above); a second concerning the personal income tax evasion charges against the first applicant, and a third concerning the personal income tax evasion charges against the second applicant.

166 . Mr Ivanov, Mr Kuvaldin, Mr Melnikov and Mr Shkolnikov prepared an expert report on the evaluation, as on 1 July 1994 and 1 October 2002, of the 20 per cent block of shares in Apatit.

167. Mr Dumnov, Mr Krotov, Mr Khanzhyan and Mr Semago prepared an expert report on the material which was extracted from the computer server that had been seized in Zhukovka in October 2003.

168. On 27 December 2004 the defence lodged a petition for a notarised and apostilled statement by Mr Prokofiev, who was absent on a business trip in the UK, to be attached to the materials of the case. This witness had been questioned in the course of the investigation and his name was included in the list of prosecution witnesses. The court refused the petition on the basis that it was a request for legal assistance. Some time later the defence petitioned the court to send to the UK a legal assistance request, whereby Mr Prokofiev could be questioned in the UK. Again, this petition was refused.

169 . On 30 December 2004 the defence challenged the conclusions reached by Mr Yeloyan and Mr Kuprianov, relying on the following arguments. In relation to the Apatit report, the experts had needed to study a huge volume of documents, running to more than 4,000 pages, and yet they had been able to complete the report within two days of having been appointed by the GPO. Moreover the report was drawn up on the GPO’s premises, which raised further questions as to the impartiality of the experts.

170. The defence made three applications for Mr Yeloyan and Mr Kuprianov to be called to give oral evidence: on 11 January 2005, 21 January 2005 and 9 March 2005. Thus, on 11 January 2005 Mr Rivkin, a defence lawyer for the second applicant, argued that the defence wished to cross-examine the two experts on the forensic accounting methods that they had used in their reports, and to identify which original materials they had used in preparing their reports and to question them on their conclusions. Similar petitions were lodged on 21 January and on 9 March 2005. The defence insisted that to ensure equality of arms they should be permitted to question the two experts just as the GPO had been able to put questions to the experts when they had drawn up their reports. On all three occasions the court refused to grant the defence team’s requests. On 9 March 2005 the court ruled that there were no grounds for examination of the expert witnesses in person; the court explained that the assessment of the experts’ reports would be carried out by the court when they would withdraw to the deliberations room.

171 . On 1 March 2005 the defence petitioned the court to call Mr Shulgin, Deputy Head of the Federal Tax Service, to give evidence in court. Mr Shulgin had been questioned in the course of the preliminary investigation and was initially included in the list of prosecution witnesses. The request arose following the court’s decision to admit a letter from Mr Shulgin which sought to discredit the defence expert Mr Shchekin (in the judgment the court referred to Mr Shulgin’s letter as one of the reasons why it did not accept Mr Shchekin’s evidence). Furthermore, Mr Shulgin had previously revoked a tax audit because it had failed to take into account a directive from the Ministry of Justice and Ministry of Taxes stating that promissory notes could be accepted in 1999. His evidence therefore went to the heart of the corporate tax evasion charges. The court rejected the defence application stating that Mr Shulgin could not give oral evidence since he was a representative of the civil plaintiff (the Federal Tax Service) in that case.

(b) Other documentary evidence

172. In support of the charges the prosecution also referred to a large number of documents: tax-inspection reports, in-house correspondence between the companies affiliated with Yukos, bank transfer orders, charters of incorporation, etc. The defence claimed that a considerable proportion of the written evidence submitted by the prosecution should be excluded from the case file because it had been obtained unlawfully or contained serious discrepancies. The court rejected all of the defence applications on the exclusion of evidence, either in the course of the trial or in the text of the judgment itself.

173 . Thus, at the hearing of 12 January 2005 the defence asked the court to exclude evidence obtained during the searches in Zhukovka on 3 and 9 October 2003. The defence claimed that the searches had been carried out in such disorder that the persons concerned and attesting witnesses had been unable to oversee the actions of the investigative team. For example, the searches took place simultaneously on three floors of the office building. The investigators participating in the searches were moving from one room to another, leaving the premises and returning. One of the attesting witnesses, Mr Moiseyev, kept being called out of the office by the investigators. The documents seized at Mr Dubov’s office were not shown to the witnesses at the moment of their seizure but only when the witnesses returned to the room. The members of investigative team kept bringing unidentified document files to the rooms where the search was being carried out.

174. The defence further noted that the offices of Mr Dubov, a member of the Duma, had been searched. According to the defence, the prosecution had failed to obtain prior authorisation from the State Duma and the Supreme Court, as required in such cases. The defence further claimed that the investigators had known whose offices they had been searching; there was a door sign indicating clearly that the offices belonged to Mr Dubov. The court heard two witnesses, Ms Ardatova and Ms Morozova, cleaning staff in the office building in Zhukovka, who confirmed the facts relied on by the defence.

175. At the hearing of 17 January 2005 the defence also asked the court to exclude materials obtained as a result of the search on 9 October 2003 in the office of Mr Drel in Zhukovka. At that time Mr Drel had been the second applicant’s lead representative in the criminal proceedings. He also acted for the first applicant and had attended the first applicant’s meeting with the GPO representatives on 5 July 2003, when this applicant had been questioned as a witness in the criminal case against the second applicant. The prosecution could not have been unaware that they were searching the offices of an advocate. Despite the special status of Mr Drel, the prosecution did not obtain the special approval needed under the law. The court heard a witness, Mr Rakhmankulov, who had been present in the premises of the ALM Feldmans law firm during the search. He testified that Mr Drel had not been given access by the investigators to his office during the search. Further, Ms Pschenichnaya, a lawyer for the firm GLM Management Services S.A. was not allowed to be present during the search.

177. Based on the above arguments, the defence asked the District Court to exclude those materials from the case file. The court rejected the objections as premature. Subsequently the District Court dismissed the defence’s objections in the judgment (see Section 9 (a) below, §§ 241 et seq.)

178. On 21 January 2005 the defence requested the exclusion of the materials seized in July-August 2003 in the course of several searches in the premises of the Menatep Sankt-Petersburg bank. The prosecution claimed that those searches had been authorised by the Deputy General Prosecutor on 8 July 2003. However, the defence claimed that only one search had been authorised by that search warrant, not several consecutive searches. On the same ground the defence sought exclusion of evidence seized during the search in the Trust Investment Bank on 11 November 2003. Further, the defence referred to various discrepancies in the search reports.

179. On the same day the defence sought to exclude documents seized during the searches in the Trust Investment Bank on 11 November 2003 and from the Tax Inspectorate No. 5 of 5 and 16 December 2003. Thus, in the opinion of the defence, seizures from the Tax Service were unlawful as the investigator had failed to obtain the prior sanction of a prosecutor as required by law, since it was clear that the investigator had seized from the inspectorate documents containing “tax secret”.

180. On the same day the defence also requested the exclusion of the materials obtained as a result of the search in the premises of Russkiye Investory on 29 July 2003. According to the defence, the search started at 2.20 p.m.; however, a written note on the report of the search certified that the investigator had examined the seized documents already as from 9.15 a.m.

181. On 8 February and 10 March 2005 the defence asked the court to exclude evidence obtained from the computers seized as a result of the search in Zhukovka on 9 October 2003, namely the print-outs of computer files. The defence referred to various inconsistencies in the bill of indictment, in the list of files extracted from the computers, etc.; further, they criticised the methods which had been employed by the prosecution to extract information from the hard drives of those computers. In particular, on 22 March 2005 Mr Dumnov confirmed to the court that the electronic files from the hard drives seized during the searches of 9 October 2003 had been copied onto the “re-writable” disks provided by the GPO and transmitted to the experts without having been properly sealed. Further, attesting witnesses who were present when the drives were examined by the GPO experts had also participated in four other investigative acts, which raised doubts as to their independence. When examining the hard drives, the investigators discovered 4,939 more files than on the drives examined by the experts. There were discrepancies in the documents which recorded the particulars of the materials seized. The court rejected the objections by the defence to the evidence on the ground that those objections were premature.

182. On 10 March 2005 the defence challenged the evidence obtained as a result of a search in the State Property Fund in Murmansk on 8 July 2003. The defence noted that the search report contained certain discrepancies as to where and when the search had been carried out.

183. On numerous occasions the defence requested the District Court to declare prosecution documents inadmissible – in particular, because the documents were illegible, were not certified, were not translated from foreign languages, or did not meet the requirements of law. For example, on 18 February 2005 the prosecutor sought to adduce three documents, none of which met the stipulated requirements for the signature, stamp or official letterhead. The defence objected against adding such documents to the case-file, but the court dismissed the objection and the documents were admitted.

(c) Examination of witnesses for the prosecution

184. In the bill of indictment, the prosecution indicated that they were relying on about 240 witnesses. Out of those, 83 were examined in court. Of these, the interview records of 32 witnesses were subsequently read out at the prosecution’s request, in addition to their oral submissions. Thus, the prosecution insisted on reading out the testimonies of Mr Shchavelev, Mr Pozdnyakov, Ms Rashina, Mr Gidaspov, Mr Vostrukhov, Mr Dobrovolskiy, Ms Kuchinskaya, Mr Anilionis and many others.

185. On 13 September 2004 the defence raised objections to the practice of reading out the records of the questioning of witnesses at the preliminary investigation stage. The defence claimed that this was possible only if there were essential discrepancies between the witness testimonies at the court hearing and those during the preliminary investigation. However, the prosecution failed to demonstrate any such discrepancies. Further, the defence claimed the court itself put pressure on witnesses Mr Schavelev, Mr Krasnoperov and others, urging them to confirm their earlier testimonies to the GPO investigators. The Meshchanskiy District Court did not accept the defence objections.

186. On 14 September 2004 Ms Antipina was questioned before the court. She was released after partial questioning. On the same day a GPO investigator summoned and questioned her in the GPO. On 23 September 2004 Ms Antipina was again questioned before the trial court. The prosecutor put to her the same questions as those put by the investigator nine days previously.

187. On 30 September 2004 Mr Lipatnikov testified that, before giving evidence to the GPO investigator, he had been visited by a Federal Security Service (FSS) officer who had told him what to say.

188. On 30 September 2004 the defence filed a new objection against the practice of reading out written testimonies by prosecution witnesses and urging them to confirm those testimonies. The court dismissed that objection.

189. On 4 October 2004 Mr Abramov was questioned by the court. At the hearing he testified , inter alia , that only some of his answers appeared in the record of his questioning by a GPO investigator.

190. On 11 October 2004 Mr Klassen testified that he had been asked leading questions by the investigator and that the record of his testimony was not totally accurate. According to the applicants, this remark by Mr Klassen was later omitted from the trial record, although it was recorded on audio by the defence and the relevant recordings were submitted to the court.

191. On 15 October 2004 Mr Kobzar was summoned and questioned by the GPO investigator. He was required to sign a written undertaking not to reveal to anyone the contents of that interview. On the same day he testified before the court.

192. On 18 October 2004 Mr A. Ustinov was questioned by a GPO investigator. On the following day Mr A. Ustinov testified before the court about the same events.

193 . On 14 March 2005 the prosecution filed a motion to read out the testimony of witnesses Mr Petrauskas, Mr Stankevicius, Mr Surma and Mr Rysev on the basis that they were foreign nationals who refused to appear in court. The defence objected to the reading out of their testimony because none of the witnesses had actually been questioned in relation to criminal case no. 18/41-03. They had been questioned in relation to another criminal case that was not the subject of the trial by the Meshchanskiy District Court. The trial court rejected the defence objections and permitted the statements to be read. Subsequently their evidence was relied upon by the Meshchanskiy District Court in its judgment (pages 265 and 271-272 of the judgment). At the court hearing on 17 March 2005, the prosecution filed a motion to read out the testimony of Mr Kartashov, Mr Spirichev and Ms Karaseva as well as to read into evidence the orders to bring charges against each of them. It was said by the prosecution that the application was made pursuant to Article 281 of the RF Code of Criminal Procedure. The defence objected to the motion, as neither the testimony of accused individuals nor the decisions to charge them came within the ambit and scope of evidence that could be read out as defined by Article 281 of the RF Criminal Code. The Meshchanskiy District Court rejected the defence objections and allowed the prosecution motion. This evidence was subsequently relied upon by the Meshchanskiy District Court in its judgment (pages 501, 502-503 and 521 of the judgment).

194. On 1 March 2005 the defence again petitioned the court to summon Mr Shulgin, the Deputy Head of the Federal Tax Service, to give evidence. As to the status of that witness, the applicants said that Mr Shulgin himself would explain in what status he would speak. On 1 March 2005 the court refused to call Mr Shulgin. The court referred to Article 56 of the Criminal Procedure Code which defines the term “witness” as “a person who knows information which is of consequence for the examination of the case”. The court also referred to Articles 44 and 45 of the Criminal Procedure Code which provided that a representative of the civil plaintiff within the criminal proceedings has a right to give evidence, but is not obliged to do so.

(d) Materials allegedly in the possession of the GPO but not disclosed to the defence

195. On 30 September 2004, the second applicant’s defence filed a motion in which they asked the court to require the state prosecutors to explain the reasons for the disappearance of American Express corporate cards from the case file, to take measures to obtain those cards and to add them to the materials of the case; and to present to the court documents on the basis of which the GPO concluded that the second applicant had allegedly been the head of Status Services. On 11 October 2004, the second applicant’s defence filed a motion seeking the disclosure from the archives of the Meshchanskiy District Court the criminal case against Mr Shakhnovskiy in order to find therein the American Express corporate cards on the basis of which the GPO had concluded that the second applicant was allegedly the head of Status Services, as well as other documents concerning the applicant’s activity as a taxpayer. Upon disclosure the second applicant indicated that he would ask for the originals or certified copies from the Shakhnovskiy case file to be added to his own case file.

197. On 28 January 2005 the defence sought disclosure of further material in relation to the acquisition of Apatit. Two letters were sought: one was a letter from the GPO to the Russian Property Fund (RFFI) dated 1 March 1999 and the other was a letter from GPO aide Mr Fomichev to Akron Plc, dated January 2003. Those letters had been mentioned in the materials of the case but had not been added to the case file. Those letters also confirmed that any dispute in respect of the acquisition of the 20 per cent block of Apatit shares raised purely civil rather than criminal issues. The defence lawyers had sought disclosure directly from the GPO. The Head of the Supervision Department of the GPO Mr Azarchenkov had replied that “all documents necessary for the fulfilment of defence may be requested by the court after discussion of the parties and granting a corresponding petition”. The court refused the application, stating that it could not see any reasons why the motion should be granted.

198. On 9 March 2005 the defence lawyers requested disclosure of the expert report that had been allegedly commissioned by the prosecution in the context of the criminal investigation into the activities of the Lesnoy town administration (the case which had been closed in 2002). For the defence it was unclear whether this report (mentioned in some of the GPO documents, namely in the decision to re-open the case of 18 July 2003) was the same document as the study prepared by the UBRAS at the request of the Lesnoy town administration (see paragraph 30 above), the copy of which was in the possession of Mr Bochko and which had earlier been submitted to the court by the defence (see paragraph 214 below). The prosecution objected to disclosure of the expert report, arguing that the court had no power to order disclosure. On 9 March 2005 the court ruled that the defence had not specified what legal and economic review might be obtained from the materials of the 2002 criminal case. Moreover, the court noted that the expert evaluation requested had been carried in the context of a criminal case which was still at the stage of preliminary investigation.

8. Presentation of evidence by the defence

(a) “Expert evidence” and other materials attached to the case-file but later rejected as inadmissible

199 . The defence submitted to the court written opinions by several specialists in the areas of taxation, financial law and accounting. In particular, reports by Mr Shchekin (a professor at Moscow State University), Mr Semenov (professor of tax law at Moscow State University), Ms Petrova (a qualified auditor since 1994, professor at Moscow State University and General Director of Expertaduit, an audit firm), Mr Grechishkin (director of Audit ‑ Premier Limited, an audit firm) and Mr Lubenchenko (former Director of the Legal Department and then Head of the Russian Central Bank, professor of law at Moscow State University) were produced.

200 . Mr Shchekin presented two reports: one referring to the personal income-tax evasion charge and the other in relation to the corporate tax evasion charge. Both reports were collected by the defence on 10 January 2005. In his report on the company-tax evasion charges Mr Shchekin explained that it was common and accepted practice for taxes to be paid for by promissory notes in 1999; he relied in particular upon a letter of December 1999 from the Finance Minister and the First Deputy Minister of Taxes and the decision of the Federal Commercial Court of 24 December 2001. Mr Shchekin further explained that the trading companies had entered into lawful agreements with the local administration for taxes to be paid by way of promissory notes. Mr Shchekin also explained that in his opinion there was no basis for characterising the trading companies as sham companies. He indicated that the question of where the oil products traded by those companies were produced and kept was irrelevant for granting them the tax cuts. In support he referred to the decision of the Federal Commercial Court for the North-West District, which in the judgment of 5 June 2002 in case no. A42ÖŠ6604/00-15-818/01 considered the granting of tax cuts in a similar situation to be legal.

201 . Mr Semenov in his report of 7 April 2004 analysed the relevant legislation and concluded that it was not open to the tax authorities retrospectively to annul tax concessions agreed with the authorities. He further referred to the case-law indicating that what the applicants were accused of doing had been considered legitimate at the relevant time, including the non-monetary payment of tax, and that there was no negative effect on the budget because of such practice. The tax audits carried out by tax inspectorates during the period under review did not reveal any violations of the law in this respect; tax authorities registered and recorded non-monetary tax payment receipts in accordance with the established procedures ( inter alia , by completing a form which was approved under Decree of 23 December 1998). He explained that the promissory notes were highly liquid securities which, bearing an interest rate of 28 per cent per annum, were well suited to constitute investments for a municipal administration. Payment on such notes was underwritten by the Doveritelny i Investsionny Commercial Bank, which entered into an agreement with the Lesnoy town authority to repurchase the securities on demand.

202 . Ms Petrova in her report of 10 November 2004 analysed standard procedures of recording on the balance sheet of tax payments, overpayments of taxes and payments of taxes in non-monetary form. Questions addressed by Ms Petrova at the request of the defence touched in particular upon the following points:

(a) the accepted procedure in 2000-2001 for entering onto the balance sheet tax payments, including overpayments of tax; and

(b) whether the fiscal bodies took into account non-monetary payments in 1999-2000.

203 . Mr Grechishkin in his report of 25 January 2005 demonstrated that the promissory notes used by the trading companies had been repaid in full and even in excess of their nominal value, and that the companies had only paid taxes by way of promissory notes in 1999.

204 . Mr Lubenchenko in his report of 30 December 2004 gave his opinion on the lawfulness of the issuing of the indemnity bonds by Menatep within the privatisation auction concerning 20 per cent of shares of Apatit.

205. The above reports were submitted by the defence to the court on various dates in January – March 2005. The reports were initially admitted by the court to the materials of the case. However, the court later declared those reports inadmissible as evidence (see the summary of the judgment in Section 11 (b) below).

(b) Materials attached to the case file but later discarded as unreliable

206. On 8 February 2005 the court accepted from the defence a series of documents in relation to the Lesnoy town trading companies. These were reports of tax inspections conducted by the Lesnoy tax inspectorate, with the attached documents regarding the number of staff working in the trading companies Business Oil, Mitra, Forest Oil, and Wald Oil; staff pay-sheets; notes regarding real-estate assets, etc. Documents showing the payments of all promissory notes and the absence of any litigation between the Lesnoy town administration and Yukos between 1999 and 2004 were also included in the materials of the case file. Those materials related to the issue as to whether the companies were bona fide trading companies or sham companies as alleged by the prosecution, and whether any damage was sustained by the State or municipal budget. The court later discounted that evidence in its judgment as unreliable (see Section 9 (b) below, §§ 261 et seq.).

(c) Materials not attached to the case file

207. On 27 December 2004 the defence filed a request to add to the case file several documents, in particular:

(a) a study from which it could be seen that in 1999-2003 proceeds from sale of products, works and services by Yukos amounted to USD 50.569 billion, out of which the profit amounted to USD 15.821 billion. These documents demonstrated that during that time shareholders directed USD 13.193 billion to the development of Yukos. In the opinion of the defence, it undermined the position of the prosecution as to the applicants’ motives, and, in particular, the mercenary intent, in the absence of which there is no criminal liability;

(b) a letter from the Director of the Achinsky refinery which stated that Mitra (one of the trading companies) was not the management company of the Achinsky refinery, as had been alleged in the bill of indictment. That response refuted the allegation of the prosecution to the effect that the applicants had controlled all transactions posted to Mitra, Business Oil, Wald Oil and Forest Oil, “as evidenced inter alia by the fact that Mitra was the managing company of Achinsk Refinery”;

(c) documents demonstrating that the applicants had been paid dividends on shares in Yukos for 1999, 2000, 2001 and 2002, showing the amounts of the dividends and the income tax paid. The defence claimed that those documents were important for tax evasion charges;

(d) copies of the defence’s requests and responses thereto confirming provision of managerial and consulting services by the applicants (in connection with the personal tax evasion charges);

(e) written answers by Mr Prokofiev, the first applicant’s former interpreter, to the questions put to him by the defence. Mr Prokofiev lived in London and was thus unable to testify personally.

The court refused to admit those documents to the materials of the case. In particular, as regards the written statement by Mr Prokofiev, the court indicated that the latter had not been duly informed by the defence about his procedural rights. The court considered that the questioning of a witness abroad should have been conducted within special proceedings, namely by rogatory letters from a Russian court to a British court.

208. On 28 December 2004 the defence asked to have other documents attached to the materials of the case. Those documents included:

(a) the response of the Lesnoy Tax Inspectorate, which included a tax report on Business Oil dated 7 March 2000, concluding that the company had not committed any violations of the Tax Code;

(b) confirmation from the Lesnoy town Finance Department that it had suffered no damage as a consequence of the payment of taxes by way of promissory notes in 1999, that no payment of taxes with promissory notes occurred in 2000, and that in 1999 the Lesnoy town administration accepted promissory notes from at least 55 other taxpayers;

(c) official documentation of the Duma of the Town of Lesnoy from 1 July 1998 to 31 December 2000 concerning the granting and use of tax benefits for all types of taxes by all taxpayers that were legal entities located in the ZATO of the Town of Lesnoy. Those documents would refute the prosecution’s argument that those benefits were obtained unlawfully;

(d) a lawyer’s request and the response thereto from the Economic Development Ministry concerning the methodology for valuation of damages to the state caused by the non-return of the stake in Apatit. The response was relevant to the Apatit charges against the applicants;

(e) a copy of a letter from the Chairman of the Russian Federal Property Fund, Mr Malin, to the Chairman of the Russian Government, Mr Kasyanov, which set out in detail all the circumstances surrounding court proceedings between the Murmansk Regional Property Fund and Volna related to dissolution of the sale contract for the 20 per cent stake in Apatit;

(f) a copy of a letter of 3 March 2003 from Deputy Finance Minister to the Russian Federal Property Fund which said, in particular, that in evaluating the alleged damage to the Russian budget and the non-return of the 20 per cent stake in Apatit resulting from non-fulfilment by Volna of its investment obligations, the applicable law was Federal Law No. 152 of 29 July 1998 (“On Valuation Activities”), and in the event of a dispute concerning reliability of the size of a valuation or another value, that dispute should be considered by the Commercial Court in accordance with the established jurisdiction or in the procedure established by the law regulating valuation activities;

(g) a copy of a letter to the Ministry for Natural Resources of 27 February 2003, which said that a review of the established conditions for subsoil use and compliance with environmental law revealed no violations by Apatit;

(h) a copy of the lawyers’ requests and responses thereto from the Meshchanskiy District Court and the Moscow City Court concerning the disclosure of the American Express cards from the Shakhnovskiy case file. In doing so, the defence sought to demonstrate that the defence had exhausted all the options for obtaining the American Express corporate cards or at least information concerning their whereabouts. It was submitted as the court had previously denied a defence motion for the disclosure of the Shakhnovskiy case file from the archives of the Meshchanskiy District Court, in particular on the ground that the defence had not exhausted its options for obtaining those cards through their own efforts.

All of the above applications were refused and the documents were not admitted to the case file. The court referred in particular to the fact that the text of the response of the Tax Inspectorate was unclear and that the attached tax review did not have the proper official stamp on it. As to the other documents, the court refused to admit them referring to Article 286 and 252 of the Code of Criminal Procedure.

209 . On 21 January 2005 the defence produced a report by Mr Gulyaev (a professor at the Moscow Academy of Economics and Law) concerning the legality of the searches conducted within the pre-trial investigation of the case. Mr Gulyaev commented on the necessity for each search to be the subject of a separate warrant from an investigator. The District Court refused to attach that report to the case stating that Mr Gulyaev had commented on matters that were exclusively for the court to determine.

210. On 7 February 2005 the defence petitioned the Meshchanskiy District Court to have a letter from the Commercial Court of the Chita Region admitted to the case-file. The letter concerned Investproekt, the successor company to the Lesnoy town trading companies. It indicated that the Commercial Court’s decision to dissolve the company Investproekt and remove it from the tax register had not been annulled or challenged by anyone as at the date of the letter. The Commercial Court of the Chita Region confirmed that its decision was still in force. Despite that decision the tax authorities reinstated Investproekt in the register. The defence considered that the decision of the Commercial Court was relevant to the company income tax evasion charges faced by the applicants.

211. On 8 February 2005 the court refused the request on the ground that the letter had been incorrectly certified, in that the signature had not been verified by an official seal. The defence wrote to the Commercial Court of the Chita Region, asking it to send a reply sealed with an official court stamp. The Commercial Court replied that official regulations expressly prohibited such letters being stamped.

212. On the same date applications were made by the defence to admit documents from the Rating Agency which demonstrated the creditworthiness of Most Bank at the material time, and a letter from the Moscow department of the Tax Service confirming that at the material time Most Bank was appropriately licensed. The defence needed those documents to prove that the promissory notes from Most Bank had real market value. The court refused to grant the applications because the documents were deemed to be irrelevant to the case.

213. The court also rejected an application to admit documents from Metamedia on the purchase of the building at 5/1B Palashevskiy Lane, Moscow. The documents were two court decisions provided by Metamedia which confirmed that the transactions were lawful. The defence claimed that the purchase of that building was supposed to cover Most Bank’s debts to Yukos on account of money transfers made in 1999 and 2000.

214 . On 1 March 2005 the court heard an expert witness proposed by the defence, Mr Bochko. Mr Bochko was the Deputy Head of the Institute of Economics of the Urals Branch of the Russian Academy of Sciences (UBRAS); he had participated in 2002 in the preparation of the “technical and economic study” by the UBRAS (see paragraph 30 above). That study had been seized by the GPO but not attached to the case materials. Mr Bochko produced a copy of that report to the court; the defence asked the court to attach it to the materials of the case. That study concluded that, far from causing any damage, the granting of the tax concessions had been positively beneficial. The granting of tax concessions had made it possible to rescue the Lesnoy town economy from a state of permanent crisis. In particular, the experts concluded that the refund of tax overpayments by Yukos promissory notes “had not caused damage to the town and federal budgets” and that the Lesnoy town trading companies had been entitled to pay tax in advance since this was the “unconditional right of a taxpayer”. Further, the experts concluded that the Lesnoy town administration was entitled to accept tax payments by way of promissory notes in 1999. The report also came to a conclusion that the trading companies registered there were all lawfully entitled to claim tax exemptions under the federal law relating to taxation in closed administrative territories.

215 . On 5 March 2005 the defence produced to the court the reports from Ernst and Young, which valued the 20 per cent stake holding in Apatit as in 1994 and 2002, and analysed the investment programme that the Lesnoy town undertook from 2000 onwards. With that report the defence sought to prove that the town had not suffered any damage.

216 . On 14 March 2005 the defence produced to the court a report from Price Waterhouse Coopers, which analysed the sale price of apatite concentrate by Apatit to a number of Russian trading companies for the period 2000 to 2002 from the perspective of the requirements of Articles 20 and 40 of the Tax Code. The report concluded that in the relevant period Apatit fixed its prices at a level 23 per cent higher than world companies performing similar activity which were recognised as Apatit’s competitors. The defence argued that as such the report was of great importance in establishing the extent of the alleged loss and was clearly relevant to the Apatit charges against the applicant.

217. By the rulings of 1 March (in relation to the UBRAS report), on 4 and 5 March (in relation to the Ernst and Young report), and 14 March 2005 (in relation to the Price Waterhouse Coopers report) the court refused to admit those reports to the materials of the case file.

218 . In particular, as to the study obtained from Mr Bochko (UBRAS report), the court held that it had been prepared at the request of third persons, and that it contained elements of legal analysis, and that the report could not be qualified as “expert” or “specialist” reports within the meaning of the CCrP. It also did not qualify as “other documents” which a party may wish to attach to the materials of the case.

219 . As to the report by Ernst and Young, the court first referred to a number of informalities in the report itself, in particular to the fact that the report mentioned the names of two persons who contributed to the report, but in fact other specialists of the Ernst and Young had also participated in its preparation. The report did not mention their names and was not signed by them. Mr Gage, a partner with Ernst and Young who testified before the court, named those persons in his oral submissions, but since they had not signed the report, it was impossible to establish their role in the preparation of the report and their qualifications. The only signature on the report was that of the general director. Furthermore, the report had been obtained at the request of ALM-Feldmans law firm, which was not participating in the criminal proceedings. The cover-letter with which that report was forwarded to ALM-Feldmans was irrelevant. Finally, the report contained analysis and therefore did not qualify as a “document” within the meaning of the CCrP. Similarly, it could not have qualified as an opinion of a “specialist” within the meaning of the CCrP.

220 . As to the report by Price Waterhouse Coopers, the court observed that the defence did not indicate to what type of evidence listed in the CCrP that report belonged. That report was originally commissioned by Apatit outside the criminal proceedings in the applicants’ case, so it could not be considered as an expert report or a report by a specialist. Furthermore, the conformity of the copy of the report was certified by a manager of Apatit and not by Price Waterhouse Coopers itself, and did not contain signatures of the persons who had conducted the examination. That report also contained opinions on legal matters.

222 . On 14 March 2005 the defence produced a report by Mr Pleshkov, a senior economist in the Giperruda research institute. He produced an expert opinion (called “technical-economic assessment”) on the economic feasibility of the investment programme to the privatisation plan for Apatit. On the same day the court refused to admit this document in evidence. The court noted that the “other documents” mentioned in Article 74 of the CCrP had to have relevance for the case. Having reviewed the report produced by Mr Pleshkov the court concluded that it “contained opinions of certain persons based on investigations and qualification of the documents on the questions provided by the defence, a part of which were questions of legal character”. Consequently, the court did not accept this “assessment” as evidence. Furthermore, the court noted that the CCrP did not provide with such method of collecting evidence as “commissioning a study”. As to the other documents submitted by the defence together with the report by Mr Pleshkov, the court ruled that they “were of no importance for the criminal case”.

223. On 16 March 2005 the defence filed a new motion with the District Court attaching a reply from the Commercial Court of the Chita Region confirming that the affixing of a stamp was not permitted by the official regulations. The court again refused to uphold the defence’s motion, claiming that a stamp was essential in all instances and that, moreover, the Russian Federation emblem on the official form used by the Commercial Court was not depicted on a heraldic shield as required by the relevant legislation.

(d) Examination of “experts” and other witnesses for the defence

224. On 17 January 2005 the second applicant’s lawyers advised the court that they would not be calling witnesses for the defence, out of fear of repressive measures which could be taken by the prosecution against those persons if they testified before the court.

