Monitoring of the case regarding damage to NJSC “Naftogaz of Ukraine” (hearing on 08.11.2020).

On August 11, the Supreme Anti-Corruption Court held a preparatory hearing in the case regarding damage to NJSC “Naftogaz of Ukraine”. The International Society for Human Rights has monitored the hearing online.

At this hearing, the petition of the representative of the legal entities in respect of which the proceedings is being carried out – Koval N.M. in the interests of LLC “Energia-Novy Razdel” on the cancellation of the seizure and return of property.

The petition is substantiated by the fact that criminal proceedings No. 52018000000000856 dated 09/06/2018 were separated from criminal proceedings No. 22016000000000243 dated 06/22/2016, in which, by a resolution of the Solomensky District Court of the city of Kiev dated 06/07/2018, property belonging to LLC “Energia-Novy Razdel” was seized as a single property complex, without specifying an exhaustive list of seized property, and transferred to the management of the National Agency of Ukraine for identifying the search and management of assets received from corruption and other crimes.

According to the defense, the arrest is unfounded in terms of property, since the property is not material evidence, is not intended for the production of heat and electricity but is intended for the implementation of centralized water supply and sewerage. In addition, it is impossible to ensure the management of such property based on a management agreement concluded between the National Agency and the manager, since it is not intended for the production of heat and electricity. Unjustified arrest and management impede the implementation of the activities of the Company on centralized water supply and drainage.

The accused and the rest of the defenders supported the stated petition and asked the court to grant it.

The European Court of Human Rights recognizes seizure as a measure to control the use of property (“Raimondo v. Italy”). Therefore, when considering complaints related to the seizure of property, the Court requires that the actions of the authorities do not contradict the paragraph 2 of Article 1 of Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms, namely:

“Every physical or legal person has the right to respect for their property. No one can be deprived of his property except in the public interest (“Feldes and Feldesne v. Hungary”) and under the conditions provided for by law and general principles of international law. The preceding provisions do not diminish the right of the state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to enforce the payment of taxes or other fees or fines.”

The ECtHR also imposes other requirements for the seizure of property, such as: legality, the observance of a fair balance between the public interest and the protection of property rights, the possibility of appealing against the actions of the authorities to impose the seizure (“Chitaev and Chitayev v. Russia”) and the obligation of the authorities to keep the property in proper condition.

In addition, the Court reiterates that, while any arrest entails losses, the actual losses incurred should not exceed those that are unavoidable (“Djukis v. Lithuania”; “Borzhonov v. Russia”).

Prosecutor Garvanko I.M. provided oral and written explanations in which he asked to reject the petition. In support of his position, he noted that LLC “Energia-Novy Razdel” as a single property complex was an instrument of criminal offenses incriminated to the participants of an organized group of criminal offenses in 2013-2015. The seizure of property in criminal proceedings is to ensure the inevitability of the onset of negative consequences for a person for committing criminal offenses due to the deprivation of such a person of the economic benefits obtained as a result of his illegal behavior, and to prevent such a person from obtaining any benefit as a result of the commission of a criminal offense, including proceeds from it. The detective, according to the prosecutor, proved the status of the single property complex of LLC “Energia-Novy Razdel”, as material evidence in accordance with the requirements of Article 98 of the Criminal Procedure Code of Ukraine.

Thus, in the opinion of the prosecution, the need for arrest is motivated by the fact that the property is an instrument for committing a crime and by the decision of the detective is recognized as material evidence.

As noted by the European Court of Human Rights, in accordance with established practice reflecting the principle of the proper administration of justice, decisions of courts and tribunals must properly set out the arguments on which they are based (“Papon v. France”).

In accordance with the requirements of Articles 94, 132, 173 of the Code of Criminal Procedure of Ukraine, when deciding on the seizure of property, the investigator, the judge must take into account the legal grounds for the seizure of property, the possibility of using property as evidence in criminal proceedings or the application of special confiscation, the existence of a reasonable suspicion of the commission by a criminal offense of an unlawful benefit that a legal entity has received, the reasonableness and proportionality of the restriction of property rights by the task of criminal proceedings, as well as the consequences of the seizure of property for the suspect, third parties.

The court, after consulting, made a decision to reject the petition to cancel the arrest and return the property.

The next court hearing is scheduled for September 2, 2020. The International Society for Human Rights will continue to monitor this criminal proceeding.