FIFTH SECTIONCASE OF ARCELORMITTAL AMBALAJ CELIGI SANAYI VE TICARET ANONIM SIRKETI v. UKRAINE(Application no. 23819/11)    JUDGMENT STRASBOURG15 July 2021 This judgment is final but it may be subject to editorial revision.In the case of Arcelormıttal Ambalaj Celıgı Sanayı Ve Tıcaret Anonım Sırketı v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Committee composed of: Mārtiņš Mits, President, Jovan Ilievski, Ivana Jelić, judges,and Martina Keller, Deputy Section Registrar,Having regard to:the application (no. 23819/11) 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 Turkish company, Arcelormıttal Ambalaj Celıgı Sanayı Ve Tıcaret Anonım Sırketı (“the applicant company”), on 8 April 2011;the decision to give notice to the Ukrainian Government (“the Government”) of the complaints under Article 6 § 1 and Article 13 of the Convention concerning the lack of reasoning in domestic courts’ decisions and under Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention concerning the State’s positive obligation to provide judicial procedures, and to declare the remainder of the application inadmissible;the parties’ observations;Having deliberated in private on 24 June 2021,Delivers the following judgment, which was adopted on that date:INTRODUCTION1.  The case concerns, under Article 6 § 1 of the Convention, the failure of the national courts to provide adequate reasoning when setting aside an arbitral award.THE FACTS2.  The applicant company, Arcelormittal Ambalaj Celigi Sanayi Ve Ticaret Anonim Sirketi, is a private company incorporated under the laws of Turkey. It was represented before the Court by Mr T. Gürmen, a lawyer practising in Istanbul.3.  By a letter of 4 September 2019, the applicant company notified the Court that it had changed its name to Virtus Ambalaj Celik Sanayi ve Ticaret Anonim Sirketi. The Court will continue processing the application under the case name of Arcelormıttal Ambalaj Celıgı Sanayı Ve Tıcaret Anonım Sırketı v. Ukraine. This corresponds to the applicant company’s name as referred to in the domestic court proceedings at issue as well as in its application lodged with the Court.4.  The Ukrainian Government (“the Government”) were represented by their Agent, Mr I. Lishchyna.5.  The facts of the case, as submitted by the parties, may be summarised as follows.6.  On 22 January 2007 the applicant company and a Ukrainian private company, A., entered into a contract for the supply of goods (“the contract”). The contract was drafted in both English and Ukrainian and specified that both versions had equal legal force and were authentic. Clause 8 of the contract contained an arbitration clause, the Ukrainian version of which read as follows:“8. Arbitration8.1. All disputes arising from the present Contract or in connection with the present Contract shall be settled by negotiation between the parties.8.2. If the parties cannot agree, the dispute shall be submitted for consideration to the International Commercial Arbitration Court at the Kyiv Chamber of Commerce and Industry (Міжнародному Комерційному арбітражному Суді при Торгово‑промисловій палаті м. Київ). The decision of the Arbitration Court shall be final and binding upon both parties.8.3. The parties have agreed that during the consideration and resolution of any such dispute, the Rules of the International Commercial Court at the Ukrainian Chamber of Commerce and Industry in Kyiv (Регламент Міжнародного Комерційного суду при Торгово-Промисловій палаті України, м. Київ) shall be applied ...”7.  In the English version of the arbitration clause, the designated arbitration tribunal was referred to as “the International Commercial Arbitration Court of the Chamber of Commerce and Industry of Ukraine”.8.  On 7 October 2008 the applicant company lodged a statement of claim with the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (“the ICAC”) against A., seeking payment for delivered goods plus damages.9.  On 8 December 2008, according to the arbitral award (see paragraph 10 below), A. submitted a statement of defence, which contained, inter alia, objections to the ICAC’s jurisdiction. It argued, in particular, that the initial negotiation procedure referred to in the arbitration clause had been bypassed, despite being a prerequisite for arbitration. A. also asked for additional time in order to submit supplementary documents and requested an oral hearing.10.  