ITEMID: 001-95329
LANGUAGEISOCODE: ENG
RESPONDENT: HRV
BRANCH: CHAMBER
DATE: 2009
DOCNAME: CASE OF EUROPAPRESS HOLDING D.O.O. v. CROATIA
IMPORTANCE: 3
CONCLUSION: No violation of Art. 10
JUDGES: Christos Rozakis;Dean Spielmann;George Nicolaou;Giorgio Malinverni;Khanlar Hajiyev;Sverre Erik Jebens
TEXT: 5. The applicant company, Europapress holding d.o.o., is a limited liability company incorporated under Croatian law, which has its registered office in Zagreb.
6. The applicant company was founded in 1990 and is the biggest newspaper and magazine publishing company in Croatia, which publishes five daily newspapers and more than thirty magazines with an average annual circulation of 177 million copies. Its most prominent weekly publication, the news magazine Globus, on 2 February 1996 published an article headlined “Minister Š. pointed a handgun at journalist E.V.!”, in which it reported on an incident that had allegedly occurred in the Government building on 26 January 1996 and had involved Mr B.Š., the then Minister of Finance and a deputy Prime Minister, and a journalist from the daily newspaper Novi list, Mrs E.V. The article suggested that B.Š and E.V. had had a conversation on the staircase of the building and that B.Š., displeased with a recent article by E.V., had told her that she should be killed. It also reported that B.Š. had subsequently followed E.V. to the press room, where he had allegedly taken a handgun from a security officer and pointed its barrel at E.V., saying that he would kill her, after which he had laughed loudly at his own joke. The article was published inside the magazine in the column “Political Terminator”. The circulation of Globus at the time was some 185,000 copies.
7. The article in question reads as follows:
Minister Š. pointed a handgun at journalist E.V.!
“Judging by the unusual scene made by B.Š. last week in the press room of the Government's headquarters, journalists may be facing a qualitatively different expression of disapproval of texts which are not to the Deputy Prime Minister's liking.
Having published a critical text concerning the new budget entitled 'B.Š.'s phenomenal numbers', E.V., commentator at Novi List, will remember her subsequent Government session for a very long time.
B.Š. was waiting for her on the stairs of the building in St. Mark's Square and, still trying to give his voice a somewhat relaxed tone, started claiming that it had not been all right, that it all reminded him of settling personal scores and the like, and at some point he allegedly blurted something like: 'You should be killed!'
Obviously irritated by E.V.'s presence, he followed her to the press room, where, in addition to several other journalists, he found one of the security officers.
And then B.Š., cool as a cucumber ['mrtav-hladan'], reaches for his [the security officer's] belt, takes out the handgun and points its barrel at the dumbfounded journalist, saying: 'I will kill you now!'
He then started laughing uproariously at his own 'joke', whereas the [other] journalists forced a smile.
E.V., however, did not find it funny at all.”
8. On 3 and 12 February 1996 Novi list published the same information, as did another daily newspaper, Glas Slavonije, on 14 February 1996.
9. Several days after the incident E.V. lodged a criminal complaint and brought an action in damages against B.Š. Both her criminal complaint and her action were dismissed on the ground that she was unable to prove that there had been a risk to her personal safety from a serious threat to her life.
10. On 10 May 1996 B.Š. brought a civil action for defamation against the applicant company in the Zagreb Municipal Court (Općinski sud u Zagrebu), seeking 500,000 Croatian kunas (HRK) as compensation for non-pecuniary damage. He argued that the published information had been untrue and that it had harmed his reputation as a public and political figure, in that the article had been published in a high-circulation weekly magazine, in which he had been depicted as an irresponsible and foolish person who was prone to bad and highly inappropriate jokes. The case was subsequently joined with two other actions brought by B.Š. on the same day against Novi list and Glas Slavonije.
11. The applicant company maintained that the information published was true or based on facts which it had had valid reasons to believe were true. Furthermore, the incident was of public interest and the public was therefore entitled to know about it, while the journalist E.V. was a serious and trustworthy source of information. Despite several attempts, the Globus journalists had been unable to obtain any comment from B.Š.'s office just a few days following the incident. Lastly, the applicant company claimed that the published article had been presented in such a way as to show that it had involved a joke rather than a serious threat.
12. During the proceedings the court heard evidence from the eyewitnesses, namely the security officer D.P., the journalist E.V., a journalist from Glas Slavonije, H.P., and a journalist from the State news agency HINA, S.Š., who were all present in the press room when the alleged incident took place. The court also heard evidence from the plaintiff, the author of the article, N.T., and the chief editor of Globus, D.B. At the applicant company's request, the court also heard evidence from the Novi list journalist J.V., who had been President of the Croatian Journalists Association at the time, and admitted a written statement from R.I, a journalist at the weekly magazine Arena (although it refused to call her as a witness).
13. At the hearing on 2 April 1997 the court heard evidence from security officer D.P. The relevant part of his testimony reads as follows:
“I remember that at [the time of] the incident there was a meeting of the Government, on which occasion I was in the security team. After the meeting the chief of ... the cabinet told me to invite Mr B.Š., indicating that he was in the press room. I went there and found [him]. As well as B.Š, there were some other persons present, Mrs E.V. and H.P.... Mr. B.Š. was talking with a woman whom I did not know. I cannot remember who that person was exactly. I addressed Mr B.Š. and informed him that the Prime Minister was looking for him, to which he jokingly replied, asking whether I had come to apprehend him. I noticed that the atmosphere in the room was relaxed and that they were joking about something.
I remained standing next to the exit, and on his way out Mr B.Š. passed next to me. Under his left arm he was holding documents, and with his right arm he [inadvertently] touched my right side, where my official handgun was [kept].
He said something when he touched it, something like 'these are the arguments'.
On that, I took out the handgun of my own initiative, emptied the magazine ... and took out the frame of the handgun. I then placed the handgun horizontally on my left hand. At that, Mrs E.V., who was [sitting]... on my left side and was writing, commented that we should not play with weapons. I replied that she had nothing to fear, that I had emptied the weapon and put the ammunition in my pocket. The plaintiff then commented: 'Please, put that away, because they will write that I have threatened a journalist'.
After that, Mrs. E.V. commented on the plaintiff's statement and said 'I will publish that'. Just as the plaintiff told me to put the handgun away..., the journalist S.Š. entered and said: 'Not E.V., she is a good girl'.
After that Mr. B.Š. left the room and Mrs E.V. continued to write her text. The only one who had my handgun in her hands was the journalist S.Š., with whom I went to the other corner of the room where we did not disturb anyone, because she was interested in weapons, given that she herself had a weapon. She has a museum piece and we talked about that.
Apart from telling me to put away the handgun because it would be published that he had threatened to kill the journalist, I did not notice that the plaintiff and journalist E.V. spoke to each other in my presence. As I said, apart from the journalist S.Š., no one held my handgun in his or her hands. The newspaper reports that the plaintiff took the handgun from me are not true.”
14. At the hearing on 21 May 1997 the court heard evidence from journalist E.V. The relevant part of her testimony reads as follows:
E.V.: “On 26 January [1996] a regular meeting of the Government was scheduled for Friday afternoon. I am an accredited journalist and follow the work of the Government. While going to the room from which I follow the meetings on a monitor with my colleagues, I met the plaintiff and G.S. The plaintiff reacted brusquely, stating that he was dissatisfied with the article which I had published in Novi list in January, in which I had written about the budget and the Government's policy. The plaintiff stated ... that he had seen the article as a personal attack on him. When I asked him to give reasons, he did not do so, saying that the article had amounted to settling scores with him. I replied that this was probably his impression because his name had appeared in the headline and the article had been accompanied by his photo. At that the plaintiff told me that I was 'a killer with a baby face' and that I should be killed. ...
After I arrived at the press room ... I sat at a table to study the documents which were given to us before the [Government] meeting. ... As well as me, in the room there was H.P., who was following something on the computer... I was concentrating on the documents I was reading, and at some point I noticed that the plaintiff and a member of the security staff, whom I had seen before, were present in the room.
I did not pay attention to their conversation until I heard, at some point, that the plaintiff was mentioning journalists, after which I looked up and saw the plaintiff holding a handgun in the palm of his hand, while the security officer was standing on the other side of the table, next to me.
At this point, the HINA journalist S.Š., entered the room and said 'Not E.V., she is good'; she took the handgun in her hands, saying that she had someone in her family who had a handgun like that and that she wanted to see it.”
The judge: “Who was the plaintiff addressing when he said 'a killer with a baby face'?
E.V.: “The plaintiff was facing me and we were in the small area near the staircase leading to the entry into the big foyer.”
The judge: “From whom did S.Š. take the handgun?”
E.V.: “I cannot say for certain, because it all happened relatively fast and I was shocked, since I saw it as a personal threat to me because I connected the incident which had taken place before I entered the press room and the threats made by the plaintiff with the fact of seeing the handgun in his hand.
The plaintiff then left the room and the security officer and S.Š., who was checking the handgun, remained. After that the Government meeting that we were to follow started.”
The judge: “Did anyone in the room react to protect you, given that you took [the incident] as a personal threat?”
