FIFTH SECTION

DECISION

Application no. 69282/10 KRIS, TOV against Ukraine

The European Court of Human Rights (Fifth Section), sitting on 15 September 2020 as a Committee composed of:

Gabriele Kucsko-Stadlmayer, President, Ganna Yudkivska, Mattias Guyomar, judges, and Anne-Marie Dougin , Acting Deputy Section Registrar ,

Having regard to the above application lodged on 15 November 2010,

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

Having deliberated, decides as follows:

THE FACTS

1 . The applicant company, Kris, Tov, is a limited liability company established in Ukraine in 1995 with its registered office in Mukachevo . It was represented before the Court by Mr R. Oliynyk, a lawyer practising in Zakarpattya region.

2 . The Ukrainian Government (“the Government”) were represented by their Agent, Mr I. Lishchyna .

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

4 . From 2005 the applicant company was engaged in the advertising business in Uzhgorod . On the basis of agreements with the Uzhgorod City municipal authorities, the applicant company installed numerous advertising billboards in the city. In 2007 the billboards were removed, after Uzhgorod City Council decided that the applicant company did not have a valid contract. The applicant company initiated various court proceedings in that connection and eventually succeeded in administrative proceedings in which the courts invalidated the decision of Uzhgorod City Council regarding the removal of the billboards.

5 . According to the applicant company, in January 2008 it reinstalled thirty-eight billboards in the city. On 11 January 2008 Uzhgorod City Council introduced new tariffs for the use of municipal sites and decided that all existing agreements had to be renegotiated. The applicant company challenged that decision in the courts, maintaining that its contracts remained valid, and on 27 March 2008 the Zakarpattya Regional Commercial Court issued an interim measure suspending both the decision and the removal of the applicant company ’ s billboards.

6 . In the meantime, on 26 March 2008 the Executive Committee of Uzhgorod City Council, considering that the applicant company no longer had a valid agreement with the city authorities for using the billboard sites, decided that the billboards should be removed. That decision was also challenged in the courts by the applicant company (see paragraphs 12 - 13 below).

7 . On 5 June 2008 the municipal police informed the applicant company that it had to remove the billboards, failing which the municipal authorities would do it themselves.

8 . Between 11 and 14 June 2008 the billboards were removed without the applicant company ’ s consent.

9 . The applicant company instituted proceedings in the commercial courts against Uzhgorod City Council and its Executive Committee, seeking damages for the arbitrary removal and destruction of their billboards. On 23 December 2009 the Zakarpattya Regional Commercial Court dismissed the claim, finding that it had not been shown who exactly had allegedly removed the billboards and what role had been played by the defendants in that connection.

10 . On 25 February 2010 the Lviv Commercial Court of Appeal upheld the judgment of 23 December 2009.

11 . On 25 May 2010 the Higher Commercial Court dismissed a cassation appeal by the applicant company as unfounded.

12 . Apart from the commercial proceedings, the applicant company instituted proceedings in the administrative courts against Uzhgorod City Council and its Executive Committee, as well as the deputy mayor of Uzhgorod and the head of Uzhgorod City municipal police. The applicant company argued that the decision of 26 March 2008 (see paragraph 6 above) had been unlawful and that the respondents had taken unlawful measures in removing and destroying the billboards.

13 . On 10 June 2010 the Lviv Administrative Court of Appeal quashed the decision of 26 March 2008 as unlawful. It found that ( i ) the agreements with the city authorities for using the billboard sites had been valid and binding at the material time, despite the attempts by the municipal authorities to dissolve the agreements unilaterally; (ii) the physical removal of the billboards had been arranged by the deputy mayor of Uzhgorod and the head of Uzhgorod City municipal police; and (iii) the decision to remove the billboards, as well as its execution, had been unlawful, contrary to the interim measure imposed by the court on 27 March 2008 and in breach of the binding contractual obligations.

14 . Article 21 of the 2005 Code of Administrative Justice of Ukraine provides that a claim for damages on account of illegal decisions, actions or inactivity of the public authorities or other violations of the rights, freedoms and legitimate interests in public-law relationships, can be examined by the administrative courts if the claim was lodged during the administrative proceedings together with the main claim to resolve the public-law dispute. Otherwise, the claim for damages should be examined under the rules of civil or commercial procedure.