On 20 February 2009 the ICAC issued an arbitral award ordering A. to pay the applicant company in full for the delivered goods and to reimburse the arbitration fee. The ICAC dealt with the issue of its jurisdiction both of its own motion and in reply to A.’s objections. It pointed first to an “inaccuracy” in the arbitration clause, in that it referred to the “International Commercial Arbitration Court at the Kyiv Chamber of Commerce and Industry” instead of the “International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry”. It found that the parties had meant to refer to the ICAC because it was the only arbitral institution at a chamber of commerce and industry acting in accordance with the Rules of the ICAC and the Law of Ukraine on international commercial arbitration. Furthermore, it replied to A.’s objection that it lacked jurisdiction, finding that the requirement for negotiations could not have been implemented, as the clause did not contain a clear procedure or time-limit and thus was not enforceable.11.  In April 2009 A. lodged an application with the Shevchenkivskyy District Court of Kyiv seeking to set aside the arbitral award, arguing that the arbitration clause was invalid under Ukrainian law, that the ICAC had exceeded its jurisdiction and that the arbitral award was contrary to the public policy of Ukraine.12.  On 27 July 2009 the Shevchenkivskyy District Court of Kyiv allowed the application and set aside the arbitral award. It found that the arbitration clause referred to a non-existent institution (the “International Commercial Court at the Kyiv Chamber of Commerce and Industry” – Міжнародний Комерційний суд при Торгово-промисловій палаті м. Київ), that the parties had failed to provide for a procedure through the courts for the settlement of disputes regarding the interpretation of the contract, and that the arbitral award had dealt with matters that fell outside the ambit of the arbitration clause in that the ICAC had interpreted the arbitration clause and had ruled on its own jurisdiction to deal with the case.13.  The applicant company appealed against that decision. It argued that the parties had agreed to refer all disputes to arbitration and not to the national courts, that A. had actively participated in the arbitral proceedings, thereby demonstrating its consent to arbitration and that, under section 16 of the Law of Ukraine on international commercial arbitration, which stated that an “arbitral tribunal may rule on its own jurisdiction”, the ICAC had had the power to rule on the question of its jurisdiction.14.  On 9 December 2009 the Kyiv Court of Appeal upheld the decision of the first-instance court. The reasoning given was that the Ukrainian version of the arbitration clause referred to a non-existent institution and that the parties had not explicitly authorised the ICAC to interpret the arbitration clause. The Court of Appeal did not comment on the applicant company’s arguments about the arbitral tribunal’s power to rule on its jurisdiction, or on A.’s active participation in the arbitral proceedings.15.  The applicant company lodged a cassation appeal. It pleaded again that the ICAC had had the power to rule on its own jurisdiction and that A.’s statement of defence had contained an acknowledgment that the ICAC had jurisdiction to hear the case.16.  On 13 October 2010 the Supreme Court of Ukraine upheld the decision of the lower courts. It did not comment on the applicability of section 16 of the Law of Ukraine on international commercial arbitration but stated that the arbitration clause did not explicitly authorise the ICAC to interpret it, nor had the parties asked the tribunal to do so. In addition, the Supreme Court concluded that A.’s objections to the ICAC’s jurisdiction indicated that the parties had not agreed to refer their disputes to it.RELEVANT LEGAL FRAMEWORK17.  The Law of Ukraine on international commercial arbitration of 24 February 1994 provided:Section 7. Definition and form of an arbitration agreement“1. An arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen, or which may arise, between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.2. The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provides a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. A reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract is in writing and the reference is such as to make that clause part of the contract.”Section 16. Competence of an arbitral tribunal to rule on its own jurisdiction“1. An arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.2. A plea that the arbitral tribunal does not have jurisdiction shall be raised no later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that that party has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.3. The arbitral tribunal may rule on a plea referred to in subsection 2 of this section either as a preliminary question or in an award on the merits. If the arbitral tribunal deals with the issue as a preliminary question and rules that it has jurisdiction, any party may request, within thirty days of receiving notice of that ruling, the court specified in section 6 to decide the matter, and no appeal is available against such a decision. While such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.”THE LAWscope of the case18.  