E.V.: “I remember that the journalist H.P. said something... I cannot remember what she said ... ”
The plaintiff's representative: “Did you and the plaintiff talk to each other in the press room?”
E.V.: “Before the handgun was taken out we did not talk. After that, as far as I remember, I said that I would publish that.”
The plaintiff's representative: “Did the plaintiff address you in the press room in any way?”
E.V.: “No. While I was reading the documents for the meeting I was not, as I stated, paying attention to what the security officer and the plaintiff were talking about. I do not know whether the plaintiff was addressing me because I was reacting to the word 'journalists' when I looked up and saw the handgun in his hand.”
The plaintiff's representative: “Did the plaintiff or anyone else point the handgun at you?”
E.V.: “I did not see that.”
The plaintiff's representative: “Did you publish anything concerning the incident?”
E.V.: “I gave my comment after MPs asked a question about the incident and after the plaintiff gave his own account in the media of the events.”
The plaintiff's representative: “Why did not you react and report on the incident immediately?”
E.V.: “It happened on Friday and I ... did not want to react until I had calmed down. After the weekend I decided to inform the editor of Novi list and the presidency of the Croatian Journalists Association of the incident.”
The plaintiff's representative: “Did you inform the Globus journalists of the incident?”
E.V.: “I talked about the incident with my journalist colleagues in the Parliament Press Centre, where the journalists who followed the work of the Parliament were [based].”
The plaintiff: “In which hand was I holding the handgun?”
E.V.: “In your right hand.”
The plaintiff: “Do you remember what was I holding in my left hand?”
E.V.: “I am not certain whether you were holding anything in your left hand.”
The plaintiff: “Was I pointing the handgun at someone?”
E.V.: “I already said that I did not see that.”
The plaintiff: “At that moment in the press room did I say: 'I will kill you now!'?”
E.V.: “I do not remember that you addressed me at that moment.”
The plaintiff: “Could you quote exactly what I said to you in the corridor?”
E.V.: “You told me: 'You are a killer with a baby face and you should be killed'.”
The respondent's representative: “Did you talk to the Globus journalist about the incident?”
E.V.: “The Globus journalist was present when I discussed it with [a] colleague ... from my editorial board.”
The respondent's representative: “Did you consider the handgun in the plaintiff's hand as a personal threat?”
E.V.: “Yes.”
The respondent's representative: “Did you have any motive to invent the whole incident in order to harm the plaintiff?”
E.V.: “No. I consider myself a serious and responsible person and so far I have not had any incidents of this sort. As regards my reporting on the work of the Government, I have written a lot and there have never been any denials or claims that I wrote something that was not true.”
The respondent's representative: “Did you talk about the incident with S.Š.?”
E.V.: “No. I have to add that I talked to S.Š. only after the whole incident had been reported in Feral [Tribune], because her name had been mentioned, and after [she] had talked to J.V., the president of the [journalists] association. After that ... S.Š. and I met and on that occasion she practically confirmed my statement and said that she remembered seeing the handgun being pointed at me.”
The respondent's representative: “Did S.Š. state on that occasion that the handgun had been in the plaintiff's hand?”
E.V.: “Yes.”
15. At the hearing on 16 June 1997 the court heard evidence from the journalist S.Š. The relevant part of her testimony reads as follows:
S.Š.: “I was present during the incident ... in the press room. ... [W]hen I entered the press room I saw that the plaintiff and E.V. were talking. I understood from the conversation that that the topic was the article E.V. had written ... From what I heard ... I did not consider that they were talking with raised voices. To the contrary, on that occasion I said to the plaintiff jokingly something like 'As long as you politicians and us journalists exist, there will always be situations where you will not be satisfied with what we write' after which I said something like 'E.V. is a good girl'. I had said that before the security officer took out the handgun. Then, as the Government meeting was approaching, the security officer came to look for the plaintiff, to which he jokingly replied: 'Did you come to apprehend me? You have the power.' When he was leaving the room he [inadvertently] touched the security officer and asked where his weapon was. The security officer took out the handgun and placed it on his palm, after which I told him that I had been taught that a weapon should always be pointed away from people. At that he said that I should not be afraid, because he had taken out the bullets. As far as I remember, the plaintiff [then] left the room, whereas I stayed with the security officer and asked about the handgun... I am certain that when I entered the press room the plaintiff and E.V. were talking. I even asked them what was going on because from the first [few] sentences I could not understand what the conversation was about. Neither of them replied to my question but I understood what the conversation was about, namely the article that E.V. had written.
While in the room, I did not hear the plaintiff saying anything that could sound like a threat to E.V. The plaintiff did not take the handgun from the security officer at any moment.
The plaintiff's representative: “Did the plaintiff at any moment call E.V. 'the killer with a baby face'?”
S.Š.: “No.”
16. At the hearing on 10 September 1997 the court heard evidence from the journalist H.P. The relevant part of her testimony reads as follows:
H.P.: “I regularly follow Government meetings as a journalist for Glas Slavonije. On that day, at the top of the staircase [of the building] where the Government meeting was held, I saw the plaintiff in the company of my colleagues .... I stopped and we started talking about computers, after which the plaintiff started talking about the article E.V. had published in Novi list. The plaintiff was angry on account of the article and ... said that E.V. should be killed and that she was a killer with a baby face. After that I went to the press room.
After I entered the room ... I sat in front of the computer and E.V. subsequently entered; we greeted each other, and I continued working. I noticed when the plaintiff entered the room but I did not notice when the security officer entered .... I heard raised voices. I was to the side of the plaintiff and E.V., who was sitting at the table. I heard some rustling, so I turned toward them and saw that the plaintiff was searching the security officer. I continued working but again raised voices drew my attention. I cannot say for certain whose voices these were. As far as I can say, I think the plaintiff and E.V. were talking. When I looked toward them I saw that the plaintiff was standing in front of E.V. and was holding a handgun in his right hand, and his right hand was leaning on the palm of his left hand... He said that journalists would be able to write that he had tried to kill E.V. Then S.Š. entered and said: 'Not E.V., she is good.' I got scared because I am afraid of weapons; I turned away and when I looked again the handgun was in the hands of S.Š.
Then I noticed that S.Š. was talking to the security officer about the handgun, but I did not notice when the plaintiff left the room. S.Š. then left the room and went to follow the Government meeting.
I remember that S.Š. told the security guard that her grandfather had a handgun like that.
After that we started following the meeting with other journalists.
I asked E.V. whether she would publish [the incident] in the newspapers and she said that she would not ....”
The plaintiff: “Was E.V. present when I said that she was a killer with a baby face?”
H.P.: “E.V. was not present at the time.”
The plaintiff: “What were my exact words?”
H.P.: “You said that, as for E.V., she should be killed, that she was a killer with a baby face.”
The plaintiff: “Did you ever convey those words ... to E.V.?”
H.P.: “I told [her] after the Government meeting was over.”
The plaintiff: “Why did not you do so before the meeting?”
H.P.: “I did not wish to talk about it with [her], and I thought that you would say something to her yourself. When I saw the handgun I realised that the situation was serious and after the meeting I retold the conversation to [her]”
The plaintiff's representative: “Could you describe exactly how the plaintiff searched the security officer?”
H.P.: “He was searching him on the upper part of his body, until the belt. After that I turned away and was working on the computer.”
The plaintiff's representative: “Did the plaintiff take the handgun from the security officer?”
H.P.: “I do not know.”
The plaintiff's representative: “Did the plaintiff point the handgun at E.V.?”
H.P.: “He did not point the handgun at E.V. I saw that the plaintiff's right hand, in which he was holding the handgun, was bent, but I did not see whether he was holding his fingers on the trigger.”
The plaintiff: “With how many hands was I searching the security guard? Was I holding something in my hands?”
H.P.: “You were using both hands. You were not holding anything in your hands.
The plaintiff's representative: “Did you see where the handgun went from the plaintiff's hands?”
H.P.: “I did not see. But I turned my head away and said: 'Put that away.'”
The plaintiff's representative: “Why did not you publish anything about the incident, given that you are a journalist?”
H.P.: “I asked E.V., who did not wish it to be published. Out of journalistic solidarity I could not publish it.”
17. At the same hearing the court also heard evidence from the chief editor of Globus, D.B. The relevant part of his testimony reads as follows:
D.B.: “I found out about the incident ... from the colleague who follows the Government meetings and reports on them. The editor of the Terminator [column in Globus] checked with the people from the Government. As we received similar information from them ..., we decided to go ahead with the text that was published in the Terminator column in Globus.
I did not personally verify anything, because that was the responsibility of the editors of specific columns in the newspaper.”
The plaintiff's representative: “Who were the people close to the Government with whom you checked the information published in Globus?”
D.B.: “It is not appropriate to discuss that, because if I reveal it now I will no longer have that source.”
The plaintiff's representative: “Did someone talk to the plaintiff about this matter?”
D.B.: “I do not know. I would have to ask the editor [of the Terminator column].”
The respondent's representative: “What was meant by the part of the text in which it was indicated that the handgun was pointed at the dumbfounded journalist?”
D.B.: “It was figurative; I do not think that the plaintiff literally pointed the handgun at E.V.”
...
