MINISTERS’ DEPUTIES

Notes on the Agenda

CM/Notes/1355/H46-28

25 September 2019

1355th meeting, 23-25 September 2019 (DH) Human rights   H46-28 Yuriy Nikolayevich Ivanov, Zhovner group and Burmych and Others v. Ukraine (Applications No. 40450/04, 56848/00, 46852/13) Supervision of the execution of the European Court’s judgments Reference documents DH-DD(2019)750, H/Exec(2018)2, CM/ResDH(2008)1, CM/ResDH(2009)159, CM/ResDH(2010)222, CM/ResDH(2011)184, CM/ResDH(2012)234, CM/ResDH(2017)184, CM/Del/Dec(2019)1348/H46-35

 

 

Application	Case	Judgment of	Final on	Indicator for the classification
40450/04	YURIY NIKOLAYEVICH IVANOV	15/10/2009	15/01/2010	Pilot judgment
56848/00	ZHOVNER GROUP (List of cases CM/Notes/1355/H46-28-app)	29/06/2004	29/09/2004	Complex problem
46852/13+	BURMYCH AND OTHERS	12/10/2017	Grand Chamber (Striking out)

Case description

These cases relate to the major structural problem of non-enforcement or delayed enforcement of domestic judicial decisions, mostly delivered against entities owned or controlled by the State, and to the lack of an effective remedy in this respect (violations of Articles 6 § 1 and 13 of the Convention, Article 1 of Protocol No. 1).

In October 2010, the Court delivered a pilot judgment in the Yuriy Nikolayevich Ivanov case. It stressed that specific reforms in Ukraine's legislation and administrative practice should be implemented without delay to resolve this problem and set a deadline of 15 July 2011 for the creation of an effective domestic remedy in this respect. The Court in particular invited the respondent State to settle on an ad hoc basis all similar applications lodged with it before the delivery of the pilot judgment (1,600) and decided to adjourn the examination of similar cases. Given that the measures called for by the Court in its pilot judgment were not adopted within the deadline set, in February 2012 the Court decided to resume examination of the frozen applications raising similar issues.

On 12 October 2017, the Grand Chamber delivered its judgment in the Burmych case. It noted that despite the significant lapse of time since the Ivanov pilot judgment, the Ukrainian Government had still not implemented the requisite general measures capable of addressing the root causes of the systemic problem identified by the Court nor provided an effective remedy securing redress to all victims at national level, so that the problem of non-enforcement could be resolved.

Bearing in mind that it had dealt with Ivanov-type cases for over 17 years,^[1] the Court concluded that nothing was to be gained, nor would justice be best served, by the repetition of its findings in a lengthy series of comparable cases, which would place a significant burden on its own resources, with a consequent impact on its considerable caseload. Accordingly, it decided to strike the Ivanov follow-up applications (12,148 applications^[2]) out of its list of cases.

It found that the grievances raised in these applications had to be resolved in the context of the general measures to be introduced by the authorities at national level, as required by the execution of the Ivanov pilot judgment, including the provision of appropriate and sufficient redress for the Convention violations, such general measures being subject to the supervision of the Committee of Ministers. The Court envisaged that it might be appropriate to reassess the situation within two years of the delivery of the Burmych judgment, i.e. by 12 October 2019.

Status of execution

Previous examination by the Committee (1348^h meeting (June 2019) (DH))

At its last examination of these cases, the Committee stressed the importance of sustained political commitment at the highest level, and the necessary coordination among the various domestic actors involved, to give priority to a lasting solution to this long-standing and complex issue. It also welcomed the completion of the authorities’ work on identification of root causes and noted with interest the draft of the comprehensive strategy identifying the institutional, legislative, financial and other practical measures required. It also recalled with concern that the comprehensive strategy had not yet been adopted. The Committee noted with interest the decisions of the highest courts incorporating the Burmych judgment into domestic jurisprudence and establishing a foundation for the transformation of the system of enforcement of judgments against the State into a system of automatic enforcement. It further expressed regret once again that the draft law No. 8533 aimed at establishing the initial mechanism for the enforcement of judgments with historical debts had not yet been adopted. It also encouraged the authorities to look into a possible expansion of the previously assessed 2012 Law,[3] reviewing its scope of application and ensuring funding to cover all potential and existing judgments establishing debts of the State.

