SECOND SECTION

CASE OF TRYKHLIB v. UKRAINE

( Application no. 58312/00 )

JUDGMENT

STRASBOURG

20 September 2005

FINAL

20/12/2005

This judgment will become final in the circ umstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Trykhlib v. Ukraine ,

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

Mr J.-P. Costa , President , Mr I. Cabral Barreto , Mr V. Butkevych , Mrs A. Mularoni , Mrs E. Fura-Sandström , Ms D. Jočienė , Mr D. Popović , judges , and Mrs S. Dollé , Section Registrar ,

Having deliberated in private on 30 August 2005 ,

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

PROCEDURE

1 . The case originated in an application (no. 58312/00) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Ukrainian national, Mr Volodymyr Ivanovych Trykhlib (“the applicant”), on 19 November 1999 .

2 . The Ukrainian Government (“the Government”) were represented by their Agent s , Ms Zoryana Bortnovska and Ms Valeria Lutkovska .

3 . On 3 July 2003 the Court decided to communicate the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility.

THE FACTS

4 . The applicant, Mr Volodymyr Ivanovich Trykhlib , was born in 1961 and lives in Nova Kahovka, the Kherson r egion .

I . THE CIRCUMSTANCES OF THE CASE

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

A. The proceeding for the recovery of salary arrears

6 . Between 1997 and 2000 the applicant brought a number of proceedings (see the annexed table) against the Pivdenelektromash Company ( a State-owned entity ; hereafter “the Company”), seeking the recovery of salary arrears. Two sets of these proceedings were instituted in the Novokahovsky City Court, while the rest of th em were brought to the Labour Disputes C ommission of the “ Pivdenelektromash ” company (hereafter “the LDC”). The decisions given by the court and the LDC awarded the applicant the salary arrears which he claimed. These decisions were sent for execution to the Novokahovsky City Bailiff s ’ Service (hereafter “the Bailiff s ’ Service”) .

7 . The decisions in the applicant ’ s favour were gradually enforced until 5 June 2000 when the Kherson Regional Court of Arbitration (hereafter “the Arbitration Court ”) instituted bankruptcy proceedings a gainst the Company and issued an injunction barring the debt recovery .

8 . On 20 June 2000 the Bailiff s ’ Service stayed the execution proceedings against the Company pending the res olution of the bankruptcy case.

9 . By letter of 10 August 2000 , the Supreme Court of Arbitration directed that the enforcement of salary arrears cases could continue pending the bankruptcy and rehabilitation proceedings.

10 . In a letter of 11 December 2000 the Bailiff s ’ Service requested permission from the Arbitration Court to continue the enforcement proceedings . On 12 January 2001 Judge V. informed the Bailiff s that the claims based on court decisions awarding salary arrears could be paid from the proceeds of the finished products and raw materi als belonging to the Company. The Judge stated that an injunction made under Article 12 of the Law of 14 May 1992 “on the Restoration of a Debtor ’ s Solvency or the Declaration of Bankruptcy” (hereafter “the Bankruptcy Act”) did not apply to salary payments.

11 . On 11 January 2001 the Bailiff s ordered the attach ment of the Company ’ s accounts.

12 . On 15 January 2001 the Arbitration Court approved the rehabilitation proposal and appointed a trustee to run a bankruptcy rehabilitation programme for the Company ’ s business performance .

13 . On 22 March 2001 the Bailiff s ’ Service, referring to the judge ’ s letter of 12 January 2001 , requested the trustee to inform them about the existence of the finished products and raw mat erials suitable for attachment.

14 . However, on 17 January 2002 Judge V. reversed his opinion about attach ing and selling the Company ’ s property, particularly as the rehabilitation proceedings were pending , the success of which, in his view, could be jeopardised if the Bailiff s ’ actions continued .

15 . On 23 January 2002 the Prominvest Bank servicing the Company ’ s accounts refused to freeze them on the Bailiff s ’ request. The bank, inter alia , rejected as irrelevant the Bailiff s ’ reference to the directive of the Supreme Court o f Arbitration of 10 August 2000 (see paragraph 9 above) .