225 . Nonetheless, a number of witnesses for the defence were heard by the court at the request of the defence. Thus, several experts whose written opinion had been submitted to the trial court gave oral testimony.

226 . Thus, Mr Shchekin was questioned in court on 17, 18, 20 and 21 January and on 14 March 2005 with regard to tax law and its implementation. The court repealed a number of questions put to Mr Shchekin by the defence as irrelevant or relating to legal matters in which the court had no need of anyone’s opinion.

227 . Ms Petrova was questioned on 24 January 2005 about the content of her report.

228 . Mr Semenov was questioned on 25 January 2005. He commented on the lawfulness of the non-monetary method of payment of taxes, which included payment by promissory notes. A part of the defence questions to Mr Semenov were dismissed by the court.

229. On 28 January 2005 the first applicant personally addressed the court, explaining why, in his view, questioning of expert witnesses on the issues of tax law, book-keeping and business and financial practices was important for the case.

230 . Mr Bochko was questioned on 1 and 2 March 2005. He was asked by the defence to give evidence on two inter ‑ related areas concerning the “tax-minimisation” schemes used by Yukos and involving companies registered in Lesnoy. The defence lawyers first asked the witness whether the town of Lesnoy had suffered any damage in accepting payment of taxes by way of promissory notes and, secondly, questioned him on the investment programme in the town. However, the court dismissed those questions. The court said that the first area of questioning related to a domain where the court did not need any external opinion (legal analysis), whereas the second area was irrelevant.

231. On 3 and 4 March 2005 the court heard evidence from Mr Myasnikova, an official from the Financial Department of the Lesnoy town administration. The court prevented Ms Myasnikova from answering a question by the defence lawyer as to whether other companies paid taxes by way of promissory notes. During the cross-examination of Ms Myasnikova, the prosecutor repeatedly referred to charges being brought against Mr Ivannikov, the Mayor of Lesnoy.

232 . On 4 and 5 March 2005 the court heard Mr Gage (a partner with Ernst and Young) who was questioned about the methods he employed while preparing the report on the market evaluation of the 20 per cent block of shares in Apatit, proposed by the defence for its inclusion in the materials of the case (see paragraph 215 above).

233. On 23 March 2005 the prosecution informed the court that the GPO planned to bring charges against one of the witnesses called by the defence, Ms Myasnikova.

234. The defence also examined Mr Lubenchenko, Mr Grechishkin and Mr Pleshkov. According to the applicants, the defence’s attempts to question those witnesses were severely restricted.

9. The two judgments of 16 May 2005

235. On 25 March 2005 the defence advised the court that, following the prosecution’s closing submissions, the defence would need five days to prepare a reply.

236. On 30 March 2005, after the prosecution had presented their closing submission, the defence confirmed that it would need five days to prepare a reply. The court ordered that the trial would continue at 9.30 a.m. on 1 April 2005.

237. On 27 April 2005 the Meshchanskiy District Court declared that it would deliver its judgment on 16 May 2005.

238 . Between 16 May and 31 May 2005 the court read out its judgment. In all the trial lasted from 8 June 2004 until 31 May 2005 and the court sat for 159 days. During the trial, 34 further volumes of materials were added to the case file (fifteen volumes of the trial record and nineteen volumes of motions, expert reports and other documents added during the trial).

239. The Meshchanskiy District Court delivered two separate judgments. The first judgment concerned the allegation of misappropriation of Apatit shares (see Section 2 (a) above, §§ 91 et seq.). The court found the applicants guilty as charged; however, because the crime had been committed more than ten years previously, namely in July 1994, the court applied the statute of limitations and relieved the applicants from criminal liability. The text of that judgment runs to 90 pages.

240. The second judgment related to the other charges against the applicants, which were not time-barred (hereafter – the “principal judgment”). That judgment is 660 pages long; it may be summarised as follows.

(a) Admissibility of evidence produced by the prosecution

241. The court analysed objections raised by the defence as to the admissibility of evidence submitted by the prosecution and dismissed all of them.

242. In particular, the court dismissed the complaint about multiple searches carried out on the basis of a single search warrant. The court held that this had been a lawful practice. Further, the court decided that the discrepancies in the report on the search in the premises of the State Property Fund in Murmansk had been the result of a typing error. In fact, the documents were seized and examined in Murmansk and not in Moscow. The court also noted that the report on the search of 9 July 2003 in Apatit’s premises indicated that the documents seized during that search had been examined by the investigators on 10 June 2003. The court considered that this had been a typing error too. The report of the search in the premises of Russkiye Investory also contained a discrepancy: it indicated that examination of the documents seized in the search had started before the documents had been seized. The court decided that this was yet another typing error.

243. The court refused to exclude evidence obtained as a result of the searches of 3 and 9 October 2003 in Zhukovka. The court found that the searches in Zhukovka had been carried out in full compliance with the law.

244 . As regards evidence obtained from Mr Drel’s office in the premises of the ALM-Feldmans law firm, the court indicated that the CCrP did not prohibit searching the premises of a law firm without a court order as the defence suggested. Further, according to the search warrant, the search “was not carried out in respect of Mr Drel personally but in the business premises”. Finally, the court noted that the investigators did not know that they were searching in the premises of a law firm. None of the lawyers who were present during that search asked the investigators to allow them to participate in the searches. The District Court noted that a search was an urgent measure. In the court’s opinion, the investigators had learnt that they had been searching in the offices of a lawyer “from V.V. Moiseyev, who participated in the search, but who did not produce any documents to support this fact”.

245 . As to the searches in other premises, the court decided that they had been conducted in an orderly and lawful manner. The court referred to the statements by Mr Uvarov and Mr Pletnev, members of the investigative team, who had participated in the searches. The court held their testimony for truthful since they “had no reasons to give false testimony”. The court further held that several attesting witnesses had participated in the searches and were able to supervise their progress. As to the statements by Ms Ardatova, Ms Morozova and Mr Rakhmankulov, relied on by the defence, the court discounted them. The court considered that those witnesses were partial, since they had been working in the firms which provided services to Yukos’ management. The court also noted certain discrepancies in their testimony and the fact that although they had been free to make notes in the search report on any irregularity they had not done so.

246 . The court further dismissed the objections raised by the defence in respect of the information obtained from the hard drives seized by the prosecution in Zhukovka. The court held that the statement by Mr Rakhmankulov, who confirmed the defence’s version of events, was unreliable and contradicted the testimony of Mr Pletnev and Mr Dumnov, the latter being one of the two experts who had examined the drives at the request of the prosecution.

247. The court dismissed several other requests from the defence seeking to have excluded evidence submitted by the prosecution. The court also analysed the testimonies of several witnesses called by the defence, but held that their testimonies did not contradict the findings of the court as to the applicants’ guilt.

(b) Admissibility of evidence produced by the defence

248. In the principal judgment the court also analysed evidence produced by the defence.

(i) Inadmissible “expert evidence” produced by the defence

249 . The court held that the written expert opinions by Mr Shchekin, Ms Petrova, Mr Semenov, Mr Lubenchenko and Mr Grechishkin were inadmissible as evidence. The court’s reasons can be summarised as follows.

250 . First, in the opinion of the court, under Article 86 the defence did not have the right to collect evidence in the form of written opinions of the “specialists” ( spetsialisty , p. 621 of the judgment).

251 . Second, the law provided in Article 58 of the CCrP that a prospective “specialist” should be notified about his or her rights and obligations by the persons vested with such a right by the current law of procedure, which do not include the defence lawyers or the expert themselves. The court noted that the written opinions produced by those persons contained entries that such rights had been known or had been explained to them by the defence lawyers. However, even if the lawyers had notified some of the “experts” about their procedural rights, that notification was not valid.

252 . The third argument concerned the reports by Mr Shchekin, Mr Semenov and Mr Grechishkin. As followed from those reports, their authors had reached their conclusions on the basis of materials from the case file which had not been “duly certified”. They based their conclusions on the documents which they believed were from the materials of the criminal case; however, those persons were not allowed to study the official copy of the materials submitted by the prosecution to the trial court and they had to rely on the copies produced to them by the defence lawyers. As to the report of Mr Shchekin, the court also noted that he had at his disposal some additional documents which were not a part of the case-file.

253. The fourth argument was that those persons had given their opinion on points of law, which was not within their competence. The court noted that those reports touched upon questions of guilt, intention, assessment of arguments of the prosecution, as well as evidence produced to the court, and interpretation of the applicable legislation. All that, in the opinion of the court, was not within the terms of reference of the experts under the CCrP.

254. The fifth argument concerned the reports by Ms Petrova and Mr Lubenchenko. The court observed that those experts had been engaged by relatives of the applicants who were not a party to the proceedings and who had not therefore had a right to collect evidence.

255. As to the research by the UBRAS, the District Court said that since it had not been specially commissioned for the criminal trial it was inadmissible.

(ii) Inadmissible documentary evidence

256. The court further ruled that some of the documents submitted by the defence, namely the charter of incorporation of Status Services, and the list of staff of that company (which had paid the second applicant for his consulting services) were inadmissible, since they had been obtained in breach of Article 53 of the CCrP. Further, the court noted that the content of those documents did not contradict the findings of the court that the second applicant was the head of that company.

(iii) Inadmissible oral evidence

257. The court further dismissed oral testimony by Mr Shchekin, Mr Semenov, Mr Lubenchenko and Ms Petrova as inadmissible evidence. The court held it to be inadmissible because those persons had never worked for the tax authorities or in audit or accounting firms. They were lawyers, and the court did not need their opinion on legal matters. Furthermore, the court noted that Mr Shchekin had represented Yukos in the commercial courts.

258 . The court took note of Mr Bochko’s testimony, but only to the extent that it concerned his participation in the preparation of the UBRAS report. At the same time the court refused to admit in evidence Mr Bochko’s testimony concerning the substantive conclusions of the report.

259. The court admitted testimony by Mr Gage about the methods used by Ernst and Young in evaluating 20 per cent of the shares in Apatit. The court, however, noted that that testimony was “general in nature” and did not contradict the court’s earlier findings. As such, audit reports submitted by the defence had not been admitted.

260. The court also admitted Mr Pleshkov’s testimony about the Apatit investment programme. In the court’s view, the evidence by Mr Pleshkov did not contradict the court’s earlier findings. Finally, the court admitted testimony by Mr Grechishkin concerning his contacts with the applicant’s lawyers but not on other points.

(iv) Unreliable documentary evidence

261. The court took note of certain documentary evidence submitted by the defence. In particular, the court examined the tax reports by the Lesnoy Tax Inspectorate, lists of staff working in the Lesnoy trading companies, documents concerning the activities and assets of those companies, letters from the Lesnoy administration, etc. However, the court discounted this evidence as unreliable. The court noted, in particular, that the acting head of the Tax Inspectorate and the Mayor of Lesnoy were under criminal investigation for granting improper tax cuts. Further, the court found that the documents submitted to the court concerning the activities of the trading companies had not existed at the relevant time, when the inspections of those companies had been carried out.

262. The court also examined the documents confirming the honouring the promissory notes received by the Lesnoy town administration from the trading companies. The court discounted that evidence, stating that the companies which had confirmed the authenticity of the promissory notes were controlled by Yukos, and were not therefore a reliable source of information. The court also discounted a number of documents, letters and certificates issued by the Lesnoy administration, and several expert opinions. The court considered that the entities which had provided the documentary evidence in question had been dependent on the applicants. It also noted that the defence had not relied on those documents during the preliminary investigation.

263. The court discounted documents submitted by the bankruptcy administrator of Most Bank with regard to the payment of promissory notes by Byron, Osmet-1, Sard-1 and GM-2. The court noted that those documents did not contain information as to when and how the promissory notes were paid, and were therefore unreliable.

264. The court finally admitted and analysed a large number of other documents produced by the defence. However, the court concluded that none of them could affect its findings as to the facts of the case, or change their legal characterisation.

(c) Findings of the Meshchanskiy District Court on the merits

(i) Criminal charges

265. The Meshchanskiy District Court found both applicants guilty as charged (see Section 2 points (b) – (j) above, §§ 97-118). In particular, the court found that the companies involved in the transactions with shares of the privatised enterprises, the trading companies registered in Lesnoy and other low-tax zones, as well as foreign companies which paid fees to the applicants had in fact been sham legal entities with no real business purpose. Most of the persons who had set up those companies on their behalf worked at Yukos, Menatep, Rosprom, and other affiliates of Yukos. In that capacity those persons were subordinated to the applicants. Further, the sham companies had no financial resources of their own, but operated with the financial support of Menatep, Rosprom, and Yukos. The sham companies did not have premises or personnel; they did not make a profit and some of them had been definitively liquidated or abandoned. Therefore, the sham companies were created solely for participation in the sham transactions; they were controlled by the applicants through their personal friends or subordinates.

“As a result of the aforementioned actions, the aforementioned companies which de facto did not carry out any commercial activities in the territory of the [Lesnoy Town], obtained a right to preferential taxation. Later, using this circumstance, through the CEOs of the aforementioned companies controlled by them, [the applicants]... arranged the filing of the 1999 and 2000 tax returns of the aforementioned companies with the Tax Inspectorate for Lesnoy town, having deliberately included in them false information that tax privileges were assessed and they had no tax arrears; as a result, budgets of various levels did not receive taxes in the aforementioned amount. Also, with a view to evading paying taxes, in violation of the requirements of the current tax legislation ..., [the applicants] arranged for the payment of taxes by the aforementioned companies using promissory notes from Yukos, which cannot be deemed to be in compliance with the statutory requirements to pay mandatory taxes. Later, out of the “overpayment” which built up in the aforementioned manner, netting operations for the following tax periods were also carried out. Furthermore, with a view to evading paying taxes, the defendants arranged non-filing by the aforementioned companies controlled by them of the 2000 balance sheet with the Tax Inspectorate, the filing of which is mandatory under Art. 23 of the Tax Code, and non-inclusion in the companies’ tax declarations of the information about the companies’ actual tax arrears. By means of the aforementioned actions, [the applicants] organized tax evasion ...”

267 . As to the amounts of unpaid taxes, the judgment of the Meshchanskiy District Court mentioned the following figures. In 1999 Business Oil obtained unlawful tax cuts in the amount of RUB 1,217,622,799. In 2000 Business Oil obtained unlawful tax cuts in the amount of RUB 1,566,046,683. Further, the four trading companies (Business Oil, Vald Oil, Forest Oil and Mitra) paid in 1999-2000 taxes with promissory notes. On that last point the judgment repeatedly referred to various amounts of unpaid taxes for different tax periods and for each company (p. 49-50 of the judgment). Figures of tax underpayments indicated in various parts of the judgment did not always match other figures concerning the same periods and operations of the same trading companies and did not fit to the overall result indicted in the conclusive paragraphs of the judgment concerning company income tax evasion charges. No explanation for those discrepancies was given in the judgment.

268 . When analysing the applicants’ involvement in the unlawful tax refund scheme, the District Court indicated, on page 51 of the judgment, that “by 2000 promissory notes of Yukos worth RUB 1,048,391,487 still remained not honoured”. The District Court found that the applicants had fraudulently obtained from the State budget RUB 407,120,540 through that scheme. In support of its conclusions on the corporate tax evasion charges the judgment referred inter alia to documents seized from Trust Investment Bank (p. 488 of the judgment).

269. On page 521 of the judgment the District Court indicated that in 1999 the applicants evaded taxes in the amount of RUB 5,447,501,388 (that figure included tax cuts obtained by Business Oil plus payment of taxes by the four companies, including Business Oil, with promissory notes), and that in 2000 they evaded taxes amounting to RUB 11,947,947,894 (again, it included tax cuts granted to Business Oil and the amount of promissory notes transferred by the four trading companies to the budget). The overall amount of unpaid taxes for 1999-2000 was therefore RUB 17,395,449,282.

270. On the personal tax-evasion charges the District Court confirmed the account contained in the bill of indictment. In particular, to demonstrate that service agreements concluded between the applicants and the two Isle of Man companies, namely Status Services and Hinchley, were not real, the judgment referred to the memo prepared by Ms Kantovich on behalf of Mr Alexanyan which had been addressed to the first applicant and described the “individual entrepreneur” scheme. The judgment also referred to corporate credit cards issued in the name of the second applicant as the head of Status Services Limited and discovered during the search in his house on 3 October 2003 in Zhukovka. Documents seized from Tax Inspectorate No. 5 were also referred as proof of the applicants’ guilt concerning the personal tax evasion charge (pp. 475-478 of the judgment).

271 . In support of its conclusions on the episode concerning the embezzlement of Apatit’s benefits and in relation to the corporate tax-evasion charges the Meshchanskiy District Court relied, inter alia , on documents seized from Mr Drel’s office in Zhukovka. The court also referred in this respect to some of the print-outs from the hard drives seized during the searches. In turn the trial court stated that the applicant’s guilt was confirmed by the “conclusions of the complex accounting-economic expert examination, the results of which show the net profit of Apatit for the period 2000-2002 in case apatite concentrate was sold independently, without intermediaries at purchasing prices of consumer plants, and at USD 45 per tonne on FOB terms to Murmansk in case of export, would have increased by RUB 6,168,043,000, including: in 2000 - by RUB 2,840,223,000, in 2001 - by RUB 1,956,565,000, in 2002 - by RUB 1,371,255,000” (p. 322 of the judgment). In support of its conclusions on the episode concerning misappropriation of Apatit benefits the District Court referred, inter alia , to the valuation of the Apatit product made by Mr Yeloyan and Mr Kuprianov in their report of 16 August 2003.

(ii) Civil claims

272. The District Court also ordered the applicants to pay to the State RUB 17,395,449,282 on account of unpaid company taxes, to be recovered from both applicants on a solidarity basis. The District Court’s judgment in the part related to civil claims run to eight lines and did not contain any calculation of the amount of damage caused to the State by the applicants’ failure to pay company taxes. The judgment in this part did not refer to any provision of the law.

273. The civil claims of the Tax Inspectorate no. 5 concerning personal income tax evasion were left without determination; the District Court ruled that those claims should be examined by a court within separate civil proceedings.

274. From the judgment it appears that the amount claimed by the Tax Service under the head of unlawful tax refund (RUB 407,120,540) was not recovered from the applicants.

(d) Evidence mentioned in the judgment but not presented to the defence during the investigation and trial

275. The applicants claimed that certain pieces of evidence, referred to by the Meshchanskiy District Court in its judgment, had never been produced to the defence for examination in adversarial proceedings. In particular, the judgment referred to:

(a) the second applicant’s income and expenditure book for the year 2000;

(b) the letter from ZAO Yukos RM of 11 August 2000;

(c) American Express credit cards said to have belonged to the second applicant; and

(d) alleged contracts between the second applicant and Status Services.

(e) Sentence

276. In conclusion, the District Court sentenced both applicants to nine years’ imprisonment in an “ordinary regime correctional colony”.

10. Appeal proceedings

(a) Preparation of the brief of appeal

277 . Within 10 days of the conclusion of the reading of the judgment, the defence teams submitted a “short” version of their appeal to the Moscow City Court. The full grounds of appeal could only be prepared after studying the trial record.

278 . According to the Government, on 7 June 2005 the first applicant received a copy of the judgment in the case.

279 . On 28 July 2005 the defence team was notified by Judge Kolesnikova (the presiding judge) that they could commence studying the trial record in order to check its accuracy. Between 29 July and 8 August 2005 the defence was permitted access to volumes 1-15 of the original trial record in the premises of the Meshchanskiy District Court. However, the applicants’ lawyers were not able to read all of the 30 volumes of the trial record. In particular, the defence was not given access to the volumes containing documents attached to the case-file during the court sessions and copies of the rulings delivered by the court after retiring to chambers. The applicants’ lawyers were told that they could not have access to the remaining volumes as they were being used by the prosecutor.

280 . On 5 August 2005 a copy of the fifteen volumes of the trial record, prepared by the Meshchanskiy District Court on its own initiative, was made available for the defence (5,565 pages). The copies of the record were not certified and they had no internal numbering or index. According to the Government, the defence was given the following time-slots to study the trial record: from Monday to Thursday, between 9 a.m. and 6 p.m., and on Friday, between 9 a.m. and 4.45 p.m. Every lawyer had been given his own copy of the trial record.

281. The defence lodged an application to review the original of the trial transcript but the court did not respond to that application.

282 . In early August it became known that the first applicant intended to stand for election to the State Duma of the Russian Federation.

283. On 8 August 2005 the first applicant was transferred to another block in the detention centre, to a cell containing 16 detainees.

284. On 9 August 2005 Judge Kolesnikova informed the defence by fax that the last date for submitting comments on the hearing record was 25 August 2005. In reply the first applicant wrote a letter to Judge Kolesnikova in which he asked for additional time. In particular, he described the conditions in which he had to study the trial record as follows:

“I am forced to study the protocol in an investigative room together with my lawyers or in the cell where I am currently being held. However, I can hardly do it in the cell because there are more than 10 more people in this cell, and they are, of course, speaking loudly to one another, many of them are smoking (I personally don’t smoke), eating, and relieving themselves, in other words, creating a situation in which it’s extremely difficult to focus on the protocol.

As to the conditions of studying the protocol in the investigative room together with my lawyers, I’d like to note the following. Every day the lawyers are allocated one and the same investigative room to meet with me. This room is unventilated with a totally sealed double-pane window, without air-conditioning and any ventilation whatsoever. The room has a table, which is too small to hold all the documents necessary to be able to work on the protocol, and two chairs, which are not enough either because I’m visited by up to five lawyers at the same time. Meanwhile, adjacent investigative rooms are vacant and have a lot of chairs. In this situation, allocating one and the same investigative room gives reason to assume that it is equipped with some special technical devices ruling out confidential communication between me and my lawyers. ... By today, I managed to study only 4.5 volumes out of the 15 volumes of the “copies” of the protocol that I had been given. To speed up the familiarisation ... I have to refuse the daily open-air walks ...”

285. From 9 August 2005 the defence lawyers repeatedly sent telegrams and letters to the Meshchanskiy District Court requesting that the defence be allowed to examine the original trial record. However, the defence received no reply to those requests.

286. On 15 August 2005 Ms Moskalenko, one of the defence lawyers, complained to the Meshchanskiy District Court about the improper conditions in which she had to review the trial record with the applicant.

287 . On 19 August 2005 the defence submitted to the Meshchanskiy District Court audio recordings made by the defence in the course of the trial. Judge Kolesnikova returned the audio recordings to the defence, claiming that the case was closed and that nothing could be attached to the case materials.

288. On 23 August 2005 Judge Kolesnikova dismissed a request for additional time to review the trial record, asserting that the applicant and his lawyers had been given sufficient time.

289. On 24 August 2005 the defence lodged comments on the volumes of the trial record to which they had been given access. The comments ran to 126 pages. In the applicant’s words, the trial record contained certain inaccuracies, some of which were relatively minor, whereas others were much more significant. Thus, entire paragraphs were missing from the trial record. The applicant gave as an example an episode in which the court discussed time arrangements for the hearing. That episode was not included in the trial record. Further, there were numerous omissions in the record of questioning of certain important witnesses (such as, for example, Mr Klassen, who had told the court about the investigator’s selective approach to the questioning).

290 . On 26 August 2005 the prosecution informed the defence about the decision taken by the Acting Chairman of the Meshchanskiy District Court, Mr Kuryukov, to fix the date of the appeal hearing on 14 September 2005.

291 . On 2 September 2005 Judge Kolesnikova issued a decree dismissing all of the points raised by the defence, with the following reasoning:

“The comments on the trial record are not based on fact – i.e. the trial record was made by court secretaries in the very course of the court proceedings, and all comments made by participants, their statements, motions, all documents examined and disclosed, witness testimony, questions and replies to those questions, as well as to the order of court proceedings, etc, have been recorded accurately and in their entirety”.

292. On 9 September 2005 the defence submitted a number of motions to the Moscow City Court, requesting that evidence which had been excluded or discounted by the Meshchanskiy District Court be re-considered at the forthcoming appeal. The motions, inter alia , concerned the report by Ernst and Young in relation to the investment programme that had been conducted in the Lesnoy town. Further, the defence sought to admit several letters from the Lesnoy Financial Department concerning payment of taxes by promissory notes and their redemption by Yukos. Further, the defence drew the court of appeal’s attention to the items of evidence which had been misinterpreted by the prosecution and subsequently by the trial court.

293 . On 13 September 2005 Ms Moskalenko submitted an additional brief of appeal in which she complained about alleged violation of the European Convention in the course of investigation and trial. In particular, she complained about the impossibility for the first applicant to have confidential contacts with his lawyers in the courtroom during the hearings and in the prison.

294. On the same date the defence lawyers asked the court of appeal to annul the hearing of 14 September 2005, since the date had been set in a manner that was not in accordance with the procedure prescribed by law.

295. In all, the briefs of appeal submitted by the defence on behalf of the applicants run to about a thousand pages.

(b) Representation of the applicants during the appeal proceedings

296. In July-August 2005, the director of the detention facility persistently refused to grant Ms Khrunova, one of the first applicant’s lawyers, a meeting with him, since the Meshchanskiy District Court refused to issue her with a “meeting permit”. After lodging a complaint with the Judges Qualification Board she was allowed access to the case by the court.

297. On 22 July 2005 Ms Mikhaylova, who was engaged as the first applicant’s ECHR lawyer in the absence of Ms Moskalenko, was not allowed access to the first applicant by the director of the detention facility. In a letter of 14 January 2008 the then director of the detention facility explained that Ms Mikhaylova had not been admitted to the proceedings in the capacity of the first applicant’s lawyers under Article 53 of the CCrP and was therefore denied access to the first applicant.

298. On 27 July 2005 Ms Mikhaylova and Mr Prokhorov were denied access to the first applicant by an oral order from the director of the detention facility. The lawyers then submitted a formal written request to visit the applicant, but on 10-11 August 2005 they were again denied access to him, again with reference to Article 53 of the CCrP.

299. On 4 August 2005 the remand prison administration sent a request to the Meshchanskiy District Court asking whether Ms Mikhaylova and Mr Prokhorov had been admitted to the proceedings as the first applicant’s lawyers. On 11 August 2005 the vice-chairman of the Meshchanskiy District Court replied that those two advocates had not participated in the trial on behalf of the first applicant. On 15 August 2005 the Meshchanskiy District Court submitted to the administration of the remand prison a list of the first applicant’s lawyers who had been admitted to the case under Article 53 of the CCrP and were thus allowed to visit him.

300. The first applicant had instructed Mr Padva, his lead lawyer, to represent him at the appeal. However, Mr Padva was admitted to hospital shortly before the appeal hearing because of a very serious concern over his health. The hearing on 14 September 2005 was therefore adjourned until 19 September 2005.

301. On 15 September 2005 Mr Mkrtychev and Mr Drel, the first applicant’s lawyers, tried to meet the first applicant but were denied access to him by the administration of the detention facility. On the same day an inmate suffering from an infectious disease was placed, firstly, in the first applicant’s cell and then transferred to the cell where the second applicant was detained. As a result, quarantine was imposed in respect of the detainees in those cells, including both applicants. However, after lengthy negotiations with the administration of the remand prison, Ms Levina and Ms Moskalenko obtained the right to visit the applicants.

302. As Mr Padva was still in hospital on 19 September 2005, the hearing was adjourned until 20 September. On 20 September the hearing was again adjourned, on that occasion until 22 September 2005.

303. On 21 September 2005 the Moscow City Court appointed Mr Shmidt to be the first applicant’s defence lawyer in the appeal proceedings.

304. On 21 September 2005 Mr Padva was denied access to the first applicant in the remand prison.

305. On 22 September 2005 the court of appeal ruled that, if Mr Padva was still absent, Mr Shmidt, another of the first applicant’s lawyers, should take his place and represent the first applicant. As a result, Mr Padva discharged himself from hospital so that he could represent the first applicant. Mr Shmidt, who was appointed as the first applicant’s lawyer by the court’s decision, requested an adjournment, but was permitted only a short meeting with the first applicant in the court building, which, in his words, did not allow for confidentiality.

(c) Appeal hearing of 22 September 2005

306 . The Moscow City Court, sitting as the court of appeal, was composed of three judges: Mr Tarasov (the presiding judge), Mr Marinenko and Ms Lokhmacheva. In total, the hearing on 22 September 2005 lasted about eleven hours.

307. At the outset of the hearing the defence lawyers requested additional time so that they could take instructions from their clients. Mr Padva explained that he had been refused access to the first applicant on the previous day. Mr Shmidt asked for the hearing to be adjourned for at least one day. The first applicant explained to the City Court that it was imperative he should be given further time to see his lawyers. He also explained that he had been given wholly insufficient time and facilities to prepare for the appeal. The judgment ran to six hundred pages, leaving aside the vast size of the trial record and the documents in the case file, and he had had only two weeks to read them and prepare his comments before the quarantine was imposed.

308. The City Court refused the applications for an adjournment but granted a period of time to the first applicant to discuss his case with Mr Padva and Mr Shmidt whilst in the courtroom. They discussed the case in presence of the guards.

309. Mr Shmidt, referring to the breaches of domestic law in assigning the case to the appeal hearing, made an application for the judges to withdraw. However, that application was dismissed.

“The court considers that there are no grounds to study the documents which were already studied by the first-instance court. The court will study the applications in which the defence state that the documents were improperly evaluated by the Meshchanskiy Court. That being said, the court accepts the documents for review.”

311 . The City Court heard addresses by the first applicant, Mr Padva, Mr Shmidt (the lawyers) and Mr Shokhin (the prosecutor). The defence enumerated various breaches of procedural law in the course of the trial, as well as substantive inconsistencies in the judgment of the first-instance court. They also asked the City Court to discontinue the proceedings concerning the misappropriation of the NIUIF shares on the ground that by 22 September 2005 the ten-year statutory time-limit established for such crimes had expired.

312. At the end of the day the City Court retired for one hour and, on the same evening, pronounced the operative part of its decision.

(d) Judgment of 22 September 2005 by the Moscow City Court

313. The decision by the Moscow City Court runs to 62 pages. The appellate court did not detect any major breaches of procedural law in the course of the trial. On the merits the court of appeal upheld some parts of the judgment by the Meshchanskiy District Court, while rejecting other accusations or modifying the District Court’s reasoning.

314. The City Court ruled that the charges concerning non ‑ payment of personal income tax in 1998 were time-barred. The episode concerning the misappropriation of Apatit profits in 1997-1999 was also time ‑ barred. As to the NIUIF charges, the City Court held that the time-limit concerning the privatisation of NIUIF would have expired at midnight on 22 September 2005. As a result, the City Court ruled itself competent ratione temporis to examine charges related to that episode, and confirmed the first instance court’s findings in that respect.

315. The City Court upheld the conviction in the part concerning misappropriation of profits of Apatit in the years 2000-2002, misappropriation of NIUIF shares, corporate income tax evasion in 1999 ‑ 2000 (tax cuts unlawfully obtained by the trading companies), personal income tax evasion in 2000, and unlawful tax refund by the trading companies.

316. As to the first episode concerning corporate tax-evasion (related to the tax cuts) the City Court held in particular as follows:

“[The trading companies] did not own or rent production facilities or fixed assets for processing, storage, or shipment of output in the territory of the ZATO Lesnoy. Employees hired by the firms and registered in Lesnoy were hired exclusively in order to meet the conditions for granting additional tax privileges. Employees residing in Lesnoy were not engaged in preparing documents for entering into agreements, negotiations with buyers or sellers of oil or oil products, or accounting.”

