FIFTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 15066/03 by Vera Andreyevna KOVALENKO and Anna Ivanovna BOYKO against Ukraine

The European Court of Human Rights (Fifth Section), sitting on 30 November 2010 as a Chamber composed of:

Peer Lorenzen , President, Renate Jaeger , Rait Maruste , Isabelle Berro-Lefèvre , Mirjana Lazarova Trajkovska , Zdravka Kalaydjieva , Ganna Yudkivska , judges, and Claudia Westerdiek , Section Registrar ,

Having regard to the above application lodged on 14 April 2003,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,

Having deliberated, decides as follows:

THE FACTS

The applicants, Mrs Vera Andreyevna Kovalenko and Ms Anna Ivanovna Boyko, are Ukrainian nationals who were born in 1942 and 1945 respectively and live in Dniprodzerzhynsk , Ukraine . They are represented before the Court by Mr P. Kukta. The Ukrainian Government (“the Government”) were represented by their Agent, Mr Y. Zaytsev, of the Ministry of Justice of Ukraine .

The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicants were employed by a private joint-stock company (“the debtor enterprise”).

From 1998 to 2002 the debtor enterprise performed some repair works for a State -owned enterprise, the Dniprovskiy Metalurgiynyi Kombinat ( ВАТ «Дніпровський металургійний комбінат» ) (“the State enterprise”). These works, however, were not paid by the State enterprise in full. The debts owed by the State enterprise were confirmed by a number of court decisions.

On 30 April 2002 insolvency proceedings were instituted against the debtor enterprise . O n 17 October 2002 the Dnipropetrovsk Regional Commercial Court recognised the second applicant as one of the creditors in the insolvency , the debt owed to her amounting to 7,783.91 [1] Ukrainian hryvnas (UAH) and comprised of salary arrears and other payments due .

On 10 January 2003 the Zavodskyy District Court awarded the first applicant UAH 4,175.76 [2] in salary arrears and other payments due to her by the debtor enterprise.

On 27 February 2003 the Dnipropetrovsk Regional Commercial Court awarded the debtor enterprise UAH 2,981,089 against the State enterprise.

By letter of 29 December 2003 the same court informed the second applicant that the overall debt of the debtor enterprise was UAH 6,750,792.80 and that the only possibility of satisfying such an amount was by recovering the State enterprise ’ s debt to the debtor company .

By a decision of the Dnipropetrovsk Regional Commercial Court o n 8 January 2004 the debtor enterprise was declared insolvent and G. was appointed its liquidator.

In accordance with information submitted by the Deputy Mayor of Dniprodzerzhynsk, by 1 February 2004 the State enterprise ’ s debt to the debtor enterprise amounted to UAH 8,400,000.

On 6 February 2004 an agreement on the privatisation of the State enterprise was signed. By letter of 2 March 2004 the State Property Fund informed the second applicant that this agreement provided for the payment of the State enterprise ’ s debts within 60 days. However, by another letter of 1 April 2004 the Fund informed the second applicant that the privatisation agreement only provided for the payment of the State enterprise ’ s debt to the State budget and did not include any obligation to pay all other debts.

According to the information submitted by the debtor enterprise ’ s liquidator, by 18 May 2004 its debts formed of salary arrears comprised UAH 5,300,000 while the overall debt of the State enterprise to the debtor enterprise was UAH 4,570,830.27.

According to the Government, between 17 Decem ber 2003 and 29 September 2004 the debts to the applicants, confirmed by court decisions of 17 October 2002 and 10 January 2003, were paid in full by instalments ‑ except for 4 UAH (around 0,40 euro) still owed to the first applicant .

COMPLAINTS

The applicants complain ed about the lengthy non-payment of the salary arrears due to them in accordance with the above-mentioned court decisions, which, in their submission, resulted from the failure of the State enterprise to pay its debts to the debtor enterprise. They further allege d that they had been subjected to slavery due to the fact that their work had not been remunerated. The applicants relied on Articles 4 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention .

THE LAW

1. The applicants complain ed about the lengthy non-payment of the salary arrears due to them. They relied on Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention. In the Court ’ s view, the applicants ’ complaints are to be considered under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 , which provide, in so far as relevant, as follows :

Article 6 § 1

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

Article 1 of Protocol No. 1

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest ....”

The Government submitted that the first applicant had lodged her application before this Court only three months after the relevant court decision had been taken and, therefore, she had not allowed the Government to enforce the decision in question. The Government therefore stated that the first applicant ’ s complaint was unsubstantiated.

The Government further stated that between 7 April 2003 and 15 January 2004, when bailiffs had been in charge of enforcing the court decision in her favour, the first applicant had not challenged their actions or omissions and had not claimed any damages. She had also not requested that she be recognised as a creditor in the insolvency proceedings and she had also failed to challenge the actions or omissions of the liquidator.

As for the second applicant, the Government noted that she had not challenged the actions or omissions of the liquidator and had failed to inform the Court that the money due to her had been paid in full by 29 September 2004.