16 . On 14 August 2002 the Kherson Regional Bailiff s ’ Service notified the applicant that by December 1999 he had been paid a total of UAH 3 ,477 . The payment of the remainder of the awarded amount was impeded by ongoing bankruptcy litigation and the entry into force of the 2001 Law o n the Introduction of a Moratorium on the Forced Sale of Property which barred the attachment and sale of the Company ’ s capital assets .

17 . In their observations of 1 September 2003 the Government stated that by 2003 all but two of the LDC ’ s decisions (15 and 29 March 2000 ) and both court judgments in the applicant ’ s favour had been executed, the outstanding debt being UAH 1,277.51 [1] , out of a total UAH 13,301,688.24 [2] owed by the Company to its creditors . In the ir observations of 21 June 2004 , the Government – while confirming the sum above – referred to the LDC decisions of 23 February and 29 March 2000 as having remained un - enforced.

18 . The applicant challenged these submissions , stating that the Government had failed to mention the LDC decision of 12 April 2000 , which, according to him, had not been executed either . He alleged that the amount due to him totalled UAH 3,783.57 [3] .

19 . On 9 December 2003 the Minister for Justice issued a circular letter, informing the Bailiff s that the injunction against debt collection in bankruptcy cases did not extend to warrants of execution in salary arrears cases .

20 . On 15 January 2004 the Bailiff s ’ Service resumed the execution proceedings in the applicant ’ s case. On 23 January and 10 February 2004 it ordered the attachment of the Company ’ s accounts . However, on 27 February 2004 the Kherson Regional Commercial Court , on the trustee ’ s appeal, quashed these decisions b ecause the Bankruptcy Act envisaged the obligatory suspension of enforcement proceedings pending the resolution of a bankruptcy case. The exemption of salary arrears payments from a general injunction against debt recovery concerned only the Company ’ s current salary expenditures.

21 . The Government provided the Court with a copy of a certificate issued on 2 February 2004 by the chief accountant of the Company, attesting that the applicant had refused to accept a sum of UAH 2,000 [4] offered to him by the Company as c ompensation for salary arrears. The applicant stated that the payment of this amount was conditioned by the withdrawal of his application before the Court .

B . The proceeding against the Bailiff s

22 . From 1998 to 1999 the applicant on several occasions unsuccessfully attempted to bring criminal proceedings against the officials of the Bailiff s ’ Service for their allegedly unlawful inactivity. On 8 February 1999 the Novokahovska City Prosecutor ’ s Office ultimately rejected the applicant ’ s complaint due to the lack of evidence to justify any criminal proceedings against the Bailiff s. On 7 May 1999 the Novokahovsky C ity Court upheld this decision.

23 . On 12 January 2000 the Novokahovsky City Court declared inadmissible the applicant ’ s complaints concerning the Bailiff s ’ inactivity because of his failure to comply with procedural requirements. On 15 March 2000 the applicant ’ s request for leave to appeal was also rejected as he had failed to comply with the procedural requirements provided by law .

24 . In December 2000 the applicant applied to the Novokahovsky City Court against the Bailiff s ’ Service seeking a declar ation that the enforcement proceedings in his cases were inadequate. On 8 May 2001 the court rejected the applicant ’ s claim, finding that no fault had been committed by the Bailiff s as the delay in the enforcement of the LDC decisions had been caused by the debtor ’ s lack of funds. It also took into account the 5 June 2000 injunction barring collection of the Company ’ s debts. On 27 June 2001 the Kherson Regional Court upheld this judgment.

II. RELEVANT DOMESTIC LAW

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

26 . Article 16 of the Law provides that a trustee must call a meeting of the creditors, to be held within ten days after the institution of the bankruptcy proceedings. At the m eeting, each creditor has a vote proportiona te to his/her claim .