317 . As to the personal income tax evasion the City Court held, in particular, that under the service agreements the amounts received by applicants were in fact paid “for their work at Rosprom, Yukos [Moscow], and foreign companies”. The City Court, in particular, found as follows:

“The facts of issuance of the patent and switch of [the applicants] to the simplified taxation scheme are confirmed by the materials adduced in the judgment and examined at the court, seized at the tax inspectorate documents on the state registration of [the applicants] as entrepreneurs carrying out their activities without setting up a legal entity, service contracts with foreign companies, 1998-2000 income declaration; [the applicants’] applications for patents to switch to the simplified taxation, accounting, and reporting scheme; patents and decisions of the inspectorate heads to issue them; payment receipts for the patents; powers of attorney for representation at the tax inspectorate; entrepreneurs’ income and expense books; and other documents”.

318 . The City Court further found the applicants not guilty in respect of several episodes. Thus, the following charges were dismissed:

(a) non ‑ compliance with the commercial court judgments in respect of Apatit and NIUIF (see Section 2 (b) and (e) above, §§ 97 et seq. and §§ 104 et seq.);

(b) payment of taxes with promissory notes (see Section 2 (g) above, §§ 111 et seq.). In this part the City Court held that it cannot be characterised as “tax evasion” under the new Article 1999, which came into force in December 2003; it also held that payment with promissory notes could not be regarded as “submission of false information” in the fiscal documents, punishable under Article 199 of the Criminal Code. The City Court added that the fact that those actions were not criminal did not affect in any way the District Court’s findings on the civil claims lodged by the Tax Ministry, since such payment of taxes with promissory notes remained unlawful (page 39 of the decision);

(c) money transfers to Mr Gusinskiy’s companies (the Most Bank episode imputed to the first applicant, see Section 2 (i) above, §§ 115).

319 . As to the pecuniary claims forwarded against the applicants, the City Court held that the amounts of non-paid taxes cannot be recovered from the sham companies; therefore, they should be recovered from the applicants personally, since they were the de facto organisers and beneficiaries of the tax evasion scheme. The judgment of the City Court in this part did not refer to any provisions of the law.

320. Finally, the City Court changed the legal classification of certain episodes with which the applicants had been charged. As a result, the overall sentence was reduced to eight years’ imprisonment for each applicant. A reasoned decision was delivered by the court of appeal some time later.

E. Serving of the sentences by the applicants

1. Placement of the first applicant in FGU IK-10

321. On 9 October 2005 the first applicant was transferred from the remand prison.

322. On 15 October 2005 the first applicant arrived at penal colony FGU IK-10 , located in the town of Krasnokamensk, Chita Region. On 20 October 2005 the first applicant’s wife was notified of that by post.

323. The distance between Moscow and Chita is about 6,320 km by motorway. According to the Government, FGU IK-10 is located about 580 km from the city of Chita. There is a railway line between Chita and Krasnokamensk; the trains have “sleeping wagons” (first-class compartments for two persons) with Internet connection and a dining car. The “transport infrastructure” within Krasnokamensk allowed the visitors to reach the territory of the penal colony.

324. According to the first applicant, penal colony FGU IK-10 in Krasnokamensk was not quite the furthest penal colony from Moscow but it was the least accessible, because direct flights were available to the colonies further from Moscow. To reach Krasnokamensk from Moscow involved a minimum of two days. It was a long and strenuous journey, made even more difficult by the infrequency of flights from Moscow to Chita. A flight from Moscow to Chita took approximately six and a half hours (occasionally more, when the aircraft had to refuel in Yekaterinburg). On arrival in Chita, there was a seven-hour wait before boarding a train for Krasnokamensk, which took another fifteen hours to arrive. Alternatively, the visitors had the choice of a train ride from Moscow, 106 hours on an uninterrupted run. This made it very arduous for the first applicant’s lawyers and family to gain access to him, and inevitably some of them were not seeing the first applicant as much as they otherwise would. The first applicant’s lawyers described the journey as “very exhausting and debilitating”. Mr Mkrtychev, a lawyer who undertook the journey from Moscow to Krasnokamensk on eight occasions, testified that he had never seen any “sleeping wagons” or a dining car on the trains on which he had travelled. Internet and mobile phone reception were also impossible, contrary to what the Government had maintained. The first applicant further maintained that Krasnokamensk itself was subject to huge extremes in climate. According to Mr Mkrtychev, during his first journey there in October 2005 the temperature was approximately minus ten degrees Celsius, with a freezing and almost unbearable wind. On one of his later visits the temperature dropped to 41 degrees below freezing point. The short summer was equally oppressive, with blistering heat and swarms of mosquitoes.

325. On 25 October 2005 the first applicant’s wife visited him in the colony. She was entitled to a “long family visit” and stayed with the first applicant until 28 October 2005.

326. The decision to send the first applicant to the Krasnokamensk colony was taken by the Federal Service of Execution of Sentences – FSIN. On 9 January 2006 the defence lodged a complaint challenging that decision. They claimed that the decision was unlawful and arbitrary. In addition, the first applicant’s lawyers pointed out that the second applicant had also been sent to a very remote region of the Russian Federation, in apparent disregard of the provisions of Russian law.

327. At the hearing the representatives of the FSIN argued that there had not been enough places in the penitentiary facilities in Central Russia, and that a decision had been taken that five convicts should be sent from Moscow to various regions of Russia. There was no requirement in the law to consider the individual circumstances of each convict; as a result, the first applicant was among the five detainees who had been sent to the Chita Region.

328 . The first applicant in the proceedings referred in particular to the figure mentioned in an interview by the then Minister of Justice Mr Chayka, who said that in September 2005 the admission capacity of Russian colonies was 786,753 places, whereas only 637,079 convicts were detained there. In another interview by Mr Kalinin, the then director of the FSIN, acknowledged that there had been free places in some of the colonies.

329 . On 6 April 2006 the Zamoskvoretskiy District Court of Moscow dismissed the first applicant’s claim and, referring to Article 73 § 2 of the Code on the Execution of Sentences, upheld the FSIN’s decision as lawful and justified. The District Court found that under Article 73 of the Code of Execution of Criminal Sentences a convicted person had the right to serve his sentence in the region where he was convicted or where he had lived before. However, if in that prison there were no places vacant, the detainee could be sent to serve his sentence in the nearest region where it was possible to accommodate him. The District Court referred to a decision of FSIN which defined which colonies must accept convicts from Moscow and in what proportions. According to the District Court, that decision was taken within the competence of FSIN, and did not violate the law. The District Court also held that if the first applicant was placed in a nearer colony the rights of other prisoners might have been violated. The court ruled that information contained in the interviews of Mr Chayka and Mr Kalinin on the number of places vacant in the Russian colonies was inadmissible evidence. On 13 June 2006 the Moscow City Court upheld that decision.

2. The first applicant’s contacts with his lawyers

330. While in the Krasnokamensk colony the applicant first continued to work with his lawyers. However, his contacts with them were seriously limited. Thus, at the beginning of his prison sentence the first applicant was only permitted to see his lawyers at the end of the working day and only one lawyer at a time was allowed to see him.

331. On 10 November 2005 Ms Terekhova, one of the applicant’s lawyers, was denied access to the first applicant. On 15 November 2005 the colony staff seized documents from Mr Mkrtychev. On 16 November 2005 Ms Levina was subjected to a body search by the colony staff when visiting the first applicant; the procedure of the search involved undressing. On 17 November 2005 Ms Khrunova was also subjected to a similar body search. On 18 November 2005 Ms Terekhova was body-searched on her way to and from the meeting with the applicant, and her professional files were examined. On 23 and 26 November 2005 she was body-searched again in the same manner.

332. From 29 November to 1 December 2005 the first applicant was visited by three of his lawyers in connection with his application to the European Court of Human Rights. They needed to see the first applicant together but were not permitted to do so. Later the first applicant successfully challenged the prison regulations concerning visits by lawyers. In a judgment dated 25 May 2006 the Supreme Court held that the rule was invalid. However, the colony authorities continued to refuse the lawyers’ access to the first applicant during working hours.

333. During the meetings with his lawyers the first applicant was separated from them by a screen which ran from wall to wall and floor to ceiling. Such arrangements had been introduced in the penal colony in question since the first applicant’s arrival. The first applicant was not permitted to retain legal documents brought to him by his lawyers on legal visits. The first applicant had a right to copy part or all of a document in his own handwriting in the course of a legal visit. As a result, the first applicant was unable to work with lengthy documents, such as the application before the Court.

334 . In November 2005 the first applicant’s British lawyers, Mr Nicholas Blake and Mr Jonathan Glasson, asked permission to meet him. In February 2006 they applied for a Russian visa, but the Russian embassy did not deliver visas to them for the reasons which remain unknown.

335. On 11 March 2006 Mr Khrunova’s professional ID was confiscated by the colony staff.

3. Disciplinary proceedings against the first applicant

336. While in the Krasnokamensk colony the first applicant was subjected to a number of disciplinary proceedings regarding his conduct in the colony, which resulted in three periods of solitary confinement for a total of twenty-two days.

337. On 12 December 2005 the first applicant left his work-place in the sewing shop because his equipment was broken and he needed to find a repair worker. On the following day he was formally reprimanded by the administration for having done so.

338. On 16 January 2006 the applicant received by post the texts of two regulations by the Ministry of Justice concerning the regime of detention of convicted persons. Those items of mail had passed through the colony censor. On the following day those regulations were seized from the first applicant and on 24 January 2006 the first applicant received a second reprimand for keeping unauthorised printed materials. He was placed in a solitary confinement cell for five days.

339. On 9 February 2006 the Krasnokamensk Town Court quashed the decision of 12 December 2005 to reprimand the first applicant for absence from work.

340. On 17 March 2006 the first applicant was subjected to seven day’s confinement in the punishment block for drinking tea in the communal area instead of in a canteen.

341. On 18 April 2006 the Krasnokamensk Town Court quashed the second reprimand of 24 January 2006.

342. On 3 June 2006 the first applicant received another reprimand. He was placed in the solitary confinement cell for ten days.

4. Placement of the second applicant in FGU IK-3

343. On 27 September 2005 the Moscow branch of the Federal Penitentiary Agency decided to send the second applicant to serve his sentence in a correctional colony FGU IK-3 in the Kharp township situated on the Yamal peninsula (Yamalo-Nenetskiy region, Northern Urals, north of the Arctic Circle). That penitentiary institution was a “strict regime” colony which had a special “ordinary regime” zone. The second applicant lived in that zone.

344. The distance between Moscow and Kharp is over 3,300 km by road. According to the Government, Kharp township had a direct railway connection with Moscow. Several trains ran on that line, including “Polar Arrow”, a “high-class train. That train had all necessary amenities, including two-bed compartments in “economy” and “business” class, services for children and a restaurant. Further, Moscow had a direct air connection with Salekhard, a nearby town. It was possible to get to Kharp from Salekhard by train or by car, through the town of Labytnangy and across the Ob River.

345. In the second applicant’s submission, the Government’s argument that there was a direct railway connection with Kharp township and direct flights between Salekhard and Moscow was certainly true. However, the train journey usually took 48 hours, while to reach Kharp from Salekhard airport one had to cross the Ob River: there was a ferry in the summer and an ice-crossing in the winter. In autumn and spring, when there was no ice, the river could only be crossed by air-cushioned vehicles, which was quite dangerous.

346. On 11 January 2006 Mr Kalinin, the Head of the Federal Penitentiary Agency, stated in an interview that the second applicant had been sent to that colony in order to guarantee his own safety.

347 . On 23 January 2006 the second applicant’s lawyers wrote a letter to the Department of the Federal Penitentiary Agency in the Kaluga region, adjacent to the Moscow region, seeking to obtain information about the number of detainees in the ordinary-regime colony ( FGU IK-2 ) situated in that region. In the letter dated 31 January 2006 the second applicant’s lawyers were informed that the Kaluga colony was capable of accepting up to 50 detainees; however, by 1 October 2005 only 48 people were serving their prison sentence in that colony. Between 1 and 10 October 2005 that number remained the same. Each detainee had 2 square metre of personal space in the colony.

348. On an unspecified date the second applicant’s lawyers challenged in court the decision of the FSIN. They asserted that the second applicant had the right to serve his sentence in a colony situated in Moscow or in the Moscow region, where he had lived before his conviction. The defendant explained that since Moscow was a capital city, it had no correctional colonies on its territory.

349 . On 16 February 2006 the Zamoskvoretskiy District Court of Moscow dismissed the complaint. The District Court established that there were no appropriate penitentiaries in Moscow; furthermore, it was impossible to accommodate all the convicts from Moscow in the Moscow Region. According to a letter from the head of the Special Register Bureau of the FSIN ( byuro spetsialnogo utcheta ), it was equally impossible to place the second applicant in correctional colonies in the regions adjacent to Moscow because of overcrowding, repair work, allocation of premises for remand prisons, etc. On 27 August 2003 and 28 July 2005 the FSIN had established quotas for sending convicts from Moscow to other regions of Russia. The quota for the Yamal peninsula was five persons. The fact that the second applicant suffered from certain chronic diseases was not an absolute obstacle to his being sent there. Consequently, the FSIN’s decision to send the second applicant to a colony on the Yamal peninsula was lawful and justified.

F. Connected proceedings

1. Tax claims against Yukos

350 . On 26 May 2004 the Commercial Court of Moscow ordered Yukos Oil Company Plc to pay taxes totalling RUB 47,989,073,311, fines in the amount of RUB 32,190,430,314 and a penalty in the amount of RUB 19,195,605,923. This award related, in particular, to taxes due by Yukos for the year 2000. The Commercial Court’s award included (but was not limited to it) reassessed taxes for 2000 attributable to the operations of Mitra, Vald Oil, and Business Oil, i.e. three of the four ZATO trading companies that formed the basis for the civil damages award made against the applicants within the criminal proceedings. The Commercial Court found that those companies (along with trading companies registered in low tax zones) had obtained tax cuts unlawfully. The Commercial Court further decided that their operations with Yukos oil had to be treated as operations of Yukos itself, because these companies were nothing more than a “façade” for Yukos, and Yukos obtained all benefits from those operations. Consequently, the Commercial Court imputed the unpaid taxes of those trading companies directly to Yukos (for more details see the judgment in the Yukos case, § 48). The decision of the Commercial Court did not contain a detailed calculation of the amounts due by each trading companies.

351. Those tax re-assessments were upheld on appeal on 29 June 2004, and on cassation appeal on 17 September 2004.

352. On 3 October 2006 the Meshchanskiy District Court ordered that the first applicant pay RUB 127,564,727.04 to the Moscow Tax Inspectorate no. 2 in relation to the unpaid personal income taxes.

353. Over the following months commercial courts examined several other cases opposing Tax Service and Yukos concerning tax underpayments. The majority of the claims by the Tax Service were upheld, which eventually led to the forced sale of the assets of Yukos and its bankruptcy.

2. Disciplinary and other measures against the applicants’ lawyers

354. In the course of the proceedings against the applicants and shortly afterwards the GPO made several attempts to disbar the lawyers who represented the applicants before the domestic instances and the Court.

355 . Thus, of nineteen lawyers acting for the applicants and in associated cases, twelve have been the subject of disbarment proceedings (Ms Artyukhova, Mr Drel, Ms Moskalenko, Mr Shmidt, Mr Mkrtychev and others). In particular, the GPO sought disbarment of Ms Moskalenko in March 2007 on the basis that her absence from Chita “grossly violated the right of [the first applicant] to defence”. To counter those accusations the first applicant had to make a statement that he was fully satisfied with Ms Moskalenko’s work. Mr Drel was accused of acting in breach of professional conduct by not appearing at a hearing on 14 September 2005. On 23 September 2005 the Ministry of Justice sent a recommendation to the Moscow City Chamber of Lawyers to institute disciplinary proceedings against the lawyers, indicating that they should be disbarred. That same day the press service of the GPO published a demand on the part of the GPO for the institution of disciplinary proceedings and the disbarring of all the first applicant’s lawyers, with the exception of Mr Padva. The demands of the GPO, the Moscow City Court and the Ministry of Justice were subsequently rejected by the Chamber of Lawyers.

356. In the course of the proceedings the lawyers’ belongings were inspected, and some of the lawyers were subjected to bodily searches involving undressing (Ms Terekhova, Ms Levina and Ms Khrunova); one was detained in custody and left Russia for fear of prosecution. Two lawyers were assaulted by unknown individuals.

357 . In November 2005 the International Protection Centre, which Ms Moskalenko founded, was subjected to a tax audit of the entirety of its activities.

358 . Early in the morning of 23 September 2005, several hours after the appeal court had rendered its judgment, Mr Amsterdam, one of the first applicant’s foreign lawyers, was visited in his hotel room by law ‑ enforcement officers. Later that day his visa was revoked and he was ordered to leave Russia within 24 hours.

359 . The question of harassment of the first applicant’s lawyers was raised by several former managers of Yukos in the extradition proceedings in which they took part in the United Kingdom (for more details see below). Senior Judge Workman of the London Extradition Court, who examined extradition requests by the GPO, concluded that the first applicant’s lawyers had been subjected to harassment. In particular, he held as follows:

“Mr Shmidt provided me with details of lawyers involved in the cases concerning Mr Khodorkovskiy, Mr Lebedev and Mr Pichugin. Of nineteen individuals, twelve have been the subject of application for disbarment, five have been subjected to searches, two assaulted, one detained in custody and two forced to leave Russia. I share Mr Shmidt’s view that this catalogue defies belief that so many lawyers could coincidentally face so many misfortunes accidentally or by genuine due process of law. I am satisfied that at least some of the lawyers suffered harassment and intimidation”.

3. Second criminal case against the applicants

360. Simultaneously with the investigation into the misappropriation of shares and tax evasion the GPO conducted a separate investigation into other facts related to the business activities of Yukos and its managers in 1998-2003. In particular, the applicants were suspected of having embezzled the profits arising from the output of the companies affiliated with Yukos. The applicants were also charged with money laundering.

361. In 2009 the second case was brought to trial. On 27 December 2010 the applicants were convicted by the Khamovnicheskiy District Court. This conviction was upheld on appeal on 24 May 2011.

362. On 21 December 2011, the Presidential Council of the Russian Federation for Civil Society and Human Rights submitted a 400-page report on the applicants’ second trial. The report contained contributions from a group of Russian, European and American experts and scholars. None of the expert group found any support for the allegations of embezzlement or money laundering. Having considered the expert reports, the Presidential Council for Civil Society and Human Rights issued a series of recommendations in which, amongst other things, it called for the judgment to be repealed and describing the second case as “a miscarriage of justice”: in particular, the report held that the applicants were convicted for acts that were not directly prescribed by the criminal law and did not contain features of a corpus delicti, as well as without due process. The experts pointed out that the verdict contradicted judgments in other Yukos ‑ related cases, which have not been overturned, and which subjected Yukos to punitive taxation on oil sales; in this case, the same oil was found to have been stolen, which would have precluded it from being taxed.

4. Proceedings on extradition of former Yukos managers, requests for legal assistance by the Russian Federation in foreign courts and other Yukos-related proceedings abroad

363 . Some of the applicants’ former colleagues and business partners left for the UK for fear of prosecution (in particular Ms Chernysheva, Mr Maruev, Mr Temerko, Mr Gorbachev, Mr Burganov and others). The GPO lodged requests for their extradition to Russia. All of the extradition requests by the GPO were eventually dismissed by the British courts on the ground that those individuals might not receive a fair trial at home. In particular, in March 2005 Judge Workman, who reviewed one of the extradition requests, concluded that “it was more likely than not that the prosecution of Mr Khodorkovskiy was politically motivated.” The GPO did not appeal against those decisions. A similar conclusion was reached by the Nicosia District Court (Cyprus) in a 2008 extradition case concerning former Yukos managers. On 31 July 2007 Czech High Court upheld the refusal of a lower court to extradite to Russia ex-employee of Yukos, Ms Vybornova. On 31 August 2007 the Vilnius Regional Court refused the extradition of Mr Brudno. Extradition of former Yukos employees and business partners was refused by the Estonian, German and Israeli courts, always with reference to the improper motives of prosecution.

364. The GPO also requested legal assistance from a number of European countries where Yukos’ assets were presumably held or operations had been conducted. The Swiss Federal Tribunal ordered the Swiss government not to co-operate with the Russian authorities on account of such requests after it concluded that the applicants’ trial had been politically motivated.

365. In particular, the Swiss Federal Tribunal in its judgment of 13 August 2007 concluded that all of the facts, taken together, “clearly corroborated the suspicion that criminal proceedings have indeed been used as an instrument by the power in place, with the goal of bringing to heel the class of rich oligarchs and sidelining potential or declared political adversaries”. It noted, in particular, that “the political ... nature of the proceedings in Russia was reinforced by the violations of guarantees respecting human rights and the right to a defence” and referred to the the conditions of the execution of the applicants’ sentence.

366. In September 2010, in Rosinvest Co UK Ltd v. the Russian Federation, the Arbitration Institute of the Stockholm Chamber of Commerce considered the tax claims that had forced Yukos into bankruptcy in the context of a claim by a Yukos shareholder Rosinvest Co. for loss of investments on the basis of a 1989 bilateral UK-USSR treaty for the protection of capital investments. The Tribunal found that the Russian Federation had breached Article 5 of the IPPA, forbidding expropriation of the investments of investors of either Contracting Party. The Tribunal found that “the treatment of Yukos and of Mr Khodorkovskiy changed dramatically after the latter had publicly criticized the Putin administration and after several projects suggested by Yukos seem to have been understood as threatening the government’s control over the Russian petroleum resources”.

367. The applicants also informed the Court about other litigation before the arbitration tribunals which opposed minority shareholders of Yukos and the Russian Government. In particular, the first applicant submitted a copy of the decision of 20 July 2012 by the Arbitration Institute of the Stockholm Chamber of Commerce in the case of Quasor de Valores, Orgor de Valores, GBI 9000 and ALOS 34 v. the Government of the Russian Federation . In this case the Tribunal found in favour of the investors and concluded, in particular, that tax minimisation schemes employed by Yukos had been lawful, and that the domestic enforcement proceedings against Yukos amounted to a de facto expropriation and were not a genuine attempt to collect taxes.

G. Reaction of international organisations, NGOs and political figures

1. Public statements of State officials; testimony about “out of record” conversations with public officials about Yukos

368. The applicants’ case attracted considerable public attention in Russia and abroad. In the course of the trial and after it many prominent public figures and influential organisations expressed their doubts as to the fairness of the criminal proceedings against the first applicant and his colleagues. The applicants submitted documents to that effect.

369. In particular, the applicants referred to statements by several high governmental officials who either directly confirmed or supposed that the applicants had been prosecuted for political reasons (such as Mr Gref, the Russian Economic Development and Trade Minister, Mr Illarionov, President Putin’s Economic Adviser, Presidential Aide Mr Shuvalov (now a First Deputy Prime Minister), the former Minister of Economics Mr Yasin, and Mr Mironov, the Chairman of the upper chamber of the Russian Parliament.

370 . The applicants relied upon the public statements and court testimony of Mr Kasyanov, the Russian Prime Minister at the time of the applicant’s arrest and detention. Thus, in his interview to Echo Moskvy radio station on 27 September 2007 Mr Kasyanov stated as follows:

“There were mistakes, many mistakes, which I am also ashamed of, such as arrest of Mr Lebedev and then of Mr Khodorkovskiy, and start of pressure being put on Yukos ... I know that there are essential facts which the authorities should have presented in court, but which they didn’t present. The ministries, official bodies and various organizations that had anything to do with this case were forbidden to present any documents or facts that may have led people to form a different opinion from the one that was presented to the court by the prosecution. So the court took the only right decision, from the point of view of the authorities”.

371 . In May 2010 Mr Kasyanov was called to testify at the applicants’ second trial at the Khamovnicheskiy District Court in Moscow. In particular, Mr Kasyanov testified about a conversation he had had with President Putin on 11 July 2003, after the arrest of Mr Lebedev. Mr Kasyanov described his dialogue with Mr Putin on that day in the following terms:

“During a break in the meeting I asked Mr Putin again about what was happening with Yukos. At the beginning, Mr Putin, as previously, tried to avoid giving a direct answer, but I was persistent, and after another attempt on my part he answered me that they (meaning [the first applicant] and other owners of Yukos) provided funding not only to Yabloko and the Union of Right Forces (the SPS) which he (Mr Putin) allowed them to provide funding to, but also to communists. And he didn’t allow sponsoring communists. I didn’t say anything in response because I was surprised at what was said. I hadn’t even suspected that statutory-allowed financial support of political parties also needed to be approved confidentially by the President. I didn’t know that Mr Putin had given [the first applicant] permission to fund the SPS and Yabloko. But Mr Putin’s answer left me in no doubt that by funding the communists [the first applicant] had crossed a line so far as Mr Putin was concerned and that the criminal prosecution case of Yukos employees was started exactly because of the funding of political parties not sanctioned by Mr Putin.”

372. Written depositions of Mr Kasyanov in the same terms were submitted to the Court in 2009. The former Prime Minister also explained that the tax optimisation schemes, which formed a central component of the criminal case against the applicant, had been in conformity with the law at the relevant time. Mr Kasyanov believed that the initial reason for the criminal prosecution of the applicant was the political concern of President Putin and his immediate circle prior to the State Duma election of December 2003. Mr Kasyanov did not think that the criminal prosecution of the applicant had originally been caused by economic reasons, including intent to take over his assets, but that goal appeared subsequently as a concomitant one to the original political goal of removing a political opponent. In the applicants’ words, Mr Kasyanov’s evidence supported that already given by Mr Dubov, a former Duma Deputy.

373 . The applicants also referred to the testimony of senior Yukos executives who had contacts with governmental officials in 2003. Mr Shakhnovskiy testified in 2006 that in 2003 he had met the then Minister of Economy, Mr Gref, who had told him that “the real target of the attack [on the applicants] was the liberal-democratic wing of the government ... and not just Mr Khodorkovskiy himself”. Mr Gref also said that “Mr Khodorkovskiy had placed himself in the firing line by his overt and powerful support for the liberal wing in Russian politics”. Mr Shakhnovskiy also reported on his meeting with the then Minister of Finances, Mr Kudrin, who said, inter alia , that unpaid taxes had been just a pretext used to crush Mr Khodorkovskiy and take away his company. Mr Nevzlin, a former member of the upper chamber of the Russian Parliament and one of the co-owners of Yukos, has testified that in mid-spring 2003 he had been warned by Mr Lesin, the Media Minister, that a political decision had been taken to attack the first applicant and Yukos. Mr Dubov, another major shareholder of Yukos, testified that on 24 October 2003 (the day before the first applicant’s arrest) Mr Surkov (one of the closest aids of President Putin) had said that “all government institutions had been forbidden from having any contact with Open Russia and that President Putin had stated that Yukos was going to be eliminated from the political sphere”. Mr Dyatelev, one of the applicants’ lawyers, gave evidence that a former Tax Minister, Mr Pochinok, was told by Mr Surkov not to give evidence at the applicant’s trial in relation to the tax charges. Mr Ivlev, a lawyer with ALM Feldmans (a law firm working for Yukos), testified that in November 2003 he had met Mr Shuvalov, another aid to President Putin, who had said that there had been absolutely nothing he could do to stop the attacks on the first applicant and Yukos, and implied that decision concerning their fate had been taken at the highest level within the Presidential Administration.

2. Statements by international organisations

374 . Several international organisations expressed their concern about a possible political underpinning of the first applicant’s criminal prosecution in the first trial (see Resolution 1418 (2005) adopted on 25 January 2005 by the Parliamentary Assembly of the Council of Europe, and the statement of the Committee on Legal Affairs and Human Rights of the Council of Europe’s Parliamentary Assembly adopted on 6 October 2005).

375. Further, in May 2009 the European Parliament adopted a Resolution on the Annual Report on Human Rights in the World 2008 and the European Union’s policy on the matter, in which it stated that the first applicant was “a political prisoner”.

376. On 23 June 2009 Mrs Leutheusser-Schnarrenberger, the Special Rapporteur of the Parliamentary Assembly of the Council of Europe published her report, entitled “Allegations of politically-motivated abuses of the criminal justice system in Council of Europe member states”. At a plenary session on 30 September 2009 the Parliamentary Assembly accepted the report from Mrs Leutheusser-Schnarrenberger and unanimously passed a resolution that noted that the applicants’ second trial gave rise to concerns that “the fight against legal nihilism launched by President Medvedev is still far from won”. In her report the Special Rapporteur analysed the new trial as an example of a high profile case involving political motivation.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. Criminal proceedings in Russia at the time of the events – a general overview

378. The prosecution carries out various investigative measures, such as searches, questioning of witnesses, expert examinations of material evidence, etc. For certain investigative measures the prosecution has to request a court order; the same concerns preventive measures, in particular the detention of the suspect. If having collected the evidence the prosecution concludes that a particular person has committed a crime, the prosecution makes an order formally charging the said person. The accused person may challenge any decisions (or inaction) of the prosecution before a higher prosecution official or, in some instances, before a court. The accused person may also seek to supplement the case file by requesting additional investigative steps to be taken by the prosecution.

379. If, in the course of the investigation, the prosecution decides that there is no basis for bringing the case to trial, the accused is released (if detained) and the case is closed. Otherwise, the prosecution must draw up an act of indictment. At this point the prosecution must invite the interested parties, including the accused and his representatives, to examine the materials collected in the course of the investigation supporting the accusation and contained in the case file. The time for reading the case file by the accused and his counsel may be limited (for example, when the defence deliberately delays the proceedings). When the time for reading the case file is over, the prosecution refers the case to the appropriate court.

380. As a general rule, trials are held in open court. All evidence in the case is, as a rule, subject to direct examination in oral proceedings. The judgment of the court may be based only on the evidence examined during the trial. The same judge must hear the case from beginning to end. During the trial the prosecutor supports the accusation, but can withdraw it wholly or in part. The parties have equal rights to make challenges, submit petitions and objections, produce evidence, participate in examination, submit pleadings and remarks, etc. A court secretary keeps a summary record of the hearings.

381. Before the start of the hearing the presiding judge invites the parties to submit requests, if any (for example, to summon new witnesses, to carry out an additional expert examination, etc). After ruling on such requests, the judge begins the “judicial investigation” of the case. The prosecutor opens the case for the accusation by setting out succinctly the essence of the accusation with reference to the relevant Articles of the Criminal Code. The judge then asks the accused if he (the accused) understands the accusation and whether or not he considers himself guilty. If the accused understands the charges and does not plead guilty, the examination of evidence produced by the prosecution begins. The prosecution decides on the order in which witnesses are called and other evidence is presented to the court. The defence can intervene and challenge the witnesses for the prosecution, put questions, etc., but the presiding judge can reject leading or irrelevant questions. An expert witness who gave an opinion during the preliminary investigation may be summoned and questioned in court; further expert examinations can be ordered if necessary. After the prosecution finishes its submission of evidence, the floor is given to the defence. The prosecution can challenge evidence adduced by the defence.

382. Upon completing the study of evidence submitted by the parties, the court asks whether they want to add anything to the judicial investigation. If there is such a request, the court discusses the matter and takes a decision, together with performing any other necessary judicial actions. The judicial investigation is then declared to be completed and the court passes to the stage of oral argument.

