5.  On 7 July 2000 the applicant company and the Ukrvuglegeologiya State Company (“the UVG”), an administrative entity of the Ministry of Fuel and Energy of Ukraine represented by its own administrative entity, the Sevastopol‑based Izumrud Recreation Centre (“the IRC”), concluded a ten‑year rental agreement, under which the applicant company rented bedroom block no. 3 (“block no. 3”) in the IRC from the UVG.
6.  Subsequently, the applicant company and the IRC concluded an additional agreement under which the former undertook to repair block no. 3, as previously approved by the UVG. The applicant company duly repaired it.
7.  On an unspecified date the applicant company applied to the Sevastopol office of the State Property Fund of Ukraine (“the Fund”) seeking the privatisation of block no. 3. In turn, the latter sought approval from the Ministry, which in a letter of 6 August 2003 stated that it did not object.
8.  By a decision of 8 December 2003 the Fund included block no. 3 in the list of property to be subjected to privatisation.
9.  On 26 December 2003 the Fund’s Sevastopol office adopted a decision to privatise block no. 3 by entering into a contract selling it to the applicant company for 552,756 Ukrainian hryvnias (UAH). This sum represented the block’s market value minus the value of the repairs made to it by the applicant company (UAH 375,295), as established in an expert report prepared on 30 November 2003 by the I. company at the office’s request. On the same date it concluded a sale contract with the applicant company, and the latter registered its title to block no. 3 with a notary.
10.  In view of the above-mentioned contract, on 12 February 2004 the applicant company and the IRC terminated the rental agreement of 7 July 2000.
11.  According to the applicant company, despite the above-mentioned contract, the UVG retained block no. 3 on its books. Moreover, in 2005 the block was disconnected from the IRC’s electricity and water supplies.
12.  In August 2005 the applicant company lodged a claim with the Donetsk Regional Commercial Court against the UVG, asking the court to oblige the UVG to remove block no. 3 from its books and to reconnect it to the IRC’s networks. In turn, the UVG lodged a counterclaim against the applicant company and the Fund’s Sevastopol office, seeking the invalidation of the contract of 26 December 2003, alleging that the IRC and block no. 3 had not been eligible for privatisation.
13.  By a judgment of 1 February 2006, the court partly allowed the claim and dismissed the counterclaim. It stated that the applicant company was the owner of block no. 3, having obtained title to it following its privatisation, which had not been declared invalid. As regards the alleged invalidity of the contract of 26 December 2003, it held that: (1) it was the Fund itself, rather than its Sevastopol office, which had made the decision on privatisation, and that decision was not being contested; (2) block no. 3 was privatised not as an “integral property complex” (цілісний майновий комплекс) but as an “individually determined immovable property” (індивідуально визначене майно – об’єкт нерухомості) which, in accordance with the law, could be privatised; and that (3) the UVG had failed to prove that block no. 3 belonged to the category of objects of cultural, historical or national importance which, under the law, could not be privatised. The court thus ordered the UVG to remove block no. 3 from its books and to reconnect it to the IRC’s utility networks.
14.  On 21 March 2006 the Commercial Court of Appeal of the Donetsk Region quashed the above-mentioned judgment on the grounds that the case had to be examined by the Sevastopol City Commercial Court. On 21 June 2006 the Higher Commercial Court quashed that decision as erroneous and upheld the judgment of 1 February 2006.  On 23 August 2006 the Supreme Court refused to allow an appeal by the UVG against the decision of 21 June 2006.
15.  In the meantime, on 20 December 2005 the Ministry for the Coal Industry (the successor to the Ministry of Fuel and Energy) decided to reorganise the UVG by singling out its structural unit, the IRC, and creating on its base the Izumrud Recreation Centre State Enterprise (“the IRC State Enterprise”). The IRC State Enterprise was stated to be UVG’s successor in relation to the activities connected with its former structural unit, the IRC.
16.  On 23 October 2006 the Donetsk Regional Commercial Court allowed a request by the applicant company and replaced the UVG with its successor, the IRC State Enterprise, as a party in proceedings instituted for the enforcement of the judgment of 1 February 2006 which remained unenforced.
17.  On 4 June 2007 bailiffs informed the applicant company that they had two mutually exclusive writs of execution: one concerning the judgment of 1 February 2006 and another one concerning a judgment of 13 October 2006 (see paragraph 21 below). They sent a letter to the Donetsk Regional Commercial Court, asking it to clarify how the judgment of 1 February 2006 was to be enforced. It appears that they did not receive any reply and accordingly stayed the enforcement proceedings.
18.  On 24 April 2007 the IRC State Enterprise lodged a request with the Donetsk Regional Commercial Court for a review of the judgment of 1 February 2006 under a procedure relating to newly discovered circumstances. Referring to findings made in the judgment of 13 October 2006, it considered that the judgment of 1 February 2006 had lost its legal effect and asked the court to quash it.
19.  On 4 June 2008 the court returned the request unexamined, as the IRC State Enterprise had subsequently withdrawn its request, having failed both to explain the reasons for it and to send a representative to the court hearings.
20.  In September 2006 the IRC State Enterprise lodged a claim with the Sevastopol City Commercial Court against the Fund’s Sevastopol office and the applicant company, seeking the invalidation of the contract of 26 December 2003. In response, the applicant company sought the discontinuation of the proceedings, arguing, with reference to Article 80 of the 1991 Code of Commercial Procedure, that the same dispute between the same parties had already been resolved by the judgment of 1 February 2006.
21.  By a judgment of 13 October 2006, the court partly allowed the claim. It stated that the UVG, a geological-service enterprise, was a company of national importance. It thus belonged to the category of State property that had not been eligible for privatisation. At the moment of conclusion of the contract of 26 December 2003, block no. 3 had been part of the UVG’s integral property complex. The IRC was a structural unit of the UVG and its property could not be privatised. Therefore, the Fund’s inclusion of block no. 3 in the list of objects for privatisation had been in breach of the law. The court thus invalidated the contract of 26 December 2003, ordered the applicant company to return block no. 3 to the State and ordered the State to refund UAH 552,756 to the applicant company. As to the applicant company’s request, the court held that by the time the case had been resolved by the Donetsk Regional Commercial Court, the IRC had been reorganised into an independent legal entity and its property rights had been transferred to the IRC State Enterprise. The UVG had not therefore been a proper party to the proceedings and it could not have put forward any counterclaims seeking the invalidation of the contract of 26 December 2003. The applicant had thus failed to prove that the courts had already decided a claim by the IRC State Enterprise in relation to the same object and grounds.
22.  On 10 November 2006 the Sevastopol Commercial Court of Appeal upheld the above judgment. As to the applicant company’s objections, it stated that it was the IRC State Enterprise, and not the UVG, which should have been the proper respondent (counterclaimant) in the case when the judgment of 1 February 2006 was adopted, and that the applicant company had failed to prove that the same dispute with the IRC State Enterprise had already been decided by the courts.
23.  On 21 December 2006 the Higher Commercial Court partly amended the judgment of 13 October 2006 and removed from it an order that UAH 552,756 be refunded to the applicant company. It held that under domestic law in the event of the invalidation of a sale of privatised objects, money paid by buyers for such objects was to be refunded, on the basis of a court decision, from the proceeds of their onward sale.
24.  On 20 February 2007 the Supreme Court upheld the above decision.