27 . According to Article 17 of the Law , the Commercial Court may approve the proposal of the meeting of creditors, and order bankruptcy rehabilitation proceedings for a period of no more than one year. T he court by the same ruling shall appoint a licensed trustee to run the rehabilitation pro gramme .

28 . Article 31 of the Law sets the order of priority of claims . The bankrupt ’ s debts to its employees hold second rank to secured debts and the costs and expenses incurred in the course of the bankruptcy/rehabilitation proceedings .

2 . The letter of the Supreme Court of Arbitration of 10 August 2000

29 . In paragraph 2.5 of the Letter , the court stated that the injunction against debt recovery from a company undergoing bankruptcy proceedings did not cover sal ary payments and, therefore, could not bar the enforcement of court judg ments granting salary arrears.

3 . Law of 21 April 1999 “on Enforcement Proceedings”

30 . Under Article 2 of the Law ( Закон України “ Про виконавче провадження ” ), the enforcement of judgments is entrusted to the State Bailiff s ’ Service. Under Article 85 of the Law, the creditor may file a complaint against actions or omissions of the State Bailiff s ’ 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 judgment, and to receive compensation.

31 . Article 44 of the Law provides that the claims of employees, deriving from court decisions in labour disputes, are paid off in the course of enforcement proceedings as third rank ing debts , after secured debts and maintenance and industrial disablement benefits .

T HE LAW

I. ADMISSIBILITY OF THE COMPLAINTS

A. Alleged violation of Articles 13 and 14 of the Convention

33 . T he applicant complained that his right to an effective remedy was violated by the prosecutor ’ s refusal to institute criminal proceedings against the Bailiff s dealing with his case. He referr ed to Article 13 of the Convention. The Court recalls that the right to have criminal proceedings instituted against a third person and to have the person concerned convicted is not as such guaranteed by the Convention (see, Kubiszyn v. Poland (dec.), no. 37437/97, 21 September 1999 ). It therefore find s that this part of the application is incompatible ratione materiae with the provisions of the Convention and must be reject ed pursuant to Article 35 §§ 3 and 4 of the Convention.

34 . The applicant further relied on Article 14 of the Convention (the prohibition on discrimination) without any further reasoning. The Court finds no indication whatsoever in the case-file which migh t disclose any appearance of a violation of this provision. The Court, therefore, rejects this part of the application , in accordance with Article 35 §§ 3 and 4 of the Convention , as being manifestly ill-founded .

B. A lleged violation of Article 6 § 1 of the C onvention

35 . The applicant complain ed about the State authorities ’ failure to execute the decisions of the LDC award ing him salary arrears against his employer . He relie d on Article 6 § 1 of the Convention, which in so far as relevant provide s :

“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.”

1. The submissions of the parties

37 . The applicant contested this submission , pointing out that his registration as a creditor in the insolvency proceedings would have entailed the termination of the execution proceedings in his case. He considered that the status of a creditor in the execution proceedings was more advantageous than in the bankruptcy proceedings. Therefore, he alleged that the resort to this remedy was redundant and ineffective.

2. The Court ’ s assessment

40 . The Court notes in the first place that the Government were unable to provide any example of a successful, comparable case in w hich an employee was paid his /her sal ary arrears as a result of registration as a creditor in bankruptcy proceedings , after withdrawing enforcement proceedings .

41 . Moreover, as regards the priority of claims in execution and bankruptcy proceedings, the Court observes that both the Law on Enforcement Proceedings and the Bankruptcy Act rank the applicant ’ s type of debt in second place, so neither procedure is more advantageous in this respect. Insofar as the Government state that, once registered as a creditor, the applicant would have been able to influence the development of the bankruptcy proceedings, the Court notes that the weight of the creditor ’ s vote at the creditors ’ meetings depend s on the amount of the debt . Therefore, the applicant ’ s small claim of UAH 1,277.51 ( around EUR 200) would have given him negligible influence in any vote in relation to the Company ’ s overall debt s of UAH 13,301,688.24 ( well over EUR 2 million - paragraph 1 7 above ).