383. Oral argument consists of statements to the court, first by the prosecution, and then by the defence. The victim, the claimants, if any, and the defendants can also take part in the pleadings. After all the participants have given their statements, they may each speak in rebuttal, the right of last rebuttal always belonging to the defence counsel and the person brought to trial. The person brought to trial has the last word.

384. The deliberations are held and the judgment is drawn up in a conference room behind closed doors; no one, except the judges who consider the case, can be present. The judgment must be “lawful, well-founded and just”. Once the judgment is signed by all judges, the bench returns to the courtroom where it is read out to the parties and the public. It is common practice, in complex cases, to read out only the operative part of the judgment; in this case the full text of the judgment is delivered later.

385. The parties can appeal; in most criminal cases (except for those heard by the justice of the peace at first instance) the court of appeal is the only court of “ordinary” jurisdiction available for the parties to challenge the judgment. Access to “supervisory review” proceedings is at the discretion of the judicial authorities. The appeal must be filed within ten days from the date on which the judgment is delivered. The court of appeal may modify or quash the judgment, adopt a new decision or refer the case for fresh consideration to the first instance court. The appeal hearings are de jure open to the public and oral; however, in practice the court of appeal rarely examines evidence directly. More often the appeal hearing consists only of the parties’ oral argument.

B. Specific provisions of the criminal procedure law

1. Withdrawal of a judge; legal force of the judgment in a related case

2. Confidentiality of lawyer-client contacts in prison and lawyers’ professional privileges

388 . The Detention on Remand Act of 1995 (Federal Law On the Detention of Suspects and Defendants no. 103- FZ of 15 July 1995), as in force at the material time, provides in section 18 that a detainee has a right to confidential meetings with his lawyers. That section does not define whether the lawyer and the client are entitled to make notes during such meetings and to exchange any documents. Meetings should be conducted out of the hearing of prison staff, but the prison staff should be able to see what is happening in the hearing room. Section 18 establishes that a meeting can be interrupted if the person meeting the detainee tries to hand him “prohibited objects, substances, or foodstuff” or to give him “information which may obstruct the establishment of truth in the criminal case or facilitate criminal acts”.

389. Section 16 of the Detention on Remand Act defines that rules on sending and receiving correspondence, as well as rules on the seizure of prohibited objects, substances or foodstuff may be established by the internal regulations of the remand prisons.

390 . Section 20 establishes that all correspondence by detainees goes through the prison administration, which may open and inspect the mail. Correspondence addressed to the courts, to the ombudsman, to the prosecuting authorities, to the European Court of Human Rights, etc., is free from perusal but correspondence with lawyers is not mentioned in this list (for more details see Moiseyev v. Russia , no. 62936/00, § 117, 9 October 2008). It appears (see the paragraphs immediately below) that the Detention on Remand Act was routinely interpreted by the prison authorities as allowing the latter to seize and inspect correspondence between a detainee and his lawyer.

391. Section 34 of the Detention on Remand Act provides, in so far as relevant, as follows:

“[Criminal defendants in the remand prisons] are subjected to personal search, taking of a photo and of fingerprints. Premises where they are detained are subjected to searches; [the defendants’] personal belongings and parcels are inspected. ...

Where there are sufficient reasons to suspect that a person entering or leaving the prison is carrying prohibited objects, substances [or] foodstuff, the prison officials may search their clothes and belongings ... and seize [those] objects, substances and food stuff ... which [detainees] are not allowed to have or to use.”

392 . The Internal Regulations for Remand Prisons, introduced by Decree no. 148 of the Ministry of Justice of 12 May 2000, in the part entitled “Receiving and sending by the suspects and accused of telegrams, letters and money transfers”, contain sections 84 and 86, which provide that correspondence of the detainees is subject to perusal, and that all letters must be submitted to the remand prison staff member in a non-closed envelope. As a rule, the administration must forward letters to the addressee within three days of their receipt from the detainee. However, there are exceptions to this rule - section 91 provides as follows:

“Letters and telegrams addressed to [co-defendants], victims, or witnesses of the crime, as well as [letters and telegrams] containing information about the case, slanderous language, threats, calls for violence, crimes or other offences, information on security arrangements in the remand prison, about prison staff, about methods of passing prohibited items, or [containing] other information which might prevent the establishment of truth in a criminal case, contribute to the commission of crimes, or which are written in cryptography ..., which contain State secret or other information protected by law, shall not be dispatched to the addressee, and must be transmitted to the body in charge of the criminal case”.

393. Pursuant to section 99 of the Internal Regulations, “proposals, declarations and complaints [of a detainee] addressed ... to the defence lawyer, shall be considered by the administration of the remand prison and dispatched to the addressee within three days”. Pursuant to section 103, “replies to the proposals, declarations and complaints received in the remand prison must be read out to [the detainee] ... and attached to their personal file”.

394. Section 27 of the Internal Regulations of 2000 reads as follows:

“Items prohibited for keeping and using [by the detainees] include objects ( predmety ), substances and foodstuff which are dangerous for life or health, which can be used as a tool of a crime, or which may frustrate achieving the purposes of detention on remand, and which are not included in the List of Foodstuff, Items of First Necessity, Shoes, Clothes and other goods [allowed for keeping and use by the detainees]”.

395. The Internal Regulations for Remand Prisons, introduced by Decree no. 189 of the Ministry of Justice of 14 October 2005 (which replaced Decree no. 148), contains section 146, which establishes that lawyers cannot use computers, audio- and video-recording equipment, copying machines, etc., during meetings with their clients in remand prisons unless authorised by the prison administration. On 31 October 2007 the Supreme Court of the Russian Federation struck down that provision as unlawful (decision confirmed on 29 January 2008).

396 . On 29 November 2010 the Constitutional Court of the Russian Federation interpreted the above provisions of the Detention on Remand Act in their constitutional meaning. The Constitutional Court held that the law may legitimately introduce certain limitations on lawyer-client confidentiality, including perusal of their correspondence. However, such limitations should not be arbitrary, should pursue a legitimate aim and should be proportionate to it. Legitimate aims may include preventing further criminal activity by the accused and preventing him from exerting pressure on witnesses or otherwise obstructing justice. The general rule is that lawyer-client correspondence is privileged and cannot be perused. Any departure from this rule is permissible only in exceptional circumstances where the authorities have valid reasons to believe that the lawyer and/or his client are abusing the confidentiality rule. Further, the Constitutional Court specified that the prison authorities should have “sufficient and reasonable grounds to believe” that the correspondence contains unlawful content and that they may peruse such correspondence only in the presence of the persons concerned and on the basis of a written motivated decision. The results of the inspection of the mail should also be recorded. At the same time the Constitutional Court ruled that any correspondence addressed by a detainee to his lawyer but not submitted “through the prison administration”, as provided by the federal law, may be checked by the prison administration.

397. Article 19.12 of the Code of Administrative Offences defines liability for passing to the detainees of prohibited “objects, substances or foodstuff”. Article 27.1 of the Code provides, in so far as relevant, that in order to suppress an administrative offence government officials who have the power to do so may conduct “inspections” of the person and/or of the personal belongings and seize objects and documents. Article 27.10 regulates the procedure for the seizure of objects and documents. It provides that seizure of objects which are tools or an object of an administrative offence or documents which may have relevance for the administrative case, which are discovered at the place where the administrative offence was committed or which are kept by the person whose person or personal belongings are inspected, may be performed by a staff member of the remand prison in presence of two attesting witnesses.

398 . Section 8 (2) of the Advocacy and Bar Act of 2002 (Federal Law of 31 May 2002, No. 63-FZ, the “Advocacy Act”) provides that a lawyer cannot be questioned as a witness on account of information which he had learned when a prospective client solicited his professional services or in the course of rendering such services. Section 8 (3) provides that a search in the premises occupied by an advocate for professional use must be authorised by a court order. Any information obtained as a result of the search may be used in criminal proceedings under condition that this information did not make part of the lawyer’s case file [ proizvodstvo ] in a particular client’s case (“except tools of crime and objects not allowed for free circulation under Russian law”). Section 18 prohibits seeking from advocates any information related to the legal assistance they render in a specific case.

399 . On 8 November 2005 the Constitutional Court issued ruling No. 439- O which gave constitutional interpretation to Articles 7, 29, and 182 of the CCrP, read in conjunction with Section 8 (3) of the Advocacy and Bar Act. It ruled, in particular, that the Advocacy and Bar Act is a lex specialis and must therefore take precedence over the general rules of authorisation of searches insofar as searches in the lawyer’s offices are concerned. In particular, the Constitutional Court ruled that the applicable legislation in its constitutional meaning “does not allow searches to be conducted on the business premises of a lawyer or lawyers’ entity without a special court decision in this respect”.

3. Expert evidence and documentary evidence

400. Article 74 of the CCrP contains a closed list of sources of information which can be used as evidence in criminal trial. That list mentions inter alia expert reports and expert testimony, as well as “other documents” (Article 74 (2) (6)). Article 84 (1) of the CCrP provides that “other documents” can be admitted as evidence if they contain information which may be important for establishing the facts which need to be established within the criminal proceedings.

401 . The CCrP (Articles 57 and 58) distinguishes between two types of expert witnesses: “experts” proprio sensu [ experty ] and “specialists” [ spetsialisty ]. Their role in the proceedings is sometimes similar, albeit not absolutely identical. Whereas the “experts” are often engaged in making complex forensic examinations prior to the trial (for example, dactyloscopic examinations, or post-mortem examinations of corpses), a “specialist” is summoned to help the prosecution or court in handling technical equipment, examining an item of material evidence, understanding the results of “expert examinations”, assessing the methods employed by the “experts”, their qualifications, etc. Both can produce their reports to the court and/or testify in person. Under Article 57 of the CCrP (with further references) the right to commission an expert examination belongs to the investigator or to the trial court. The court may commission an expert examination at its own initiative or on the request of the parties.

402 . Article 58 (1) of the CCrP defines the functions of a “specialist” (in so far as relevant to the present case) as follows:

“A specialist is a person possessing special knowledge, who is brought in to take part in the procedural actions ..., to assist in the discovery, securing and seizure of items of evidence ..., in the use of technical equipment ..., to put questions to the expert and also to explain to the parties and to the court matters which come within his or her professional competence”.

403. Article 58 (2) of the CCrP stipulates the rights that the specialist has in the proceedings, as well as his or her obligations. It refers to Articles 168 and 270 of the Code which deal with summoning the specialist and the procedure for his participation in the criminal proceedings. Article 164 deals with participation of the specialist in investigative actions at the pre-trial investigation stage at the request of the investigator. Article 270 provides that the presiding judge at the trial should explain to the specialist his or her rights and responsibilities before questioning.

404 . The Plenary Supreme Court of the Russian Federation in its Ruling no. 8 of 4 July 1997 “On certain aspects of the application of penal law on tax evasion by the courts of the Russian Federation” held inter alia as follows:

“17. ... In view of the specific character of criminal cases concerning tax evasion, it is recommended that the courts, in order to establish circumstances of tax evasion in the most ample and comprehensive manner, invite for the participation in the trial, when necessary, specialists ( специалисты ) which have relevant knowledge in the field of taxation”.

405. Under Article 75 of the CCrP, evidence obtained in breach of the provisions of the Code, are inadmissible. By virtue of Article 50 (2) of the Russian Constitution, in the administration of justice evidence obtained in violation of the federal law shall not be used.

406. Article 252 of the CCrP stipulates that the trial proceedings must concern only the accused person and must be limited to the accusations which have been formulated against him. Changing the scope of the accusation is possible to the extent that it does not worsen his situation and does not impair the rights of the defence.

407. Article 286 of the CCrP provides that the court may attach to the materials of the case-file documents produced by the parties.

4. Collecting of evidence by the defence

408. The old CCrP (in force before 2002) provided that the duty to obtain evidence fell to the investigative bodies. The new CCrP (applicable to the case) recognises the defences’ right to collect evidence, albeit with important limitations. Thus, Article 53 (2) of the Code provides that the defence lawyer has a right “to collect and submit evidence necessary for providing legal assistance, in accordance with Article 86 (3) of the Code”. Amongst other powers of the defence lawyer Article 56 (3) mentions “engaging a specialist in accordance with Article 58 of the Code”. However, it does not allow the defence to commission and produce “expert reports”.

409 . Article 86 of the new CCrP formulates the rules on collecting evidence as follows:

“1 In the course of the criminal proceedings evidence shall be collected by ... the investigator, the prosecutor and the court by means of investigative measures and other procedural actions provided by the present Code.

2. [An accused] ... and his representatives may collect and produce written documents ... to be added to the case file as evidence.

3. The defence lawyer may collect evidence by:

(1) obtaining objects, documents and other information;

(2) questioning persons with their consent; or

(3) requesting ... documents from the authorities ... and other organisations which are obliged to produce such documents or their copies.”

410. The defence lawyer’s right to obtain expert evidence is defined in Section 6 (4) (3) of the Federal Law No. 63- FZ “On Advocacy” of 2002:

“... 3. The advocate can ... (4) engage specialists on a freelance basis in order to obtain explanations on the issues relevant to the legal assistance”.

411 . Article 271 (4) of the CCrP stipulates that the court cannot refuse to hear a witness or a “specialist” who arrived at the court at the request of one of the parties.

5. Reading-out of written testimony of witnesses at the trial

412. Article 281 of the CCrP (“Reading-out of the testimony of the victim and of the witness) reads, in so far as relevant, as follows:

“2. If the victim or the witness did not appear in court, the court shall be entitled on the request of a party or on its own initiative to decide on the reading-out of the testimony previously given by them, in the event of:

1) the death of the victim or witness,

2) their very poor health, impeding their appearance in court,

3) the refusal of a victim or witness who is a foreign citizen to appear in court

when summoned,

4) a natural disaster and other extraordinary circumstances impeding their appearance in court.”

6. Detention on remand

413. For the relevant provisions of the Russian law concerning detention on remand under the Criminal Procedure Code, see Khodorkovskiy (no. 1) , §§ 86 et seq.

C. Taxation; criminal and tax liability for tax evasion

1. Tax Code on re-characterisation of transactions and application of market prices to “suspicious transactions”

414 . Article 40 (1) of the Tax Code requires that parties trade at market prices. It also establishes a refutable presumption that the prices agreed to by the parties correspond to market levels and are used for taxation purposes. Under Article 40 (2) of the Tax Code, the tax authorities are empowered to overrule the above presumption by verifying and correcting the prices for taxation purposes. A finding that the prices were lowered usually leads to the conclusion that the taxpayer understated the taxable base and thus failed properly to pay his taxes. This may happen in a number of cases, in particular when the parties are interdependent.

415. Under Article 45 (2) 3 of the Tax Code the power to re ‑ characterise transactions by a taxpayer with third parties, their legal status and the nature of the taxpayer’s activity in tax disputes lies with the courts (as opposed to executive bodies). Section 7 of Law No. 943-1 of 21 March 1991 “On Tax Authorities in the Russian Federation” vests the power to contest transactions as void and recover everything received in such transactions with the State budget.

416. Under Article 11 of the Tax Code, the institutions, notions and terms of the civil legislation of Russia used in the Tax Code keep their respective meanings, unless specifically stated.

2. Sham transactions under the Civil Code

417 . Under Article 153 of the Civil Code, transactions are defined as activities of natural and legal persons creating, altering and terminating their civil rights and obligations. Article 10 (1 and 2) of the Code states that parties involved in civil-law transactions are prohibited from abusing their rights. In such cases, the courts may deny legal protection in respect of the right which is being abused. Article 10 (3) establishes a refutable presumption of good faith and reasonableness of actions on the parties in civil-law transactions.

418. Article 166 of the Civil Code states that a transaction may be declared invalid on the grounds established by that Code, either by force of its being recognized as such by the court (a voidable transaction), or regardless of such recognition (a void transaction).

419. Under Article 167 of the Civil Code, void transactions entail no legal consequences, apart from those relating to their invalidity, and are invalid from the moment they are conducted.

420. Article 170 (2) establishes specific rules in respect of two types of void transactions: “imaginary” transactions (effected only for form’s sake, without the intention to create the corresponding legal consequences) and “sham” transactions (effected for the purpose of screening other transactions). This provision condemns both imaginary and sham transactions as void.

421. It also provides that in the event of sham transactions, the rules governing the transaction that was in fact intended by the parties may be applied by a court, regard being had to the substance of this transaction (the so-called “substance over form” rule).

3. Application of “sham transaction” and “bad faith” concepts in tax disputes

422 . By a decision dated 15 May 1997 in the case of the Tax Service v. Commercial Bank Mechel-Bank and OAO Mechel (no. F09-162/97- AK ), the Federal Commercial Court of the Ural Circuit quashed the decisions of lower courts in which they had upheld the lawfulness of a “kickback” contract which had been concluded between the respondent bank and the respondent company. The Circuit Court ruled that the lower courts had failed to study and to take account of all of the circumstances relevant to the case at issue. In particular, the court noted the finding that the contract had been concluded specifically to avoid the payment of taxes. Accordingly, it reversed and invalidated the contract as unlawful, contrary to the legal order and morality, and ordered that the proceeds derived by the parties from the contract be seized in favour of the State.

423. In a decision of 9 December 1997 in case no. 5246/97, the Presidium of the Supreme Commercial Court of Russia invalidated a loan secured by a promissory note and a related pay-off agreement as imaginary and sham respectively. The court had regard to the terms of contracts concluded between the parties and the manner of their execution, in particular the fact that the loan had never been used by the borrower; it concluded that the transactions in question covered the sale of a promissory note and invalidated them as sham.

424. In a decision of 6 October 1998 in case no. 6202/97 the Presidium of the Supreme Commercial Court of Russia invalidated two contracts for the sale of securities and a related loan agreement as sham, having regard to the terms of contracts in question, the manner of their execution and the contractual prices. The court established that the sales contracts in fact covered the loan agreement secured by the pledge of securities and remitted the case for re-trial.

425 . The case of Tax Service v. OOO TF Grin Haus (no. A40 ‑ 31714/97-2-312) concerned a series of intertwined transactions (rent contracts and loan agreements) between the respondent entity and two third parties: as a result, the respondent leased a building in central Moscow to the third parties, but was able to avoid inclusion of the rent payments in the taxable base of its operations by claiming that they were interest payments in respect of the loan agreement. The Tax Service discovered the tax-evasion scheme, re-characterised the transactions in question as rent and ordered the taxpayer to pay RUB 2 billion in back taxes. The case was examined in three rounds of court proceedings by the courts at three levels of jurisdiction. Having regard to the substance of the transactions entered into by the respondent, the terms of payment and execution of the contested contracts, and, generally, to the conduct of the respondent company and the third parties, the courts decided that the contractual arrangement had been sham, re-characterised the arrangement as rent and upheld the decision of the Tax Service. In the first round of proceedings the courts adopted their decisions on the following dates: 1 December 1997, 27 January 1998 and 30 March 1998. In the second round of proceedings the decisions were adopted by the first-instance and appeal courts on 26 May 1998 and 21 July 1998. The decision of the cassation court was taken on an unspecified date. The third round of proceedings involved decisions on 17 November 1998, 25 January 1999 and 2 March 1999.

426. In its decision no. 24- P dated 12 October 1998, the Constitutional Court of Russia for the first time made use and interpreted the notion of “bad/good faith” to assess the legal consequence of the conduct of taxpayers in its jurisprudence. In this case this was done to define the moment at which a taxpayer can be said to have discharged his or her constitutional obligation to pay taxes.

427. In its decision no. 138- O dated 25 July 2001, the Constitutional Court of Russia confirmed that there existed a refutable presumption that the taxpayer was acting in good faith and that a finding that a taxpayer had acted in bad faith could have unfavourable legal consequences for the taxpayer. The case again concerned the definition of a moment at which a taxpayer can be said to have discharged his or her constitutional obligation to pay taxes.

428. Starting from 2002 the concept of a “bad-faith taxpayer” regularly appeared in the case-law of the North-Caucasian District Commercial Court (see the Yukos judgment, §§ 361 et seq.).

4. Definition of tax evasion under the Criminal Code

429 . Articles 198 and 199 of the Criminal Code define tax evasion. In 1999-2003 those provisions, insofar as relevant, read as follows:

Article 198. Evasion by a Natural Person of Paying Taxes or Contributions ...

“1. Evasion by a natural person of paying taxes ... by way of failure to submit a tax declaration where submission of such declaration is obligatory under the law, or by knowing inclusion in the tax declaration of false data on profits and costs, as well as [evasion of paying taxes] by other means ...”

Article 199. Evading Payment of Taxes and (or) Contributions ... Collectible from Organizations

“1. Evasion of paying taxes and contributions ..., collectible from organisations, by way of knowing inclusion in the accounting documents of false data on profits and costs, or by other means, ...”

In December 2009 Article 199 was supplemented with footnote no. 2, which reads as follows:

“A person who had committed the crime provided by Article 199 ... for the first time, must be discharged from criminal liability if that person or the company which evaded taxes through the acts imputed to that person paid the outstanding amount of the taxes, plus penalties and fines in the amounts fixed in the Tax Code”.

430. A constitutional interpretation of Article 199 of the Criminal Code was given by the Constitutional Court of Russia in its Judgment no. 9- P of 27 May 2003. It concerned, in particular, interpretation of the concept of “other means” used in Article 199 of the Criminal Code. The plaintiffs in that case considered that the concept of “other means” was too vague, might lead to arbitrary interpretation and was therefore unconstitutional. In particular, Mr T., one of the plaintiffs, was a director of a firm which had an outstanding tax debt. Instead of paying that debt he spent the money of his firm for other purposes. Such behaviour was considered as tax evasion “by other means” and Mr T. was convicted. The Constitutional Court held that “taxes ... can be considered as lawfully established only where the law defines clearly the object of taxation, the taxable amounts, the amounts of tax payments, category of taxpayers [concerned] and other substantive elements of a fiscal obligation”. It continued as follows:

“In cases when law provides various benefits relieving [taxpayers] from payment of taxes or allowing [them] to reduce the sum of the tax payments, the obligation to pay lawfully established taxes in application to the relevant categories of taxpayers means the need to pay only that part of them to which the benefits to do not apply, and it is in relation to that part that those taxpayers are subject to the liability for failure to pay lawfully established taxes.

Thus, it is unacceptable to set liability for such actions of the taxpayer which, although resulting in non-payment of a tax or reduction of its amount, involve using rights granted to the taxpayer by law and related to the lawful tax exemption or to selection of the forms of entrepreneurial activity that are the most beneficial for him and therefore of the optimal kind of payment.”

The Constitutional Court also stressed that the key element in the disposition of Article 199 was the deliberate character of the tax evasion, i.e. the existence of the intent of the tax-payer to avoid paying taxes. It held that the law does not criminalise non-payment of taxes which results from inadvertence or from the lawful use of legal tools reducing tax burden (point 4 of paragraph 5 of the Judgment).

431. On 27 May 2003 in Ruling no. 254- O the Constitutional Court held, in particular, that “... criminal liability may only arise if [non-payment of taxes] is committed deliberately and is aimed directly by evasion of a lawfully established tax in violation of the tax law which should be established by a general jurisdiction court during examination of factual circumstances concerned”.

432 . On 19 June 2003 the Constitutional Court adopted Judgment No. 11- P , where it held inter alia as follows:

“In accordance with the Small Business Act the simplified system of taxation, to which small business operators may transfer voluntarily, is based on replacing the taxes established by the legislation of the Russian Federation as payable to the federal, regional and local budgets with a tax calculated on the small business operator’s income received from the performance of entrepreneurial activity during the reporting period.”

433. On 8 December 2003 the Criminal Code was amended. The new law excluded from Article 198 the reference to “other means” of tax evasion, but added that tax evasion may take a form of submission of knowingly false data in the tax declaration as well as in “other documents” which must be produced to the tax authorities for fiscal purposes. A similar amendment was made to Article 199 of the Code. Furthermore, the Criminal Code from that time forth penalised only tax evasion on a particularly large scale.

434 . The Plenary Supreme Court of the Russian Federation in its Ruling no. 64 of 28 December 2006 (points 2 and p. 9) indicated inter alia that tax evasion included deliberate submission to the tax authorities of false information on the taxpayers’ income, yield, property, eligibility to tax cuts etc. in the tax declaration or in other documents which a taxpayer must produce to the tax authorities. The Ruling also described situations where one person de facto pursued business activities through another person, a front man ( podstavnoye litso ), in order to evade taxes (point 6). The Supreme Court also noted that the courts can commission expert examinations and invite experts to participate in the trial in the tax evasion cases (point 23).

5. Eligibility for tax cuts in the low tax zones

435. For the relevant legislation concerning taxation in the low-tax zones (ZATOs) and applicable case-law see the case of Yukos , §§ 307 et seq., cited above; see in particular §§ 354-357, and §§ 384-399.

436 . On 14 October 1999 the Urals District Commercial Court, sitting as a court of cassation, adopted a ruling in the case of OOO Chelpiks v. Tax Inspectorate for the Sovetskiy District of Chelyabinsk (case no. F09 ‑ 864.99- АК ). It concerned the operation of a company (Chelpiks) registered on the territory of ZATO of the Snezhinsk town and operating there on the basis of a preferential taxation agreement concluded with the town administration. The Tax Inspectorate required that the company paid taxes in full. They argued that given the “ de facto location of the company” preferential taxation agreement was not valid. The court of cassation disagreed. It observed that the company was lawfully registered on the territory of ZATO and that the preferential taxation agreement was not declared null; in such circumstances the court held that the company was entitled to tax cuts.

437 . On 3 April 2001 the same court examined the case of Tax Ministry (Tax Inspectorate for the Central District of the Ozersk town) v. ZAO Energosintez . The latter company was registred in the ZATO of the town of Ozersk and operated on the basis of a preferential taxation agreement concluded with the town administration. The court of cassation noted that under the ZATO Act, in order to be eligible to tax cuts, the company should have at least 90 per cent of its assets and carry out at least 70 per cent of its business activities on the territory of the ZATO at issue; in addition, 70 per cent of the average number of personnel on payroll should be from ZATO, while at least 70 per cent of wage should be paid to workers who are permanent residents of ZATO. The court found that 70 per cent of the average number of staff in the company were ZATO residents and that they received more than 70 per cent of wages paid by the company. The central argument for the Tax Inspectorate was that the business activity of the defendant company (which consisted of processing and re-selling of oil-products) was not carried out on the territory of ZATO and that it was done by the industrial facilities which did not belong to the defendant company. The court however, rejected that argument as irrelevant and held that those factors did not affect eligibility of the defendant company to tax cuts.

438 . On 27 December 2000 the Eastern Siberian District Federal Commercial Court examined the case of Tax Service (Tax Inspection of the Zheleznogorsk town) v. OOO Siblekon (cases nos. A33-6259/00-C3a-F02-2820/00-C1 and A33-6259/00-C3a-F02-2821/00-C1). In that case a company registered in the Zheleznogorsk town ZATO was brought to tax liability for the allegedly unlawful use of tax cuts obtained on the basis of a preferential tax agreement with the town administration. The court of cassation upheld the first instance court’s judgment insofar as it ordered the defendant company to pay taxes in full. The court of cassation found that the preferential tax agreement had been concluded by the town administration in breach of the procedure prescribed by law and was therefore invalid. At the same time the court of cassation quashed the first-instance court’s judgment in so far as it concerned recovering penalties from the defendant company, and upheld the decision of the court of appeal in this respect. It held in particular as follows:

“The court of appeal relieved the applicant from paying penalties on the ground that there had been no fault of the taxpayer; having examined the court of appeal’s reasoning on this account, [the court of cassation] considers as follows. OOO Siblekon used in the first quarter of 2000 tax cuts granted by a decision of the municipal authorities. Therefore, not only the taxpayer did not understand the unlawfulness of his actions [- the unlawfulness which consisted of not paying taxes in full amount] – he could not and must not have realised that. Therefore, there was no fault [of the taxpayer] even in the form of negligence”.

439 . On 5 June 2002 the North-Western District Commercial Court, sitting as a court of cassation, adopted a ruling in the case of the Tax Service (Inter-District Inspectorate No. 3 for the Murmansk Region) v. OOO Pribrezhnoe (case no. A42-6604/00-15-8-818/01). The case concerned tax cuts obtained by the defendant (OOO Pribrezhnoe) on the territory of the ZATO of the Snezhogorsk town, Murmansk Region, on the basis of a preferential tax agreement with the town administration. The tax authorities claimed that the tax cuts had been granted to the defendant (referred to in that Ruling as “the company”) unlawfully, and that it had not satisfy the requirements of the law on ZATOs. In 2000 the Tax Inspectorate took a decision bringing the company to tax liability for unlawfully obtained tax cuts. That decision was upheld by the courts at two levels of jurisdiction. However, the North-Western District Commercial Court (sitting as a court of cassation) quashed the lower court’s decisions and the decision of the tax inspectorate of 2000. The court of cassation held, in particular, as follows:

“[As demonstrated by decision of the ZATO administration no ... of ... the company is registered on the territory of Snezhnogorsk ZATO and also registered there as a taxpayer ...

According to the company’s balance sheet ..., the only fixed asset of the company is a computer, which is ... located at the following address in Snezhnogorsk ...

The materials of the case confirm the fact that in 1999 at least 70 per cent of workers ... were permanent residents of ZATO whereas 70 per cent of wages were paid to those who resided in ZATO; these facts are not disputed by the plaintiff [i.e. the Tax Inspectorate].

The Tax Inspectorate based its tax claims... on the assumption that the defendant company had failed to prove that its “productive business activities” [ proizvodstvennaya deyatelnost ] had been carried our on the territory of ZATO. However, Article 5 (1) of the Law on ZATOs does not make tax cuts conditional on the character of business activities, ‘productive’ or others. As follows from the Charter of incorporation of the company ..., the main field of activities of the company is wholesale and retail sale. As confirmed by the materials of the case, the taxable income was received by the defendant company mostly from the trading in oil-products and providing services to investors at the securities market ...

In such circumstances the question of whether the company had on the territory of ZATO any premises for storage and transportation of oil-products is irrelevant, since trading in oil products, i.e. concluding sell-and-buy agreements, neither requires that the company owns such premises nor requires that the oil-products are [physically] located on the territory of ZATO.

Furthermore, section 5 (1) of the Law on ZATOs makes tax cuts conditional on the volume of business activities carried out on the territory of ZATO and not at the address of registration [i.e. the address formally indicated by the company in the incorporation documents]; [consequently], it is irrelevant whether or not the company carried out its activities at the address of registration. In addition, the company concluded a rent agreement with the Municipal Property Department of the ZATO concerning non-residential premises located in Snezhogorsk.... Those premises were used by the company for its office, as confirmed by the town police department..., by a letter from the municipal enterprise ..., by the testimony of witnesses – employees of the company, questioned by the Tax Inspectorate ..., and by other materials of the case ...

In order to make and receive payments the company opened a bank account in the Snezhnogorskiy branch of the Sberbank ...

The reference of the first-instance court to the fact that the number of desks and chairs does not correspond to the number of personnel (minus a lawyer who had been working from home, and the cleaning-lady), is not convincing, since this fact does not prove indisputably that the company had not carried out its business activities on the territory of ZATO. The decision of the Tax Inspectorate at issue did not assert that the income had been received by the company not in its headquarters but in a branch office ...

