FIFTH SECTION      CASE OF BUSHBM-PLYUS, TOV v. UKRAINE (Application no. 20880/07)             JUDGMENT    STRASBOURG 6 June 2019   This judgment is final but it may be subject to editorial revision.In the case of BUSHBM-PLYUS, TOV v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Committee composed of: Síofra O’Leary, President, Ganna Yudkivska, Lado Chanturia, judges,and Milan Blaško, Deputy Section Registrar,Having deliberated in private on 14 May 2019,Delivers the following judgment, which was adopted on that date:PROCEDURE1.  The case originated in an application (no. 20880/07) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by BUSHBM-PLYUS, TOV (“the applicant company”), a limited liability company registered in Ukraine, on 16 April 2007.2.  The applicant company was represented by Mr D. Sabyetov, a lawyer practising in Kyiv. The Ukrainian Government (“the Government”) were represented by their Agent, Mr I. Lishchyna.3.  On 24 January 2018 notice of the applicant company’s complaints about the non-enforcement of a judgment in its favour (under Article 6 § 1 of the Convention) and the annulment of its title to a property (under Article 1 of Protocol No. 1) was given to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.4.  The Government objected to the examination of the application by a Committee, but provided no reasons. After having considered the Government’s objection, the Court rejects it.THE FACTSTHE CIRCUMSTANCES OF THE CASEA.  Background information5.  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.B.  Proceedings instituted by the applicant company12.  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.C.  Proceedings instituted by the IRC State Enterprise20.  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.THE LAWI.  SCOPE OF THE CASE25.  In its reply to the Government’s observations on the case the applicant company raised a new complaint under Article 13 of the Convention about a lack of effective remedies in its case.26.  In the Court’s view, this complaint is not an elaboration of the applicant company’s original complaints, on which the parties have had the opportunity to comment. It considers, therefore, that it is not appropriate to take up this matter in the context of the present case (see, for instance, Terentyev v. Ukraine, no. 39763/02, §§ 32-33, 29 May 2008).II.  ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION27.  The applicant company complained about the non-enforcement of the judgment of 1 February 2006 as a result of the adoption of the judgment of 13 October 2006. It referred to Article 6 § 1 of the Convention, which reads in so far as relevant as follows:“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”A.  The parties’ submissions28.  The Government in essence reiterated the findings made in the judgment of 13 October 2006 (see paragraph 21 above). They argued that there had been two sets of proceedings with two different parties: in the first set it had been the UVG and in the second set, the IRC State Enterprise. In sum, they contended that the complaint was manifestly ill-founded and that, in any event, there had been no violation of the above provision.29.  The applicant company disagreed. It stated that by the time the IRC State Enterprise had instituted the proceedings against it, the Commercial Court of the Donetsk Region had already decided, in its final judgment of 1 February 2006 (see paragraph 13 above), on the same dispute between the same parties. The IRC State Enterprise had been the UVG’s successor and its actions had been limited by the UVG’s previous procedural actions. The applicant company thus argued that the principle of legal certainty had been breached in its case.B.  The Court’s assessment1.  Admissibility30.  The Court considers that this complaint raises serious issues of law requiring examination on the merits. Therefore, it is not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention. The Court further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.2.  Merits31.  The Court notes that, in reply to the applicant company’s arguments that the matter had already been resolved by the Donetsk Regional Commercial Court, the Sevastopol City Commercial Court stated that the UVG had been the wrong party in the proceedings before the former court, and that it was the IRC State Enterprise (which had already succeeded the UVG) which should have put forward the relevant counterclaim. It thus concluded that the applicant company had failed to prove that the courts had already decided the claim by the IRC State Enterprise in relation to the same object and grounds.32.  The Court is not convinced by such a conclusion. It considers that in both sets of proceedings the applicant company had a dispute with the same party, namely the State – as represented by its two entities (first the UVG and then its successor, the IRC State Enterprise), both being subordinate to the Government (see, similarly, Kehaya and Others v. Bulgaria, nos. 47797/99 and 68698/01, §§ 59-67, 12 January 2006). The Court also considers that in both sets of proceedings the core of the applicant company’s dispute with the State was the same: the lawfulness of the privatisation of block no. 3 and the validity of the contract of 26 December 2003. In the final judgment of 1 February 2006 the Donetsk Regional Commercial Court ruled on both these issues. Therefore, in the Court’s view, the subsequent proceedings against the applicant company had the effect of providing a “second chance”, allowing the State to obtain a re-examination of a dispute that had already been determined in the above-mentioned judgment. In turn, such a re-examination created legal uncertainty by depriving that judgment of any legal effect (ibid., §§ 69-70).33.  