On October 13, 2021, the Northern Economic Court of Appeal held a hearing in case No. 911/1825/20 on the claim of Nayda Miron Mironovich against the Private Joint Stock Company DTEK Kiev Regional Electric Networks and DTEK Naftogaz Limited Liability Company to invalidate the decision of the Supervisory Board and commitments to repurchase shares. The case was selected for monitoring as one of the possible ones to be observed by means of the broadcast of the court hearings on the website of the judicial authority of Ukraine.
On April 6, 2021, the Economic Court of the city of Kiev dismissed the claim of Naida Miron Mironovich against the Private Joint Stock Company DTEK Kiev Regional Electric Grids and the Limited Liability Company DTEK Naftogaz on invalidating the decision of the Supervisory Board of PJSC Kievoblenergo, drawn up by the protocol of the hearing No. 8/20 from 07/12/2019. On April 19, 2021, an additional court hearing was held, according to which funds were collected from the plaintiff in favor of the defendants for reimbursement of the costs of professional legal assistance.
The plaintiff in the case did not agree with the said decision and filed an appeal, which was admitted to the appeal proceedings. In the appeal, he noted that the court of first instance made a decision, which he considers illegal, unfounded, with incomplete clarification of the circumstances and examination of evidence relevant to the case. The appellant asked to cancel the decision of the court of first instance and to invalidate the additional decision of the supervisory board; satisfy the claim in full. The defendant’s representative filed a response to the appeal.
On October 13, 2021, during the court hearing, the plaintiff upheld his appeal. He made an explanation of the circumstances of the case in order to protect his rights and interests. The main reason for the claim was that the defendant at the meeting of the JSC illegally, in the interests of the majority shareholder, understated the buyback price based on the report of the illegal appraiser (as evidenced), which significantly violated the rights and interests of the plaintiff.
The representative of the defendants completely objected to the satisfaction of the appeal. All the grounds for the appeal in the response were refuted on the basis that all the facts of the dispute are already missing in the case. Indeed, during the consideration of the case in the court of first instance, the plaintiff completely alienated the shares that are the subject of the dispute. On this basis, the defendants immediately filed a motion and asked to close the case. That is, the verdict in the case will not affect the rights and interests of the plaintiff, this has already been repeatedly noted by the court. The representative of the defendants also noted that it was impossible to satisfy the claims of the plaintiff, because the defendant could not be forced to purchase shares that he did not have. Regarding the appeal, the representative stated that its subject matter was formed improperly. The plaintiff also pointed out illegal financial statements that have no relation to the time and circumstances of the case. It was also refuted that there was no public financial reporting. Since reliable reporting was published on the website of the JSC, an independent audit was carried out in accordance with the Law of Ukraine “On Auditing”.
The concept of “legal dispute” should be interpreted broadly, taking into account the approach of the European Court of Human Rights to the interpretation of the concept of “dispute about law” (paragraph 1 of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms). In particular, the ISHR noted that, in accordance with the spirit of the Convention, the concept of a “dispute about law” should not be considered purely technically, it should be given an essential, not formal, meaning.
Analyzing the course of the case, it can be concluded that the case was postponed without a full study of the circumstances, that is, the documents provided by the defendant that refute the plaintiff’s charges were not analyzed. Due to the impossibility of monitoring the consideration of the case in the first instance, which, of course, would make it possible to more fully and widely analyze the level of ensuring the right to a fair trial in this proceeding, the observer, and then the experts of the ISHR, had to concentrate their attention on the appeal instance. After examining the added materials, and also confirming that the decision in the case could no longer have any relation to the plaintiff, the case could have been closed at this hearing. However, the hearing was postponed, which may violate the right to a fair trial, in accordance with Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“Borisenko v. Ukraine”, “Burov v. Ukraine”, “Tretyakov v. Ukraine”, “Friedlander v. France”).
After the speech of the representative of the defendants, the court turned to the plaintiff, who asked for time to systematize his objections, and also filed a motion to announce a break in the court session.
The collegium, having consulted on the spot, granted the petition, announced a break in the court session until October 27, 2021. In addition, the panel drew the plaintiff’s attention to the fact that he should prepare properly for the court sessions. It was also reported that at the next court session, a check and investigation of the circumstances of the case with evidence will be carried out. This means that the parties to the dispute can additionally familiarize themselves, before the start of the court session, with written evidence, which are attached to the case file, in order to then give their explanations.