There is no ground for the following assertions made by the lower courts: that the physical transfer of crude oil had taken place outside of the ZATO territory; that the head of the company-buyer of the crude oil had been in the town of Sarov at the moment when the report of the transfer of crude oil had been signed; that telephone numbers in the office rented by the company [in Snezhinsk] were registered at a different name; that the defendant company had not paid for the electricity in its office. All the above circumstances as such did not exclude that the company was carrying out its activities on the territory of the ZATO and are irrelevant for the case at hand, since they are not taken into account by the tax law in order to define conditions for tax cuts.

The fact that the first-instance court and the court of appeal examined those circumstances demonstrates that they interpreted Section 5 (1) of the Law on ZATOs wrongly and went beyond [the mere examination] of conditions explicitly referred thereby for obtaining tax cuts. In breach of Article 3 (7) of the Tax Code the lower courts [wrongly] assumed that since the law did not refer to other criteria for defining whether the business activity was carried out on the territory of ZATO other than the presence of fixed assets, personnel and wages [there], the tax inspectorate or the court could establish such criteria by themselves.

The argument of the Tax Inspectorate that the Director General of the company had no permanent place of residence in the ZATO is equally irrelevant, since Section 5 (1) of the Law on ZATOs makes tax cuts conditional of the fact that 70 per cent of staff of the company-taxpayer lives in the ZATO, but not necessarily the director of the company taxpayer. In addition, as follows from the materials of the case ..., the Director General of the company regularly stayed in a hotel in the ZATO.”

440. Further, the court of cassation indicated that the Tax Inspectorate collected evidence against the company in the course of “on-the-site” tax audits of the contractors of the company, and following an “examination of the premises”. At the same time, the decision of the Tax Inspectorate of 2000 indicates that the company was brought to tax liability following a “desk” tax audit – i.e. solely on the basis of documents submitted by the taxpayer. The documents submitted by the company to the Tax Inspectorate demonstrated that the company satisfied all requirements of section 5 (1) of the Law on ZATOs. The Tax Inspectorate, within a “desk” tax audit, was not empowered to visit premises of the company. Although after the decision bringing the company to tax liability the Tax Inspectorate conducted an “on-the-site” tax audit of the company, its results cannot be used to support the conclusions of the decision of 2000. The court of cassation also held that it was wrong to shift on the company the burden of proof that it had indeed carried out its business activities on the territory of ZATO. Although it was possible to request the taxpayer to submit additional documents, in the case at hand it had been done simultaneously with rendering the decision on bringing the company to tax liability. The court also noted that the eligibility of the company to tax cuts was confirmed by the official letters of the Ministry of Taxes and the Ministry of Finances.

441. For the more recent case-law on tax cuts in the low-tax zones see §§ 429-458 of the Yukos judgment.

6. Preferential taxation for individual entrepreneurs’ based on the Small Business Act

442. Preferential taxation for small business was introduced by the Federal Law “On Simplified Taxation, Accounting and Reporting for Small Businesses” (No. FZ -222, 29 December 1995, the “Small Business Act”). It introduced inter alia a “patent” system for self-employed businessmen, who, instead of paying a variety of different taxes and submitting complex tax declarations, were only required to buy every year a “patent” (licence) for a particular type of activity, provided that their yearly proceeds do not exceed a particular amount (100,000 times the statutory minimum wage). The price of the licence thus constituted a nominal annual advance tax payment (calculated as a multiple of the State defined minimum wage), and exempted the entrepreneur from further taxation (including state insurance premiums) in respect of the licensed activity income. Under Article 1 of the Act, the businessmen eligible for the “licence system” were free to choose it or to remain within the “traditional” taxation framework. A separate licence was required for each category of services specified in the Small Business Act.

443 . On 2 October 2002 the Federal Commercial Court for Eastern-Siberian District, sitting as a court of cassation, rendered a decision in the case of Tax Service (Angarsk Inspectorate) v. Vliran Ltd (case No. A19-884/02-24-F02-2873/02C1). That case concerned a service agreement concluded between Mr K. and the taxpayer - Vliran Ltd. Under that agreement Mr K. was supposed to work as a general manager of the taxpayer company, in exchange of a fee. Mr K. was registered as an individual entrepreneur; at the same time he was the sole owner of the Vliran Ltd (i.e. the taxpayer company). As a result, the service agreement had his signatures on behalf of both sides: he signed it in the capacity of an individual entrepreneur and in the capacity of the sole owner of the company. The fees paid by the company to Mr K. were included in its declaration as “costs”. The Tax Inspectorate considered that these fees could not be regarded as “costs” on the ground that the service agreement between the company and Mr K. was null, since it was signed by the same person on both sides. The court of cassation, however, ruled in favour of the taxpayer company. It held, in particular, that the charter of the company did not provide for the position of a general director, and that his functions could therefore be transferred to an external person. Furthermore, there was nothing in the law to prevent the company from “outsourcing” the managerial function to somebody else. The court ruled that there was no evidence that the company acted in bad faith, and the service contract was therefore valid.

7. Recovery of damages from a criminal defendant in cases under Article 199

444 . As a general rule (Article 56 § 1 of the Civil Code of 1994) civil liability of a company before its creditors is limited by the amount of its assets. At the same time, § 2 provides that where the insolvency of a legal person is caused by its owners or by other persons who “have the power to give binding orders to that legal person or are capable of controlling its activities otherwise”, those persons, in case the assets of the legal person are insufficient to satisfy the creditors’ claims, bear subsidiary liability for its debts.

445. A person who suffered pecuniary or non-pecuniary damage as a result of a crime may introduce a civil claim against the alleged perpetrator within the criminal proceedings against him (Article 44 § 2 of the new Criminal Procedure Code of 2001; Article 29 of the old Criminal Procedure Code). The criminal procedure law distinguishes between the figures of the victim of the crime and of the “civil plaintiff” (i.e. the person whose pecuniary interest had been affected by the crime): they are not necessarily the same person. Similarly, the criminal defendant (the suspect or the accused person) is not necessarily the same person as the “civil defendant”. The latter is defined in Article 54 of the new Criminal Procedure Code as “a legal person or an individual, who, under the Civil Code of the Russian Federation, bears [civil] liability for the damage caused by the crime [committed by the criminal defendant]”.

446 . The Criminal Procedure Code does not define what provision of the Civil Code a civil plaintiff may rely upon in lodging a civil claim. By default, a civil plaintiff has to rely on the general rule of tort, that is on Article 1064 § 1 of the Civil Code, which provides that “damage caused to the property or to the person of an individual, or damage caused to the property of a legal person, must be compensated in full by the tortfeasor”. As a general rule, liability for tort is conditioned upon the fault of the tortfeasor; however, in some cases the law may provide for strict liability. The last paragraph of that provision stipulates that where the victim of the tort has asked for the damage to be caused, or has agreed to it, no liability for tort arises. In addition, Article 1068 of the Civil Code provides for liability of a legal person for the damage caused by an employee of that legal person. Insofar as relevant it reads as follows:

“A legal person ... must compensate damage caused by its employee in the performance of work-related (official, service-related) duties. For the purposes of the present Article employees are understood as individuals working on the basis of a labour contract or of a civil law contract, if they acted or must have acted pursuant to the instructions of the legal person concerned ... and under its control of safety of the works performed [by the individual contractor]”.

447 . Article 108 of the Tax Codes speaks of liability for violations of tax law. Under § 4 of that provision, “bringing a company to tax liability does not exclude ... bringing its managers to administrative, criminal or other liability provided for by the law”. Article 110 of the Tax Codes defines different types of fault (“ vina ” - the same word used for describing guilt in the criminal law context) for qualifying an act as a tax offence. A person (a legal person or a company) is guilty of a tax offence if it committed the imputed act knowingly or by negligence (§ 1). Article 110 § 4 of the Tax Code reads as follows:

“The fault of the organisation in committing a tax offence is defined depending on the fault of its executives or the representatives of the organisation, whose acts (or omissions) led to the tax offence at issue”.

448 . On 4 July 1997 the Plenary Supreme Court issued Decree No. 8 in which it interpreted some provisions of material and procedural law related to the application of provisions of the Criminal Code on tax evasion (Articles 198 and 199). It held, in particular, as follows:

“18. [The lower courts] must pay attention to the strict compliance with the criminal procedure legislation when, together with adopting a judgment, they examine civil claims lodged [within criminal proceedings]. It must be stressed that in the tax evasion cases, along with pecuniary damage in the amount of unpaid taxes ..., it is possible to seek recovery from the culpable ( виновного ) of the amounts of penalties and fines established [in the tax law].”

The term “ vinovniy ” used by the Plenary Supreme Court is quite large. In a criminal-law context it is a criminal offender, a person guilty of a crime. In the civil law it refers to a civil fault and may be translated (depending on a context) as “defaulter”, “liable person”, “tortfeasor”, etc. In the tax-law context it refers to a taxpayer (a legal person or an individual) at fault, the one who is culpable of not paying taxes, or is culpable of other tax offences.

449 . On 11 January 2001 the Supreme Court of the Russian Federation quashed the lower courts’ judgments in the case of the Tax Ministry (North-East District Tax Inspectorate in Moscow) v. I. and K. Those individuals were executive officers of a limited company “Taros”. In 1999 they were convicted by the Ostankinskiy District Court of Moscow for company tax evasion (under Article 199 of the Criminal Code), for having submitted false information in the tax declaration submitted on behalf of the “Taros Corporation” company. The criminal judgment ordered, in particular, the reimbursement of damages to the State in the amount of unpaid company taxes (company income tax, VAT, etc.). Having analysed that particular issue, the Supreme Court held as follows:

“Under the federal legislation ...those taxes are enterprises and organisations which are legal persons under the law of the Russian Federation ... or [foreign companies and corporations].

Therefore, a taxpayer in respect of those taxes is always a legal person; the duty to pay [the outstanding amount of company taxes in the case at hand] is on “Taros Corporation” Ltd.

Having satisfied the civil claims of the Tax Inspectorate towards I. and K. the [lower courts] de facto shifted the obligation to pay taxes on an inappropriate taxpayer.

Satisfying civil claims of tax authorities related to the taxes not paid by the “Taros Corporation” Ltd within a criminal case under Article 199 of the Criminal Code ... from the personal assets of the individuals who have been convicted under that provision, has no basis in law.

In addition, it was established that the money which must have been paid as taxes were not appropriated by the convicts, were not taken from the assets of “Taros Ltd” and were not used [by the criminal defendant] for personal needs.

In such circumstances the criminal judgment, in the part concerning civil claims, is unlawful; in this part the judgment must be quashed and the civil claim must be re-considered within civil proceedings.

... The Presidium of the Moscow City Court, when considering the supervisory review appeal of the Vice-President of the Supreme Court ... referred to the Decree of the Plenary Supreme Court of 4 July 1997 ... which provides that [in tax evasion cases] pecuniary damage ... in the amount of taxes not received by the State budget ... must be recovered from the culpable.

However, as follows from the materials of the case, de facto the taxes has not been paid by the “Taros Corporation” Ltd. Therefore, the amounts of unpaid taxes must be recovered from “Taros Corporation”.

It follows that the judgment, insofar as it concerned the civil claims ... must be quashed and the case in this part remitted to a civil jurisdiction court.”

450 . On 28 December 2006 the Plenary Supreme Court issued a new Decree on the application of provisions of the Criminal Code on tax evasion (Decree no. 64) which replaced decree no. 8. In that decree the Plenary Supreme Court held, in particular, as follows:

“24. Under [the Criminal Procedure Code] the courts’ attention must be drawn to the requirement that ... in the judgments under Articles ... 198, 199 ... of the Criminal Code there should be a decision on the civil claim lodged [by the civil plaintiff]. A civil claim may be lodged on the behalf of the tax authorities ... or State prosecution bodies ..., whereas a civil defendant in such proceedings may be a legal person or a physical person, who is, under the law (Articles 1064 and 1068 of the Civil Code) is responsible for the damage caused by the crime.

Having decided that a civil claim must be granted, the court must indicate in the judgment the amount to be recovered and, depending on the type of the outstanding tax, the level of the budget (federal, regional or municipal) or a State non-budgetary fund where the amount is to go.”

451 . In the following years that ruling was repeatedly interpreted by the Russian courts as not allowing the “piercing of the corporate veil” and recovering company taxes from the managers of the company found guilty of tax evasion under Article 199 of the Criminal Code (see the Ruling of the Omsk Regional Court of 4 June 2009, no. 22-1873 in the case of B. ; Ruling of the Perm Regional Court of 28 May 2012, no. 33-3769 in the case of Popovtsev ; see also the Decree of the Presidium of the Chelyabinsk Regional Court of 7 September 2011 “On the analysis of the judicial practice in the Chelyabinsk Region on examination of civil claims within criminal proceedings”, point 3.2.3 ( в )).

D. Regime of detention of suspects and of the convicted criminals

452 . Section 40 of the Detention on Remand Act of 1995 (Federal Law on the Detention of Suspects and Defendants, no. 103- FZ of 15 July 1995), as in force at the material time, set rules of detention in isolation cells. Placement in an isolation cell is a punishment for various breaches of prison rules, from the “repeated non-compliance with prison rules” to attacking the prison staff. All contacts, except for contacts with the lawyer, are prohibited for a detainee placed in an isolation cell. He is not allowed to buy foodstuff in the prison shop or receive parcels from his relatives. A detainee cannot read books or magazines or watch TV while in an isolation cell (this limitation was later annulled; at present the detainees can read books and magazines in the isolation cell). He has a right to one one-hour walk per day during daytime.

453. The Russian Code on the Execution of Sentences (CES) provides for five main types of penitentiary institutions for convicted criminals: colony-settlement, general regime colony, strict regime colony, special regime colony and prison. The conditions of serving a sentence in a colony-settlement are the mildest. On the contrary, the regime in prisons is the most severe. The difference between the “strict” regime and “ordinary” regime colonies concern such aspects as the amount of money a detainee has the right to spend, the number of letters and parcels a detainee can receive, the length of meetings with relatives, etc.

454 . Under Article 73 of the CES persons sentenced to deprivation of liberty must serve their sentences in the federal entity (region) where they had their residence and where they were convicted. Derogations from this rule are possible only on medical grounds or in order to secure the safety of a detainee, or at his or her own request. Article 73 § 2 provides, however, that should there be no appropriate institution within the given region or if it proves impossible to place the convicted person in the existing penal institutions the convicted person is to be sent to the nearest penal institutions located on the territory of the said region, or, exceptionally, they may be sent to penal institutions located on the territory of the next closest region.

E. Conditions of detention

455 . In the 21 st General Report of the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT) ( CPT/Inf (2011) 28) made certain recommendations on the solitary confinement of prisoners. It noted, in p. 55, that “solitary confinement further restricts the already highly limited rights of people deprived of their liberty. The extra restrictions involved are not inherent in the fact of imprisonment and thus have to be separately justified”. For the CPT, it is appropriate to apply the traditional tests developed by the case-law of the European Court of Human Rights. In particular, any further restriction of a prisoner’s rights must be linked to the actual harm the prisoner has caused in the prison setting. During solitary confinement there should, for example, be no automatic withdrawal of rights to visits, telephone calls and correspondence or of access to resources normally available to prisoners (such as reading materials). Given the potentially very damaging effects of solitary confinement, the CPT considers that the principle of proportionality requires that it be used as a disciplinary punishment only in exceptional cases and as a last resort, and for the shortest possible period of time, no higher than 14 days for a given offence, and preferably lower. Prisoners undergoing solitary confinement as a disciplinary sanction should be entitled to at least one hour’s outdoor exercise per day, from the very first day of placement in solitary confinement, and should also be permitted access to a reasonable range of reading material (for further details see Razvyazkin v. Russia , no. 13579/09, § 89, 3 July 2012). On the last point the 21 st General Report reiterated recommendation made in respect of the Russian Federation in the Report on the 2001 visit to the Russian Federation (CPT/inf (2003) 30), made public on 30 June 2003, where it urged the Russian authorities in § 119 to “take steps to ensure throughout the country that prisoners placed in disciplinary cells have access to reading matter.”

456. Recommendations contained in the 21 st General Report developed and supplemented principles of treatment of prisoners contained in earlier documents of the CPT. Thus, for example, the 2nd General Report (CPT/Inf (92) 3) of 13 April 1992 indicated that “the principle of proportionality requires that a balance be struck between the requirements of the case and the application of a solitary confinement-type regime, which is a step that can have very harmful consequences for the person concerned. Solitary confinement can, in certain circumstances, amount to inhuman and degrading treatment; in any event, all forms of solitary confinement should be as short as possible.”

457. For more information about the European standards for prison conditions, see Ananyev and Others v. Russia (nos. 42525/07 and 60800/08, §§ 55 et seq., 10 January 2012).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 3 OF THE CONVENTION - CONDITIONS OF DETENTION OF THE SECOND APPLICANT IN THE REMAND PRISON

458. Under Article 3 of the Convention the second applicant complained about conditions of his detention in remand prison IZ-77/1 . Article 3 of the Convention provides as follows:

“No one shall be subjected to torture or to inhuman or degrading treatment or punishment.”

A. The parties’ submissions

1. The Government’s submissions

459. According to the Government, Russian law provided that conditions of detention on remand must be compatible with human dignity and presumption of innocence. Detention on remand was possible only on the basis of a court order. Criminal prosecution of a suspect inherently entailed limitations of his or her Convention rights which would not be permissible in other situations. One of those limitations concerned the possibility of detaining the suspect; this was done in order to help the State authorities maintain public order and prevent further crimes.

460. The Government informed the Court that sanitary treatment and disinfestation of cells in the remand prison had been entrusted to a private subcontractor. They produced copies of service agreements with the subcontractors and certificates of completed work. The cells were examined on a daily basis by the prison medical staff. The cells were treated with special chemical substances every month. In addition, the inmates are required to clean the cells on a daily basis. The sanitary conditions in the cells were inspected by experts from the Moscow Centre of State Sanitary-Epidemic Surveillance and the Centre of Hygiene and Epidemiology, part of the penitentiary system. Heads of regional penitentiary departments and particular penitentiary institutions were responsible for maintaining hygiene standards in the places of detention which would be compatible with the requirements of the Convention.

461. In accordance with the Detention on Remand Act and the prison regulations, the second applicant had a right to one sixty-minute walk per day in one of the remand prison’s courtyards. On hearing days the applicant was “placed under the orders” of the escort squad which secured his transfer to the court building and his return to the remand prison. On those days the applicant was able to take walks provided that he was back in the prison before sunset. On hearing days the applicant was given a “dry lunch”, which corresponded to the three-course meal which he would otherwise have received in the remand prison, in accordance with the norms established for prison food by the Ministry of Justice. In the courtroom the applicant was given hot water to prepare instant food and make coffee or tea. He was also afforded sufficient time to prepare food and eat. However, the applicant refused to accept the dry food provided by the remand prison. In addition, the applicant had been entitled to take with him food which he had received from his relatives and which was allowed by the prison administration and food from the prison food shop.

2. The second applicant’s submissions

462. The second applicant complained about two specific aspects of his detention. First, he complained about the conditions in the isolation cell were he had been detained between 18 and 25 August 2005. In his words, conditions there were degrading. The reason for his placement in the isolation cell was the fact that he had complained to the Prosecutor General about the actions of Mr Tagiev, the director of the remand prison. Thus, Mr Tagiev, who had submitted the information about the conditions in the isolation cell, definitely had an interest in providing an untrue account. The applicant believed that the documents appended to the Government’s memorandum had been drawn up by persons who were not disinterested. Throughout the entire period of his detention in the isolation cell and in the other cells, there had been no independent examinations of the sanitary and hygiene conditions. The applicant’s lawyers were not permitted to see him in the various cells in which he was kept.

463. The second applicant further complained that on the days of court sessions, which had taken place almost every day for more than a year, he had been deprived of hot food and outside walks. The Government’s reference to dry “travel rations”‘ that were offered to the applicant on trial days meant that they accepted that he had not been provided with hot food. During the trial the applicant was not able to undertake any physical exercise. The Government’s indication that the applicant “had an opportunity to undertake daily outdoor exercise for no less than one hour in daylight time” made it clear that such an exercise regime was necessarily unavailable on court days.

B. The Court’s analysis

1. General principles

464. The Court reiterates that in order for a punishment or treatment associated with it to be “inhuman” or “degrading” within the meaning of Article 3, the suffering or humiliation involved must in any event go beyond that inevitable element of suffering or humiliation connected with a given form of legitimate punishment or treatment, such as, for example, deprivation of liberty (see, among other authorities, V. v. the United Kingdom [GC], no. 24888/94, § 71, ECHR 1999-IX; Indelicato v. Italy , no. 31143/96, § 32, 18 October 2001; Lorsé and Others v. the Netherlands , no. 52750/99, § 62, 4 February 2003; and IlaÅŸcu and Others v. Moldova and Russia [GC], no. 48787/99, § 428, ECHR 2004 ‑ VII).

465. In assessing whether the treatment inflicted on a prisoner went beyond the “inevitable element of suffering or humiliation” associated with the deprivation of liberty, the Court often took into account the cumulative effect of various aspects of prison life ( Dougoz v. Greece , no. 40907/98, § 46, ECHR 2001-II). In previous cases the Court analysed such factors as access to natural light or air in the cells, adequacy of heating arrangements, compliance with basic sanitary requirements, the opportunity to use the toilet in private and the availability of ventilation (see, for example, Peers v. Greece , no. 28524/95, §§ 70-72, ECHR 2001-III; Babushkin v. Russia , no. 67253/01, § 44, 18 October 2007; and Vlasov v. Russia , no. 78146/01, § 84, 12 June 2008). That list is not exhaustive; other conditions of detention may lead the Court to the conclusion that the acceptable threshold of suffering or degradation has been exceeded and the applicant was subjected to “inhuman or degrading treatment” (see, for example, Fedotov v. Russia , no. 5140/02, § 68, 25 October 2005; Trepashkin v. Russia , no. 36898/03, § 94, 19 July 2007; and Slyusarev v. Russia , no. 60333/00, § 36, ECHR 2010-...). The length of the period during which a person is detained in the particular conditions also has to be considered (see, among other authorities, Alver v. Estonia , no. 64812/01, 8 November 2005).

466. The Court also reiterates that in the case of Ramirez Sanchez v. France [GC] (no. 59450/00, § 119, ECHR 2006 ‑ IX) it stressed that “the measures taken [in respect of a detainee] must also be necessary to attain the legitimate aim pursued”. In that case the applicant, who was detained in isolation for many years, was considered to be one of the most dangerous terrorists of his time. The Court had to assess whether, in view of the danger he represented, “the measures taken [i.e. isolation] were necessary and proportionate compared to the available alternatives” (§ 136). In Ensslin, Baader and Raspe v. Germany (nos. 7572/76, 7586/76 and 7587/76, Commission decision of 8 July 1978, Decisions and Reports (DR) 14, p. 64), the Commission stressed that “in assessing whether [isolation] may fall within the ambit of Article 3 of the Convention in a given case, regard must be had to the particular conditions, the stringency of the measure, its duration, the objective pursued and its effects on the person concerned”.

2. General conditions of detention

467. Insofar as the second applicant can be understood as complaining about conditions in the ordinary cell where he was detained most of the time, the Court observes that he did not develop this complaint in sufficient detail and did not submit information or documents that would persuade the Court that conditions there were indeed “inhuman and degrading”. The Court concludes that Article 3 was not breached on this account.

3. Conditions in the isolation cell

468. The second applicant also complained about his placement in the isolation cell between 18 and 25 August 2005, as well as about sanitary conditions there and regime restrictions during his isolation.

469. The Court observes, first of all, that at the relevant time the second applicant’s conviction has not yet been confirmed by the court of appeal. Therefore, in domestic terms he was still detained on remand. In a number of previous cases the Court stressed that “prolonged solitary confinement is undesirable, especially where the person is detained on remand” (see Ramirez Sanchez , cited above, § 120 with further references).

470. Secondly, the Court notes that the solitary confinement was imposed on the applicant for his alleged refusal to go for a walk. Some of the submitted documents mentioned that the applicant had refused to go to the shower (see paragraph 57 above). Whatever the real reason for imposing a disciplinary sanction, the Court considers that the applicant’s fault, if any, was not particularly serious and did not probably call for such a measure (see in this respect the CPT’s recommendation that such a serious punishment as solitary confinement should be commensurable to the disciplinary offence for which it was imposed, paragraph 455 above). The Court reiterates that although it is not for the Court to specify which security measures may be applied to prisoners, “the absence of any substantive reasons” for placing a detainee in a solitary confinement cell for a considerable period of time can be a relevant factor for characterising this form of disciplinary punishment as “inhuman and degrading treatment” (see Babar Ahmad and Others v. the United Kingdom , nos. 24027/07, 11949/08, 36742/08, 66911/09 and 67354/09, § 211, 10 April 2012; see also Razvyazkin , cited above, § 107).

471. Thirdly, the Court reiterates that solitary confinement is one of the most serious measures which can be imposed within a prison. Bearing in mind the gravity of the measure, the domestic authorities are under an obligation to assess all relevant factors in an inmate’s case before placing him in solitary confinement (see Ramishvili and Kokhreidze v. Georgia , no. 1704/06, § 83, 27 January 2009; Onoufriou v. Cyprus , no. 24407/04, § 71, 7 January 2010; and A.B. v. Russia , no. 1439/06, § 104, 14 October 2010).

472. That being said, the Court does not consider that the solitary confinement by itself was contrary to Article 3 (see Messina v. Italy (no. 2) (dec.), no. 25498/94, ECHR 1999-V, quoted with approval by the Grand Chamber in Ramirez Sanchez , cited above, § 12; Öcalan v. Turkey [GC], no. 46221/99, § 191, ECHR 2005-IV). The Court must examine whether other limitations and hardships associated with this disciplinary sanction brought the whole situation within the ambit of Article 3.

473 . Some elements in the applicant’s account of the conditions in the isolation cell are not disputed by the Government. In particular, the Court takes it as accepted that the cell had a window measuring 90 x 60 cm. It is questionable whether such a window would provide enough natural light for a cell measuring 5.5 square metres. The permanent electric light in the cell may have been very disturbing for a detainee, and the one-metre distance between the open toilet pan and the sleeping place was clearly insufficient. Furthermore, the applicant had been deprived of all social contacts, could not read books or magazines or watch TV (see paragraph 452 above), and could not lie down on the bunk-bed, since it was unfolded only between 10 p.m. and 6 a.m.

474. Other factual assertions by the applicant concerning the conditions in the isolation cell (poor sanitary condition of the cell, no hot food or walks) are disputed by the Government. However, the Court is not required to resolve this factual controversy on those points. Even if the applicant’s description of the other conditions of detention was accurate, and even if such conditions might indeed be very uncomfortable, it is crucial to note that the situation complained of lasted for only seven days (cf. with Popandopulo v. Russia , no. 4512/09, § 95, 10 May 2011, or A.B. v. Russia , cited above, §§ 105 et seq., where the applicants’ solitary confinment lasted much longer). The Court concludes that in the circumstances of the present case the degree of suffering to which the applicant was exposed, given its short duration and in view of the applicant’s age and mental and physical condition, did not reach the minimal threshold of severity to amount to “inhuman or degrading” treatment. Consequently, there was no violation of Article 3 on this account.

4. No walks and no hot meals on court days

475. Finally, the second applicant complained about the alleged lack of hot food and walks on the days of court hearings.

476. As regards the unavailability of hot food on court days, the Court notes that the Government produced a document, written by the applicant himself, whereby he refused to receive dry meals because he had his own food (see paragraph 60 above). As follows from the Government’s explanations, the detainees were allowed to use a kettle in the premises of the Meshchanskiy District Court. It was therefore possible for the applicant to prepare tea, coffee or instant food during the day. Such arrangements, in the absence of any particular medical counter-indications, and where a detainee can afford to buy his own food in sufficient quantities, do not raise any issue under Article 3 of the Convention.

477. The Court will now turn to the alleged lack of physical exercise. The Court has frequently found that a short duration of outdoor exercise, limited to one hour a day, was a factor that further exacerbated the situation of applicants who were confined to their cells for the rest of the time without any kind of freedom of movement (see Skachkov v. Russia , no. 25432/05, § 54, 7 October 2010; Gladkiy v. Russia , no. 3242/03, § 69, 21 December 2010; and Yevgeniy Alekseyenko v. Russia , no. 41833/04, § 88, 27 January 2011). The applicant in the present case claimed that for most of the time he had been deprived even of that short walk. The Government’s responses in this respect indicate that walks had been available to detainees only if they left the remand prison some time after sunrise and returned there before sunset. The Court reiterates its factual findings in the case of Trepashkin v. Russia (no. 2) (no. 14248/05, § 119, 16 December 2010), which analysed the situation in the same remand prison in the following terms:

“... It is doubtful whether the applicant was able to use the walking yards on the days of the court hearings. Between January and April 2004 the applicant was taken to the courts almost every second working day ... As appears from the evidence in the case file, the logistical arrangements in the remand prison were such that groups of prisoners were dispatched to different courts in Moscow in the same prison van. As a result, the applicant was usually woken up early and returned to the remand prison quite late. This fact is confirmed by, amongst other sources, the letter from the Ministry of Justice concerning the delays in dispatching prisoners to and back from the Moscow courts ...

The Government stated that detainees from the same cell were taken for walks together, normally during the daytime. However, the Government did not explain whether any special arrangements had been made for those returning from the courts in the evening, especially in winter, when the “daytime” is short. In sum, the Court concludes that on the days of the hearings the applicant was repeatedly (if not always) deprived of any possibility of physical exercise, however limited.”

478. The Court notes that in 2004-2006 the applicant was taken to the Meshchanskiy District Court more than 160 times (see paragraph 60 above). There is no information as to the exact time that the applicant left the prison and when he was returned there on every particular date. In the circumstances the Court is prepared to assume that on most of the days when the applicant was taken to the court he could not take walks in the remand prison. Furthermore, it is unclear whether the second applicant was able to take advantage of that possibility (the first applicant had this opportunity – see the case of Khodorkovskiy (no.1) , § 113).

479. That being said, the Court notes that in the present case the lack of physical exercise was not combined with other negative factors, such as, for instance, overcrowding in the cell or bad conditions of transportation to and from the court building (cf., mutatis mutandis , with Yevgeniy Alekseyenko , cited above, or Moiseyev v. Russia , no. 62936/00, §§ 124 et seq., 9 October 2008). Furthermore, the applicant was able to take walks on weekends and on those days when there were no hearings. On the whole, the Court is unable to conclude that the absence of the possibility for walks on the days of the court hearings amounted to a breach of Article 3 of the Convention.

5. Conclusion

480. Having regard to the above, the Court concludes that material conditions in the remand prison, complained of by the second applicant, did not amount to “inhuman and degrading treatment” within the meaning of Article 3 of the Convention.

II. ALLEGED VIOLATION OF ARTICLE 3 OF THE CONVENTION - CONDITIONS OF DETENTION OF THE SECOND APPLICANT IN THE COURTROOM

481. The second applicant further complained, relying on Article 3 of the Convention, cited above, about having been placed in an iron cage during the hearings before the District Court which examined his criminal case from 8 June 2004 to 31 May 2005. In his words, it humiliated him in the eyes of the public and in his own eyes and was physically painful.

A. The parties’ submissions

1. The Government’s submissions

482. The Government submitted that security measures applied in the courtrooms were amongst many negative effects which were inherent in the very idea of criminal prosecution. At the time there was no other means of securing public order in the courtroom than placing the applicants in a metal cage. This security arrangement was a part of the standard design of courtrooms according to State building standards. The cage was 2.2 m high and surrounded the defendants’ bench. The defendants’ bench was intended to seat up to 20 people. In sum, there had been nothing exceptional in such a security measure.

