SECOND SECTION

FINAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 29439/02 by Fedor Aleksandrovich SOKUR against Ukraine

The European Court of Human Rights (Second Section), sitting on 16 December 2003 as a Chamber composed of:

Mr J.-P. Costa , President , Mr A.B. Baka , Mr Gaukur Jörundsson , Mr K. Jungwiert , Mr V. Butkevych , Mrs W. Thomassen , Mr M. Ugrekhelidze , judges ,

and Mrs S. Dollé , Section Registrar ,

Having regard to the above application lodged on 25 July 2002,

Having regard to the partial decision of 26 November 2002,

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

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Fedor Aleksandrovich Sokur, is a Ukrainian national who was born in 1940 and resides in the village of Grodovka, Donetsk Region, Ukraine.

A. The circumstances of the case

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

In 2001, the applicant instituted proceedings in the Novogrodovsky City Court of Donetsk Region against the “Novogrodovskaya” Mining Company - a State-owned enterprise - to recover unpaid salary for the years 1998-2000.

On 3 May 2001, the Novogrodovsky City Court found in favour of the applicant ( Решение Новогродовского городского суда Донецкой области ) and awarded him 7406.21 UAH of salary arrears and compensation for devaluation. The decision became effective on 14 May 2001 and was sent for execution to the Novogrodovsky City Bailiffs’ Office ( Отдел Государственной исполнительной службы Новогродовского городского управления юстиции ). However, the decision was not executed, allegedly due to the failure of the Bailiffs’ Office to act, in not selling the property of the Mining Company.

In the course of the enforcement proceedings, it was established that on 19 November 1998 the Donetsk Regional Arbitration Court ( Арбітражний суд Донецької області ) had instituted bankruptcy proceedings against the “Novogrodovskaya” Mining Company.

The applicant instituted proceedings in the Novogrodovsky City Court of the Donetsk Region against the Novogrodovsky City Bailiffs’ Office for failure to execute the court decision in his favour. On 18 July 2001, the City Court rejected the applicant’s claim, finding no fault had been committed by the Bailiffs’ Office. The court stated that the Bailiffs’ Office had presented a decision of the Commercial Court of the Donetsk Region of 30 August 2000 to the respondent company. This decision prohibited the enforcement of decisions against the company by selling its property, due to the bankruptcy proceedings which had been initiated against it.

On 1 November 2001, the Appellate Court of the Donetsk Region dismissed the applicant’s appeal. On 18 February 2002, the panel of three judges of the Civil Chamber of the Supreme Court of Ukraine rejected the applicant’s request for leave to appeal.

On 26 December 2001, the ban on the forced sale of assets belonging to undertakings in which the State holds at least 25% of the share capital was entrenched in the Law on the Introduction of a Moratorium on the Forced Sale of Property. On 10 June 2003, the Constitutional Court of Ukraine found the Moratorium to be compatible with the provisions of the Constitution of Ukraine.

B. Relevant domestic law

1. Law of Ukraine of 14 May 1992 “on the Restoration of a Debtor’s Solvency or the Declaration of Bankruptcy”

Under Article 12 of the Law ( Закон України “ Про відновлення платоспроможності боржника або визнання його банкрутом ” ), a commercial court is entitled to order a moratorium on debt recovery from a company which is the subject of bankruptcy proceedings. The moratorium implies a prohibition on the Bailiffs’ Office to execute judgements against such a company. The same Article provides that the company protected by moratorium shall be immune from any fines and other sanctions for non-fulfilment or improper fulfilment of its financial obligations during the moratorium.

2. Law of Ukraine of 29 November 2001 “on the Introduction of a Moratorium on the Forced Sale of Property”

The Law ( Закон України “Про введення мораторiю на примусову реалiзацiю майна” ) aims at protecting State interests on the sale of assets belonging to undertakings in which the State holds at least 25% of the share capital.

A moratorium on the enforcement of judgment debts has been introduced until such time as the mechanism for the forced sale of the property of such undertakings has been improved. No time-limit has been set.

Article 2 of that Law provides that the prohibition on the forced sale of property includes the execution of writs by the State Bailiffs’ Office on property belonging to such companies.

The Law therefore stays the execution of all writs by the State Bailiffs’ Office against the assets of or undertakings in which the State holds at least 25% of the share capital.

3. Civil Code of Ukraine

Under Article 214 of the Civil Code, in case of delay in the fulfilment of its financial obligations, the debtor must, upon a claim by the creditor, pay the amount of the debt, plus any interest payable at an officially established inflation rate during the default period.

4. Law of Ukraine of 21 April 1999 “on Enforcement Proceedings”

Under Article 2 of the Law ( Закон України “ Про виконавче провадження” ), the enforcement of judgments is entrusted to the State Bailiffs’ Service. Under Article 85 of the Law, the creditor may file a complaint against actions or omissions of the State Bailiffs’ Service with the head of the competent department of that Service or with a local court. Article 86 of the Law entitles the creditor to institute court proceedings against a legal person, entrusted with the enforcement of a judgment, for the inadequate enforcement or non-enforcement of that judgement, and to receive compensation.