The plaintiff: “Why did not you consider it necessary to address me personally in order to verify the accuracy of the allegations concerning the handgun?”
D.B.: “Because the editors of specific columns bear the responsibility for those columns.”
18. The court then heard evidence from B.Š. as the plaintiff. The relevant part of his statement reads as follows:
B.Š.: “On that day, while walking down the corridor to my room, I met the journalists D.K. and H.P., who usually followed Government meetings. On that occasion D.K. asked me when the next Government press conference would take place, to which I replied: 'What is the point in deceiving the public?'. D.K. asked if I had in mind E.V.'s article. I replied that I had been hurt by E.V.'s article, which implied that I was deceiving the public... After that E.V. came, and we discussed her article in her presence. I said: “I can understand that you do not like me but I cannot understand that you are writing such things.” I considered her a very responsible journalist, because she had previously published an interview with me, which was, in my opinion, very fair.
At that point I saw minister M. who was coming to the Government meeting... I said 'Here is the killer with a baby face', referring to minister M.
After that I went to my office to pick up the documents for the Government meeting.
...
B.Š. then described the incident in the press room:
“... Shortly afterwards, security officer D.P., whom I knew, entered the room. ... [He] said that he had an order to take me to the Prime Minister, to which I replied asking if he had come to take me or apprehend me, whereupon he said that he did not mind, so long as he complied with his order. At that moment I patted him on his jacket on the right side and, since it was visible that he had a handgun in the inside pocket, I said: 'You have the power.' D.P. ... took out the handgun, saying 'Here are the arguments.' At that point I heard a female voice – I am not certain whether it was H.P.'s voice – saying: “Do not play with weapons!”, at which I said: 'You should put that away, otherwise the newspapers will write about it.'
I said that because we were among journalists. I never held the handgun in my hands. I had the documents for the meeting and in my right hand I had a cigarette. I had never put those documents away. It is not true that I was searching the security officer with both hands.
After I said that to the security officer, E.V. showed up and said: 'Just so that you know, I will publish that.' I did not reply ... because I was not certain whether she was serious or was joking, and left the room.
I was present when S.Š. came and commented on the security officer's handgun, saying something like: 'My grandfather has a better handgun.'
...
It was not until Wednesday that I was informed that Globus had published a text mentioning that I had threatened the journalist E.V. I simply failed to react ... out of naivety, because I expected that one of the journalists [who had been] present would write ... what had actually happened and state that the incident had not been the way it was described in Globus.
...
None of the authors of the texts that are the subject of these proceedings called me concerning the incident, in order to talk to me or get a statement from me.”
The judge: “Did you address E.V. in the press room?”
B.Š.: “I did not address her. As I said, she addressed me first when she said that she would publish that. It is not true that I said that E.V. was a killer with a baby face and that she should be killed.“
...
The respondent's representative: “Why did you enter the press room?”
B.Š.: “I cannot say for certain. I assume that I entered to tap [the ashes] off my cigarette or because I was talking to someone.“
...
The respondent's representative: “Did you see it as normal for the security officer to take out his handgun?”
B.Š.: “I felt uneasy. Especially with the journalists in the room.”
...
The respondent's representative: “Do you remember what S.Š. said when she entered the room?”
B.Š.: “I do remember. ... The first words she said were: 'Not E.V., she is good.'
The respondent's representative: “Did you understand that these words were addressed to you?”
B.Š.: “At that moment I was not looking at S.Š. Given the phrase 'E.V. is good', those words could have been addressed to anyone in the press room.”
19. At the hearing on 10 December 1997 the court heard evidence from the author of the article, the Globus journalist N.T. The relevant part of his testimony reads as follows:
N.T.: “I had obtained the information I wrote about in Globus from E.V. on the day after the incident – actually, I am not certain that it was the next day – in the café at the Parliament. E.V. was sitting with a colleague and I found them talking. She was excited. I asked her what was going on, after which she told me about the incident that had occurred in the Parliament, when the plaintiff had addressed her on the staircase about the article she had written and had threatened to kill her. This is what she said. He had been verbally attacking her. He had continued to follow her to the press room and had continued with verbal attacks, even though, as E.V. told me, he had been trying to do so jokingly. Among journalists the plaintiff is known for his specific sense of humour.
When I speak of the plaintiff's specific sense of humour, I mean that he is not willing to accept journalists' criticism, and reacts vehemently to texts concerning him. For the most part, he reacted [to E.V.'s text] jokingly. E.V. then told me that during these verbal attacks the plaintiff had asked for a handgun from the security officer, saying 'Give me the handgun!' and pointed it at E.V. while saying: 'What should I do now? Should I kill her?'
I tried to check this information by contacting the plaintiff's office. It was Tuesday, the day on which the edition closes, and the deadlines were running out. I tried to reach the plaintiff a few times but did not succeed because, as his secretary told me, he was unavailable.”
...
The judge: “To whom did you pass the information?”
N.T.: “I cannot remember with certainty but I think to Mr G., the editor of the Terminator column.”
The judge: “Did you really believe, on the basis of E.V.'s statement, that the plaintiff had threatened her or tried to kill her?”
N.T.: “Of course I did not, nor did E.V. say that. She described it as an inappropriate joke, and I understood it that way. Since she is a colleague whom I have known for many years I accepted her statement as being true. The text was published in Terminator column precisely because it was a joke, otherwise it would have been published on the front page.”
The judge: “Did you believe that the information was true because you got it from E.V.?”
N.T.: “It is difficult for me to reply to that question. She is a person that I know well, who is almost my friend, and that is why I accepted the information.”
...
20. At the same hearing the court also heard evidence from the Novi list journalist J.V., who was the President of the Croatian Journalists Association at the time. The relevant part of her testimony reads as follows:
J.V.: “I got the information ... from E.V., and from [my] conversation with H.P. and S.Š.
...
As regards E.V., she told me that on that day she had met the plaintiff on the staircase of the Parliament... The plaintiff had reacted vehemently to the article she had written on the budget, and had said ... angrily that she was a killer with a baby face and should be killed. After that he had followed her to the press room ..., had taken a handgun from the security officer, and had pointed it at [her]. From the conversation with S.Š. I found out that [she] had entered the press room when the plaintiff was holding the handgun in his hand. According to S.Š., it was a tense and uneasy situation so she took the handgun from the plaintiff's hands in order to calm the situation and said that she had already seen such a handgun. ... When taking the handgun S.Š. said: 'Not E.V., she is good.'”
...
The plaintiff's representative: “When did you talk to E.V. and find out [about the incident]?”
J.V.: “About seven or five days after the incident, the day before [the information] was published in Globus.”
21. In her written statement the journalist R.I. stated that she had heard that the security officer involved in the incident had been dismissed for allowing a third person to take his official handgun. Since she was unable to obtain either confirmation or denial of that information from the Parliament or the Government, she decided to call S.Š., who had witnessed the incident. The relevant part of R.I.'s statement reads as follows:
“I called my colleague S.Š. and told her what I wanted to know. She was unable to confirm the veracity of my information. On the contrary, she claimed that it was not correct and, in a ten-minute telephone conversation, told me the following:
'Unbelievable! Everybody is writing about the incident between B.Š. and E.V. as if they were personally present. I wanted to tell you that you are the first journalist who has called me for information... I was really the right person, since I saw what happened. I was standing next to B.Š. and E.V. when they were discussing her recently published article on the Deputy Prime Minister [i.e. B.Š.]. I did not have the impression that they were arguing. At one point the Deputy Prime Minister B.Š. took the handgun from the security officer in his hands and said rather jokingly: 'What should I do to her? Should I kill her?' And that was all. None of us present understood it as a threat, nor did I think that something could happen to... E.V. I was surprised that she published it at all in Novi list.'”
22. On 27 February 1998 the Zagreb Municipal Court gave judgment, partially granting the plaintiff's claim. It ordered the applicant company to pay B.Š. 100,000 Croatian kunas (HRK) as compensation for non-pecuniary damage, together with the statutory default interest running from the adoption of the judgment until payment, and HRK 14,640 in costs.
23. In its reasoning, the court held that the published information had been untrue and that the applicant had not properly verified its accuracy. In particular, it found that B.Š. had not held the handgun in his hands during the described incident, since this had been confirmed by the testimonies of two eyewitnesses, D.P. and S.Š., and by B.Š. himself. Although the two remaining eyewitnesses, E.V. and H.P., testified that the handgun had indeed been in B.Š.'s hands, the court did not find their testimonies convincing, on the ground that they differed. The relevant part of the judgment reads as follows:
“As to ... whether the plaintiff ... took the official handgun from the security officer in the press room and threatened E.V. with it, the court ... heard evidence from the plaintiff ... and witnesses E.V., D.P., H.P. and S.Š.
The plaintiff and witnesses D.P. and S.Š. stated in their testimonies that the plaintiff had not had D.P.'s official handgun in his hands. Witness E.V. testified that, while reading the documents for the forthcoming session, she had at some point looked up and seen the plaintiff ... holding the handgun in the palm of his hand, after which the journalist S.Š. had come in and had taken the handgun, saying 'Not E.V., she is good'. In reply to the question from whom [S.Š.] had taken the handgun, the plaintiff or D.P., witness E.V. could not reply with certainty, explaining that it had all happened relatively quickly and that she had been shocked to see the handgun in the plaintiff's hands, since she had seen this as a personal threat.