2. The second applicant’s submissions

483. During the court hearings the second applicant was obliged to spend long periods of time (up to nine hours a day) in the courtroom, confined within a very narrow iron cage where he was unable even to stretch his legs. Such security arrangements, which might exceptionally be warranted in the case of dangerous defendants, were wholly unjustified in the applicant’s case. The applicant was charged with economic crimes and there was no reasonable basis for keeping him in a cage during the trial. He had never been convicted of any criminal offence prior to his trial. The second applicant was a very tall man (almost 2 metres in height), with long feet (size 47), and a history of knee surgery. The fact that he was kept in a cramped cage for extended periods of time, sometimes for almost the entire day, caused him physical suffering.

484. The applicants’ co-defendant, Mr Kraynov, was not held in the iron cage. The second applicant was displayed in the iron cage and, as can be seen from photographs, he was televised and photographed by the media whilst in that cage. On arrival at the court he was surrounded by armed forces and handcuffed. The average observer could easily have believed that an extremely dangerous criminal was on trial. Such public exposure humiliated him and aroused in him feelings of inferiority. There was no real risk of the applicant absconding from the court, where he was under the supervision of numerous guards immediately beside the cage and a significant number of armed guards in the vicinity of the courthouse.

B. The Court’s assessment

“124. ... In the recent case of Ramishvili and Kokhreidze ... the Court, in a very similar factual context, decided as follows:

“... The public watched the applicants [in the courtroom] in ... a metal cage ... Heavily armed guards wearing black hood-like masks were always present ... the hearing was broadcast live ... Such a harsh and hostile appearance of judicial proceedings could lead an average observer to believe that ‘extremely dangerous criminals’ were on trial. Apart from undermining the principle of the presumption of innocence, the disputed treatment in the court room humiliated the applicants ... The Court also accepts the applicants’ assertion that the special forces in the courthouse aroused in them feelings of fear, anguish and inferiority ...

The Court notes that, against the applicants’ status as public figures, the lack of earlier convictions and their orderly behaviour during the criminal proceedings, the Government have failed to provide any justification for their being placed in a caged dock during the public hearings and the use of ‘special forces’ in the courthouse. Nothing in the case file suggests that there was the slightest risk that the applicants, well-known and apparently quite harmless persons, might abscond or resort to violence during their transfer to the courthouse or at the hearings ....

This approach was recently confirmed by the Court in the case of Ashot Harutyunyan ..., where the applicant had been kept in a metal cage during the entire proceedings before the Court of Appeal ...

125. In the Court’s opinion, most of the decisive elements in the Georgian and Armenian cases referred to above were present in the case at hand. Thus, the applicant was accused of non-violent crimes, he had no criminal record, and there was no evidence that he was predisposed to violence. The Government’s reference to certain “security risks” was too vague and was not supported by any specific fact. It appears that “the metal cage in the ... courtroom was a permanent installation which served as a dock and that the applicant’s placement in it was not necessitated by any real risk of his absconding or resorting to violence but by the simple fact that it was the seat where he, as a defendant in a criminal case, was meant to be seated” (see Ashot Harutyunyan v. Armenia , cited above, § 127). Furthermore, the applicant’s own safety or the safety of the co-accused was not at stake. Finally, the applicant’s trial was covered by almost all major national and international mass media, so the applicant was permanently exposed to the public at large in such a setting. As in Ashot Harutyunyan the Court concludes that “such a harsh appearance of judicial proceedings could lead an average observer to believe that an extremely dangerous criminal was on trial. Furthermore, [the Court] agrees with the applicant that such a form of public exposure humiliated him in his own eyes, if not in those of the public, and aroused in him feelings of inferiority” (§ 128).

III. ALLEGED VIOLATION OF ARTICLE 5 § 3 OF THE CONVENTION IN RESPECT OF THE SECOND APPLICANT

487. Under Article 5 § 3 the second applicant complained that his detention from 2 July 2003 until 16 May 2005 pending investigation and trial had not been justified and had exceeded a “reasonable time”. Article 5 § 3 of the Convention, referred to by the second applicant, provides:

“Everyone arrested or detained in accordance with the provisions of paragraph 1 (c) of this Article shall be ... entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial.”

A. The parties’ submissions

1. The Government’s submissions

488. The Government claimed that the second applicant’s continued detention had been based on “relevant and sufficient” reasons. The Government asserted that when selecting a measure of restraint the courts took account of all legally relevant circumstances, as required by law. Under Article 97 of the CCrP detention on remand can be ordered if there is a risk of absconding, re-offending, or interfering with the course of justice. In deciding on the measure of restraint the court must take into account the gravity of the crime imputed to the accused, information about his character, age, health condition, family situation, occupation and other relevant factors.

489 . In the Government’s submissions, the applicant tried to “avoid meetings with the investigative authorities” of the Russian Federation. Thus, on 27 June 2003 the applicant was summoned for questioning in the building of the General Prosecutor Office. The meeting was scheduled for 10 a.m. on 2 July 2003; however, ten minutes before the start of the interview the applicant’s lawyer called the investigator to inform him that the applicant had been taken to hospital. According to a certificate from the Vishnevskiy Hospital, however, the applicant was admitted there at 12.56 p.m., and not at 9.50 a.m. as he had alleged. During his examination at 3.20 p.m. the doctors observed an improvement in his condition, describing it as “satisfactory”. The Government concluded that the applicant’s hospitalisation had merely been a pretext for evading questioning.

490. Furthermore, on 2 July 2003, at the time of his arrest, the applicant threatened the investigator, in presence of several FSS officers, with criminal liability. He also threatened to begin a press campaign against the officials involved in his prosecution. At the time of his arrest the investigative authorities knew that the applicant had three passports for foreign travel and owned real-estate in foreign countries. Furthermore, they knew from unnamed sources that the applicant’s lawyers had assured the applicant that he would be released on bail following a press campaign in his defence.

491 . Some of the applicant’s subordinates exerted pressure on the witnesses in order to impede the investigation. The Government produced a copy of an interview with a certain Ms Kar., made in 2008. According to Ms Kar., she worked for one of the companies which traded Yukos oil. In 2003 Yukos managers persuaded her to leave Russia for Cyprus and paid for her to stay there. In 2004 she returned to Russia and was arrested. The Government further noted that the applicant’s accomplices had left Russia and did not intend to return. According to written testimony by Mr Glb., a Yukos manager, obtained in 2007, in 2003 the first applicant had met him and persuaded him to leave Russia. Later he had been told not to return to Russia. He understood that the Yukos security service had its personnel sent to London and considered that move as a personal threat to his security.

492. The Government concluded that the authorities had assessed the applicant’s dangerousness, his personality, character, property, links to his home state and other relevant factors. The applicant had access to private jets at Vnukovo airport, and it would have been relatively easy for him to leave secretly the hospital where he had been admitted. He had access to foreign currency through “the plastic cards emitted by foreign banks”. The authorities had also relied on the applicant’s position within the company. Given that most of the evidence and testimony in the case could have been obtained only from the company’s staff, it had been important to keep the latter out of the applicant’s reach.

493. All these reasons were directly set out in the court decisions extending the applicant’s detention. The fact that they were repeated in the consecutive detention orders meant only that they continued to exist throughout the term of the applicant’s detention. Not only did the reasons which were previously stated in the court’s decision not cease to exist, new reasons appeared, which were also set out in the court decisions.

494. During court examination of issues related to the second applicant’s detention on remand, his procedural rights had been fully respected. Thus, the defence was informed about the forthcoming hearings, and were able to prepare their arguments and lodge appeals. The length of the applicant’s detention was due to the complexity of the case and the need to examine carefully the arguments of both parties. The defence lawyers protracted the period of detention by deliberately delaying the examination of the case-file. The investigation was closed on 22 August 2003, i.e. two months after the opening of the case; however, the defence finished examining the file only on 25 March 2004, i.e. seven months later. The applicant’s health condition did not prevent him from studying the case; his intellectual level and professional skills were sufficient for understanding the evidence against him.

2. The second applicant’s submissions

495. For the second applicant, the reasons given by the Russian courts responsible for extending his detention beyond July 2004 were always substantially the same as the previous reasons. Thus, the decisions by the Moscow courts had failed to address any of the points relevant to the applicant’s continuing pre-trial detention. The Moscow courts had nowhere acknowledged the principle of the reduced likelihood of absconding the longer the pre-trial detention continued; had failed to identify precisely how the applicant would be able to interfere materially with witness evidence; had nowhere conducted the essential balancing exercise between the ongoing and prolonged deprivation of liberty against the risks involved. House arrest or other alternative measures of restraint had not been considered.

496. The allegation that the applicant had three valid international passports in his possession was refuted by the existence of two passports marked “annulled”, attached to his case file. The applicant had not transferred any money to credit cards issued by foreign banks in any manner that could have shed a negative light on his conduct. In addition, it had been established in the case file that the applicant kept most of his money in accounts with Russian banks, while using his foreign bank accounts in strict compliance with Licence no. 32-05-1190/97 of the Central Bank of the Russian Federation. The applicant had not had access to the company’s private jets. In any event, owing to his status, the applicant could have used the services of any airline in the world. The issue of border crossing in any place should be under the authorities’ control. The applicant could not be blamed for the “powerlessness” demonstrated by the authorities as regards control over crossing of the State’s borders.

497. The applicant had not been attempting to avoid meetings with investigative bodies and had been prepared to appear for questioning as a witness. The applicant had not been simulating his illnesses; his hospitalisation had been based on the results of an examination by the head of the Vishnevskiy Military Hospital.

498. The documents referred to by the Government had not been mentioned in the proceedings before the domestic courts, and the corresponding documents had not been produced before the latter. The Government’s argument that the applicant might have bribed witnesses or coerced them into giving false testimony was unsubstantiated.

499. The Government failed to demonstrate why alternative preventive measures were not considered by the domestic courts when deciding on the detention requests by the prosecution. They also failed to point to any facts in the detention decisions which confirmed that the purported risks which were said to initially justify the applicant’s detention remained valid in the course of the subsequent investigation and trial. Nowhere in the detention decisions was there a sign of the “special diligence” that is required by a court as it considered whether there continued to be “relevant and sufficient reasons” as the period of pre-trial detention continued.

B. The Court’s assessment

1. The Court’s findings in Lebedev (no. 1) and Khodorkovskiy (no. 1)

501. On 25 November 2004 in the case Lebedev (no. 1) the Court held, in a partial decision on admissibility, that the second applicant’s detention in custody from 2 July 2003 until 10 September 2004 had been justified. The Court found that some of the arguments put forward by the Russian courts were questionable, whereas others were “not devoid of merit”. Assessing the reasons invoked by the Russian authorities as a whole and having regard to the overall length of the applicant’s detention accrued by the time of the examination of the first case, the Court accepted “that the Russian authorities had not failed to give sufficient and relevant justification for the applicant’s continued detention.” The question before the Court in the present case is whether the reasons adduced by the domestic courts were sufficient to justify the second applicant’s detention from 10 September 2004 onwards, i.e. until 16 May 2005.

502. The Court notes that in Khodorkovskiy (no. 1) it examined the first applicant’s detention from the day of his arrest until his conviction within the same criminal proceedings. In that judgment the Court outlined the general principles of its case-law governing the application of Article 5 § 3 of the Convention (see §§ 182-186). It held, in particular, that when choosing a measure of restraint for the first time a court may rely on relatively loose presumptions of fact, and that the existence of a potential risk, for example, the risk of fleeing, cannot be demonstrated with the same degree of certitude as the existence of a fact that has already occurred (see §§ 188 et seq.). Having examined the first detention order in respect of the first applicant, the Court acknowledged that the domestic authorities had little time to evaluate the possibility for applying alternative measures of restraint, and that, although not flawless, the first detention order provided sufficient justification for the applicant’s detention on remand.

503. The Court noted further that in the subsequent period the first applicant’s personal situation had evolved, and that some of the risks mentioned in the original detention order ceased to exist. The Court stressed, in particular, that “the Russian courts on two occasions failed to indicate reasons for the continued detention of the [first] applicant, they relied on material obtained by way of a violation of the lawyer-client privilege, and never seriously considered other measures of restraint.” On the last point the Court held as follows:

“194. ... The Court observes that at no point during the whole period of the applicant’s detention did the District Court or City Court take the trouble to explain why it was impossible to apply bail or house arrest to the applicant, or to accept ‘personal sureties’.

195. There is no single standard of reasoning in those matters, and the Court is prepared to tolerate an implicit rejection of the alternative measures at the initial stages of the investigation. However, the time that had elapsed since the applicant’s arrest should have given the authorities sufficient time to assess the existing options, to make practical arrangements for their implementation, if any, or to develop more detailed arguments as to why alternative measures would not work. Instead, the Russian courts simply stated that the applicant could not be released ...

196. Further, the context of the case was not such as to make the applicant obviously “non-bailable”... The applicant was accused of a number of non-violent crimes; he did not have any criminal record and he lived permanently with his family in Moscow, where he had his main business interests.

197. In sum, the domestic courts ought to have considered whether other, less intrusive, preventive measures could have been applied, and whether they were capable of reducing or removing completely the risks of fleeing, re-offending or obstructing justice. Their failure to do so seriously undermines the Government’s contention that the applicant had to be detained throughout the whole period under consideration”.

On the strength of the above the Court concluded that the first applicant’s continuous detention was not justified by compelling reasons outweighing the presumption of liberty.

2. Whether the second applicant’s detention after September 2004 was justified

504. In their submissions the Government described in detail the circumstances of the second applicant’s arrest and claimed that his behaviour at that point, as well as his informal exchanges with his lawyers had been indicative of his inclination to flee (see paragraph 489 above). However, the Court notes that these arguments did not constitute part of the domestic courts’ reasoning. The Government further referred to the testimony of potential witnesses who had fled the country, allegedly at the insistence of the Yukos management (see paragraph 491 above). The Court notes that that testimony was collected only in 2007-2008 and, consequently, had not been relied upon by the domestic courts in 2003 ‑ 2005. The same concerns information about credit cards issued by foreign banks in the applicant’s name, real-estate abroad and private jets which had allegedly been at the applicant’s disposal at Vnukovo airport: those factual elements were not mentioned in the extension orders under examination. The Court reiterates in this respect that “it is essentially on the basis of the reasons given in [the detention orders] and of the established facts stated by the applicant in his appeals that the Court is called upon to decide whether or not there has been a violation of Article 5 § 3” (see, for example, Wiensztal v. Poland , no. 43748/98, § 50, 30 May 2006). In the present case the Court will take into consideration only those arguments and information which were explicitly relied upon by the domestic courts in their decisions (see paragraphs 47 et seq. above) and which the applicant had an opportunity to discuss in the domestic proceedings.

505. During the period under consideration the domestic courts extended the second applicant’s detention with reference to two risks: the risk of tampering with evidence and the risk of absconding. As to the former, the Court notes that by June 2004, when the trial started, all documentary evidence had been already seized by the prosecution, all prosecution witnesses and experts had been questioned and their recorded testimony had been submitted to the court. By the end of 2004 the court had completed its examination of evidence collected by the prosecution. These developments significantly reduced the risk of tampering with evidence. Furthermore, throughout 2004 the main assets of Yukos were attached and sold at auction (see the Yukos case, §§ 92 et seq.). Thus, the second applicant ceased to exercise de facto control over the company; his ability to influence the company’s personnel was accordingly reduced. Despite those changes the domestic courts continued to repeat the reasons set out in their earlier detention orders.

507. The Court also notes that in ordering the extensions the courts used a stereotyped wording. Such an approach may suggest that there was no genuine judicial review of the need for the detention (see YaÄŸcı and Sargın v. Turkey , 8 June 1995, § 50 et seq., Series A no. 319 ‑ A) at each extension.

508. Finally, the domestic courts during the period under consideration never considered the alternative preventive measures provided for by Russian law. The Court reiterates that when deciding whether a person should be released or detained the authorities have an obligation under Article 5 § 3 to consider alternative measures of ensuring his or her appearance at trial. This Convention provision proclaims not only the right to “trial within a reasonable time or to release pending trial” but also lays down that “release may be conditioned by guarantees to appear for trial” (see Jabłoński v. Poland , no. 33492/96, § 83, 21 December 2000, and Sulaoja v. Estonia , no. 55939/00, § 64, in fine , 15 February 2005). In the present case the authorities did not consider the possibility of ensuring the second applicant’s attendance by the use of a more lenient preventive measure, such as bail, house arrest, or other measures provided by the Russian law, and “the context of the case was not such as to make the applicant obviously “non-bailable” (see Khodorkovskiy (no. 1) , § 196, with further references).

509. The Court concludes that the domestic courts failed to demonstrate that the applicant’s detention during the period under consideration (10 September 2004-16 May 2005) was justified by “relevant and sufficient” reasons. There was therefore a violation of Article 5 § 3 of the Convention on this account.

IV. ALLEGED VIOLATION OF ARTICLE 5 § 4 IN RESPECT OF THE SECOND APPLICANT

510. The second applicant complained, relying on Article 5 § 4 of the Convention, that the proceedings in which the lawfulness of his detention had been reviewed, had not offered sufficient procedural guarantees. Article 5 § 4 provides:

“4. Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful.”

A. The parties’ submissions

1. The Government’s submissions

511. As regards the time given to the defence to prepare their replies to the prosecutor’s requests for detention (the requests of 10 September 2004, 14 December 2004 and of 2 March 2005), the Government submitted that virtually all of the detention hearings concerned the same elements: the applicant’s financial status and his failure to appear for questioning on 2 July 2003. Thus, the prosecution’s arguments were well known to the defence.

512. Concerning the alleged delays in the examination of the second applicant’s appeals against the detention orders, the Government submitted that his appeals had been examined as quickly as was possible in the circumstances and that the periods of examination of the second applicant’s appeals were reasonable. Further, the second applicant himself had contributed to the length of the proceedings before the second-instance court which was supposed to examine his appeals against the detention orders.

2. The second applicant’s submissions

513. The second applicant complained of a violation of the principle of equality of arms during the detention hearings. Thus, the requests for extension of his detention were made by the prosecutor orally (and thus in violation of the law) on all three occasions: on 10 September 2004, 14 December 2004 and 2 March 2005. The prosecutor had unlimited time to prepare those requests. In contrast, the second applicant’s lawyers were forced to submit an ex tempore response on each occasion, with very limited time. On 10 September 2004 the defence team was given insufficient time to prepare objections to the state prosecutor’s oral request for the extension of the second applicant’s detention. On 14 December 2004 the defence team was given two hours and thirty minutes to prepare objections to the state prosecutor’s oral request for extension of the second applicant’s detention; and on 2 March 2005 the defence team was given no time to prepare. Since the prosecutor’s request repeated the previous requests practically verbatim, and it became clear that there was no realistic prospect whatsoever that the court would accept the defence’s arguments, the second applicant’s lawyers decided not to press the court for time to prepare objections.

514. The appellate court was under an obligation to address the defence arguments, not simply to recite them and then to reiterate the same formulaic and stereotypical conclusions that had been made in the initial detention decisions. The second applicant’s appeal (which ran to ten pages) against the extension order of 10 September 2004 cited at least seven separate grounds for quashing the District Court’s decision as unlawful and unjustified, but in its ruling of 13 October 2004 the Moscow City Court compendiously rejected all of the defence arguments in just one single sentence. The defence subsequently filed an eight-page appeal against the ruling of the Meshchanskiy District Court of 14 December 2004. Although in its ruling of 19 January 2005 the Moscow City Court cited the defence’s arguments, it failed to address them. In the ruling of 31 March 2005, in reply to an eleven pages’ appeal against the Meshchanskiy District Court’s ruling of 2 March 2005, the appellate court once more failed to engage with the substance of the second applicant’s arguments.

515. The second applicant claimed that the time taken to hear his appeals did not meet the requirement of speediness. Thus, the appeal against the ruling of 10 September 2004 had been considered by the second-instance court on 13 October 2004; the appeal against the ruling of 14 December 2004 had been considered by the second-instance court on 19 January 2005. The second applicant argued that there had thus been unacceptable delays in the light of the Court’s case-law on this subject.

B. The Court’s assessment

1. Equality of arms in the detention proceedings

516. The Court reiterates that when the lawfulness of detention pending investigation and trial is examined, the proceedings must be adversarial and must always ensure equality of arms between the parties – the prosecutor and the detainee (see Nikolova v. Bulgaria [GC], no. 31195/96, § 59, ECHR 1999 ‑ II; see also Graužinis v. Lithuania , no. 37975/97, § 31, 10 October 2000). This means, in particular, that the detainee should have access to the documents in the investigation file which are essential for assessing the lawfulness of his detention (see Lamy v. Belgium , judgment of 30 March 1989, § 29, Series A no. 151, and Schöps v. Germany , no. 25116/94, § 44, ECHR 2001-I). The detainee should also have an opportunity to comment on the arguments put forward by the prosecution (see NiedbaÅ‚a v. Poland , no. 27915/95, § 67, 4 July 2000).

517. In the present case the Court has to examine procedures in which the second applicant’s detention was extended from 10 September 2004 onwards. According to the second applicant, the defence was not prepared to counter the detention requests lodged by the prosecution. The Government replied that the time given to the defence to counter the detention requests had been sufficient, given that the prosecution had always referred to the same grounds for the continuing detention and the defence had been familiar with their arguments.

518. The Court observes that the complexity of the prosecution requests for extension may be a relevant factor: the more complex and unexpected the requests are, the more time the defence requires to counter them. In such a situation, where a request for extension comes as a surprise, the defence is in a disadvantageous position vis-à-vis the prosecution.

519. The Court notes that, by claiming that the extension requests were stereotyped, the Government in fact supported the applicant’s complaint under Article 5 § 3 of the Convention (see above): they indicated that, throughout the entire period under consideration, the prosecution’s arguments calling for the applicant’s detention remained the same.

520. On the other hand, this same factor speaks in favour of the Government’s contention under Article 5 § 4 that the defence had sufficient time to respond to the prosecution’s requests, in view of their similarity. The Court reiterates in this respect that “Article 5 contains more flexible procedural requirements than Article 6 while being much more stringent as regards speediness” (see Lebedev (no. 1) , § 84). The Court observes that the applicant was represented by a group of highly professional lawyers, that the hearings were adjourned for one or two hours each time when the defence asked for it, and that the defence did not seek extra adjournments (see paragraph 49, 51 and 53 above). The Court concludes that even though the prosecution had more time to develop their arguments, given the nature of the proceedings, this disparity between the parties did not perturb the principle of equality of arms to an extent incompatible with Article 5 § 4 of the Convention.

2. Speediness of review

521. The second applicant complained that his appeals against the detention orders were not examined speedily by the court of appeal. The Court reiterates that under Article 5 § 4 a detainee is entitled to take proceedings by which the lawfulness of his detention must be decided speedily by a court (see Rehbock v. Slovenia , no. 29462/95, §§ 82-88, ECHR 2000 ‑ XII, and G.B. v. Switzerland , no. 27426/95, §§ 34-39, 30 November 2000). Where domestic law provides for a system of appeal, the appellate body must also comply with the requirements of Article 5 § 4; at the same time, the standard of speediness “is less stringent when it comes to the proceedings before the court of appeal.... The Court would not be concerned, to the same extent, with the speediness of the proceedings before the court of appeal, if the detention order under review was imposed by a court and on condition that the procedure followed by that court had a judicial character and afforded to the detainee the appropriate procedural guarantees” (see Shakurov v. Russia , no. 55822/10, § 179, 5 June 2012). In the case of Mamedova , cited above, which, like the present case, concerned appeal proceedings, it found that the “speediness” requirement was not complied with where the appeal proceedings lasted thirty-six, twenty-six, thirty-six, and twenty-nine days respectively, stressing that their entire duration was attributable to the authorities (see Mamedova , § 96; see also, for longer delays, Ignatov v. Russia , no. 27193/02, §§ 112-114, 24 May 2007, and Lamazhyk v. Russia , no. 20571/04, §§ 104-106, 30 July 2009). By contrast, the length of appeal proceedings that lasted ten, eleven and sixteen days was found to be compatible with the “speediness” requirement of Article 5 § 4 (see Yudayev v. Russia , no. 40258/03, §§ 84-87, 15 January 2009, and Khodorkovskiy (no. 1) , § 247). Finally, the Court reiterates that the delay for which the State may be held responsible should not include the time when the defence was preparing their brief of appeal (see Khodorkovskiy (no. 1) , § 247), unless the defence was prevented from finalising it through the fault of the authorities (see Lebedev (no. 1) , § 100).

522. Turning to the present case the Court reiterates that a similar complaint by the second applicant concerning earlier detention orders has already been addressed in Lebedev (no. 1) . In that case the Court held that delays of forty-four and sixty-seven days, of which twenty-seven and forty ‑ seven were attributable to the authorities, constituted a breach of Article 5 § 4 (see §§ 98-108). During the period now under examination the detention order of 10 September 2004 was reviewed within twenty-three days, if calculated from the date when the brief of appeal was introduced (see paragraphs 49 et seq. above). The detention order of 14 December 2004 was reviewed by the City Court within twenty-six days. The detention order of 2 March 2005 was examined by the City Court within twenty days from the date when the brief of appeal had been introduced, and only twelve days out of this period can be attributed to the State, since the defence requested an adjournment of the appellate hearing.

524. The Court accordingly concludes that the appeal against the detention order of 14 December 2004 was not examined “speedily”, as required by Article 5 § 4 of the Convention. There was therefore a violation of that provision in this respect.

3. Failure of the court of appeal to give reasons

V. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION (IMPARTIAL TRIBUNAL)

526. The first and the second applicants complained of several distinct breaches of Article 6 of the Convention. The first group of their arguments related to the alleged bias of the presiding judge. This complaint will be addressed immediately below, in Section V. The applicants further claimed that the hearing in their case was not “fair”, contrary to Article 6 § 1, in particular due to the lack of time and facilities to prepare the defence (Article 6 § 3 (b)), impossibility to enjoy effective legal assistance (Article 6 § 3 (c)), and the applicants’ inability to examine prosecution evidence or adduce their own evidence (Article 6 § 3 (d)). These allegations will be examined in Section VI of the present judgment. Finally, in Section VII the Court will turn to the applicants’ allegation that placing them in a metal cage during the trial was contrary to the presumption of innocence guaranteed by Article 6 § 2 of the Convention.

527. The Court will start with the applicants’ complaint that Judge Kolesnikova was not impartial. They referred to Article 6 § 1 which, in so far as relevant, provides:

“In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal”

A. The parties’ submissions

1. The Government’s submissions

528. The Government claimed that Judge Kolesnikova had not been in a situation which might have caused doubts as to her impartiality, as provided by Articles 61-63 of the CCrP, that there had been two other judges on the bench, and that the District Court judgment had later been reviewed at two levels of jurisdiction, including the supervisory review proceedings. None of the procedural decisions taken by her during the trial contained anything which could have been reasonably interpreted as a declaration of the applicants’ guilt. Various procedural steps taken by her were solely aimed at securing fair and speedy examination of the case. The law prohibited the judge from expressing her opinion on the substance of the accusation prior to the delivery of the judgment. Further, she was one judge out of three, and the applicants did not express any doubts as to the impartiality of the lay assessors. Finally, the District Court judgment was later reviewed by the judges of the court of appeal, whose impartiality was not contested.

529. As to Ms Kolesnikova’s findings in the judgment in Mr Shakhnovskiy’s case, the first applicant’s name was mentioned in the Shakhnovskiy judgment only once, in passing, where the District Court described a note written by Ms Kantovich to the first applicant and to Mr Aleksanyan, the then head of the Yukos legal department. That reference to the first applicant’s name concerned assessment of evidence and could not be interpreted as showing the judge’s bias against the first applicant.

530. The second applicant’s name was mentioned five times in the judgment against Mr Shakhnovskiy. On page 12 of the judgment the court referred to contracts between several leading Yukos executives, including the second applicant, and the firm Status Services; it also mentioned corporate American Express credit cards seized during the search of the applicant’s country house. On pages 17 and 19 the court again referred to that evidence as proof of tax evasion. In the Government’s opinion, the wording used by Judge Kolesnikova had not contained any declaration of the applicant’s guilt; his name had simply been mentioned to identify documents and other evidence against Mr Shakhnovskiy.

531. The crimes of which Mr Shakhnovskiy was found guilty had been committed by him alone and did not contain, as a qualifying element, the element of an “organised group”. That judgment could not therefore be construed as implicating the applicants in the crimes imputed to Mr Shakhnovskiy. The judgment against Mr Shakhnovskiy was very lenient: he was relieved from serving his sentence and acquitted in respect of part of the accusations. In the Government’s opinion, this showed that Judge Kolesnikova had no predisposition against Yukos managers.

532. In their observations on the merits of the case, the Government maintained that law-enforcement bodies did not conduct any inquiries or investigations in respect of Judge Kolesnikova or her relatives over the period 2000-2006.

2. The applicants’ submissions

533. The applicants claimed that in the judgment concerning Mr Shakhnovskiy Judge Kolesnikova not only concluded that Mr Shakhnovskiy had evaded personal taxes, she also made a finding that the second applicant had similarly evaded personal taxes. Furthermore, in her judgment on the Shakhnovskiy case, Judge Kolesnikova placed reliance on the first applicant’s knowledge of that tax arrangement, as demonstrated by a memo written to Mr Khodorkovskiy on behalf of Mr Aleksanyan by Ms Kantovich. The applicants were subsequently convicted by Judge Kolesnikova of exactly the same offence as Mr Shakhnovskiy.

534. Moreover, Judge Kolesnikova made a series of findings in Mr Shakhnovskiy’s trial as to the admissibility of evidence that had been unlawfully seized and which was similarly relied upon in the applicants’ trial. In the applicants’ trial Judge Kolesnikova once more refused to exclude the evidence as inadmissible. It was irrelevant that Judge Kolesnikova had given Mr Shakhnovskiy a non-custodial sentence: this did not undermine the fact that she had found him guilty and made certain findings of fact.

535. During the applicants’ trial Judge Kolesnikova took decisions that were not only unfavourable to the applicants but plainly unlawful and unjustified. Those decisions concerned the extension of their detention on remand, limitation of time for studying materials and innumerable other decisions adverse to the defence, such as ruling against the admissibility of defence expert reports, ruling against the defence requests to cross-examine prosecution witnesses, ruling against the defence applications for disclosure of exculpatory material, etc., while adopting a differing, more favourable approach to deficient evidence produced by the prosecution. Defence motions were often summarily rejected with no substantive reasons given. Judge Kolesnikova refused to grant permission to the Council of Europe Special Rapporteur to see the applicants. Finally, almost two years after the conclusion of the trial Judge Kolesnikova made an order lifting the seizure of Yukos ordinary shares and directing that they be used towards satisfying the civil damages award. The overwhelming effect was a clear impression that the District Court’s presiding judge was biased against the applicants.

536. It was Judge Kolesnikova who, as presiding judge, had led court sessions. Throughout the trial, the two other judges (Judge Maksimova and Judge Klinkova) asked only a few questions, while Judge Kolesnikova had a more comprehensive role, examining witnesses and specialists and adopting procedural and organisational decisions. From media the applicants became aware of the rumour that Judge Kolesnikova and/or her family members were under investigation by the GPO during the trial. The applicants stressed that Judge Kolesnikova had not done anything to disprove those allegations. Furthermore, that allegation had not been commented by the Government in their pre-admissibility observations.