5. Law of Ukraine of 24 March 1998 “on the State Bailiffs’ Service”

Article 11 of the Law ( Закон України “ Про державну виконавчу службу” ) provides for the liability of bailiffs for any inadequate performance of their duties, and compensation for damages caused by a bailiff when enforcing a judgment. Under Article 13 of the Law, acts and omissions of the bailiff can be challenged before a superior official or the courts.

COMPLAINTS

The applicant complained under Article 6 § 1 of the Convention about the non-enforcement of the court decision in his favour . He requests compensation for material and moral damage.

THE LAW

I. THE GOVERNMENT’S PRELIMINARY OBJECTIONS

The Government presented preliminary objections concerning the non-exhaustion of domestic remedies by the applicant, on the ground that he did not lodge a claim with the domestic courts, seeking compensation for the loss in value of the amount awarded to him by the Novogrodovsky City Court.

The applicant contests this submission, pointing out that his complaint against the Bailiffs’ Service was considered by three levels of jurisdiction. He maintains that he did not raise the issue of compensation for the delay in the enforcement proceedings although he had sustained material and moral damage.

The Court reiterates that the purpose of Article 35 § 1 of the Convention is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court. However, the only remedies to be exhausted are those which are effective. It is incumbent on the Government claiming non-exhaustion to satisfy the Court that the remedy was an effective one, available in theory and in practice at the relevant time (see Khokhlich v. Ukraine , no. 41707/98 , § 149, 29 April 2003).

The Court further reiterates that the domestic remedies must be “effective” in the sense either of preventing the alleged violation or its continuation, or of providing adequate redress for any violation that had already occurred (see Kudla v. Poland [GC], no. 30210/96, § 158, ECHR-XI).

The Court notes that the Government’s non-exhaustion argument refers solely to a “compensatory” remedy, namely a claim for compensation for an alleged loss in value of the amount awarded to the applicant by the decision of 3 May 2001.

The Court recalls that in previous cases against Ukraine concerning the non-enforcement of the judgments, (see, for example, Makarov v. Ukraine (dec.), no. 59032/00, 28 May 2002), it accepted this argument of the Government with respect to applicants’ claims for compensation for material and moral damage, caused by lengthy and allegedly irregular enforcement proceedings, in the situation where the judgments given in favour of the applicants had been enforced and, therefore, their principal complaint had been remedied at the domestic level. However, in the instant case, the first judgment in the applicant’s favour remains unenforced.

The Court further notes that the applicant did have recourse to the domestic courts against the Bailiffs’ Office, which not only did not remedy, but also could not remedy the principal complaint under Article 6 § 1 of the Convention. Therefore, the Court is of the opinion that the preliminary objections of the Government are irrelevant to the principal complaint of the applicant and cannot be accepted, since the remedy they invoke cannot prevent the continuation of the alleged violation. Furthermore, the Government did not comment on the applicant’s litigation against the Bailiffs’ Office.

In so far as the issue of “preventive” remedies is concerned, the Court recalls that, where the facts of the case show that, throughout the period under the consideration, the enforcement of the judgment was prevented by legislative measures, rather then by a bailiff’s misconduct, the applicant cannot be reproached for not having taken proceedings against the bailiff (see Shestakov v. Russia, decision, no. 48757/99, 18 June 2002).

Accordingly, the Court dismisses the Government’s preliminary objections .

II. ARTICLE 6 § 1 OF THE CONVENTION

The applicant complains that, due to the non-execution of the judgment in his favour, his right to a fair hearing was violated. He invokes Article 6 § 1 of the Convention which provides as relevant:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair and public hearing ... by an independent and impartial tribunal established by law.”

The Court notes that the judgment in favour of the applicant remains unenforced for more than two years and there are no clear prospects of its enforcement in the foreseeable future. The Government maintained that the right of the applicant to have his case enforced is not denied, but it could not be remedied now due to the many creditors and the large amount of the outstanding debt. In reply, the applicant maintained that the statutory two-month time-limit for the enforcement of the judgment in his favour was not respected and he challenged the inability of the debtor to execute the judgment. He further maintained that the enforcement proceedings against the debtor were barred first by the bankruptcy proceedings against the debtor and then by the Law “on the Introduction of a Moratorium on the Forced Sale of Property”.

The Court considers, in the light of the parties’ submissions, that this complaint under Article 6 § 1 of the Convention raises serious questions of fact and law, the determination of which requires an examination on the merits. The Court concludes therefore that it is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

For these reasons, the Court unanimously

Declares the remainder of the application admissible, without prejudging the merits of the case.

S. Dollé J.-P. Costa Registrar President