Witness H.P. in her testimony also stated that ... she had seen the plaintiff searching the security officer D.P., after which the plaintiff had held the handgun in the palm of his right hand, which he had been holding ... on the palm of his left hand. According to [her] testimony, the plaintiff was at that moment talking to E.V. with a raised voice.
The court does not accept the testimonies of E.V. and H.P., because they are not convincing. E.V. expressly stated that in the press room she had neither talked to the plaintiff nor had [he] addressed her, whereas witness H.P. stated that the plaintiff and E.V. had talked with raised voices.
Witness E.V. said that the plaintiff had had the handgun on the palm of his right hand, whereas H.P. testified that he had been holding [it] with both hands, that is, that one palm had been resting on the other. E.V. was unable to say from whom S.Š. had taken the handgun, whereas H.P. stated that she had taken it from the plaintiff's hands.
On the other hand, the testimonies of S.Š., D.P. and the plaintiff ... are in concordance ... From the testimony of the plaintiff and D.P. it follows that while in the press room the plaintiff was holding the documents for the forthcoming session under his left arm, so it was not possible that he was holding the handgun in his hand [at the same time], as ... H.P. testified.
This court does not accept the written statement ... by R.I. or the testimony of J.V., because they were not present during the incident and have no direct knowledge of it. It is to be noted that R.I.'s written statement and the testimony of J.V. concerning S.Š.'s testimony... are completely contradictory and different, for which reason the court does not accept them as convincing.
...
Given that the plaintiff was acquitted by a final judgment in criminal proceedings on a charge of ... having told E.V. on 26 January 1996 'you should be killed', and of having taken the handgun afterwards from the security officer D.P. and held it in his hand, and having regard to the testimonies of witnesses S.Š., D.P. and the plaintiff himself..., and even E.V. herself, this court finds that on the critical [date] the plaintiff did not threaten E.V., nor did he say on the same occasion that ... she should be killed. For that reason the conditions set forth in section 23(1)3 of the [Public Information] Act for exonerating the [respondent] from liability to pay damages are not met, in that the information causing the damage is not based on true facts. The court also establishes that the conditions for exculpation of the publisher – according to which the publisher is to be exonerated from liability if the information causing damage is based on facts which the author had reasonable grounds to believe were true and with regard to which it took all necessary measures to verify their accuracy – were not met either.
In this respect the court ... heard evidence from witnesses ... D.B. and N.T. ...
D.B. stated that he had not checked the accuracy of the published information, whereas N.T., as the author of the article, ... stated that he had obtained the information from E.V. [N.T.] testified that he had contacted the plaintiff's office in order to verify the information, but had been unable to reach the plaintiff, who was very busy, and that, given the source of the information, he had considered [it] accurate.
...
The court therefore finds that the [respondent] did not, as provided by section 23(1)3 of the [Public Information] Act, take all necessary measures to verify the accuracy of the information..., for which reason the conditions for [its] exculpation [were not met] in the present case.
...
The court finds that by [publishing] the disputed text the [respondent] harmed the dignity, honour and reputation of the plaintiff, and that therefore there is a legal basis for [awarding the] compensation for non-pecuniary damage sought by the plaintiff.
According to the information in the case file, it is established that the circulation of Globus is 185,000 copies ...
In deciding on the amount claimed by the plaintiff and the damages to be awarded ... for his mental pain, the court took into account the circulation of [Globus], ... the way in which the article was worded, and ... the fact that the plaintiff is a public figure who must as such accept the fact that not all members of the public are favourable towards him, [for which reason] his reactions to negative reviews must be different from that of an ordinary person. ... [G]iven that Globus first wrote on the incident ... of 26 January 1996 in a manner which, in the view of this court, harmed the plaintiff's dignity, reputation and honour, the court awards [him] 100,000 [Croatian] kunas together with the statutory default interest from the adoption of the judgment until payment, as just satisfaction for the damage sustained... The remainder of the plaintiff's claim, in the amount of 400,000 [Croatian] kunas, is dismissed as unfounded.”
24. On appeal, on 1 December 1998 the Zagreb County Court (Županijski sud u Zagrebu) upheld the first-instance judgment but reduced the amount of damages payable to B.Š. to HRK 60,000 and the costs to HRK 8,784.
25. The applicant company then lodged an appeal on points of law (revizija) against the second-instance judgment. On 19 December 2002 the Supreme Court (Vrhovni sud Republike Hrvatske) dismissed the applicant company's appeal on points of law, endorsing the reasons given by the lower courts in their judgments.
26. Finally, on 23 November 2005 the Constitutional Court (Ustavni sud Republike Hrvatske) dismissed the applicant company's subsequent constitutional complaint, finding no violation of its constitutional right to freedom of expression. The relevant part of the decision reads as follows:
The Constitutional Court found that the complainants' constitutional rights guaranteed by Article 38(1) and (2) of the Constitution had not been breached by the impugned judgments.
Constitutionally guaranteed freedom of expression of thoughts, which includes the freedom of the press, is not absolute but is subject to restrictions prescribed by Constitution or statute.
Those restrictions stem, in respect of the media, from the ... Public Information Act ...
Having regard to the findings of the [lower] courts that the complainant harmed the plaintiff's dignity, reputation and honour by publishing incorrect information and that he is ordered by the impugned judgments to compensate the plaintiff for the damage caused thereby, the complainant's reliance on Article 38(1) and (2) is unfounded.
As regards the provisions of Article 10 of the Convention, according to which the exercise of freedom of expression carries with it duties and responsibilities and may be subject to restrictions, the Constitutional Court notes the following:
Freedom of expression represents one of the important foundations of every democratic society. Its protection is of special significance where the press is concerned because the latter's task is, inter alia, to publish information of public importance. However, the freedom to publish information in the press is circumscribed by the protection of the dignity and reputation of other persons. It is therefore important to determine the conditions under which the State authorities may take measures which could impinge on the activity of the press in cases of legitimate public interest.
Freedom of expression of thoughts concerns not only the publication and expression of information with positive connotations, but also the publication of information which may resonate negatively in the public. However, freedom of the press is not absolute, but is subject to certain restrictions, even in respect of press articles which concern information of public interest. These duties and responsibilities come into play also when, as in the present case, the reputation of a State official is harmed. It is precisely because of these duties and responsibilities of those who exercise their right to freedom of expression that the press, when imparting information of public interest, is bound to act in good faith in order to provide trustworthy information in accordance with the ethics of journalism.
In assessing whether freedom of expression has been breached it is necessary to view each individual case in the light of all the circumstances, including the content of the impugned statements, as well as the context in which they were made. In particular, it is necessary to establish whether the measures taken in order to restrict freedom of expression are proportionate to the legitimate aim pursued by that restriction. The protection of a State official from harassment must however respect the right and the interest of the press to free reporting and allow it to impart freely information of public interest.
The article for which the [complainant] was ordered to pay damages to the victim is, by its content, of such a nature that it constituted an attack on the victim as a public figure, in particular on his reputation, and it certainly influenced public confidence in him, given his function as Deputy Prime Minister of the Government of the Republic of Croatia at the time. The Constitutional Court, in this particular case, and on the basis of the findings of the [lower] courts, finds that the impugned article contained allegations on the behaviour of another individual (public figure), which harmed [his] reputation...
It has to be noted that the impugned allegations were based on the statement of one individual and were not completely arbitrary in nature. Namely, even if a public figure was involved, the complainant was required to verify the accuracy of the information before its publication. This is especially so because the impugned allegations related to a specific incident. The [lower] courts found that the [complainant], in publishing information which could have harmed the dignity, honour and reputation of another person, had not taken all necessary measures in order to verify its accuracy.
Given that the [complainant] in this case did not satisfy its duty to verify the information before publication, as ... it was required to do, and given that the information harmed the reputation and honour of another person, the Constitutional Court considers that the measures restricting the [complainant's] freedom of expression were necessary and justified.
As regards the compensation for non-pecuniary damage awarded for harming the reputation of another person, the Constitutional Court emphasizes that the courts have discretion in assessing the amount of compensation for mental pain sustained by the victim, having regard to the circumstances of each case. However, a judicial decision on the amount of such compensation may also breach the principle of proportionality between the intensity of the interference by the courts with freedom of expression and the importance of the interest pursued by the restriction of that freedom.
The Constitutional Court finds that the measure taken to protect the reputation of another person, that is, the award of damages in the above-mentioned amount, is proportional to the intensity of the breach of that person's reputation, and to the intensity of the interference by the courts with the freedom of expression caused by that measure. Given that the complainant as a publishing house did not comply in its activities with the provisions of the [Public Information Act], the Constitutional Court considers that the article tarnished the reputation of another person and undermined the public confidence in that person as a State official.
Therefore, it is established that the measure taken in this case to restrict the freedom of the press is, taken as a whole, proportional to achieving the legitimate aim – the protection of the reputation of another person, and that the impugned judicial decisions did not lead to a restriction of the complainant's rights or freedoms, contrary to Article 16 of the Constitution.
The Constitutional Court's decision was served on the applicant company's representative on 8 December 2005.