15 . Article 62 of the 1991 Code of Commercial Proceedings, as worded at the relevant time, provided that a claim could not be accepted for consideration on the merits if a commercial court or other competent authority was dealing with or had resolved a commercial dispute between the same parties concerning the same claim submitted on the same grounds.

COMPLAINTS

16 . The applicant company complained under Article 1 of Protocol No. 1 that its billboards had been groundlessly removed and destroyed by the local authorities. The applicant company also complained under Article 6 § 1 of the Convention that in refusing its claim for damages, the commercial courts had failed to give reasons for their decisions and had not dealt with the applicant company ’ s pertinent and important arguments.

THE LAW

17 . The first complaint by the applicant company concerns the allegation of the unlawful removal and destruction of its commercial billboards. The applicant company relied on Article 1 of Protocol No. 1, which provides as follows:

“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 or to secure the payment of taxes or other contributions or penalties.”

18 . The Government submitted that the applicant company had not exhausted domestic remedies in relation to that complaint given that it had not brought a claim for damages in the administrative courts when challenging the decision of 26 March 2008 and the removal of the billboards. Moreover, the applicant company had not instituted separate proceedings for damages, after the decision of 10 June 2010 adopted by the Lviv Administrative Court of Appeal (finding who had been engaged in the removal of the billboards).

19 . The applicant company contended that it had complied with the rule of exhaustion of domestic remedies given that its claim for damages had already been dismissed by the commercial courts before the administrative court had delivered its ruling in the case.

20 . The Court reiterates that the obligation under Article 35 requires that an applicant should have normal recourse to the remedies likely to be effective, adequate and accessible (see Sejdovic v. Italy [GC], no. 56581/00, § 45, ECHR 2006 ‑ II). To be effective, a remedy must be capable of remedying directly the impugned state of affairs and must offer reasonable prospects of success. However, the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust that avenue of redress (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 74, 25 March 2014).

21 . The applicant company instituted several sets of proceedings at the domestic level, each of them distinct as regards the substance of the dispute, the jurisdiction of the courts concerned and the composition of the defendants. In the most recent decision of 10 June 2010 (see paragraph 13 above), the administrative courts invalidated the municipal authorities ’ decision to remove the billboards and identified exactly who had been responsible for the execution of that decision. Within that set of proceedings, the administrative courts did not decide any claim for damages because the applicant company had not submitted one. Neither did the applicant company institute separate commercial proceedings on the basis of those crucial new findings by the administrative courts. The Court does not consider that the options for seeking damages at the domestic level would have been futile or effectively prevented by the earlier dismissal of the applicant company ’ s claim for damages which had been based on different grounds. In any event, mere doubts in this regard on the part of the applicant company are not sufficient to justify the failure to use these remedies.

22 . It follows that the Government ’ s objection should be upheld and the present complaint should be dismissed for non-exhaustion of domestic remedies in accordance with Article 35 §§ 1 and 4 of the Convention.

23 . The second complaint by the applicant company concerns the allegation that the commercial courts had failed to give adequate reasons for their decisions. The relevant part of Article 6 § 1 of the Convention reads as follows:

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

24 . The Government submitted that the domestic courts were better placed to interpret and apply domestic law, and to assess the evidence. They submitted that the domestic courts had duly reasoned their decisions: the applicant company had simply failed to provide material in support of its claims, which had been bound to fail. Accordingly, the complaint was manifestly ill-founded.

25 . The applicant company insisted that the domestic courts ’ reasoning had been inadequate and had compromised the fairness of the proceedings.

26 . The Court reiterates that it should not act as a court of fourth instance and will not therefore question under Article 6 § 1 the judgment of the national courts, unless their findings can be regarded as arbitrary or manifestly unreasonable (see Bochan v. Ukraine (no. 2) [GC], no. 22251/08, § 61, ECHR 2015, with further references).

27 . In the commercial proceedings instituted by the applicant company, the courts dismissed the claim essentially for lack of proof as regards the basic facts pertaining to the claim, in particular who had removed the billboards and what role the defendants had played in that connection. There is nothing to suggest that the commercial courts failed in their duty to conduct a careful examination of the case as presented by the applicant company. Likewise, there is no indication that the courts did not provide reasons for their findings. Based on the available material, the Court cannot find that the commercial courts ’ decisions were arbitrary or manifestly unreasonable or that any key argument raised by the applicant company remained unanswered.

28 . It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 8 October 2020 .

             Anne-Marie Dougin Gabriele Kucsko-Stadlmayer              Acting Deputy Registrar President