II . M ERITS

1. Parties ’ submissions

44 . The Government maintained that the length y failure to enforce decisions in the applicant ’ s favour had been caused by the ongoing bankruptcy proceedings against the debtor Company and its critical financial situation. In particular, the Government stressed that the Company ’ s overall debt totalled UAH 13,301,688.24 and could not be immediately repaid . The Government further maintained that the Bailiff s ’ Service performed all necessary actions and cannot be blamed for the delay. The regularity of the enforcement proceedings in the present case was co nfirmed by the domestic courts.

45 . The applicant put in doubt the willingness of the Bailiff s to enforce the decisions in his favour. He maintained that the enforcement proceedings 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 applicant submitt ed that the steps taken by the State were insufficient to e nsure his right to have court decision given in his favour enforced without undue delay .

2. The Court ’ s assessment

a. Preliminary considerations

46 . The Court notes in the first place that the decision s of the L DC in the applicant ’ s case are the equ ivalent of court decision s , and the State bears responsibility for t heir non-execution (see Rom ashov v. Ukraine , no. 67534/01, § 41 , 27 July 2004 ) . The Court also finds it unnecessary to embark on a discussion of the exact amount of the Company ’ s debt to the applicant, the outcome of which would be of no relevance in the present case as the principal question to be determined is whether the State is responsible for the delay in the enforcement of the LDC decisions (see, mutatis mutandis , Sokur v. Ukraine , cited above § 32) . It suffices for the Court to find that , in any event , the oldest of the unenforced decisions was taken in February 2000.

b. As to the infringement of Article 6 § 1 of the Convention

47 . The Court reiterates that the right of access to court includes a right to have a court decision enforced without undu e delay (see Immobiliare Saffi v. Italy [GC], no. 22774/93, ECHR 1999-V, § 66). However, a stay of execution of a judicial decision for such period as is strictly necessary to enable a satisfactory solution to be found to public order problems may be justified in exc eptional circumstances (see Immobiliare Saffi v. Italy , § 69).

48 . The Court notes the Government ’ s arguments that the length of non- enforcement in the present case was due to the impossibility o f pursuing the execution proceedings pending the resolution of the bankruptcy case , as well as the financial difficulties of the respondent c ompany.

49 . The Court must first address the Government ’ s submissions regarding the ongoing bankruptcy proceedings. It observes that in the course of such proceedings the commercial court may block any debt retrieval from the bankrupt entity , and the latter remains immune from any penalties for the delays in honouring t heir obligations for the duration of those proceedings. The Court recalls that it has already found in the Sokur v. Ukraine case ( cited above , §§ 34-35) that th is procedure, applied in similar circumstances , can lead to the violation of Article 6 § 1 of the Convention. Moreover , in the present case , th e situation was aggravated by a striking discordance between the domestic authorities as to the correct interpretation of the Bankruptcy Act. The Court notes that t here w ere two unsuccessful attempts by the Bailiff s to enforce the applicant ’ s judgment debts . The Bailiff s ’ actions were based on the interpretation of Article 12 of the Bankruptcy Act given by the Supreme Court of Arbitration and the Minister for Justice , which interpretation sanctioned the parallel development of bankruptcy proceedings and enforcement in cases of salary arrears. This interpretation w as first endorsed by the Kherson Regional Court of Arbitrati on which, however, a year later, reversed its opinion on the issue and prohibited the attachment and forced sale of the Company ’ s property.

50 . The Court reiterates that it is primarily for the national authorities, notably the courts, to resolve problems of the interpretation of domestic legislation ( Waite and Kennedy v. Germany [GC], no. 26083/94, 18 February 1999, § 54). However, it observes that Article 6 § 1 imposes on Contracting States the duty to organise their legal systems in such a way that their authorities can meet its requirements (see, mutatis mutandis , Podbielski v. Poland , judgment of 30 October 1998, Reports of Judgments and Decisions 1998 ‑ VIII, p. 3395 § 38 ). In the present case the domestic courts did not choose the so l ution which would have permit ted the State to honour its obligations under the Convention . Instead, the bankruptcy injunction created a situation in which the apparently active Company, where the applicant is still a full - time employe e , was capable of meeting his salary arrears (see paragraph s 16 and 2 0 above ), but the Bailiff s were prevented from pursuing the legal enforcement of the court decisions in the applicant ’ s favour against the Company.