27. The relevant part of the Constitution of the Republic of Croatia (Ustav Republike Hrvatske, Official Gazette nos. 56/1990, 135/1997, 8/1998 (consolidated text), 113/2000, 124/2000 (consolidated text), 28/2001 and 41/2001 (consolidated text), 55/2001 (corrigendum)) provides as follows:
“(1) Rights and freedoms may be restricted only by law in order to protect the rights and freedoms of others, the legal order, public morals or health.
(2) Every restriction of the rights and freedoms should be proportional to the nature of the necessity for the restriction in each individual case.
“(1) Freedom of thought and expression shall be guaranteed.
(2) Freedom of expression shall include in particular the freedom of the press and other media, freedom of speech and public expression, and free establishment of all media institutions.
(3) Censorship shall be forbidden. Journalists shall have the right to freedom of reporting and access to information.
(4) The right to correction shall be guaranteed to anyone whose rights guaranteed by the Constitution or a statute were breached by public information.”
28. Sections 199 and 200 of the Obligations Act (Zakon o obveznim odnosima, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/1978, 39/1985 and 57/1989, and Official Gazette of the Republic of Croatia no. 53/1991 with subsequent amendments – “the 1978 Obligations Act”) provided, inter alia, that anyone who has suffered mental anguish as a consequence of an injury to his or her honour or reputation may, depending on its duration and intensity, sue for damages before the civil courts and, in addition, request other forms of redress “which may be capable” of affording adequate non-pecuniary satisfaction.
29. The relevant part of the Public Information Act (Zakon o javnom priopćavanju, Official Gazette nos. 83/96, 143/98 (corrigendum), 96/01 (amendments) and 69/03 (consolidated text)), as in force at the material time, provided:
“(1) A publisher who causes damage to another person by publishing certain information in the media shall be obliged to compensate it.
...
(4) Non-pecuniary damage shall be compensated by correcting false information, by publishing a correction of the information and an apology, and by payment of just satisfaction for sustained pain and anguish, if their duration and intensity so justify, in accordance with the general provisions of civil law.
(5) Non-pecuniary damage shall be compensated by a publisher who, through information about personal or family life, or by any other information published in the media, violated another person's privacy, dignity, reputation, honour or any other constitutionally or statutorily protected right.”
“The publisher shall not be liable in damages:
...
3. if the information causing the damage is based on:
- true facts, or
- facts which the author had reasonable grounds to believe were true and undertook all necessary measures to verify their veracity, provided there existed a legitimate public interest in publishing such information and the author acted in good faith,
...”
30. The relevant part of the Code of Ethics of Croatian Journalists (Kodeks časti hrvatskih novinara, of 27 February 1993, applicable at the material time, reads as follows:
“A journalist is bound to publish true, balanced and verified information. He or she shall indicate persons or institutions from which he or she obtained data, information or statement. He or she has a right not to disclose the source of information, but for published information bears moral, material and criminal responsibility.”
NON_VIOLATED_ARTICLES: 10


ITEMID: 001-86010
LANGUAGEISOCODE: ENG
RESPONDENT: UKR
BRANCH: ADMISSIBILITY
DATE: 2008
DOCNAME: PETROL v. UKRAINE
IMPORTANCE: 4
CONCLUSION: Inadmissible
JUDGES: Isabelle Berro-Lefèvre;Karel Jungwiert;Mark Villiger;Mirjana Lazarova Trajkovska;Peer Lorenzen;Renate Jaeger;Volodymyr Butkevych
TEXT: 1. The applicant company, MPP Petrol (Мале приватне підприємство “Петрол”), was a Ukrainian privately owned enterprise that was registered in Mukacheve. On 8 May 2003 its registration was annulled and it was struck off the State register of enterprises as it had been declared insolvent. It is represented before the Court by Mr Tsytsey and Ms Sokolova, respectively, the applicant company’s former director and sole owner (“the Director”) and the applicant company’s former deputy director (“the Deputy Director”; hereinafter together – “the Directors”).
2. The Ukrainian Government (“the Government”) are represented by their Agent, Mr Zaytsev.
3. The facts of the case, as submitted by the parties, may be summarised as follows.
4. On 13 January 1998 the Mukacheve State Tax Inspectorate (the “Inspectorate”) ordered that the applicant company’s accounting records for the period of 1997 be inspected for compliance with tax regulations. As a result of the inspection, held from 13 to 19 January 1998, the Inspectorate issued two decisions: nos. 26-87/2 of 19 January 1998 and 26-87/11 of 12 March 1998. On 26 January 1998 the Inspectorate found violations of the procedure for keeping incoming cash records and ordered the applicant company to pay a fiscal penalty in the amount of 505,060 Ukrainian hryvnyas (UAH). On 21 March 1998 it ordered the applicant company to pay in fiscal penalty of UAH 2,332,850 and UAH 79,150.
5. On 17 March and 27 August 1998 the Regional Tax Administration upheld the decisions taken in the context of the tax inspection. On 22 and 25 May and 28 July 1998 the State Tax Administration of Ukraine rejected similar complaints as unsubstantiated.
6. On 20 March 1998 the Zakarpatsky Regional State Control and Revision Service (Державне Контрольно-Ревізійне Управління; the “Revision Service”) ordered the applicant company to pay UAH 9,596 as a penalty for infringement of financial regulations.
7. On 21 December 1998, 21 December 1999 and 14 April 2000 the Zakarpatsky Regional Court of Arbitration (“the Arbitration Court”) declared null and void, respectively:
- the orders of the Inspectorate of 26 January and 21 March 1998 (decision upheld on 18 March 1999 by the President of the Arbitration Court);
- the order of the tax authorities for the payment of UAH 79,150;
- the order of 20 March 1998 of the Revision Service.
8. On 20 January 1998 the Mukacheve Prosecutor’s Office (“the Prosecutor’s Office”) initiated criminal proceedings against the Directors, suspecting them of being involved in tax evasion. Subsequently, criminal proceedings were initiated on other charges against them - fraud committed by an official of the company, tax evasion, financial fraud, corruption and misappropriation of company property.
9. On 7 October 1998 the Mukacheve City Court remitted the indictment against the Director to the Mukacheve Prosecutor’s Office for additional investigation, having noted that the investigation was incomplete and did not comply with procedural regulations. The remittal was upheld by the Zakarpatsky Regional Court on 11 November 1998. It also partly revised it, in relation to the alleged absence of unlawful intention on the part of the accused to evade tax, and confirmed that the charges had not been duly corroborated. The Directors signed an undertaking not to abscond.
10. From December 1998 to May 2000 the Mukacheve Prosecutor’s Office and the Zakarpatsky Regional Prosecutor’s Office (“Regional Prosecutor’s Office”) reopened and suspended investigations for various procedural reasons. The charges against the Directors were amended on several occasions.
11. On 14 August 2000 the criminal investigation against the Directors in relation to tax evasion episodes was terminated as the fiscal sanctions imposed by the Inspectorate had been declared null and void by the Arbitration Court (see paragraph 7 above). New criminal proceedings were instituted in respect of forgery committed by an official of the company, which were joined to the original proceedings.
12. On 23 September 2000 the prosecutor in charge of the case filed a new bill of indictment against the Deputy Director on charges including abuse of power, forgery committed by an official, tax evasion and embezzlement. On 30 November 2000 the bill of indictment was lodged with the Mukacheve City Court. The Director was indicted for forgery committed by an official, theft and financial fraud.
13. On 18 June 2001 the Mukacheve City Court remitted the case to the Regional Prosecutor’s Office for additional investigation as it held, inter alia, that the investigation had failed to comply with the Code of Criminal Procedure and the court’s resolution of 7 October 1998. On 20 August 2001 the remittal was upheld on appeal.
14. On 24 October and 14 December 2001 the Regional Prosecutor’s Office filed new bills of indictment concerning the Directors and lodged them with the Mukacheve City Court. In particular, the Deputy Director was charged with forgery committed by an official and abuse of power. The Director was charged with forgery committed by an official, abuse of power and financial fraud.
15. On 5 January 2002 the case file, with the indictment against the Deputy Director on charges of financial fraud, abuse of power and forgery committed by an official, and the indictment against the Director on charges of financial fraud, abuse of power and forgery committed by an official, was referred to the Mukacheve City Court for preliminary examination.
16. On 16 July 2004 the Mukacheve City Court, in the presence of the accused, their two representatives and the prosecutor, found the Directors guilty of document forgery and financial fraud. The Court decided not to convict them as the limitation period had expired, acquitted them of the remainder of the charges and ordered “the return of the material evidence as relevant”. No appeal was lodged against this judgment and it became final.
17. On 13 and 22 January 1998 the Inspectorate and Assistant Prosecutor, respectively ordered the seizure of the banking documents, main record book, cash registers, invoices, receipts, agreements and other accounting documents of the applicant company for the period from 1 January 1997 to 1 January 1998 and the accounting records of the applicant company for 1996. These documents were added to the case file.