B. The Court’s assessment

1. General principles

2. Application to the present case

(a) Procedural decisions taken by Judge Kolesnikova

539. First, the applicants claimed that procedural decisions taken by Judge Kolesnikova during the trial were indicative of her bias. The Court, however, is not convinced by that argument. In Morel v. France (no. 34130/96, §§ 45 et seq., ECHR 2000 ‑ VI, with further references) the Court held that the mere fact that a judge had already taken pre-trial decisions could not by itself be regarded as justifying concerns about his impartiality. What mattered was the scope and nature of the measures taken by the judge before the trial. For example, a preliminary analysis of the available information for the purposes of taking a procedural decision does not mean that the final analysis in the judgment had been prejudged.

(b) Whether Judge Kolesnikova was under investigation herself

(c) Involvement of Judge Kolesnikova in Mr Shakhnovskiy’s case

542. There remains the third argument by the applicants, namely the question whether the involvement of judge Kolesnikova in the proceedings against Mr Shakhnovskiy would make an objective observer believe that she was not impartial to judge the applicants’ case.

543. The Court observes that, in a number of cases, it has come to the conclusion that the involvement of the same judge in two sets of proceedings concerning the same events may arguably raise an issue under Article 6 § 1 of the Convention (see Ferrantelli and Santangelo v. Italy , 7 August 1996, § 59, Reports of Judgments and Decisions 1996 ‑ III, and Rojas Morales v. Italy , no. 39676/98, § 33, 16 November 2000).

545. In Schwarzenberger , cited above, the Court emphasised that the assessment of facts in the judgment given against the applicant clearly differed from that in the judgment against the co-accused and that the judgment convicting the applicant did not contain any references to the judgment against the co-accused, showing that the judges had given fresh consideration to the applicant’s case. Further, in the judgment against the co-accused, the established facts about the applicant’s involvement in the crimes were essentially based on the co-accused’s submissions, and thus did not constitute the Regional Court’s assessment of the applicant’s guilt. In Poppe , cited above, the Court found it decisive that the applicant’s name had been mentioned only in passing in the judgments against the co ‑ accused and that the trial judges had not determined whether the applicant was guilty of having committed an offence.

546. Finally, in Miminoshvili , cited above, §§ 117 et seq. the Court examined a similar situation and found that the applicant’s fear of partiality was not objectively justified. In that case the judgment in the applicant’s case contained a reference to a judgment rendered earlier in the case of his brother, who was a member of the same gang, but only in passing. There was no direct evidence that the findings of the previous judgment were relied on by the judge in the proceedings against the applicant. What is more, Article 90 of the CCrP clearly stipulated that those findings could not have the force of res judicata in the applicant’s case. The judge sitting in the applicant’s case was required to conduct a fresh examination of the charges against him, relying only on the evidence examined at his trial.

547. In Miminoshvili the Court also analysed the judgment in the case concerning the applicant’s brother, Mr M., and stressed that the applicant’s name was never mentioned there in any incriminating context: the domestic court did not refer to the applicant as a “perpetrator” or “co-offender”, in contrast to the situation in Ferrantelli and Santangelo , cited above. The court in the case of the applicant’s brother did not determine whether the applicant was guilty, and there was no specific qualification of the acts committed by him. The Court further held as follows:

“Indeed, several witnesses named the applicant as the leader of the gang and described his role in some of the episodes imputed to [his brother]. That information was reproduced in the judgment; however, it was presented in the judgment as reported speech, and not as the court’s own findings. It can be seen from the judgment that the information about the applicant’s involvement in the gang was not a condition sine qua non for the conviction of [the applicant’s brother]. At least, there is no indication that the Nikulinskiy District Court would not have come to the same conclusions in [the applicant’s brother’s] case if all references to the applicant’s name had been removed. These circumstances lead the Court to conclude that the judgment in [the applicant’s brother’s] case did not contain findings that actually prejudged the question of the applicant’s guilt in subsequent proceedings”.

The Court finally took note of the fact that Judge K. was a professional judge and, as such, she was a priori more prepared to disengage herself from her previous experience in Mr M.’s trial than, for instance, a lay judge or a juror. The Court concluded that the trial court in the Miminoshvili case had been impartial.

548. Turning to the present case the Court finds it similar to Miminoshvili in many respects. Thus, in the applicants’ case Judge Kolesnikova, under the Russian law, had been in no way bound by her earlier findings in the case of Mr Shakhnovskiy (see paragraph 387 above). She had to reconsider the whole case with all the issues raised by the case remaining open. Further, the judgment in the applicants’ case did not refer to the case of Mr Shakhnovskiy.

549. The Shakhnovskiy judgment, in turn, did not contain any finding directly incriminating the applicants: they were not referred to as “perpetrators”, “offenders”, “co-authors” etc. The judgment did not analyse their involvement in the crime imputed to Mr Shakhnovskiy (personal tax evasion) and did not establish the constituent elements of the applicants’ criminal liability.

550. The applicants seem to suggest that, while Judge Kolesnikova was not legally bound by her previous findings, she might have at least felt constrained by them. Although the Shakhnovskiy judgment did not establish the applicants’ guilt, their names were mentioned in a somewhat incriminating context. Thus, the central proposition of the Shakhnovskiy judgment was the fictitious character of his relations with Status Services. This was based on a number of other interim factual findings, including the fact that Mr Aleksanyan had given a legal opinion to the first applicant, describing the individual entrepreneur’s scheme, the fact that the second applicant had been a chief executive of Status Services, and the fact that an identical service contract had existed between the second applicant and Status Services (see paragraph 142 above).

551. Second, in Mr Shakhnovskiy’s trial Judge Kolesnikova had admitted evidence that was later relied upon by her upon in the applicants’ trial – in particular, the note of Mr Aleksanyan, evidence related to the credit card in the second applicant’s name, and the contract between the second applicant and Status Services. It appears that at least the first two items of evidence were discovered by the prosecution during the searches in the Yukos premises in Zhukovka in October 2003 (see paragraphs 69 et seq. above). The Court notes that the defence in the case at hand tried to obtain the exclusion of materials obtained during those searches (see paragraph 173 above). By admitting that evidence in Mr Shakhnovskiy’s proceedings the judge implicitly acknowledged the lawfulness of the searches and seizures which led to the discovery of that evidence.

552. The Court accepts that the Shakhnovskiy judgment might arguably be construed as implying that the second applicant had somehow aided Mr Shakhnovskiy in using the “individual entrepreneur scheme”, whereas the first applicant had been at least aware of the situation. That being said, such inferences are not based on the literal meaning of Judge Kolesnikova’s findings in the Shakhnovskiy judgment.

553. Furthermore, even if those facts may be said to describe the applicants’ role in the crimes imputed to Mr Shakhnovskiy, they did not concern the charges against the applicants in their own case. Those facts were mentioned by Judge Kolesnikova in order to illustrate the fictitious character of relations between Mr Shakhnovskiy and Status Services, but they cannot be interpreted as suggesting that the applicants themselves had evaded taxes in a similar way.

554. As to the issue of admissibility of evidence, the Court emphasises that, in adversarial proceedings, the determination of what is admissible and what is not largely depends on the parties’ positions and arguments. The Court has no information about the particulars of Mr Shakhnovskiy’s defence, but given the brevity of his trial and the lenience of the sentence the Court is prepared to accept that Mr Shakhnovskiy did not challenge the prosecution evidence and their factual assertions as vigorously as the applicants did in their trial. In such circumstances nothing prevented Judge Kolesnikova from departing from her earlier findings as to the admissibility of evidence.

555. Finally, the Court notes that, as a professional judge, Judge Kolesnikova was a priori prepared “to disengage herself from her previous experience” in Mr Shakhnovskiy’s trial.

556. The Court concludes that the judgment in Mr Shakhnovskiy’s case did not contain findings that prejudged the question of the applicants’ guilt in subsequent proceedings, and that Judge Kolesnikova was not bound by her previous findings, either legally or otherwise.

557. In sum, the Court concludes there was no violation of Article 6 § 1 of the Convention on account of Judge Kolesnikova’s previous involvement in Mr Shakhnovskiy’s trial.

VI. ALLEGED VIOLATION OF ARTICLE 6 §§ 1 AND 3 OF THE CONVENTION (FAIR HEARING)

A. Time and facilities for the preparation of the defence

558. The applicants complained that they had lacked adequate time and facilities to prepare their defence. They referred to Article 6 §§ 1 and 3 (b) which, in so far as relevant, provide:

“1. In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... .

3. Everyone charged with a criminal offence has the following minimum rights: ...

(b) to have adequate time and facilities for the preparation of his defence”.

1. The parties’ submissions

(a) The Government’s submissions

559. The Government maintained that any limitations of the time given to the defence to prepare for the case were explained by the need to conduct proceedings in accordance with the requirement of a speedy trial. The applicants retained several highly professional lawyers, who had access to the materials of the case for almost six months for the first applicant and even longer for the second. The applicants and their lawyers repeatedly signed forms acknowledging that they had been allowed to study the materials of the case without any time restrictions. The applicants’ defence teams were allocated special rooms in the remand prison in order to enable them to prepare for the trial. These rooms were equipped with safe-boxes, where the defence was allowed to keep the materials of the case-file. The applicants were studying the materials in parallel with their lawyers; according to a letter from the head of the remand prison, the defence could ask the administration to make copies of the materials in the case file. In addition, the applicants were entitled to make notes and take materials from the case file to their cells, and transmit written comments to the lawyers, under the conditions established in sections 17, 18, 20 and 21 of the Detention on Remand Act. The second applicant had always had paper, writing accessories and law books at his disposal. The Government denied that the second applicant had not been allowed to use a magnifying glass or a calculator: although, as a rule, detainees could not have such objects, the applicant had been allowed to use them during the court hearings and when he studied the case file.

560. After the start of the trial the lawyers for Mr Kraynov (a co ‑ defendant) asked the court to give them additional time, until 23 August 2004, to study the case file. When the court asked the parties’ opinion about a possible adjournment on this ground, the applicants left that question to the court’s discretion. When any new material was added to the case file during the trial, the court always adjourned the hearing and provided the defence with an opportunity to study it. Throughout the entire trial the applicants and their lawyers had access to the materials of the case file. They never declared that they were unable to participate in the examination of evidence because they were unfamiliar with the materials of the case. The fact that the applicants were well-aware of the content of the case file was demonstrated by their own detailed requests and motions lodged during the trial.

561. As to the changes in the planning of the hearings, allegedly detrimental to the defence, this was a decision taken by Judge Kolesnikova and within her discretion. If the defendants needed more time to meet their lawyers, they were entitled to ask the court for an adjournment. The court would decide those requests on a case-by-case basis. The Government produced extracts from the trial record which showed that the defence was repeatedly given short adjournments during the hearings to prepare their arguments and examine documents produced by the prosecution.

562. Bearing in mind the professional level of their defence team, the Government concluded that the applicant had sufficient time to prepare their defence.

563. As regards the judge’s refusal to attach audio-recordings of the hearings, made by the defence, to the materials of the case, the Government explained that the judge who had examined the defence comments and objections concerning the trial record had dismissed them as unfounded. Since the trial record had been accurate, there had been no need to examine the audio recordings of the hearings. In signing the minutes of the hearing, the judge consciously confirmed the veracity of that document.

(b) The applicants’ submissions

564. The applicants maintained that the time given to the defence to prepare for the trial had been clearly insufficient. The first applicant’s case ‑ file originally comprised 227 volumes, approximately 55,000 pages. The second applicant’s case-file contained 164 volumes, each volume contained 250 pages on average, i.e. there were about 41,000 pages in total. Two bills of indictment constituted another two volumes. At the trial, after the two cases had been joined, the first applicant received 22 working days to study 165 volumes of case materials from the second applicant’s case, whereas the second applicant had to study 228 additional volumes within that period. The bill of indictment had covered a period of over ten years, and the case was extremely complex, both legally and factually. Although there was a commonality in the charges faced by the applicants there were also significant differences. It was therefore imperative for the applicant’s lawyers to scrutinise the additional materials. Some documents, of course, appeared in both sets of files, but it was necessary to look through all of the volumes to understand which documents had already been studied and which had not.

565. The Government’s reliance on the fact that the applicants had not refused to take part in the trial on account of not being prepared for proceedings was entirely without merit, since the applicants could not have done that without risking irreparable harm to their defence. During the trial they did ask for more time to familiarise themselves with the case materials, while the applicants’ lawyers commented that they were placed in an impossible situation.

566. As to the conditions in which the applicants had had to study the case file and prepare their defence, the applicants argued that the defence had no place to keep the materials of the case file, and that the Government’s assertion that a safe-box had been allocated for that purpose in the detention facility was untrue. In addition, the defence had only been permitted to use certain meeting rooms, even when others were vacant, which was very suspicious. The Government’s assertion that the applicant was able to give written comments to his lawyers was misleading, in as much as it omitted to mention the fact that all such comments had had to be passed through a special division of the detention facility - i.e. lawyer ‑ client confidentiality had systemically been violated. The applicants were not allowed to have their own copy of the case file. It is to be noted that they would have been able to have their own copy had they been released on bail rather than detained. The applicants had been entitled to read the case file only in the presence of the investigator. When the applicants wished to discuss the documents in private with their lawyers the investigator had removed the documents. The temporary absence of a magnifying glass and a calculator had seriously impaired the preparation of the defence of the second applicant. The applicants were very largely reliant on the notes that they had made when they were reviewing the case files in the presence of the investigator. They were in theory permitted, upon request, to receive photocopies of the materials in the case file but in fact they were provided with only a very small number of copies of pages from the case materials. They were permitted to keep their notes and very limited extracts from the case file in their cells.

567. At the start of the trial the applicants’ respective legal teams were given each one copy of the case file in relation to the co-defendants. Subsequently the applicants’ legal team made copies of those case files for their use. However, the applicants themselves were not permitted to be given a copy of the case files. In the court room, the applicants were entirely reliant on their lawyers showing extracts of the case file to them through the bars of the iron cage in which they were kept. The only way that the applicants were able to access the case materials during the trial was to request an adjournment of the trial. In the applicants’ words, such limitations significantly prolonged the time needed to study the case file.

568. As to the timing of the hearings, the court originally instituted a four-day court week so as to allow the fifth day to be used for trial preparation, and the hearings started at 11 a.m. The Government offered no explanation as to why in the middle of the trial, at its most intensive phase, it had suddenly become possible to start earlier in the day. The time available for preparing the case had suddenly decreased. Equally, the Government did not explain why, as the defence phase of the trial progressed, it had become reasonable for the Court to sit five days a week.

569. The applicants asserted that they had never been given access to the entire trial record. The GPO had had access to all 30 volumes, but the defence had access to only 15. The applicants’ cells were placed in quarantine after the same infected inmate had been placed successively in both applicants’ cells.

570. As to the analysis of inaccuracies in the trial record, the defence’s objections had been summarily dismissed. The defence had tried to rectify inaccuracies in the trial record by submitting to Judge Kolesnikova audiotapes containing the audio-record of the entire trial, but on 2 September 2005 Judge Kolesnikova returned all of the audiotapes to the defence on the basis that the case was closed and nothing more could be added. The applicants argued that those audiotapes substantiated the defence objections to the trial record. The audiotapes were lawfully recorded and the CCrP required such tapes to be added to the case materials.

571. According to the applicants, some of the inaccuracies in the trial record identified by the defence were quite significant – for example, the record omitted the requirement for documents to be handed to the judge before being passed to the applicants during the trial and the omission of discussions about sitting on Wednesdays. Other omissions in the trial record concerned serious inaccuracies in the evidence given by witnesses. In the applicants’ opinion, dismissing such objections summarily suggested bad faith on the part of the court.

572. The appeal was improperly expedited so as to ensure that the hearing was completed before the expiry of the limitation period for the NIUIF charges (see paragraph 314 above) and before elections to the Duma. The applicants had been regularly denied access to their lawyers and they had been unable to review even the incomplete trial record in the time available and in the cramped conditions of their cells. In addition, seven days prior to expiry of the date set by the court for reading of the trial record, the second applicant had been placed in an isolation cell where it was impossible for him to read the trial record. The defence’s request for an adjournment was refused.

2. The Court’s assessment

(a) General principles

574. It is a fundamental aspect of the right to a fair trial that criminal proceedings, including the elements of such proceedings which relate to procedure, should be adversarial and that there should be equality of arms between the prosecution and the defence, which means that both the prosecution and defence must be given the opportunity to have knowledge of and comment on the observations filed and the evidence adduced by the other party (see Belziuk v. Poland , 25 March 1998, § 37, Reports of Judgments and Decisions 1998-II; and Dowsett v. the United Kingdom , no. 39482/98, § 41, ECHR 2003 ‑ VII). The accused must have the opportunity to organise his defence in an appropriate way and without restriction as to the possibility to put all relevant defence arguments before the trial court and thus to influence the outcome of the proceedings (see Moiseyev , cited above, § 220, or Dolenec v. Croatia , no. 25282/06, § 208, 26 November 2009). The facilities which should be enjoyed by everyone charged with a criminal offence include the opportunity to acquaint himself, for the purposes of preparing his defence, with the results of investigations carried out throughout the proceedings (see C.G.P. v. the Netherlands , no. 29835/96, Commission decision of 15 January 1997, and Galstyan v. Armenia , no. 26986/03, § 84, 15 November 2007).

(b) Application to the present case

(i) Preparation for the trial

575. The Court notes that the second applicant was given access to his case file on 22 August 2003 (see paragraph 119 above). The first applicant obtained access on 25 November 2003 (see paragraph 120 above). The case files were withdrawn from the defence on 13 May 2004 (see paragraph 132 above). It follows that the second applicant had eight months and twenty days to study over 41,000 pages, whereas the first applicant had five months and eighteen days to study over 55,000 pages (see paragraphs 120 and 127 above). In order to go through the case file at least once the second applicant would have to read at a rate of over 200 pages per working day. The first applicant would have needed to read more than 320 pages per working day in order to study the prosecution case. Those figures might be higher if one excludes public holidays, days when the applicants were brought to the court or when they were considering defence evidence.

576. The Court notes that the applicants’ case files consisted mostly of financial and legal documentation. Thus, in order to prepare for the trial it was not enough simply to read all of the documents; the applicants had to keep notes and, most probably, re-read some of the documents many times, compare them with other documents and discuss them with the lawyers.

577. The Court also takes note of the conditions in which the applicants had to work with their case files. In the Court’s opinion those conditions were uncomfortable at best (see paragraphs 121 et seq. above). Thus, only one copy of each case file was made available to the defence. If one of the lawyers was studying a particular volume of the case-file in the premises of the GPO, the applicants were unable to study that volume at the remand prison. Although the applicants were allowed to take handwritten notes, it was impossible for them to make photocopies. The lawyers, by contrast, were allowed to make photocopies, but mostly for their own use. If they needed to give a copy of a document to the applicants, this was possible only through the remand prison administration and, in any event, the applicants could keep only a limited amount of printed materials in their cells. The second applicant was not allowed to use a magnifying glass and a calculator for some time, which must have slowed down his work. The case file was made available to the defence only in special rooms. The applicants and their lawyers were unable to discuss the case confidentially and, simultaneously, to work with the case file: if they needed to have the case file before them, the presence of an investigator was obligatory. In 2004 the case files were transferred to the remand prison, and, as follows from the applicants’ lawyers’ complaints to the investigative authorities, this made photocopying of documents impossible. All this made the work of the defence team very difficult.

578. After the joinder of the two cases in June 2004 (see paragraph 143 above) each applicant was given twenty-two days to familiarise himself with the materials related to the co-defendants; this meant that the second applicant, for instance, had to go through 2,500 pages per day related to the first applicant’s case, without rest days and without spending time on other tasks.

580. The Court stresses that even where the lawyer has access to the materials of the case, this cannot fully replace personal examination of the case-file by the defendant. The Court reiterates that in Öcalan , cited above, §§ 141 et seq.,) it found a violation of Article 6 § 3 (b) because before the start of the trial the applicant had not been permitted to inspect the prosecution case file personally, even though the applicant’s lawyers had had access to it. However, the present case must be distinguished from Öcalan . In the latter the applicant had no access to the case file whatsoever prior to the start of the trial, whereas in the present case both applicants had the case files at their disposal for several months. When in Öcalan the applicant was finally given direct access to the materials of the prosecution case, he had only twenty days to read 17,000 pages. The time given to the applicants in the present case was much longer. Finally, in Öcalan v. Turkey (no. 46221/99, § 162, 12 March 2003) “the applicant’s lawyers may have been prevented from giving the applicant an assessment of the importance of all these items of evidence by the sheer number and volume of documents and the restriction imposed on the number and length of their visits”. No such drastic restrictions were imposed on the applicants in the present case (compare with the description of the conditions in which the applicant had to meet his lawyers in Öcalan , cited above, § 26 et seq.).

582. Secondly, the Court notes that the applicants were able to keep handwritten notes and use them at the trial. Furthermore, at least until the end of 2003 – beginning of 2004 there was a possibility for the defence lawyers to make copies of the materials. The Court previously held that unrestricted use of any notes and the possibility of obtaining copies of relevant documents were important guarantees of a fair trial. The failure to afford such access weighed, in the Court’s assessment, in favour of the finding that the principle of equality of arms had been breached (see Matyjek v. Poland , no. 38184/03, §§ 59 and 63, 24 April 2007; Luboch v. Poland , no. 37469/05, §§ 64 and 68, 15 January 2008; and Moiseyev, cited above, § 217). However, the applicants in the present case, unlike in Matyjek or Moiseyev , were not bound by any rules on State secrets; they could make notes and keep their notebooks with them, and their lawyers were allowed to make copies of pages from the case file, at least until the end of 2003 – beginning of 2004.

583. Thirdly, the Court notes that both applicants were senior executives of one of the largest oil companies in Russia and had university degrees. Their ability to absorb and analyse information was necessarily above average; they knew the business processes at the heart of the case and were, arguably, more competent in those matters than any other participants in the proceedings. Their professional status is also an additional factor in favour of the Court’s finding that the applicants’ inability to study every document personally was somehow compensated by their lawyers’ participation in examination of the case file: it must have been natural for the applicants, as senior managers, to delegate certain tasks to their lawyers.

584. Fourthly, it is possible that some of the materials in the case files were not directly pertinent to the subject-matter of the case. For example, contracts between Yukos and its affiliates were important only in so far as they contained information about the price of oil and about the parties involved. It follows that the applicants did not need to read every page of such contracts in order to counter the prosecution’s arguments. As transpires from the judgment in the applicants’ case, a large part of the materials in both cases must have been identical. This means that in reality the number of pages which the applicants needed to scrutinise after the joinder of the two cases was less than the overall number of pages in each co-defendant’s case.

585. Fifthly, there is no indication that the applicants’ and their lawyers’ access to the case file was in any way restricted later on, during the trial itself (see Fruni v. Slovakia , no. 8014/07, § 125, 21 June 2011).

586. The above five elements lead the Court to the conclusion that although the defence had to work in difficult conditions at the pre-trial stage, the time allocated to the defence for studying the case file (compare with the judgment in the Yukos case, cited above, § 536) was not such as to affect the essence of the right guaranteed by Article 6 §§ 1 and 3 (b). It follows that there was no violation of those Convention provisions on this account.

(ii) At the trial

587. As to the “time and facilities” allocated to the defence during the trial, the Court observes that the timing of the hearings during the first stage of the trial proceedings, when the prosecution was presenting their case, was indeed more relaxed and made greater allowance for the preparation of arguments by the parties. However, the timing changed and the hearings became more intensive as soon as the court began examining evidence by the defence. Thus, without any apparent reason the court started hearings much earlier in the day (see paragraph 157 above) and discontinued the practice of Wednesday recesses (see paragraph 158 above).

588. Although that change in the hearing arrangements may have made the task of the defence more difficult, the Court is not persuaded that it was impossible for the applicants to follow the proceedings. The defence was able to request short adjournments when needed, and there is no evidence that the court did not treat such requests favourably (see paragraph 158 above).

589. The Court is aware of the difficulties which the defence experienced in the courtroom, in particular as concerns the conditions in which the applicants communicated with their lawyers. The Court considers, however, that those aspects of the case should be examined through the prism of the applicants’ complaint under Article 6 § 3 (c) of the Convention. The Court concludes that the change of the hearing schedule during the trial was not, as such, contrary to Article 6 §§ 1 and 3 (b) of the Convention.

(iii) During the appeal proceedings

590. The Court observes that the appeal proceedings lasted from 31 May 2005 (the date when the Meshchanskiy District Court finished reading out its judgment) to 22 September 2005 (the date when the Moscow City Court upheld the judgment in the main part). The defence obtained a copy of the first-instance court judgment on 7 June 2005; the fifteen volumes containing the hearing record (which ran to over five thousand pages) were made available to the defence on 28 July 2005. The appeal hearing took place on 22 September 2005 (see paragraphs 278, 279 and 306 above). After lodging a preliminary brief of appeal the defence had the opportunity to supplement it (see paragraph 293 above). Thus, the defence team had three months and sixteen days to prepare written pleadings and to prepare for an oral argument, which appears to be a sufficient time, at least on the face of it. The Court’s analysis, however, cannot stop here: it must ascertain whether that time was sufficient in view of the specific conditions in which the defence had to prepare their appeal and whether the defence had all necessary facilities for that purpose.

591. The Court reiterates that the conditions of detention of an accused is a relevant, albeit not decisive, factor in assessing his ability to prepare for the trial (see, for example, Mayzit v. Russia , no. 63378/00, § 81, 20 January 2005; Trepashkin , cited above, § 167). The Court notes that from 8 August 2005 the first applicant was detained in a “common” cell. In Khodorkovskiy (no. 1) the Court found that the conditions of detention in that cell amounted to “inhuman and degrading treatment” within the meaning of Article 3 of the Convention (§§ 117 et seq.). On 18 August 2005 the second applicant was placed for one week in an isolation cell where it was impossible to work with the case (see paragraph 473 above). On 15 September 2005 both cells in which the applicants were detained were placed under the quarantine regime (see paragraph 301 above); as a result, the applicants were unable to meet with their lawyers for some time. All that must have impeded the applicants’ preparation for the appellate hearing.

592. The applicants further claimed that before finalising their submissions to the court of appeal the defence had to verify the accuracy of the trial record and read materials added in the course of the trial. The Court reiterates that Article 6 § 3 (b) guarantees “adequate time and facilities for the preparation of his defence” and therefore implies that the substantive defence activity on the accused’s behalf may comprise everything which is “necessary” to prepare the trial (see Yukos , cited above, § 538). The Court accepts that studying a trial record and other trial materials may be a necessary phase in the preparation of a brief of appeal, especially where, as in the case at hand, the defence questions the lower courts’ findings of fact and challenges procedural decisions made during the trial, and where the court of appeal does not conduct a full rehearing of the case but bases its conclusions on written materials contained in the case file (see, mutatis mutandis , Klimentyev v. Russia , no. 46503/99, § 107, 16 November 2006). The Court will therefore examine whether the defence was given sufficient time to study the trial materials.

593. The Court takes note of the applicants’ complaint that they did not receive the original of the trial record but only a copy of it. However, since the applicants did not allege that the copy was not authentic, the Court does not attach any importance to this fact.

594. The Court further observes that on 5 August 2005 the defence was given copies of the hearing record only, i.e. to fifteen out of thirty volumes containing trial materials. The remaining volumes were not available to the defence, apparently because GPO was using them. Those volumes contained a number of the court’s procedural rulings and some documentary evidence added during the trial. The remaining volumes were given to the defence some time later, but the applicants were silent on that point and the Government did not comment either. The Court is prepared to admit that the defence had to prepare their appeal initially without having the entirety of the trial materials before them. In the Court’s opinion, such a situation may potentially be a serious handicap for the defence.

595. The applicants also alleged that the trial record had been inaccurate and that some important moments of the trial had been either omitted or misrepresented. The Court is not in a position to say whether this was really so. It is, however, worrying that the defence’s written submissions on the trial record were dismissed by the domestic judge in a summary manner. The judge refused to consider the audiotapes made by the defence throughout the trial (see paragraph 287 above) and held in essence that she trusted her secretaries and her own memory better than the audiotapes (see paragraph 291 above). The Court accepts that audio-recording is not the only possible method of keeping track of proceedings. However, the case at hand was extremely complex, the trial lasted for nearly a year, seven secretaries were employed to keep the summary record, and hearings were held almost every day. In such circumstances it is difficult to believe that in all 126 pages of the defence’s written submissions, based on the audiotapes they had made, there was not a single accurate remark worthy of attention and that the secretaries’ diligence and the judge’s memory were infallible. In addition, the date of the appellate hearing was set by the Chairman of the Meshchanskiy District Court before Judge Kolesnikova had ruled on the defence’s objections to the trial record (see paragraph 290 above). This all leads the Court to the conclusion that the objections to the trial record were not considered seriously, and that the accuracy of the trial record is, therefore, open to doubt.

596. Indeed, the defence had a possibility of preparing a brief of appeal relying solely on the text of the District Court’s judgment, on the case file as it was submitted to the Meshchanskiy District Court in May 2004 and on their own recollections of what had happened in the courtroom. However, such a situation is pregnant with dangers, and any professional lawyer would prefer to have at his or her disposal the entirety of the trial materials before finalising the brief of appeal.

597. The Court thus acknowledges that the defence was in a somewhat disadvantaged position during the appeal proceedings. That “disadvantaged position” need not necessarily be analysed in terms of the equality-of-arms guarantee, primarily because the Court does not know whether the prosecution had any problems with access to and the accuracy of the trial materials. The situation may, however, be assessed alone, in the light of the principle of adversarial proceedings, which means, inter alia , that the defence must have a possibility to put arguments on all pertinent points, including “the elements ... which relate to procedure” (see Dowsett , cited above).

598. Nevertheless, the Court reiterates that not every disadvantage of the defence leads to a violation of Article 6 § 3 (b) (see, for example, Kremzow v. Austria , cited above, § 50). The defence must be able to put relevant arguments so as to influence the outcome of the proceedings. In the circumstances the Court considers that possible inaccuracies in the trial record and the defence’s temporary inability to obtain access to part of the trial materials did not make it impossible for the defence to formulate their arguments and did not, therefore, influence the outcome of the appeal proceedings. The applicants’ conviction was based on various items of evidence, including a large amount of documentary evidence and statements from dozens of witnesses. Even acknowledging that the trial record may have contained some inaccuracies, the Court is not persuaded that they were such as to render the conviction unsafe. Furthermore, the defence were aware of the procedural decisions that had been taken during the trial and what materials had been added. They had audio recordings of the trial proceedings and could have relied on them in the preparation of their points of appeal.

599. The Court concludes that the difficulties experienced by the defence during the appeal proceedings did not affect the overall fairness of the trial. It follows that there was no violation of Article 6 §§ 1 and 3 (b) on this account.

(iv) Conclusion

600. Having regard to its findings above concerning time and facilities which were at the disposal of the defence at the pre-trial investigation stage of the proceedings, during the trial and the appeal proceedings, the Court concludes that there was no violation of the applicants’ rights under Article 6 §§ 1 and 3 (b) of the Convention.

B. Lawyer-client confidentiality

601. The applicants complained that their confidential contacts with their lawyers had been seriously hindered. They relied on Article 6 § 3 (c), which provides:

“3. Everyone charged with a criminal offence has the following minimum rights:

...

(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require”.