As for the State enterprise ’ s debts to the debtor enterprise, the Government noted that although the State enterprise had not paid in full for the work performed by the debtor enterprise, the latter ’ s management had continued concluding contracts with the State enterprise, to the detriment of the debtor enterprise ’ s interests. Moreover, there were also private enterprises which had failed to pay their debts to the debtor enterprise.

The applicant s disagreed. They stated that they had had to organise numerous meetings of pro test in front of the debtor enterprise ’ s offices in order to receive their salary arrears and that it had taken more than four years to receive the payments due to them.

The Court points out at the outset that the applicants ’ recourse to the European Court of Human Rights does not preclude the Government from honouring its commitments under the Convention, when this is the case.

The Court further notes that the first applicant was awarded salary arrears on 10 January 2003 and that the second applicant was recognised as a creditor by the court decision of 17 October 2002. The Court thus considers that there was no enforceable decision in favour of the second applicant and the question arises whether she could be considered as having a “legitimate expectation” to receive the whole amount in question. However, the Court is of the opinion that it is not necessary to examine this issue in the present case, as the application is in any event inadmissible for the reasons expressed below.

As for the Government ’ s non-exhaustion objections, the Court notes that the debtor enterprise was a private company. In accordance with the Court ’ s well established case-law, t he responsibility of the State in such case is limited to the organisation and proper conduct of the enforcement proceedings (see Shestakov v. Russia (dec.), no. 48757/99, 18 June 2002). Ukrainian legislation provides for the possibility of challeng ing the lawfulness of actions and omissions of the State Bailiffs ’ Service in enforcement proceedings before the courts and also claim ing damages from that body for any delay in the payment of sums awarded (see, for instance, Dzizin v. Ukraine (dec.), no. 1086/02, 24 June 2003 , and Kukta v. Ukraine (dec.), no. 19443/03, 22 November 2005).

The Court notes that the applicants did not raise any complaints in respect of the Bailiffs ’ Service and/or the liquidator before the domestic courts. However, in the present case, the domestic courts recognised the enterprise ’ s debts to the applicants subsequent to the commencement of the insolvency proceedings and it is not clear from the parties ’ submissions whether in such circumstances the recourse against the State Bailiffs ’ Service provided for in domestic law could be considered as an effective remedy. Moreover, there is no evidence that the recourse against the liquidator would be effective too given the absence in the Government ’ s submissions of any further precision in this respect. However, the Court considers that in the present case it is not necessary to examine these issues since, even assuming that no effective remedies for the applicants ’ complaints existed, the application is nevertheless inadmissible for the following reasons.

Although the State cannot be held liable for the debts of private persons, t he Court gives some consideration to the fact that the insolvency of the debtor enterprise and the consequent impossibility of enforcing the court decisions in the applicants ’ favour could had a causal link with the non-payment of high-value debts owed to the debtor enterprise by the State enterprise. In a situation where the debtor enterprise did not have any effective possibility of recover ing the overdue amounts from the State enterprise and accordingly to settle its own debts , it could be considered that the State is indirectly liable for the failure of the debtor enterprise to pay the amounts awarded to the applicants (see Mykhaylenky and Others v. Ukraine , nos. 35091/02 and foll., § 45, ECHR 2004 ‑ XII, where the applicants ’ debtor was a State-owned public enterprise working under a government contract; see by contrast Katsyuk v. Ukraine , no. 58928/00, 5 April 2005 ).

In the present case the Court considers that the materials available to it are not sufficient to conclude that the links between the debtor enterprise and the State enterprise were of such an extent that the non-payment of debt by the State enterprise had led to the insolvency of the debtor enterprise and rendered it unable to honour its obligations to the applicants.

The Court further notes that the parties did not dispute the fact that the amounts due had been paid in full to them by 29 September 2004 (except for 0,40 euros in respect of the first applicant, which cannot be considered as a significant disadvantage suffered by the applicant within Article 35 § 3 (b) of the Convention (see Adrian Mihai Ionescu v. Romania (dec.), no. 36659/04, 1 June 2010). As for the time it had taken to make the payments, the Court considers that these periods constituted, accordingly, one year and nine months in the case of the first applicant and one year and eleven months in the case of the second applicant, and in the circumstances of the case these periods cannot be considered as excessive.

In the absence of any undisputable evidence that the non-payment of the debts to the applicants during the above mentioned periods was caused by the actions or inactivity of the State and given that the amounts due to them were paid in less than two years via instalments, the Court considers that this part of the application must be reject ed as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention .

2. The applicant s further allege d that they had been subjected to slavery due to the fact that their work had not been remunerated . The Court notes that the applicant s performed their work voluntarily and that their entitlement to payment has never been denied. The dispute thus involves the applicants ’ civil rights and obligations, but does not disclose any element of slavery or forced or compulsory labour within the meaning of this provision (see Sokur v. Ukraine (dec.), no. 29439/02, 26 November 2002 ) . In these circumstances, the Court considers that this part of the application must be rejected as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

             Claudia Westerdiek Peer Lorenzen Registrar President

[1] At the material time approximately 1,541.24 euros (EUR)

[2] At the material time approximately EUR 739,91