18. On 14 January 1998 the Inspectorate requested the JSC Zakarpatnaftoprodukt-Mukachevo (“Z.M.”) to store 993,938 kg of diesel bought by the applicant company from a private company, JSC Galychyna-Kyiv (“G.K.”). On 16 January 1998 the Inspectorate informed the applicant company of the transfer of these products to G.K. as they had not been paid for.
19. On 21 January 1998 the Assistant Prosecutor of Mukacheve (the “Assistant Prosecutor”) ordered the attachment of all of the applicant company’s and the Director’s property, in order to secure compensation for damage allegedly caused by their unlawful activities, which amounted to UAH 25,278. On 26 and 27 January 1998 the Inspectorate seized petroleum products belonging to the applicant company from three different locations:
- petrol station AZS MPP Petrol, the village of Chmonin;
- petrol station no. 2, Mukacheve (AZS MPP Petrol);
- petrol store of the MP “Erko” (a private enterprise).
20. On 27 January 1998 the Inspectorate attached diesel, petroleum and motor oil stored with Z.M. (The applicant company alleged that the petrol stations in Chmonin and Mukacheve, where the products were stored, were in a “natural disaster zone” and had been destroyed by natural disaster, as allegedly stated in the notice issued by the Zakarpatsky Regional Chamber of Trade and Commerce of 29 December 1999. The applicant company mentioned that products stored at MP Erko had also disappeared).
21. On 13 February 1998 the Assistant Prosecutor ordered a search of the private joint household of the Directors. The search resulted in the seizure of documents relating to the activities of the applicant company.
22. On 24 February 1998 G.K. and the private company OJSC “APPEK” were declared “civil plaintiffs” in the criminal proceedings. On the same date the Assistant Prosecutor made a report on the transfer of diesel, petroleum and oil to storage by G.K. (G.K. had previously requested the Mukacheve Prosecutor’s Office to declare it a “civil plaintiff” and to order a transfer of petroleum products stored at Z.M.’s premises to it, allegedly for recovery of the applicant company’s debts for petroleum supplied in 1997.) The applicant company and G.K. signed the decisions on transfer of these products to G.K. They were transferred to this company under bills of transfer, with the application of Incoterms provisions traditionally used in commercial activities for contracts on sale of goods (see paragraph 105 below). (Later, on 17 September 1999, at G.K.’s request, the applicant company signed a verification of debt record, which confirmed the applicant company’s debts to G.K. of UAH 560,385.33.)
23. On 14 May and 31 May 1998 the JSC Ukrbudresoursy (a private company) and the Revision Service were also declared civil plaintiffs.
24. On 24 and 25 May 1998 the Assistant Prosecutor allowed the Deputy Director’s requests for access to the accounting documents seized and for an additional forensic economic examination in the case. He also ruled that the documents seized, including accounting documents for 1997, were material evidence and a part of the criminal case file.
25. On a number of occasions throughout the criminal investigation, and in particular from 9 January 1999 to November 2001, the Mukacheve Prosecutor’s Office and the Zakarpatsky Regional Prosecutor’s Office informed the applicant company that:
- the documents seized could not be returned as they were part of the case file, but that the Directors were not prohibited from copying them;
- the petroleum products seized had been transferred to G.K. for storage;
- it was not possible to terminate the criminal proceedings;
- it was not possible to lift the attachment on property and documents, including accounting records, and return them, as they were material evidence.
26. On 16 April and 8 December 1999 and 11, 14 and 25 January 2000 the applicant company lodged several complaints with the President’s Administration, the Ministry of Justice, the Prosecutor General’s Office and the Regional Prosecutor’s Office, of unlawful seizure of accountancy documents and requesting their return. In particular, it made unsuccessful requests to:
- have the documents returned for completion as some formal information was missing from them, such as signatures, seals and so on;
- be recognised as a “civil plaintiff” in the criminal investigation and to have the prosecutor’s office which had seized documents designated a “respondent”.
27. On 17 and 27 January 2000 the Regional Prosecutor’s Office stated that the Directors’ access to the accounting records was not limited as they had been able to familiarise themselves with the case file from 11 to 17 January 2000.
28. On 27 December 2000 and 29 October 2002 the applicant company unsuccessfully requested the Mukacheve City Court to annul the attachment of its property and the Directors’ private property.
29. On 16 July 2004 the Mukacheve City Court ordered the return of material evidence “as relevant” (see paragraph 16 above).
30. On 3 April 2000 the Arbitration Court returned the applicant company’s claim of 29 March 2000, in which it had sought damages and loss of profit from the Inspectorate as “not lodged” because of its failure to pay the court fee (amount claimed UAH 26,618,690.60). It also ruled that the company had failed to pursue a pre-arbitration settlement procedure.
31. On 15 April 2000 the applicant company lodged a request for pre-arbitration settlement with the Inspectorate, demanding damages and compensation for loss of profit in the amount mentioned in paragraph 30 above. On 5 September 2000 the Inspectorate disagreed with the request for settlement, finding it unsubstantiated, both as to form and content.
32. On 8 May 2000 the applicant company lodged its claims with the Arbitration Court again and requested it to declare unlawful the verbatim reports on the seizure of documents and attachment of property by the Inspectorate on 13 and 27 January 1998 (see paragraphs 17 and 20 above).
33. On 15 May 2000 the Arbitration Court refused to examine the applicant company’s claims as it had failed to pay the court fee for bringing the claims and thus had not complied with Article 63 of the Code of Arbitration Procedure (see paragraph 87 below). It also stated, referring to the recommendation of the Presidium of the Higher Arbitration Court of 26 January 2000, that these claims should be resolved in accordance with the Code of Criminal Procedure (see paragraph 99 below).
34. On 22 May 2000 the applicant company complained to the Mukacheve City Court that the tax authorities’ acts were unlawful and requested the court to annul the Inspectorate’s reports of 13 and 27 January 1998 (see paragraphs 17 and 20 above). On 30 May 2000 the court dismissed the applicant company’s complaint without examining it on the merits, finding that it had no jurisdiction to deal with it. The court indicated that complaints concerning criminal proceedings were to be examined by the courts of general jurisdiction, pursuant to Articles 24 and 248-1 of the Code of Criminal Procedure (see paragraph 76 below).
35. The applicant company appealed in cassation to the Zakarpatsky Regional Court. The first-instance court informed the applicant company that a hearing was scheduled on 15 June 2000 and ruled that the presence of its representative was not obligatory.
36. On 27 June 2000 the regional court, with no parties present and in a preliminary hearing, returned the appeal in cassation to the first-instance court without examining it. The court ruled that the Deputy Director had failed to provide a letter of authority and the case file was returned to the first instance court.
37. In August 2000 the applicant company lodged a complaint with the Mukacheve City Court, contending that the appeal in cassation had been properly lodged. In a letter of 11 August 2000 the Acting President of the Mukacheve City Court stated that the letter of authority had been sent to the Regional Court in order to be appended to the case file. He stated that the returned case file had had no letter of authority attached to it and requested a new letter of authority.
38. The parties have provided no information as to the outcome of these proceedings.
39. On 22 August and 11 September 2000 the Arbitration Court refused to examine three claims against G.K. lodged by the applicant company for annulment of the decision on the transfer of petroleum products from it to G.K. as they were beyond the jurisdiction of the arbitration courts (Article 12 of the Code of Arbitration Procedure). In particular, the “transfer decisions” were not “normative acts” within the meaning of this provision (see paragraph 85 below).
40. On 17 November 2000 the Kyiv Court of Arbitration refused to examine three new claims by the applicant company against G.K. by which it sought annulment of the transfer decisions mentioned above as the company had no legal capacity after having been declared insolvent: only the company’s liquidator could act on its behalf.
41. On 19 December 2000 the Kyiv Court of Arbitration, in a different composition, left the applicant company’s claims unexamined as they were unsubstantiated, meaning that the copy of the “transfer decision” did not provide evidence of a legal act, nor could it lead to a finding of the existence of a legal act.
42. On 18 September 2000 the applicant lodged a claim with the Arbitration Court against the Inspectorate seeking damages of UAH 35,095,760 for the Inspectorate’s unlawful actions.
43. On 25 September 2000 the Arbitration Court returned this claim without having examined it, under Article 63 § 3 of the Code of Arbitration Procedure (see paragraph 87 below), as the applicant company had failed to provide corroborating evidence in support of its claims for loss of income and to prove a causal link between the fiscal sanction and the damage alleged.
44. In October 2000 the applicant company lodged its claims again and on 2 October 2000 the Arbitration Court returned this claim for the same reasons as on 25 September 2000 (see paragraph 43 above).
45. On 22 and 29 December 1999 Z.M. informed the applicant company that it had been instructed by G.K. to sell the petroleum products and that the seized petroleum products had been transferred to that company.
46. On 12 May 2000 the applicant instituted proceedings in the Arbitration Court against G.K., seeking the return of the petroleum products or reimbursement of their cost. On 18 May 2000 the Arbitration Court returned these claims as not having been lodged, without having examined them on the merits, as the applicant company had failed to substantiate the sum claimed and had not paid the court fee.
47. On 24 August 2001 the Directors complained to the Mukacheve City Court against the Mukacheve Prosecutor’s Office, seeking a declaration that the actions of the Prosecutors’ Office were unlawful and requesting compensation for pecuniary damage. The outcome of these proceedings, which apparently were not pursued, is unknown.
