Sovtransavto Holding v. Ukraine, (48553/99) [2002] ECHR 621, 25 July 2002
Facts: the applicant Sovtransavto is a
Russian public company which owned shares in a Ukranian public company
Lougansk. Sovtransavto-Lougansk passed a resolution which increased the company’s
share capital and reduced the applicant company’s shareholding.
Sovtransavto-Lougansk was thus able to sell part of its assets to various
undertakings set up by its managing director. The applicant received a compensation
after Sovtransavto-Lougansk liquidated, which was allegedly not commensurate
with its original share in the company’s share capital.
Complaint: Violation of Article 6 § 1
(right to a fair trial) because of the excessive length of the proceedings and
violation of Article 1 because of the loss of control over the management and
assets of Sovtransavto-Lougansk following the ratification of the resolutions
passed by its shareholders and that
Holding: the Court found a violation of article 1 (protection of property) and
a violation of article 6§1 (right to a fair trial) of the Convention.
Reasoning: The ECHR found that none of
the applicant’s demands had been recognized, which deprived the applicant of
any possibility of obtaining a hearing of its claims; that the Ukrainian authorities’
activities were incompatible with the notion of an "independent and impartial
tribunal" and that they failed to apply the relevant law correctly.
Accordingly, there had been a violation of article 6§1. As to article 1, the
Court found that the shares held by the applicant company constituted
"possessions". Article 1 imposed positive obligations on State parties.
The Ukrainian courts’ interpretation and application of the law was not
compatible with the applicant company’s right to the peaceful enjoyment of its
possessions. The manner in which the proceedings in issue had been conducted
had upset the fair balance that had to be struck between the general interest
and the need to protect the applicant company’s right to the peaceful enjoyment
of its possessions.