The Court also considers that a situation where facts that have already been determined by a final decision in one case are later overruled by the courts in a new case between the same parties is similar to the one where, following a reopening of the proceedings, a binding and enforceable decision is quashed in its entirety. It has already found such a situation to be in breach of the principle of legal certainty (see, for instance, Esertas v. Lithuania, no. 50208/06, § 25, 31 May 2012).34.  The Court further reiterates that the quashing of a final judgment in breach of the principle of legal certainty cannot be accepted as a justification for a failure to enforce it (see, for instance, Zheltyakov v. Ukraine, no. 4994/04, § 55, 9 June 2011). It considers that this principle also applies where, as in the present case, a final judgment has been rendered devoid of any legal effect by virtue of another subsequent one.35.  In view of the above, the Court concludes that that there has been a violation of Article 6 § 1 of the Convention in the present case.III.  ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 136.  The applicant company complained of a breach of its property rights under Article 1 of Protocol No. 1, which reads 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.”A.  The parties’ submissions37.  The Government submitted that the contract of 26 December 2003 had been unlawful because the UVG could not be privatised. Furthermore, as soon as the IRC State Enterprise had become aware of that contract, it had lodged a claim for its invalidation, and the judgment allowing that claim had become final two years and eleven months after the conclusion of that contract. In this regard they referred to the case of Romankevič v. Lithuania (no. 25747/07, §§ 43-46, 2 December 2014), in which the Court had found no violation, noting that a period of two years had not been unacceptable for correcting the authorities’ mistake and that the applicant in that case had not claimed compensation before the courts. The present applicant company had not claimed compensation either. Accordingly, its complaint was manifestly ill-founded and, in any event, there had been no violation of the above‑mentioned provision.38.  The applicant company stated that it had been deprived of its title to block no. 3 because of the judgment of 13 October 2006, even though the question of its title to that property had previously been resolved in the judgment of 1 February 2006. It further submitted that block no. 3 had not been part of the UVG’s integral property complex and had therefore been privatised lawfully. As to compensation, the applicant company considered that this issue had been for the courts to decide, while it had done all that had been required of it.B.  The Court’s assessment1.  Admissibility39.  The Court considers that this complaint raises serious issues of law requiring examination on the merits. Therefore, it is not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention. The Court further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.2.  Merits40.  The Court considers that by virtue of the final judgment of 1 February 2006, in which the applicant company was recognised as the owner of block no. 3, it had a “possession” within the meaning of Article 1 of Protocol No. 1. The judgment of 13 October 2006, the effect of which was to overrule the above judgment, constituted an interference with that possession. Given that the judgment of 13 October 2006 deprived the judgment of 1 February 2006 of any legal effect, in breach of the principle of legal certainty (see paragraphs 31-35 above), it cannot be maintained that the interference at issue was lawful. Nor can it be considered that a public interest overriding the fundamental principle of legal certainty and the applicant company’s rights justified a re-examination of the dispute and the resulting invalidation of the applicant company’s property title (see, similarly, Kehaya, cited above, § 76, and Solomun v. Croatia, no. 679/11, §§ 60-63, 2 April 2015). In view of this conclusion, the Court does not consider it necessary to examine other arguments raised by the Government.41.  There has therefore been a violation of Article 1 of Protocol No. 1.IV.  APPLICATION OF ARTICLE 41 OF THE CONVENTION42.  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.  Damage43.  