48. On 10 November 1999 the Inspectorate lodged an application with the Arbitration Court seeking to declare the applicant company insolvent.
49. On 15 November 1999 the Arbitration Court assumed jurisdiction over the case and instituted liquidation proceedings against the company, prohibiting the sale of its assets.
50. On 3 April 2000 the Arbitration Court requested the parties to provide it with additional information on the case and ordered that the applicant company should be managed by an insolvency officer, D.M.A., (арбітражний керуючий) who should analyse the company’s finances, and attach its property and prohibit its sale. The court also prohibited enforcement of any claims of creditors against the company, except those allowed by section 12(4) of the Insolvency Act (salary- and social-related payments).
51. On 7 April 2000 D.M.A. issued an order prohibiting any actions with regard to the company or its assets.
52. On 16 June 2000 the Arbitration Court, in the presence of the Deputy Director, representatives of the applicant company’s creditors and D.M.A., ordered the Inspectorate to publish information on the initiation of the liquidation proceedings. D.M.A. was ordered to draw up a list of creditors. The next hearing was scheduled for 5 September 2000.
53. On 25 September 2000 the Arbitration Court, in the presence of the Deputy Director, approved the list of the company’s creditors, consisting of the Inspectorate, G.K. and the Uzhgorod Branch of Ukrsotsbank. It approved the list of their financial claims and ordered the creditors to meet on 12 October 2000. D.M.A. had to inform the court of the results of the meeting and to provide the court with a final register of creditors’ claims. In particular, the court noted that the claims of G.K. amounted to UAH 450,843.30 and had not been challenged by the Deputy Director in the course of the hearing.
54. On 6 November 2000 the Arbitration Court declared the applicant company insolvent and initiated its liquidation, which had to be completed within twelve months. D.M.A. was appointed as the company’s liquidator and was ordered to publish information about the applicant company’s insolvency, to form a liquidation commission and to finalise the liquidation procedure. The applicant company had to provide the liquidator with all the documents, official seals and other property belonging to it by 17 November 2000. The liquidator had to provide a liquidation balance to the court by 5 November 2000.
55. On 21 November 2000 the Directors unsuccessfully requested the Arbitration Court to review and quash its own ruling of 6 November 2000.
56. On 17 September 2001 the Directors unsuccessfully requested the Regional Prosecutor’s Office to return the accounting records, which from their point of view were necessary for finalising the liquidation, and to lift the attachment of the petroleum products so as to have them included in the register of the liquidated company’s property. (According to the applicant this request remained unanswered.)
57. On 18 September 2001 the Directors instituted proceedings against the liquidator in the Zakarpatsky Regional Commercial Court (formerly the Arbitration Court; hereafter “Commercial Court”) seeking to declare unlawful his failure to include the seized petroleum products in the register.
58. By a ruling of 28 September 2000, which apparently was adopted on 28 September 2001, the Commercial Court approved the liquidation balance and the liquidator’s report. The court ruled that the company should be liquidated, that the relevant State authorities and the company’s management should be informed of the court’s ruling and the termination of the proceedings.
59. On 17 October 2001 the Directors appealed against the ruling of 28 September 2001 to the L’viv Commercial Court of Appeal. They also requested that the ruling of 6 November 2000 be quashed and the time-limit for lodging an appeal be extended, alleging that they had received that ruling late.
60. On 29 October 2001 the L’viv Commercial Court of Appeal, composed of three judges, dismissed the applicant company’s request for the extension of the time-limit as it had been lodged outside the statutory time-limit of three months under Article 91 of the Code of Commercial Procedure. It also returned the appeal of 17 October 2001 to the applicant company, without examining it on the merits.
61. On 24 November 2001 the applicant company appealed in cassation to the Higher Commercial Court, seeking to have declared null and void the rulings of 28 September 2001 and 6 November 2000. In particular, it alleged that the liquidator had failed to include the property seized by the prosecutor’s office in the liquidation report. The company noted a technical mistake in the year of the ruling dated 28 September 2000, which in fact had been adopted on 28 September 2001. It alleged that a request for extension of the time-limit had been lodged with the Higher Commercial Court.
62. On 9 January 2002 the Higher Commercial Court informed the applicant company that the appeal in cassation had been wrongly lodged, as it should have been sent through the first instance commercial court.
63. On 6 March 2002 the Higher Commercial Court refused to examine the applicant company’s appeal in cassation as it had failed to comply with the requirements of Chapter XII of the Code of Commercial Procedure in that the company had failed to pay the court fee for lodging the appeal (see paragraphs 91 – 94 below).
64. On 14 May 2002 the Higher Commercial Court dismissed the applicant company’s appeal in cassation as it had not complied with the one-month time-limit envisaged by Article 110 of the Code of Commercial Procedure (see paragraph 95 below). The Court also informed the applicant company that no request for extension of this time-limit had been lodged.
65. On 20 June 2002 the Supreme Court remitted the applicant company’s appeal, without having examined it, to the Higher Commercial Court and eventually it was sent to the first-instance commercial court.
66. On 9 July 2002 the Higher Commercial Court again dismissed the applicant’s appeal in cassation as having been lodged out of time, finding that no request for extension had been lodged.
67. The applicant company alleged that it had lodged a request for extension of the time-limit, together with its appeal in cassation, with the Higher Commercial Court after the ruling of 9 July 2002.
68. On 27 October 2006 the Directors lodged compensation claims against the prosecution authorities with the Mukacheve City Court. They sought UAH 24,537,664 in pecuniary and non-pecuniary damage caused by the allegedly unlawful actions during the criminal investigation against them.
69. On 6 November 2006 the Mukacheve City Court left the aforementioned claims unexamined and returned them to the Directors, finding that they had not complied with the requirements of Article 119 of the Code of Civil Procedure. The claimants were asked to rectify these shortcomings before 15 November 2006. On 16 November 2006 the court returned these claims unexamined, for failure to comply with the court’s previous ruling.
70. The relevant provisions of the Constitution read as follows:
“Everyone shall have a right to compensation ... for losses sustained as a result of unlawful decisions, acts or omissions by public or municipal bodies or civil servants in the performance of their official duties.”
By virtue of Article 442 of the Code everyone has the right to compensation for damage caused by unlawful actions by State authorities.
71. Section 2 of the Enterprises Act envisages that private enterprises are commercial companies founded by private persons. The private enterprise has no distinct shareholding and particularised ownership of property, except if specified in the articles of its association, statute or other internal corporate regulations.
72. The private enterprise, in accordance with the Section 4 of the Property Act, is an object of a free exercise of property rights envisaged for any kind of privately owned property. The ownership rights and the rights and legal obligations of a founder of a private enterprise can also be transferred to other private persons on the basis of an agreement (this is confirmed in other normative acts and recommendations, such as the letter no. 4-422-329/7239 of 10 December 2001 of the State Committee on Entrepreneurship; Resolution no. 740 of the Cabinet of Ministers of 25 May 1998).
73. In accordance with Section 7 of the Property Act the owner of a private enterprise was not responsible for its legal obligations (letter no. 2222/1068 of 22 February 2002 of the State Committee on Entrepreneurship). The liability of an owner for debts of a private enterprise could only be established on the basis of its statute or articles of association or specific normative acts.
74. Section 13 of the Enterprises Act provides that the State must guarantee protection of enterprises’ property rights. Seizure of funds and property belonging to enterprises is only allowed in situations provided for by the law. Also, a decision to pay compensation for damage caused to an enterprise by the infringement of its property rights by citizens, legal entities or State bodies must be based on a judgment of a court or court of arbitration.
75. Sections 24 and 31 of the Enterprises Act stated that the private enterprise must, as all other legal entities, comply with the credit agreements and State tax and other payment obligations. A private enterprise that fails to comply with its financial obligations could be declared bankrupt in the course of ordinary insolvency proceedings and could be liquidated, as any other legal entity.
76. The relevant extracts from the Code can be found in Merit v. Ukraine, no. 66561/01, 30 March 2004 (Relevant domestic law and practice).
77. Pursuant to Article 80 of the Code of Criminal Procedure (the conditions for storage of material evidence), material evidence must be stored until the judgment or decision terminating proceedings in the criminal case becomes final. Documents that are material evidence must be stored together with the case file and interested persons or organisations can receive copies of these documents on request. If there is a dispute as to the right of ownership of the material evidence, this evidence must be stored until the final judgment is given in civil proceedings. Material evidence which could be damaged by storage and which cannot be returned to its owner must be transferred to State or “cooperative organisations” to be sold on. These organisations must, if necessary, return property similar to the material evidence sold or pay compensation for it in accordance with prices established by the State as pertaining at the time of return of that evidence.
78. Pursuant to Article 81 of the Code decisions relating to material evidence are to be taken by means of a judgment of the court in the criminal case or a ruling or a resolution of the court, body of inquiry, investigator or prosecutor (concerning termination of the proceedings in the case). Any dispute with regard to the return of material evidence must be decided in civil proceedings.