52 . The Court finds, therefore, that by failing since February 2000, i.e. some five years and four month s , to take the necessary measures to comply fully with the decision s of the LDC, the authorities deprived the provisions of Article 6 § 1 of the Convention of much of their useful effect.

53 . There has , accordingly , been a violation of Article 6 § 1 of the Convention.

III . APPLICATION OF ARTICLE 41 OF THE CONVENTION

54 . Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A. Damage

55 . The Court points out that , under Rule 60 of the Rules of Court , any claim for just satisfaction must be itemised and submitted in writing, together with the relevant supporting documents, failing which the Court may reject the claim in whole or in part.

56 . The applicant claimed EUR 56,000 in respect of pecu n iar y and non-pecuniary damage.

57 . The Government maintained that the applicant had not specified the nature of the damage caused to him and had not substantiated the amount s claimed.

58 . The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. However, the Court takes the view that the applicant has suffered some non-pecuniary damage as a result of the violations found which cannot be made good by the Court ’ s mere finding of a violation. Nevertheless, the amounts claimed are excessive. Making its assessment on an equitable basis, as required by Article 41 of the Convention, the Court awards the applicant the sum of EUR 2,560 in respect of non-pecuniary damage.

B. Costs and expenses

59 . The applicant did not submit any claim under this head within the set time-limit; the Court therefore makes no award in this respect.

C. Default interest

60 . The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1. Declares the complaint under Article 6 § 1 of the Convention admissible and the remainder of the application inadmissible;

2 . Holds that there has been a violation of Article 6 § 1 of the Convention;

3 . Holds

(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final according to Article 44 § 2 of the Convention, EUR 2,560 ( two thousand five hundred and sixty euros) in respect of non-pecuniary damage, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement, plus any tax that may be chargeable;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

4 . Dismisses the remainder of the applicant ’ s claim for just satisfaction.

Done in English, and notified in writing on 20 September 2005 , pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

S. Dollé J.-P. Costa Registrar President

APPENDIX

List of the decisions of the Novokahovsky City Court and the labour disputes commission of the Pivdenelektromash C ompany.

No.

Decision body

Date of decision

Sum awarded (UAH)

1.court

27 May 1997

738

2.court

23 July 1997

228

3.commission

24 July 1997

173

4.commission

21 August 1997

175

5.commission

4 September 1997

175

6.commission

2 October 1997

213

7.commission

30 October 1997

150

8.commission

27 November 1997

145

9.commission

5 February 1998

202

10.commission

19 February 1998

189

11.commission

20 March 1998

176

12.commission

16 April 1998

179

13.commission

31 May 1998

231

14.commission

25 June 1998

161

15.commission

15 July 1998

185

16.commission

20 August 1998

196

17.commission

2 September 1998

165

18.commission

22 October 1998

199

19.commission

26 November 1998

178

20.commission

24 December 1998

183

21.commission

23 February 1999

162

22.commission

23 February 1999

109

23.commission

18 March 1999

103

24.commission

15 April 1999

181.07

25.commission

25 May 1999

186

26.commission

29 June 1999

152

27.commission

12 July 1999

89

28.commission

10 September 1999

213.57

29.commission

10 September 1999

190.03

30.commission

11 October 1999

217.63

31.commission

12 November 1999

327

32.commission

16 December 1999

218

33.commission

17 January 2000

128.76

34.commission

23 February 2000

315.72

35.commission

15 March 2000

961.79

36.commission

29 March 2000

316

37. [5]

commission

12 April 2000

121[1] EUR 200.41

[2] EUR 2,085,352.89

[3] EUR 593.62

[4] EUR 315.56

[5] According to the applicant’s submissions