In its observations of 10 July 2018, submitted in reply to those of the Government, the applicant company stated that it maintained its claims made in its application. In turn, in its application, making reference to the 2003 expert report (see paragraph 9 above), the applicant company claimed, in respect of pecuniary damage, UAH 1,003,110[1], comprising the sum of UAH 552,756[2] that it had paid for block no. 3 under the contract of 26 December 2003 and UAH 450,354[3] being the market value of the repairs that it had made to it. The applicant also claimed UAH 6,600,000[4] for loss of profit due to its loss of title to block no. 3. Lastly, it claimed EUR 300,000 for non-pecuniary damage, referring to a loss of its reputation and the inconvenience caused to its management members.44.  The Government considered that the applicant company had failed to specify its claims for pecuniary and non-pecuniary damage and that a finding of a violation would therefore constitute sufficient just satisfaction.45.  The Court first notes, as regards the Government’s objection, that in its observations the applicant company expressly stated that it maintained the claims made in its application. In such circumstances, it cannot be considered that there is no call for an award under Article 41 (see, mutatis mutandis, Chernyayev v. Ukraine, no. 15366/03, § 28, 26 July 2005, and Čalovskis v. Latvia, no. 22205/13, §§ 235 and 236, 24 July 2014). That being so, the Court agrees that the pecuniary damage to be paid to the applicant company corresponds to the value of block no. 3 and the repairs made to it. It also notes that in claiming compensation for pecuniary damage the applicant company referred to the 2003 expert report and it considers that to be an acceptable source on which the applicant company’s claim for compensation for pecuniary damage can be based. The Court will therefore base its decision on the amounts indicated in that report. According to the report, the market value of block no. 3 was UAH 552,756 which corresponded to the amount claimed by the applicant company. However, as far as the value of the repairs is concerned, the report referred to UAH 375,295[5] (rather than to the UAH 450,354 claimed by the applicant company). The Court will therefore adhere to the amounts stated in the report. The value of block no. 3, together with the repairs made to it by the applicant company, accordingly totalled UAH 928,051[6]. The Court finds it reasonable to award the above amount to the applicant company, which corresponds to EUR 29,824. In awarding compensation for pecuniary damage to the applicant company, the Court also notes that it does not appear that the latter had a possibility of obtaining that compensation at the domestic level, given that in the event of the invalidation of a sale of privatised objects, money paid by buyers for such objects was to be refunded from the proceeds of their onward sale (see paragraph 23 above). It was not contended by the Government nor does it appear otherwise that block no. 3, whose sale to the applicant company was declared invalid by the domestic courts on the ground that it had not been eligible for privatisation, could be sold again. As to the applicant company’s claim for lost profit, the Court notes that no documentary evidence has been submitted in support of this head of claim and therefore rejects it as unsubstantiated. Lastly, deciding on an equitable basis, the Court awards the applicant company EUR 3,900 for non-pecuniary damage.B.  Costs and expenses46.  The applicant company claimed UAH 13,841.39[7] for the costs and expenses incurred before the domestic courts. It provided a document confirming that it had paid UAH 5,552.75[8] as a court fee charged to it by the Sevastopol City Commercial Court in its judgment of 13 October 2006.47.  The Government did not provide any comments under this head.48.  Regard being had to the documents in its possession and to its case‑law, the Court awards EUR 178 to the applicant company in respect of costs and expenses.C.  Default interest49.  The Court considers it appropriate that the default interest rate 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 application admissible; 2.  Holds that there has been a violation of Article 6 § 1 of the Convention; 3.  Holds that there has been a violation of Article 1 of Protocol No. 1; 4.  Holds(a)  that the respondent State is to pay the applicant company, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:(i)  EUR 29,824 (twenty-nine thousand eight hundred and twenty-four euros), plus any tax that may be chargeable, in respect of pecuniary damage;(ii)  EUR 3,900 (three thousand nine hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;(iii)  EUR 178 (one hundred and seventy-eight euros), plus any tax that may be chargeable to the applicant company, in respect of costs and expenses;(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 5.  Dismisses the remainder of the applicant company’s claim for just satisfaction.Done in English, and notified in writing on 6 June 2019, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Milan Blaško Síofra O’LearyDeputy Registrar President[1].  Approximately 32,236 euros (EUR) at the material time[2].  Approximately EUR 17,763 at the material time[3].  Approximately EUR 14,473 at the material time[4].  Approximately EUR 212,100 at the material time[5].  Approximately EUR 12,061 at the material time[6].  Approximately EUR 29,824 at the material time[7].  Approximately EUR 445 at the material time[8].  Approximately EUR 178 at the material time