5.  The present case concerns criminal proceedings against the applicant, who was Minister of Defence in the period between July 2000 and May 2001, and three other defendants (K.Gj., V.T. and Lj.P.). The applicant and K.Gj., who was undersecretary (подсекретар) in the Ministry of Defence (“the Ministry”) at the time, were convicted of abuse of office (злоупотреба на службена положба и овластување) in relation to two procurement contracts (for food and construction services) concluded in December 2000 between the Ministry and HS (“the company”) that had been owned at the time by Z.S. and his wife, M.S. In February 2001, the company was bought by Lj.P. and V.T. – the applicant’s father-in-law and brother-in-law respectively. The latter contract concerned construction of army housing in a military base (касарна) in Skopje.
6.  In spring 2001 an armed conflict broke out in the respondent State.
7.  On an unspecified date in 2001, an investigating judge of the Skopje Court of First Instance (Основен суд Скопје – “the trial court”) opened an investigation in respect of the applicant, K.Gj., Lj.P. and V.T., because of a reasonable suspicion of abuse of office. Several witnesses were examined and a forensic accounting report was commissioned.
8.  On 11 June 2001 the investigating judge heard evidence from K.K., a Ministry official. He stated that K.Gj. had asked him to meet with Lj.P. to sign the construction contract and told him that the applicant had insisted on having the contract urgently signed. He had met with Lj.P., but an issue had arisen when, erroneously, a certain company called M. had been indicated as the supplier. At that point Lj.P. had called the applicant and told him “this [had] not [been] our company, ours [had been the company HS]”.
9.  On 18 June 2001 the investigating judge heard evidence from the applicant, who denied the charges against him.
10.  On 26 October 2001 the investigating judge heard evidence from Z.S. solely in the presence of the public prosecutor. He denied any personal acquaintance with the applicant and stated that Lj.P. had asked him to make a bid to supply food to the Ministry. He further affirmed that V.T. had signed the contracts on behalf of the company, although he had not authorised him to represent the company. After Z.S. had found out about the bank transfers from the Ministry, Lj.P. and V.T. had threatened that he would sell the company to them.
11.  On 23 November 2001 the public prosecutor lodged a bill of indictment with the trial court against the four defendants. The applicant and K.Gj. were indicted on charges of abuse of office and Lj.P. and V.T. were charged with inciting them to commit the offence. The applicant was also charged with ordering K.Gj. to conclude the two public-procurement contracts on behalf of the Ministry with the company, contrary to the procedure provided by the Public Procurement Act (Закон за јавни набавки, Official Gazette no.26/98). The prosecutor proposed that certain evidence be admitted at trial, and requested that the court summon witnesses, including Z.S.
12.  On 11 March 2002 a three-judge panel of the trial court confirmed the indictment dismissing the defendants’ objections as unfounded.
13.  All four defendants gave oral statements at the trial. The applicant gave his statement at the trial hearing held on 13 June 2003. Throughout these proceedings he maintained his innocence. The applicant denied any involvement in the procurement process regarding the two contracts and challenged K.Gj.’s allegations as untrue (see paragraph 14 below). He maintained that the procurement process had been conducted through the Ministry’s administration (стручни служби) and the undersecretary, that he had not been informed of the details of individual contracts and that the two contracts had been lawfully concluded. He insisted that had been unaware that his relatives had owned the company.
14.  His co-defendant, K.Gj., asserted that he had informed the applicant of the public-procurement decisions and acted on his orders. He affirmed that on the applicant’s orders the construction contract that had been initially signed with the company M. had been invalidated and a new contract had been signed with company HS. Throughout the proceedings, K.Gj. maintained that the two contracts had been concluded in accordance with the law as they had been exempt from the regular process under the Public Procurement Act for the following reasons: the food contract had concerned urgent procurement; and the construction contract had concerned issues of security and defence.
15.  The other two co-defendants, V.T. and Lj.P., maintained that the takeover of the company had been mutually agreed. V.T. asserted that he had signed the two contracts on Z.S.’s instructions and with proper authorisation. Lj.P. claimed that he had intended to fulfil all contractual obligations, but the construction had been stalled owing to the breakout of armed conflict.
16.  At a hearing held on 11 September 2003 the trial court, despite the objections of the defence, read out Z.S.’s pre-trial statement (see paragraph 10 above) since police enquiries had confirmed that he had left the country for the United States. At the same hearing, the court heard evidence from other witnesses, including M.S., who maintained that neither she, nor her husband had authorised V.T. to sign contracts on behalf of the company. She confirmed that her husband had asked her to sign the documents for the takeover of the company and that he had been scared. V.M. (M.’s owner) also testified, confirming that the Ministry had withdrawn from the construction contract that had been initially signed with his company.
17.  On 3 November 2003 the trial court convicted the defendants as charged, except Lj.P., the proceedings against whom had been separated. On 2 March 2004 this judgment had been quashed by the Skopje Court of Appeal (Апелационен суд Скопје – “the Court of Appeal”) which gave detailed instructions to the trial court. It noted that the trial court had not made sufficient efforts to hear evidence from Z.S., whose testimony was considered as key evidence (клучен доказ). His examination was considered relevant in the context of V.T.’s role in the case and the use of the funds transferred by the Ministry to the company. The trial court also needed to examine those Ministry officials that had participated in the procurement procedure regarding the contracts in order to establish whether the defence arguments regarding the lawfulness of the contracts were valid. Lastly, all relevant facts needed to be established regarding the execution of the two contracts, including the existence of any objective difficulties in this regard.