1. The parties’ submissions

(a) The Government’s submissions

602. The Government claimed that the applicants enjoyed all the rights guaranteed to detainees by the law. During the pre-trial proceedings the applicants’ right to meet their defence lawyers had not been limited. Thus, for example, while in the remand prison the second applicant had 505 meetings with his lawyers. As to the searches in the offices of Mr Drel and the personal searches of the lawyers Ms Artyukhova, Mr Baru, and Mr Shmidt, these had been lawful and necessary.

603. The Government stressed that the applicants had been detained on remand, so their meetings with the lawyers had necessarily taken place in the specific context of a remand prison. According to the Government, all correspondence by detainees was subject to “censorship” (perusal). An exception to this rule concerned letters to certain State bodies and to the European Court itself. All “proposals and requests” of a detainee addressed to his lawyer had first go to the prison administration, which had three days to review them and forward them to the addressee. Those rules were intended to “prevent the entry of prohibited items into the territory of the facilities” and thus corresponded to Article 6 § 3 (c) of the Convention. Further, since the applicants were suspected of having committed crimes in an organised group, those measures were aimed at preventing them from putting pressure on the witnesses and committing new crimes.

604. As to the alleged seizure of lawyers’ confidential materials by the remand prison officials, the Government submitted that on several occasions the lawyers’ belongings had indeed been inspected, and prohibited objects had been seized. On other occasions the lawyers’ documents had been seized without inspection of their belongings. The documents were seized from the applicants’ lawyers in accordance with sections 16, 18, and 34 of the Detention on Remand Act, point 27 of the Internal Regulations for Remand Prisons, as well as Articles 19.12, 27.1 and 27.10 of the Code of Administrative Offences.

605. The Government commented on the note seized on 11 November 2003 from Ms Artyukhova, the first applicant’s lawyer. The Government maintained that “on the basis of factual information, which had been important for the case, and in order to prevent [the defence] from frustrating the investigation by falsification of evidence, which might have been prejudicial for the establishment of the truth, it was decided to seize the note from Ms Artyukhova”. The Government further stressed that pursuant to point 27 of the Remand Prisons Rules (Decree of the Ministry of Justice of 12 May 2000, no. 148) lawyers were prohibited from accepting “letters of private character” from detainees. In the case at hand it was not a private letter which was seized, but a note which contained instructions to commit unlawful actions. That note had contained a plan of actions for the defence. It described how to exert pressure on the investigative authorities and on the administration of the remand prison. In particular, it had mentioned a hunger strike. In addition, the note had contained the following instructions to the first applicant’s lawyers: “to address the issue with witnesses”; “as to the participation in RTT, Lebedev must give a negative answer”, “to address the issue of fees received for the consulting services”, “to obtain evidence [from the defence witnesses] that there was no criminal intent, and that Mr Lebedev did not give any orders on the methods of investment and taxation”. In other words, in that note the first applicant had tried to induce witnesses to perjury, to obtain false evidence, and to collude with the second applicant, and sought to maintain control of over one hundred defence witnesses who had been former employees of Yukos.

606. As regards the search of Mr Baru, the Government submitted as follows. According to an inquiry conducted by competent authorities in 2010, on 4 December 2003 the second applicant met with one of his lawyers, Mr Baru. Prison officers who supervised the meeting noted that the second applicant, in breach of section 18 (4) of the Detention on Remand Act, gave Mr Baru a handwritten note which was not a part of any procedural document. Mr Baru tore the note to pieces and hid the shreds in the pocket of his trousers. At the end of the meeting prison officer N. informed Mr Baru that all written complaints and requests addressed to the lawyer must first be inspected by the administration of the remand prison and then forwarded to [him] within three days. Mr Baru was invited to hand over prohibited objects but he refused. In such circumstances, and pursuant to section 34 (6) of the Act, the prison officers had grounds to believe that Mr Baru was carrying prohibited objects; they searched his clothes and discovered shreds of the note written by the applicant. Those shreds were seized. As follows from that note, the second applicant was instructing Mr Baru how to impede the investigation.

607. On 11 March 2004 prison officials had seized a handwritten note from Mr Shmidt, who had been about to leave the prison after a meeting with the first applicant. The notes on the sheet had not been made in Mr Shmidt’s hand, so this had given the prison officials sufficient reason to believe that Mr Shmidt had tried to pass a prohibited object – a “private letter”. Mr Shmidt had not been subjected to a personal search. The seizure of that document had been lawful by virtue of sections 16, 18 and 34 of the Detention on Remand Act, and of Decree no. 148 – it was a “prohibited object”. The seizure was also lawful by virtue of Artcles 19.12, 27.1, and 27.10 of the Code of Administrative Punishments. Seizure of the document was found to be lawful by a decision of the Preobrazhenskiy District Court of Moscow of 19 May 2005.

608. As to the meeting rooms where the applicants communicated with their lawyers, the Government asserted that the applicants’ allegations of eavesdropping were unfounded. Conditions in those rooms complied with the requirements of section 18 of the Detention on Remand Act. Since the case file was very voluminous, the prison administration allocated the applicants several meeting rooms, equipped with safe-boxes for storing the materials of the case, in order to make the defence’s task easier. Prison officials were able to see what was happening in the meeting room but not to hear conversations. The Government referred to the record of an interview with the second applicant: according to the record, when the applicant was asked whether he had had an opportunity to consult his lawyers in private, he had replied: “Not always, but, in general, yes”. Given that the second applicant otherwise had a very critical attitude towards the investigative authorities, this reply suggested that he had been generally satisfied with the degree of confidentiality of his communication with his lawyers.

609. After the start of the trial the applicants were given an unlimited right to see their lawyers. The court even sent a letter to the administration of the remand prison inquiring about the meetings between the second applicant and his lawyers. This showed that the court did not ignore the defence lawyers’ motions concerning meetings with their client. The defence lawyers were capable of communicating with their clients orally during the breaks in the court hearings. Originally the court allocated one day per week for meetings between the applicants and their lawyers. Later that arrangement was changed; however, when needed, the court allowed short breaks and even adjourned proceedings until the following day. The applicants’ defence lawyers did not object to such arrangements.

610. The applicants’ assertion that they had been unable to obtain documents from their lawyers was untrue. The applicants were not separated from the lawyers by a screen during the meetings in the remand prison. As to the exchange of documents in the courtroom, the head escort officer informed the defence that the applicants were entitled to use their notes, show them to the defence and transmit documents. Pursuant to the law the exchange of objects and documents between the defence lawyers and the defendant had to remain under the supervision of the investigators and the court, in order to exclude collusion. Under Article 275 § 2 of the Criminal Procedure Code the applicants were entitled to use notes, which had to be shown to the presiding judge if he or she so requested. The presiding judge had explained to the defence that all transmitted documents should first be shown to her for inspection, to which Mr Padva, one of the first applicant’s lawyers, replied “Sure, by all means”. The judge needed to inspect notes transmitted from the applicants to their lawyers in order to decide whether they were related to the criminal proceedings, and in order to prevent the applicants giving their lawyers personal letters and similar documents that were not relevant to the case. The judge did not object to the contacts between the applicants and the lawyers during the breaks and even in the course of the hearing (to the extent that these did not pose a problem for the normal course of the hearing), but insisted on inspecting written documents passed between them. That measure was accepted by Mr Padva, who had said: “I will print out [those documents and notes] and show them to you”. The second applicant said to the judge that he did not always need to pass documents to his lawyers but at least needed to read them or let them be read. In sum, the procedure for inspection of materials had been decided with the participation of the defence lawyers. The Government concluded that the existing arrangement was accepted by the defendants and did not raise any objections.

611. The rule of preliminary examination of documents passed between the applicants and their lawyers had been introduced at the request of the escort service in order to facilitate their task, which consisted of securing order in the courtroom. That rule did not cover oral communications, which were limited only to the extent required in order to comply with the detention rules. As to the distance between the applicant and his lawyers, which allegedly had not permitted them to communicate in private, the court had refused to examine that issue since it was outside the court’s competence.

612. The Government maintained that Mr Drel had never been questioned in the course of the pre-trial investigation, either as a witness or in any other capacity. Had that occurred, Mr Drel would have kept a supporting document – for example, a copy of summons. However, the applicants failed to produce to the European Court any document in support of his assertion.

613. The Government confirmed that in July and August 2005 Ms Khrunova had indeed been denied access to the first applicant. However, contrary to what the applicant suggested, Ms Khrunova had not been his lawyer. Under Articles 62 and 72 of the Code of Criminal Procedure, the official in charge of the criminal case (an investigator or a judge) must confirm the participation of a lawyer in the case. However, on 15 August 2005 Ms Khrunova did not have the status of the applicant’s legal representative in the proceedings and had not therefore been allowed to visit him. On 23 August 2005, when he obtained confirmation of her status from the Meshchanskiy District Court, she had been allowed to visit the applicant. On 15 and 21 September 2005 the applicant’s lawyers Mr Mkrtychev, Mr Drel and Mr Padva were unable to meet the applicant because on those dates the applicant’s cell had been closed for quarantine because one of his cellmates had fallen ill. Information about the quarantine was sent to the prosecution authorities and to the court, and placed in the reception area of the prison administration.

(b) The applicants’ submissions

614. The applicants complained that throughout the proceedings the authorities repeatedly breached the confidentiality of lawyer-client contacts.

615. Thus, Mr Drel, one of the lawyers for the applicants, had been summoned to the GPO for interrogation as a witness in the second applicant’s case at least twice – on 17 and 25 October 2003, but had refused to attend, referring to his professional status.

616. The applicants also complained about the search in the office of Mr Drel on 9 October 2003. The search had been manifestly unlawful. That search was instigated on the basis of an order from the GPO, and not by a judge, as required by the Advocacy Act. In the course of the search, the investigators seized, and later added to the criminal case file as evidence, documents constituting lawyer’s case files for a number of different clients. Those documents were subsequently widely used by the investigators. The files were labelled as containing lawyers’ notes relating to the defence of the second applicant, and Mr Drel’s role in the case was very well known to the GPO and the investigators. It was indisputably established before the Meshchanskiy District Court that a number of documents were seized directly from Mr Drel, a defence lawyer in the criminal case, shortly before the second applicant’s arrest on 25 October 2003; these concerned the first applicant’s tax affairs and advice given to the applicant in connection with the case being conducted at that time against the second applicant, who by that time had already been in detention for more than three months. Since the first applicant’s name was mentioned in the charges against the second applicant – and the charges subsequently brought against them were virtually identical – Mr Drel, at the first applicant’s request, had formulated the applicant’s defence position in the event of identical charges being brought against him. Thus, by dint of the search the prosecution knew about the first applicant’s likely legal defence strategy in advance of the charges being brought against him.

617. The applicants also complained of the security arrangements in respect of their contacts with their lawyers, especially as regards the exchange of documents and notes. All documents passing between the applicants and their lawyers had to be scrutinised by the authorities of the remand prison. The applicants were only permitted to pass documents to their lawyers, and to receive documents from them, if such documents had been inspected by the remand prison authorities, in the absence of the applicants and in the absence of their lawyers. The applicants submitted detailed testimony about such inspections from one of the first applicant’s lawyers, Mr Mkrtychev. In addition, the applicants claimed that the meetings between each of them and their respective lawyers had always taken place in the same meeting rooms, equipped with eavesdropping devices.

618. As to the searches of the applicants’ lawyers, the applicants noted that the Government did not deny that incidents of that kind had taken place. The search of Ms Artyukhova had been unlawful and a blatant violation of lawyer/client privilege. The record of the search of Ms Artyukhova indicates that the search was conducted under section 34 (6) of the Detention on Remand Act . According to this section, a search can only be conducted if there are sufficient grounds for suspecting individuals of attempting to smuggle in prohibited items, substances or food. It was claimed in the report following Ms Artyukhova’s search that the duty officer saw that “the lawyer and the defendant were repeatedly passing to each other notepads with some notes, making notes therein from time to time”. There were thus no legal grounds for conducting a search of Ms Artyukhova, because there was no indication in the report that the officer witnessed any attempt to pass any prohibited items, substances or food.

619. As to the seizure of documents from Mr Shmidt, the Government argued that the documents were seized in accordance with sections 16, 18, and 34 of the Detention on Remand Act, point 27 of the Internal Regulations for Remand Prisons, and Articles 19.12, 27.1 and 27.10 of the Code of Administrative Offences. However, the search of and subsequent seizure from Mr Shmidt occurred when he was leaving the remand prison, and it could not therefore be alleged that the measures were designed to prevent prohibited items being brought into it. The applicants noted that that as a consequence of the search the Ministry of Justice demanded that disbarment proceedings be instigated against Mr Shmidt. The St Petersburg Bar Association subsequently exonerated Mr Shmidt at the disciplinary proceedings and determined that Mr Shmidt was entitled to take the document in and out of the remand prison and that the document was legally privileged.

620. At the hearings the applicants’ lawyers were required by the Meshchanskiy District Court to stand at a distance of one metre from the cage in which the applicants were kept. Armed guards regularly stepped between the applicants and their lawyers when they attempted to communicate directly through the bars of the cage. The court declined to intervene, notwithstanding its overriding duty under the CCrP to ensure the fairness of its proceedings. However, the applicants were not violent. They had never attempted to escape. It was difficult to see what possible reason that there could have been for such a restriction, save to ensure that their discussions could be overheard. At a key phase in the trial (when the applicants’ defence was being presented) the court eliminated the Wednesday recess, which had been the primary opportunity for the applicants and their lawyers to communicate. The defence complained to the Meshchanskiy District Court about the inability to discuss matters confidentially in the court room on a significant number of occasions. The trial court refused to alter the arrangements in any way, simply stating that the defence were able to discuss matters confidentially during the adjournments. The District Court took the view that the requirement that the defence lawyers stood at least one metre from the applicants in the cage “does not really have anything to do with the case”. The defence raised those issues in the brief of appeal, but the Moscow City Court did not even address this aspect of the appeal in its decision.

621. All notes passing between the applicants and lawyers had had to be inspected first by the court, thereby entirely circumventing the lawyer-client privilege. The Government sought to justify the restriction on the applicants’ rights by asserting that “the court could not permit the passing of private notes or any other correspondence of such kind”. The Government did not suggest that this restriction was mandated by any provision of domestic law. So far as the applicants’ lawyers were aware from their own experience, the trial at issue had been the only trial in which the presiding judge imposed such a requirement.

622. As to the alleged impediments on the applicants’ meetings with their lawyers during the appeal proceedings, the first applicant argued that the Government did not comment at all on the repeated refusal of access to Ms Mikhailova or on the refusal of access to Mr Prokhorov and to Mr Padva. As to Ms Khrunova and Ms Mikhailova, they were both authorised by the first applicant to act for him, in relation to the criminal proceedings as well as the applicant’s case before the Court. The Government’s reliance on Articles 62 and 72 of the CCrP was misconceived. Those provisions related to a lawyer’s participation in the trial, and did not govern the right of a lawyer to see his client. Section 18 of the Detention on Remand Act contained the applicable law in relation to access to a lawyer and provided that an accused was permitted to receive visits from his lawyer “with no limitation of their number or duration”. Moreover, Section 18 expressly stated that “visits shall be granted to a defence lawyer upon presentation of a lawyer’s ID and an authorisation. Demanding other documents from a lawyer is prohibited”. There was no requirement under domestic law for the trial court to “validate” a lawyer before he or she was permitted access to a client who had already authorised that lawyer to represent him or her in the proceedings. The remand prison officials’ insistence that the applicant’s lawyers had to be authorised by the trial court before they were permitted to see the first applicant was particular to his case and was unlawful.

623. As to the period when the applicants were unable to meet their lawyers due to quarantine requirements, the applicants maintained that the Government did not explain why on 15 September 2005 the same infected inmate was placed successively in the first applicant’s cell and then in the cell of the second applicant. The timing of such quarantine, in the absence of any explanation and in the context of repeated attempts to hinder access to the lawyers, indicated that the authorities were seeking to impede the applicants’ access to their lawyers at a critical stage before the hearing of the appeal.

624. The Government had mistakenly referred in their response to an allegation that during consultations at the remand prison the applicants and their lawyers were separated by a full screen, whilst in fact that complaint related to the first applicant’s imprisonment in the penal colony at Krasnokamensk following sentencing. It was there that the first applicant’s contact with his lawyers had been permitted only in a room in which he was separated from his lawyers by a screen which ran from wall to wall and floor to ceiling.

2. The Court’s assessment

625. The Court takes note of the first applicant’s complaint concerning the conditions in which he had to communicate with his lawyers in the Krasnokamensk penal colony. The Court observes that the first applicant’s complaint under Article 6 § 3 (c) about the alleged breach of lawyer-client confidentiality concerned criminal proceedings against him. In order to decide whether Article 6 § 3 (c) was complied with the Court does not need to know what happened after those proceedings were over, i.e. after the judgment of the Moscow City Court of 22 September 2005. It follows that this aspect of the case is not material in so far as the first applicant’s complaint under Article 6 is concerned. The Court will address only those limitations on written and oral communications between the applicants and their lawyers which concern the period of pre-trial investigation and the trial.

626. The Court further observes that the applicants did not complain that legal assistance had not been available to them in principle, but that the State had interfered with the confidentiality of their contacts with the lawyers and thus hindered effective legal assistance.

(a) General principles

628. The State may regulate the conditions in which a lawyer meets his detained client. First, “there are inherent time and place constraints on meetings between a detained person and his lawyer” (see Orlov v. Russia , no. 29652/04, § 106, 21 June 2011). Second, there could be legitimate restrictions related to the security risks posed by the defendant. The existence of any “security risk” may be inferred from the nature of the accusations against him, by the detainee’s criminal profile, his behaviour during the proceedings, etc. Thus, the Court has tolerated certain restrictions imposed on lawyer-client contacts in cases of terrorism and organised crime (cf. e.g. Erdem v. Germany , no. 38321/97, § 65 et seq., ECHR 2001-VII (extracts); and Istratii and others v. Moldova, nos. 8721/05, 8705/05 and 8742/05, §§ 97 et seq., 27 March 2007).

(b) Application to the present case

(i) Confidentiality of the lawyer-client contacts at the pre-trial stage

(α) Summoning Mr Drel for questionning

631. First, the applicants complained about summonses sent by the GPO to Mr Drel, one of the lawyers for the applicants (see paragraph 75 above). The Court accepts that such summonses may have had a chilling effect on the applicants’ defence team, but even if they were unlawful, Mr Drel refused to testify, and that refusal did not lead to any sanctions against him. It follows that, in the particular circumstances of the present case, lawyer-client confidentiality was not breached on account of that episode.

(β) Searching Mr Drel’s office and seizing his papers

634. The Court sees no compelling reasons for such interference. The Government did not explain what sort of information Mr Drel might have had, how important it was for the investigation, and whether it could have been obtained by other means. At the relevant time Mr Drel was not under suspicion of any kind. Most significantly, the search in Mr Drel’s office was not accompanied by appropriate procedural safeguards, for example a court warrant, as required by the Advocacy Act and confirmed by the Constitutional Court (see paragraphs 398 and 399 above; see also, mutatis mutandis , Aleksanyan , cited above, § 214; Golovan v. Ukraine, no. 41716/06, § 64, 5 July 2012; and Wieser and Bicos Beteiligungen GmbH v. Austria , no. 74336/01, ECHR 2007 ‑ IV). There were no specific considerations which might have justified the departure from the general rule requiring a court warrant, and this omission strengthens the Court’s conclusion that the search and seizure were arbitrary and thus contrary to the requirements of Article 6 § 3 (c) of the Convention.

(γ) Checking the applicants’ correspondence with the lawyers

635. Third, the applicants complained about the interference by the authorities with written communications between the detained applicants and their lawyers. They referred, in particular, to several identical episodes with the applicants’ lawyers (Ms Artyukhova, Mr Baru, Mr Shmidt), all concerning seizure of their working papers by the prison administration.

636. The Government claimed that at the time all correspondence by detainees was subject to perusal by the prison administration, and that the prison administration could lawfully seize any document which was not submitted through the prison administration. The Government relied on sections 16, 18, and 34 of the Detention on Remand Act, point 27 of the Internal Regulations for Remand Prisons, as well as Articles 19.12, 27.1 and 27.10 of the Code of Administrative Offences (see the “Relevant domestic law” part above, paragraphs 388 et seq.).

637. The Court observes that not only the applicants’ letters to their relatives or friends were subject to perusal; also the notes and drafts prepared by the applicants’ lawyers and brought to the meetings with their clients were regarded by the prison administration as “prohibited objects” (see, in particular, paragraphs 136 and 137 above) and seized. Such limitations, however, had no firm basis in domestic law. Thus, the legislation referred to by the Government regulated the correspondence of detainees with the outside world (“telegrams [and] letters” or “proposals, declarations and complaints” - see section 20 of the Detention on Remand Act, sections 84, 86, 91 and 99 of the Internal Regulations). It also mentioned “objects, substances and foodstuff” which the detainees were not allowed to have or to use (see sections 18 and 34 of the Detention on Remand Act, and, in particular, section 27 of the Internal Regulations, which associates “objects” with physical objects rather than documents, or Article 19.12 of the Code of Administrative Offences). The Court has doubts as to whether the drafts or notes made by a lawyer during a meeting with his or her client could be qualified as “correspondence” or “prohibited objects” within the meaning of the Detention on Remand Act or the Internal Regulations. The Government did not specify what set of rules applied to the notes and to other written materials which the applicants might have exchanged with their lawyers during the meetings, and the Court cannot accept that the law was applied by extension in such a sensitive area as intereference with privileged materials of the defence. The Court reiterates in this respect that any limitations imposed on a detainee concerning his contacts with lawyers should have a lawful basis and that the law should be sufficiently precise (see, mutatis mutandis , Nolan and K. v. Russia , no. 2512/04, §§ 98-99, 12 February 2009, with further references).

638. Furthermore, even assuming that the Russian law at the time prevented the defence from keeping and exchanging notes during the meetings, the Court is not persuaded that such a measure was necessary in the applicants’ case. Secrecy of written communications is no less important than the secrecy of oral exchanges, especially where the case is factually and legally complex. As follows from the judgment of the Constitutional Court of 29 November 2010 (see paragraph 396 above), notes, drafts, outlines, action plans, etc. prepared by the lawyer for or during a meeting with his detained client are to all intents and purposes privileged material. In addition, as noted by the Constitutional Court, certain exceptions from the general principle of confidentiality are permissible, but only if the authorities have a reasonable cause to believe that the professional privilege is being abused. The Court fully subscribes to this position. The Court reiterates that in Campbell , cited above, it stressed that the prisoner’s correspondence with a lawyer should not be “susceptible to routine scrutiny”. Such correspondence can be opened only when the prison authorities have “reasonable cause to believe that it contains an illicit enclosure”. The letter should, however, only be opened and should not be read. The reading of a prisoner’s mail to and from a lawyer should only be permitted “in exceptional circumstances when the authorities have reasonable cause to believe that the privilege is being abused in that the contents of the letter endanger prison security or the safety of others or are otherwise of a criminal nature” (§ 48).

639. In the present case the authorities took as their starting point the opposite presumption, namely that all written communications between any detained person and his lawyer were suspect. This went so far as to assimilate “correspondence” with written notes made by the lawyers in preparation for the meetings with the client or during them. The only way for the defence to overcome that presumption was to submit their working papers to the prison authorities for inspection, i.e. to reveal their arguments to a body which could hardly be regarded as independent, and which was required by law to communicate all suspicious correspondence to the investigative authorities (see paragraph 392 above).

640. Again, the principle of confidentiality of lawyer-client contacts is not absolute. However, the fact that a criminal defendant is detained is not sufficient to subject all of his written communications with his lawyers to perusal, and that for an indefinite period of time and without any justification specific for that particular case. The Court has repeatedly condemned the practice of “indiscriminate, routine checking of all of the applicant’s correspondence” with his lawyer (see Jankauskas v. Lithuania , no. 59304/00, § 22, 24 February 2005; see also Kepeneklioğlu v. Turkey , no. 73520/01, § 31, 23 January 2007). This is a fortiori true in respect of papers brought by the lawyer to a meeting with his client or prepared during the meeting. To have a reasonable cause for interfering with the confidentiality of lawyer-client written communications the authorities must have something more than a sweeping presumption that lawyers always conspire with their clients in disregard of the rules of professional ethics and despite the serious sanctions which such behaviour entails.

(ii) Confidentiality of the lawyer-client contacts at the the trial

643. The Court observes that the rule whereby all written materials had to be checked before being passed to the applicants or received from them continued to apply throughout the trial. However, it was no longer a prison official but a judge who was reading the documents exchanged between the applicants and their lawyers.

644. The Court takes note of the Government’s argument that the defence agreed to such security arrangements (see paragraph 152 above). However, the Court cannot regard this as a valid waiver of the defence’s rights under Article 6 § 3 (c). It reiterates that a waiver of a right must be, amongst other things, voluntary, and must be established in an unequivocal manner (see Hermi v. Italy [GC], no. 18114/02, § 73, ECHR 2006 ‑ XII, with further references; and, more recently, Vozhigov v. Russia , no. 5953/02, § 57, 26 April 2007; Pishchalnikov v. Russia , no. 7025/04, § 77, 24 September 2009; and Damir Sibgatullin v. Russia , no. 1413/05, § 48, 24 April 2012). The “waiver” in the present case satisfied neither of these two criteria. At the trial the defence expressed their concerns about the “security plan” implemented by the escort service in the courtroom. From the judge’s reaction it was clear that she did not consider herself competent to deal with that issue (see paragraph 151 above), and that the judge deferred to the prison authorities in a matter clearly related to legal assistance. Be that as it may, having consulted with the prosecution and the escort service the judge proposed an alternative solution, namely that all defence documents would be passed through her. The defence seemingly had no other choice but to accept that new rule. Therefore, Mr Padva’s remark that he would comply with the new rule cannot be interpreted as an unequivocal and voluntary acceptance of it.

645. The Court accepts that a judge offers better guarantees of independence and impartiality than an escort officer. Nevertheless, in the circumstances the new rule still fell short of the requirements of Article 6 § 3 (c). The Court reiterates in this respect that, first, the applicants’ case was not such as to give reason to stringent restrictions on confidential exchanges, and that the authorities did not refer to specific facts which would justify the departure from the general rule of confidentiality of the lawyer-client contacts, including written communications. Second, the Court observes that Judge Kolesnikova, who requested the defence lawyers to show her all written communications, was also a judge of fact and law in the trial. While checking drafts and notes prepared by the defence lawyers or the applicants the judge might have come across information or arguments which the defence would not wish to reveal (see, for example, paragraph 155 above). Consequently, her role in checking the defence papers might have affected her opinion about the factual and legal issues involved in the case (compare, mutatis mutandis , with Erdem , cited above, § 67) where the Court examined a similar procedure of checking prisoners’ correspondence). In the Court’s opinion, it would be contrary to the principle of adversarial proceedings if the judge’s decision was influenced by arguments and information which the parties did not present and did not discuss at an open trial.

647. The Court reiterates that not every measure hindering communication between the defendant and his lawyer must necessarily lead to a violation to Article 6 § 3 (c). Thus, for example, in assessing limitations imposed on the defence in the case of Titarenko v. Ukraine (no. 31720/02, 20 September 2012), the Court applied a quantitative approach and held as follows (§ 92):

“The security arrangements [i.e. placement of the accused in a metal cage] undeniably limited communication between the applicant and his lawyer during the hearing. These limitations did not, however, amount to a complete lack of communication between the applicant and his lawyer; the applicant did not demonstrate that it was impossible to request that the lawyer’s seat be brought closer to his “cage”, or that they had been denied an opportunity for private communication when necessary.”

In contrast with Titarenko , in the present case the applicants did not have “an opportunity for private communication” with their lawyers, due to the permanent presence of escort officers near the metal cage and the minimal distance the lawyers had to respect. The fact that the defence was able to request adjournments during the hearings is irrelevant: it appears that even during those adjournments the lawyers were unable to discuss the case with their clients anywhere but in the hearing room, i.e. in the close vicinity of the prison guards. The Court concludes that even though the applicants benefited from legal assistance by several lawyers, the secrecy of their exchanges, both oral and written, was seriously impaired during the hearings.

(iii) Conclusion

C. Taking and examination of evidence

650. Under Article 6 §§ 1 and 3 (d) of the Convention the applicants complained that their conviction had been based on inadmissible or unreliable evidence, that the judgment had referred to evidence which had not been examined in adversarial proceedings, and that there had been a disparity between the prosecution and the defence in the process of taking and assessment of evidence. Article 6 § 3 (d) provides:

“3. Everyone charged with a criminal offence has the following minimum rights:

...

(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him ...”

1. The parties’ submissions

(a) The Government’s submissions

651. The Government maintained that it was for the domestic authorities to assess the admissibility, reliability and relevance of evidence and to interpret it. The Russian courts at two instances had examined the objections of the defence as to the admissibility of a large number of items of evidence and dismissed them. The fact that the defence had not been satisfied with the decisions of the domestic courts in this respect did not mean that the principle of equality of arms had been breached.

652. As regards other evidence relied on by the prosecution, the Government asserted that all of the evidence had been obtained lawfully, and that the premises in Zhukovka where the searches had been conducted had not been lawyers’ offices and thus protected by lawyers’ professional privilege. The Government maintained that the court had verified the admissibility of the evidence obtained during the search and found it to be lawfully obtained. The judgment contained the court’s reasoning on that point. The Government further noted that the question of admissibility of evidence had been discussed in the subsequent proceedings on appeal and during the supervisory review appeal. The defence had been able to present their view on the issue of the admissibility of various pieces of evidence. Occasionally, the requests and motions of the defence were satisfied; in other instances the court took the side of the prosecution. The District Court was acting in compliance with the provisions of Article 50 (2) of the Russian Constitution, which provides that unlawfully obtained evidence cannot be used in criminal proceedings. In any event, even when the prosecution objected, the defence had a right to call and question their witnesses.

653. In so far as the questioning of witnesses by the prosecution during the trial was concerned, the Government maintained that several witnesses for the prosecution in the first criminal case had indeed been questioned again within the framework of another criminal case, which had been severed from the first case and investigated separately. Their testimony so obtained had not been used within the criminal case under examination. They denied that such practice amounted to putting undue pressure on the witnesses.

654. With regard to the experts for the prosecution, the Government indicated that witnesses Mr Yeloyan and Mr Kupriyanov had not been witnesses but “expert witnesses” whose appearance at the trial had been requested by the defence in order to calculate the amount of damage allegedly caused by the applicant to the State. Under Russian law, an expert is a person who has specialised knowledge in an area where the judge has no competence.

655. The court decided not to call expert witnesses Mr Yeloyan and Mr Kupriyanov because the defence had failed to show convincingly why their personal appearance had been necessary. In the circumstances the presence of an expert in those matters had not been necessary. Further, questioning of an expert was always preceded by the preparation of a report by that expert. An expert could not be questioned if he had not earlier produced a written expert opinion. At the same time, the law allowed a written expert opinion (report) to be admitted to the materials of the case file without subsequent questioning of the expert who had prepared it. The judge in this case decided that there had been no grounds for calling the experts for questioning. It was the court’s task to establish the amount of damage, and the court had all the necessary information for that purpose. The District Court noted that the final assessment of the conclusions of the report by Mr Yeloyan and Mr Kupriyanov could be made only at the conclusive stage of the proceedings, when the court had deliberated and developed its position. The Government submitted that the same was true in respect of the expert Mr Shulgin.