In its submissions in reply to the Government’s observations, the applicant company additionally complained that its rights of access to a court, legal certainty and equality of arms had been breached when the national courts had quashed the final and binding judgment, that is, the arbitral award.19.  The Court notes that these new, belated complaints do not constitute an elaboration on the applicant company’s original complaints on which the parties have commented. The Court considers, therefore, that it is not appropriate now to take up these matters in the context of the present case (see Piryanik v. Ukraine, no. 75788/01, § 20, 19 April 2005).ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION20.  The applicant company complained under Articles 6 and 13 of the Convention that the national courts had failed to provide adequate reasoning for their decisions.21.  The Court will examine this complaint solely under Article 6 § 1 of the Convention, which in the present case should be viewed as a lex specialis in relation to Article 13.22.  Article 6 § 1 of the Convention 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 ...”Admissibility23.  The Court notes that this complaint is neither manifestly ill-founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.Merits24.  The applicant company submitted that the national courts had disregarded the power of an arbitral tribunal to interpret a contract and to decide on its own jurisdiction.25.  The Government submitted, with reference to letters from the Head of the Shevchenkivskyy District Court of Kyiv of 13 May 2019 and from the Secretary General of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry dated 6 May 2019, that on account of the expiry of the time-limit for their storage, the relevant case files had been destroyed.26.  The Government further argued that it was not the task of the Court to review alleged errors of facts or law committed by national judicial authorities. Furthermore, the national courts had followed the established practice, which was well known to practising lawyers, in that at the material time, the national courts had routinely set aside arbitral awards and found arbitration clauses to be unenforceable when they contained the incorrect name of an arbitral institution. That practice, despite not being conducive to arbitration, could not be characterised as arbitrary or unfair. Therefore, the applicant company had had a fair hearing before the national courts.27.  The Court reiterates that it is not for it to deal with alleged errors of law or fact committed by the national courts unless and in so far as they may have infringed rights and freedoms that are protected by the Convention – for instance, where it can, exceptionally, be said that they constitute “unfairness” incompatible with Article 6 of the Convention (see Bochan v. Ukraine (no. 2) [GC], no. 22251/08, § 61, ECHR 2015). The Court 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 Zubac v. Croatia [GC], no. 40160/12, § 79, 5 April 2018).28.  The Court also reiterates that, according to its established case-law concerning the proper administration of justice, judgments of courts and tribunals should adequately state the reasons on which they are based (see García Ruiz v. Spain [GC], no. 30544/96, § 26, ECHR 1999‑I). The question whether a court has failed to fulfil the obligation to state reasons, deriving from Article 6, can only be determined in the light of the circumstances of the case. If, however, a submission would, if accepted, be decisive for the outcome of the case, it may require a specific and express reply by the court in its judgment (see, for instance, Petrović and Others v. Montenegro, no. 18116/15, § 41, 17 July 2018). The principle of fairness enshrined in Article 6 of the Convention would be disturbed where the domestic courts ignored a specific, pertinent and important point made by an applicant (see, for instance, Pronina v. Ukraine, no. 63566/00, § 25, 18 July 2006, and Mala v. Ukraine, no. 4436/07, § 48, 3 July 2014).29.  In the present case, the national courts set aside the arbitral award, finding that the arbitration tribunal had exceeded its jurisdiction when it had interpreted the contents of the arbitration clause, as the parties had not specifically authorised it to interpret the provisions of the contract. In addition, the name of the arbitration institution in the Ukrainian version of the contract, namely the ICAC, was incorrect and therefore it could not have been said that the parties had opted for that institution (see paragraphs 12, 14 and 16 above).30.  Before the national courts, the applicant company had pointed to section 16 of the Law of Ukraine on international commercial arbitration, which recognises the doctrine of “competence-competence”, that is, the power of an arbitration tribunal to rule on its own jurisdiction. It also referred to the active participation of A. in the arbitration and to the fact that A. had objected only to the failure to observe the negotiation stage of the arbitration clause, but had not objected to the ICAC’s jurisdiction as such (see paragraphs 13 and 15 above).31.  