18.  In the re-trial proceedings, the trial court commissioned an addendum to the forensic accounting report and an additional expert report regarding the construction contract. The first hearing in the re-trial proceedings was held on 13 September 2005. In the course of the proceedings, the trial court held numerous hearings, examined a number of witnesses and admitted other documents and expert evidence (see paragraph 20 below). It joined the case against Lj.P. to the applicant’s case. The court heard evidence from the Ministry officials who had participated in the construction services and food procurement and examined K.K., who maintained his earlier statements (see paragraph 8 above). Several hearings were postponed on account of health reasons in respect of some of the defendants.
19.  At the hearing held on 27 April 2006 the trial court admitted the written record of Z.S.’s pre-trial statement as evidence on basis of section 351(2) of the Criminal Procedure Act (see paragraph 29 below) since securing his attendance at the trial would have been extremely difficult and might have prolonged the proceedings, given that repeated police enquiries had confirmed his residence in the United States. Moreover, sufficient evidence had been adduced regarding the facts that needed to be established from his testimony. The defence objected to his statement and argued that his presence was required in order to establish all relevant facts, particularly regarding V.T.’s authorisation to represent the company and Z.S.’s alleged use of company funds. They argued that Z.S.’s address abroad had been known and the trial court could have summoned him through diplomatic channels.
20.  At the same hearing, the court admitted documentary evidence, including: financial and other documents related to the company; official documents from the Ministry related to the procurement process and the two contracts; and several letters from the Ministry sent in reply to enquiries made by the trial court. The defence challenged the veracity of the letters and applied to have the signatories examined at the trial. They proposed that further documentary evidence be taken into evidence, including the full case file from the Ministry regarding the contracts. These proposals were rejected as the trial court found no reason to doubt the veracity of the letters and considered that all relevant documents had already been submitted and any further requests were aimed only at prolonging the trial.
21.  At the hearings held on 10 and 17 November 2006 the defence reiterated their request to examine the signatories of the letters (see paragraph 20 above) and some other witnesses and proposed as evidence written material (including army reports and documents, government transcripts and media articles related to the armed conflict) in order that the court establish the relevant facts in respect of the circumstances related to the procurement process, the execution of the contracts, the influence of the deteriorating security situation and Z.S.’s role in the company’s affairs. The trial court refused to admit the request, finding that sufficient evidence had already been adduced regarding the relevant facts that were to be established from the proposed evidence.
22.  On 29 December 2006 the trial court convicted the defendants as charged and ordered them to compensate jointly the Ministry for the damage caused. The applicant was sentenced to three years and six months’ imprisonment. Relying on a considerable amount of evidence, including the testimony of Ministry officials who had participated in the two contracts and other witnesses, written material related to the procurement, two expert reports and the statements of the two experts at the trial, the trial court concluded the two contracts had not been awarded in a process compliant with the rules of public procurement. It was established that the food contract could not be considered as urgent procurement. As to the construction contract, the court found that there had been neither a legal framework governing the construction of military housing on the site of the base, nor a clear decision or plan for the particular location, which suggested that the defendants’ choice of location had been aimed at circumventing the public-procurement rules. The company had not been officially registered for construction activity at the time of award of the contracts, only subsequently. The trial court also found that any reasons related to the inability to execute the contracts had been irrelevant.
23.  The trial court dismissed the applicant’s defence, relying on the statements of K.Gj. and K.K., who confirmed his involvement with the impugned contracts (see paragraphs 8 and 14 above). A written order signed by the applicant requiring that all procurement was to be executed according to the plan and that he should be notified of the process was considered as a further confirmation of his involvement. Referring to Z.S.’s statement, the trial court dismissed V.T. and Lj.P.’s defence, holding that his and M.S.’s statements had proven that these two defendants had taken over the company with threats, as part of their plan to obtain unlawful pecuniary gain (see paragraphs 10 and 16 above).
24.  As to the refused evidence, it reiterated the reasons given at the trial hearings (see paragraphs 20 and 21 above). Z.S.’s statement had been admitted into evidence because it would be difficult to secure his presence at the trial as he resided at an address in California in the United States of America.
25.  The applicant appealed, arguing, inter alia, that the trial court had dismissed all his applications to introduce evidence (see paragraphs 20 and 21 above) which aimed to prove: (i) that the deteriorating security situation had justified the urgent food procurement and impeded the execution of the construction contract; (ii) that any construction in the military base had fallen under the “security” exception of the public-procurement rules. The trial court had also failed to secure the presence of Z.S. at the trial, despite the Court of Appeal’s instructions, and had refused evidence to disprove his testimony.
26.  On 18 and 19 September 2007 the Court of Appeal held a public hearing at which it dismissed the defendants’ appeals. It found that all relevant facts had been correctly established and that the trial court had complied with its instructions. It considered that the refused evidence, which had mostly concerned the inability to execute the construction contract, had been irrelevant for the case. The court referred to the statements of Z.S. and M.S. in the context of the use of their company in the impugned procurement process by V.T. and Lj.P., without commenting on Z.S.’s absence from the trial.
27.  The applicant lodged an application for extraordinary review of the final judgment (барање за вонредно преиспитување на правосилна пресуда) reiterating his complaints (see paragraph 25 above).
28.  On 20 May 2008 the Supreme Court upheld the lower courts’ judgments and their findings regarding the lawfulness of the contracts. It found, inter alia, that the deteriorating security situation had not affected to the events in question. It further found that the trial court had admitted into the file evidence proposed by both the prosecution and the defence that had been necessary for establishing the relevant facts. The refusal to admit further evidence had not violated the defendants’ right to defence, nor had it affected the lawful and correct adjudication of the case.