In response to the Committee’s decision, the authorities submitted updated action plans on 5 July and on 28 August 2019, a summary of which is set out below (for full details see DH-DD(2019)750 and
DH-DD(2019)914 and DH-DD(2019)914-add).

Individual measures:

The authorities provided information on the payment of just satisfaction and enforcement of domestic judgments for the majority of cases of the Zhovner group.[4]

Generalmeasures:

The authorities provided information on execution of judgments under the budgetary programme 4040[5] and on an additional financial allocation for 2019 for execution of cases with the Pension Fund of Ukraine as a debtor. They also indicated that the formation of the Pension Fund Registry is almost fully established and that all the judgments of 2013-2014 have been dealt with.

As for the Burmych and Others judgment, they also indicated that in 2019 the State Treasury Service enforced 482 domestic judgments and that they continue intensive work on the adoption of further individual measures to execute the Court’s judgment.

The authorities indicated that on 19 July 2019 the draft version of the National Strategy for implementation of general measures for execution of the pilot judgment in the cases of Yuriy Nikolayevich Ivanov v. Ukraine and Burmych and Others v. Ukraine (“the Strategy”), noted with interest by the Committee at its last examination of the case, was discussed at a meeting of the Interdepartmental Working Group. Subsequently, the domestic authorities involved submitted their responses to the Strategy which are currently being assessed.

The authorities also provided information on recent developments and legislative changes which in their view will have a positive effect for solving the issue of non-enforcement or delayed enforcement of judicial decisions mostly delivered against entities owned or controlled by the State. These measures include amendments to the Budgetary Code introducing such tools as “medium-term budgetary planning” and the “program-targeted method”, which aim to streamline and forecast public spending. They also indicated that under the provisions of the new Budgetary Code the terms for pending bankruptcy proceedings would be reduced and proceedings simplified. The authorities also referred to the new corporate governance reform of state-owned enterprises and noted that the latter should operate in similar conditions to private companies.

The authorities indicated that they intend to submit a letter to the Court requesting an extension of the two-year time-limit for the completion of the general measures following the delivery of the Burmych and Others judgment.

Finally, they provided information on the recent political processes in Ukraine which have delayed progress since the Committee’s last examination in June 2019. In July 2019, parliamentary elections were held in Ukraine. In these elections one party obtained the majority of seats in the Verkhovna Rada. The authorities considered that this would facilitate the formation of a new government and the implementation of a unified state policy in general. They noted also the strong political support of the President for dealing with the issue of non-enforcement of domestic judgments delivered against the State.

NGO submission:

On 25 July 2019, the Ukrainian Helsinki Human Rights Union (“the UHHRU”) made a submission under Rule 9.2 and provided its main observations on the Strategy. They welcomed the efforts to identify the root causes of the problem of non-enforcement of court decisions and to develop the Strategy, but stated that practical measures should also be adopted by the authorities. They pointed out that the Strategy exists only in draft form, and that the draft law No.8533 has been pending since June 2018. The UHHRU underlined that following the adoption of the Burmych judgment practical measures from the authorities are still lacking. They acknowledged that the decision of the Constitutional Court, welcomed by the Committee in June 2019, created a prerequisite for the automatic enforcement of court decisions. Nevertheless, they pointed out that another decision will potentially lead to the rise of similar claims before domestic courts. The UHHRU raised concerns about the lack of state budget funding for the enforcement of judgments delivered against the State and about the emerging problem of enforcing of judgments that concern territories outside the control of the Ukrainian authorities. Finally, they raised concerns about the continued non-enforcement of domestic judgments of the applicants from the Burmych judgment and the lack of adequate redress for the applicants.

In response, the Ukrainian authorities indicated that they have taken a number of significant measures to address the systemic problems of non-enforcement. They also stated that the budgetary allocation for the enforcement of domestic judgments increased in 2019, and that they have previously closed the enforcement proceedings in 11% of cases linked to the Burmych and Others judgment.

Analysis by the Secretariat:

Individual measures:

As regards the judgments of the Zhovner group, the authorities’ efforts to enforce outstanding judgments of the Court can be noted with interest.[6] Nevertheless, clear information on the payment of just satisfaction and enforcement of judgments with in-kind obligations in the remaining cases should be requested.

General measures:

a)     Measures previously taken by the authorities and their assessment by the Committee

The Ukrainian authorities previously took measures to identify the root causes of the problem of non-enforcement, with expert advice provided via the cooperation activities of the Council of Europe and the Secretariat. In this regard the authorities presented to the Committee their draft Strategy.