The Court observes that the national courts did not respond to those specific and important arguments, which were decisive for the outcome of the case (see paragraphs 14 and 16 above).32.  The Court therefore concludes that there has been a violation of Article 6 § 1 of the Convention in relation to the lack of adequate reasoning of the national courts’ decisions.ALLEGED VIOLATIONS OF ARTICLE 1 OF Protocol no. 1 to THE CONVENTION and Article 13 of the Convention33.  The applicant company also complained that, by setting aside the arbitral award, the national courts had violated Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention, which read as follows:Article 1 of Protocol No. 1“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.”Article 13“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”34.  The Court observes that this complaint rests on the hypothesis that the national courts should not have set aside the arbitral award. Given the circumstances, the Court finds that this complaint is premature and should be rejected in accordance with Article 35 §§ 1 and 4 of the Convention as inadmissible (see, mutatis mutandis, Centre for the Development of Analytical Psychology v. the former Yugoslav Republic of Macedonia, nos. 29545/10 and 32961/10, § 50, 15 June 2017, with further references). In this connection, the Court notes that its finding of a violation of Article 6 § 1 gives the applicant company the opportunity to request the reopening of the proceedings before the national courts in accordance with the relevant domestic law (see Mont Blanc Trading Ltd and Antares Titanium Trading Ltd v. Ukraine, no. 11161/08, §§ 100-101, 14 January 2021), which will allow for a fresh examination of its claims.APPLICATION OF ARTICLE 41 OF THE CONVENTION35.  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.”Damage36.  The applicant company claimed 3,347,627 United States dollars (USD) in respect of pecuniary damage, corresponding to the value of the delivered but unpaid goods as established in the arbitral award of 20 February 2009. It further claimed 10,000 euros (EUR) in respect of non-pecuniary damage.37.  The Government submitted that the arbitral award had ceased to exist, as it had been set aside, and that the Court should not restore it. In respect of non-pecuniary damage, they submitted that the applicant company had failed to elaborate on that claim. They asked the Court to reject the claims in respect of damage as unsubstantiated.38.  The Court considers that there is no causal link between the violation found and the pecuniary damage alleged. It further considers that, in the circumstances of the present case, the finding of a violation constitutes in itself sufficient just satisfaction for any non‑pecuniary damage sustained by the applicant company. In this connection, the Court refers again to the domestic law, which provides for the right to request the reopening of the proceedings before the national courts (see paragraph 34 above, and Mont Blanc Trading Ltd and Antares Titanium Trading Ltd, cited above, § 55).Costs and expenses39.  The applicant company claimed EUR 10,000 for the costs and expenses incurred before the Court and USD 28,927 for costs and expenses incurred in arbitration proceedings.40.  The Government noted that no legal agreement had been submitted by the applicant company in respect of the former claim and, in respect of the latter, that the arbitration proceedings had not been aimed at preventing a violation of the Convention from occurring or at obtaining redress for such a violation. They asked the Court to reject the claim for costs and expenses as unsubstantiated.41.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the information in its possession, the lack of substantiation of the applicant company’s claim and the above criteria, the Court rejects the claim for costs and expenses. Neither is there any call for the Court to order the reimbursement of costs and expenses incurred during the arbitration proceedings, as those proceedings do not constitute “domestic proceedings” for the purposes of a claim for costs and expenses.FOR THESE REASONS, THE COURT, UNANIMOUSLY,Declares the complaint concerning the lack of reasoning admissible and the remainder of the application inadmissible;Holds that there has been a violation of Article 6 § 1 of the Convention;Holds that the finding of a violation constitutes in itself sufficient just satisfaction for any non-pecuniary damage sustained by the applicant company;Dismisses the remainder of the applicant company’s claim for just satisfaction.Done in English, and notified in writing on 15 July 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.Martina Keller  Mārtiņš MitsDeputy Registrar President