79. Pursuant to Article 126 of the Code, the seizure (attachment) of property belonging to a suspect or accused is intended to secure a possible civil claim and a ruling as to confiscation of property in the course of criminal proceedings. Attached property must be inventoried and can be transferred for storage to the representatives of enterprises, institutions, organisations or members of the accused’s family or other members. Persons who are responsible for storage of property must be informed about criminal liability for failure to comply with storage obligations which have been undertaken by them. Seizure of property and its transfer for storage are to be carried out on the basis of a substantiated resolution (постанова) that must be signed by the person who inventoried this property, witnesses to the seizure of the property and the person responsible for storage. An inventory must be appended to the resolution. A specialist should be invited to estimate the value of seized property in case such a valuation is required. If there is no further need for seizure of property, the investigator must pass a separate resolution.
80. Under paragraph 3 of the Instruction material evidence denotes objects which have been used to commit a crime or which bear traces linked to criminal activity or were objects of a criminal act; these can include monies and other valuables obtained by unlawful means and all other objects that can assist in investigating a crime and establishing the facts of the case.
81. Under paragraph 43 of the Instruction, attached property can be transferred to an entity which has suffered damage from an alleged criminal act. If necessary property can also be seized.
82. Pursuant to pаrаgraph 49 of the Instruction, material evidence which is part of the criminal case file, after termination of the preliminary investigation and the case file’s transfer to the court or another investigating body, must always be appended to it.
83. Pursuant to paragraph 63 of the Instruction, material evidence owned by enterprises, institutions or organisations must be transferred to their authorised representatives.
84. Pursuant to paragraph 64 of the Instruction, the body of inquiry, preliminary investigation or investigative body must return any confiscated objects before adoption of the final judgment in the case, if it is decided that the return of these objects will not impede the investigation in the case.
85. Under Article 12 of the Code of Arbitration Procedure (the “CAP”) the arbitration courts have jurisdiction over: cases concerning the conclusion, amendment, suspension and execution of agreements; disputes concerning technical standards or prices of products and services and others. The arbitration courts (currently “commercial courts”) also have jurisdiction over insolvency cases.
86. Article 53 provides that arbitration courts may grant extensions or renewals of the time-limits enshrined in the CAP on an application by a party or a public prosecutor or on their own initiative. A ruling shall be given in the event of a refusal to grant an extension of a procedural time-limit which has not been complied with. This ruling may be appealed against.
87. In accordance with Article 63 paragraph 3 of the CAP, the judge must return a claim that was lodged and the documents appended to it, if it does not refer to any circumstances on which the claim was based, has no relevant corroborating evidence or does not include an estimate of the sum claimed. A judge has to issue a ruling on return of a claim within five days of receipt. Return of the claim does not prevent it from being lodged again, in accordance with general procedure, after any shortcomings have been rectified.
88. In accordance with Article 91, Chapter XII of the Code of Arbitration Procedure (“CAP”), a party could request a supervisory review of the lawfulness and reasoning of a judgment, ruling or resolution. Such a review was conducted by the presidents or vice-presidents of the regional arbitration courts and the arbitration courts of the Crimea, Kyiv and Sevastopol and the specialised judicial division for review of the rulings, resolution and judgments of the Higher Arbitration Court.
89. Under Article 92 of the CAP, the first-instance arbitration court could review its judgments, rulings or resolutions on its own initiative. In accordance with Articles 93 and 94 of the CAP the judicial decisions of the regional arbitration courts and the arbitration courts of Kyiv, Sevastopol and the Crimea could be reviewed by the presidents of these courts or their deputies. The parties could request to be present at the review.
90. Under Article 100 of the CAP, the request for review had to be lodged with the first-instance arbitration court together with the proof of payment of State tax for lodging it and documents confirming the dispatch of a copy of a request to another party. Review proceedings did not suspend enforcement of an initial judicial decision; however a separate procedural decision in this case might be taken by a review body. A request for review had to be substantiated and based on law and the relevant facts of the case (Article 101 of the CAP). It had to be lodged within two months of the adoption of a judgment, ruling or resolution (Article 102 of the CAP). A reply to a request for review was dealt with in Article 103 of the CAP and parties should be informed of the date and time of the hearing in the case.
91. Under Article 105 of the CAP the arbitration court had to decide on the admissibility of a request for supervisory review of a judgment, ruling or resolution if the request had not been signed or had been signed without relevant authority, or if a copy of the request had not been sent to another party, the State tax had not been paid or the time-limit for lodging a request for review had expired.
92. In accordance with Article 106 of the CAP, the arbitration court had the power to: uphold the judgment, ruling or resolution, leaving it unchanged; amend the judgment, ruling or resolution; quash the judgment, ruling or resolution and adopt a new one; or quash the previous decisions and refer the case back for a fresh examination. It could also leave claims unexamined and terminate the proceedings in the case. The arbitration court which reviewed the case had all the powers of the first-instance court in examining a commercial dispute on its merits. The finding of the review of the case by the Division on Review of Judgments, Rulings or Resolutions of the Higher Arbitration Court was final, except when one of the parties was outside the territory of Ukraine or a different procedure was envisaged by international treaties.
93
94. The arbitration court, acting in the course of supervisory review proceedings, had to issue a resolution, which had to be substantiated, based on law and include relevant legal reasoning (Article 108 of the CAP). The instructions given in the resolution of the supervisory court were binding in the course of the fresh examination of the case. The resolution of the court could not contain an assessment of evidence or instructions as to how the case should be decided in the future (Article 109 of the CAP). The resolution of the arbitration court had to be sent to the parties within five days (Article 110 of the CAP).
95. The relevant provisions of the amended Code of Commercial Procedure of 5 July 2001 (CCP) read as follows:
“1. This law shall become effective from the date of its publication, save for Article 81-1 [of the Code], which shall become effective on 28 June 2002.
... 9. Decisions of the judicial divisions of the Higher Arbitration Court of Ukraine or of the Presidium of the Higher Arbitration Court of Ukraine that were not challenged by way of supervisory review proceedings before this Law entered into force, as well as resolutions of the Plenary Higher Arbitration Court of Ukraine, shall be final but may be appealed against to the Supreme Court of Ukraine on the basis of and pursuant to the procedure prescribed by the Code of Commercial Procedure of Ukraine.”
“An appeal in cassation (petition for appeal in cassation) shall be lodged with the Higher Commercial Court through the court of first instance or the commercial court of appeal which gave the contested judgment or resolution.
A first-instance or commercial court of appeal which has adopted a contested judgment or resolution shall transfer the appeal in cassation (petition for appeal in cassation) together with the case file to the Higher Commercial Court of Ukraine within five days of its receipt.”
“Appeals in cassation (petitions for appeal in cassation) shall be lodged within one month from the date the judgment of the first-instance court or the resolution of the court of appeal becomes effective.”
96. In accordance with Article 111 of the CCP appeals on points of law must be accompanied, inter alia, by proof of payment of the court fee.
97. Under Article 111-3 paragraph 4 of the CCP the courts should return appeals on points of law examining them on the merits if the appellant fails to provide evidence of payment of the court fee.
98. In accordance with Article 111-3 paragraph 5 of the CCP courts and tribunals should return notices of appeal on points of law to the appellant without examining the appeal on the merits if it has been lodged out of time and the appellant has not applied for an extension of time.
99. Under paragraph 6.2 of the Instruction, requests for annulment of investigative measures by courts and prosecution bodies were outside the jurisdiction of the arbitration courts as a different procedure was envisaged for examination of these requests.
100. The relevant provisions of Chapter 40 of the Code provided for appeals in cassation against court judgments and for the lodging of cassation appeals by the prosecutor.
101. In particular, under Article 289 of the Code, parties and others participating in the proceedings had the right to lodge appeals in cassation against the judgments in whole or in part. Appeals in cassation against judgments of the first-instance courts were to be lodged with the Supreme Court of the Autonomous Republic of Crimea, regional, Kyiv and Sevastopol city courts. Appeals in cassation against judgments given by the regional courts and equivalent courts were to be lodged with the Supreme Court.
102. In accordance with Article 311 of the Code the court of cassation was entitled to: uphold the judgment; quash it in full or in part and remit the case to the first-instance court in a different composition for a fresh examination; quash the judgment in full or in part and terminate proceedings in the case, leaving the claims unexamined; or amend the judgment, adopting a new one, without referring the case back for a fresh examination if, inter alia, there had been an error in application of substantive or procedural law.
103. Section 16 of the Act provides that a trustee (insolvency officer) must call a meeting of creditors, to be held within ten days of the institution of liquidation proceedings. At the meeting, each creditor has a vote proportionate to his or her claim.
104. Under section Article 17 of the Act, the Commercial Court may approve the proposal of the meeting of creditors, and order economic rehabilitation proceedings for a period of no more than one year. The court by the same ruling should appoint a licensed trustee (insolvency officer) to manage these rehabilitation proceedings.
105. “Ex works” means that the seller places the goods at the disposal of the buyer at the seller’s premises or another named place not cleared for export and not loaded on any collecting vehicle. The term represents the minimal obligation for the seller, and the buyer has to bear all costs and risks involved in taking the goods from the seller’s premises. However, if the parties wish the seller to be responsible for the loading of the goods on departure and to bear the risks and costs of such loading, this should be made clear by adding explicit wording to this effect in the contract of sale.