In parallel, the judicial practice of the Grand Chamber of the Supreme Court incorporated the Burmych and Others judgment into domestic legal practice. The decision of the Constitutional Court of Ukraine, declaring unconstitutional an obligatory advance payment of fees to state bailiffs to institute enforcement proceedings as regards judgments delivered against the State, laid the basis for the automatic execution such judgments at the domestic level.

The amended 2012 Law, if implemented with sufficient budgetary allocations, with ensured budgetary allocations programmes and in line with the previous recommendations of the Committee,[7] could serve as a remedy for the issue of non-enforcement of domestic judgments. Another step yet to be taken is the adoption of draft law No. 8533, which the Committee has considered to be a necessary element of the general measures needed in the cases concerned As for the fact that re-launched enforcement proceedings

have led to the payment of compensation to over 11% of the applicants in the Burmych and Others judgment, this has already been noted by the Committee. Nevertheless, such a low level of enforcement of judgments in this case is worrying and can be seen as an indication of the overall inefficiency of the system of domestic enforcement of judgments.

b)     Recent developments reported by the authorities

As to the recent legislative developments – amendments to the Budgetary Code, the new Bankruptcy Code and the amendments to regulatory acts concerning corporate governance of state-owned enterprises – they can be noted with interest. In this regard the authorities should be called upon to ensure the practical implementation of the above-mentioned regulatory reforms in compliance with Convention standards and to provide further information on the practical effects of such implementation for the resolution of the issue of non-enforcement of judgments against the State, or against entities owned or controlled by the State.

Nevertheless, it appears overall that the measures adopted thus far, which might alleviate certain execution obstacles and prevent the accumulation of judgment debts, are still clearly insufficient to establish a durable solution.

Furthermore, since the last examination of this group of cases in June 2019, the Strategy has, unfortunately, not yet been officially adopted either as a non-binding or binding instrument, and therefore cannot guide the actions of the authorities. Nor does it appear that there has been any progress in the adoption of the comprehensive legislative package, based on the Strategy, which was to be synchronised with other practical measures, including proper budgetary planning, lifting moratoriums and reviewing mechanisms for bankruptcy of insolvent entities owned or controlled by the State or ensuring their privatisation. This is a matter of regret as the authorities should by now have a clear vision of not only the root causes, but also the remedial action which should be undertaken without further delay.

Moreover, a delay in implementation of general measures raises serious concern especially in view of the date set by the Court of 12 October 2019 in Burmych and Others to reassess the situation with a view to considering whether it should exercise its power to restore this vast group of applications to its docket.  The Committee could take note of the authorities’ intention to submit a request to the Court for an extension of this deadline, request additional information on the timeline for implementing the outstanding general measures under the judgment.

c)     Further steps to be taken by the authorities

Following the presidential election in April 2019, an advisory body, the Legal Reforms Commission, was created. One of its priorities is the preparation and submission of legislative proposals regarding the protection of human rights. Further information should be requested from the authorities whether the mandate of this body will include implementation of the measures necessary for the execution of the European Court’s judgments, including this group of cases. If so, the authorities should also indicate whether the outstanding issues concerning these cases will be taken up by the Legal Reforms Commission in the nearest future and given priority.

In view of the recent political changes in Ukraine, the newly-elected President, the competent governmental bodies, as well as Parliament should be called upon to make the issues at stake in the present cases one of the highest priority issues for their domestic reform agendas.

It should be recalled that this problem represents an important danger for respect for the rule of law and access to justice. The authorities should therefore continue their efforts, in coordination with various domestic actors involved, to finally find a lasting solution to this long-standing and complex issue, and to achieve rapid progress in resolving the problems identified by the Court’s judgments and in the execution process.

The authorities are again encouraged to urgently look into the issues at stake jointly with other international partners, including the World Bank and International Monetary Fund, as well as the European Union through its projects, which are assisting in the reform of public finance and the system of enforcement of judgments, and also in cooperation with the Secretariat.

It is proposed to return to this case in March 2020, allowing more time to the authorities to report back on the outstanding issues, in view of the recent domestic developments in Ukraine, to evaluate the effects of measures already taken by 15 January 2020 and to inform the Committee of the Court’s reaction to their request to defer the deadline set in the Burmych judgment.

Financing assured: YES