SAN11, TOV proti Ukrajině

FIFTH SECTION

DECISION

Application no. 42402/17
SAN11, TOV
against Ukraine

The European Court of Human Rights (Fifth Section), sitting on 23 October 2025 as a Committee composed of:

Kateřina Šimáčková, President,
María Elósegui,
Gilberto Felici, judges,
and Martina Keller, Deputy Section Registrar,

Having regard to:

the application (no. 42402/17) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 8 June 2017 by a Ukrainian company, SAN11, TOV (“the applicant company”), located in Kyiv and represented by Mr I.Y. Lishchyna, a lawyer practising in Kyiv;

the decision to give notice of the application to the Ukrainian Government (“the Government”), represented by their Agent, Ms M. Sokorenko;

the parties’ observations;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1. The present application concerns the invalidation, following a prosecutor’s action, of the applicant company’s title to a non-residential premises it had privatised by way of buyout from the State. The applicant company relied on Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention.

1. Background information and main proceedings

2. In 2011 the applicant company and the Kyiv Region Office of the State Property Fund (“the SPFU”) signed a lease agreement for a non-residential premises located in Kyiv city centre (“the premises”) which were “on the books” of the State scientific institution, the Institute of Innovative Technologies and Content of Education (Державна наукова установа “Інститут інноваційних технологій і змісту освіти; hereinafter “the Institute”).

3. Before concluding that lease, the SPFU obtained confirmation from the Ministry of Science and Education that the premises in question were not immune to privatisation as provided by law for the assets of education and scientific institutions financed by the State and relating to teaching or scientific activities.

4. As alleged by the applicant company, it had to make considerable and costly repairs in the premises, including permanent (inseparable) repairs.

5. In May 2013 the applicant company initiated a privatisation procedure by way of a buyout of the premises. After all approvals had been received, on 6 December 2013 the SPFU and the applicant company signed a contract of sale. The applicant company paid 6,580,326 Ukrainian hryvnias (UAH – approximately 606,000 euros (EUR) at the time).

6. In August 2015 the Deputy Prosecutor General of Ukraine applied to the Kyiv City Commercial Court seeking to invalidate the lease and sale of the premises in question as well as the respective SPFU orders enabling them. The prosecutor alleged, primarily, that the premises could not have been leased and further privatised as they belonged to the Institute which was an educational establishment financed by the State and its assets could not be subject to lease or privatisation.

7. The prosecutor’s claims were rejected twice by the lower courts. However, on 14 December 2016, the High Commercial Court of Ukraine (“the HCCU”) reversed the decision and allowed the prosecutor’s action in full. The HCCU essentially agreed with the prosecutor’s arguments, holding that the premises’ lease and privatisation had been unlawful and they therefore had to be transferred back to the State.

8. As it appears from the case file, during the examination of the case before the HCCU a question arose concerning the application of the legal consequences of the invalidity of a deed as provided for in Article 216 of the Civil Code, namely that if a deed is found to be invalid, each party is obliged to return in kind everything that was received by way of execution of that deed to the other party. The applicant company, in its submission to the HCCU in that regard, emphasised that that issue, as well as the amount of compensation that the applicant company should have been awarded had privatisation been invalidated, had never been examined by the lower courts (as they had consistently ruled against the prosecutor). The HCCU, being a court of cassation, could not examine new evidence that had not been examined by the lower courts.

9. In its judgment the HCCU noted in that regard that the procedure for the return into State ownership of property – the privatisation of which had been invalidated – was set out by Order no. 32 of the Cabinet of Ministers of Ukraine of 18 January 2001 and the SPFU’s Order no. 1701 of 15 August 2000 (“Order no. 1701”) which established that in the event the privatisation of property was invalidated, reimbursement was only possible after the relevant property had been re-privatised. In other words, a former owner of State property could only be reimbursed if and when the State obtained money from the re-privatisation of the same property.

10. In November 2017 the applicant company handed over the keys to the premises to the authorities and the enforcement proceedings into the HCCU’s judgment were terminated.

2. Compensation proceedings

11. In late November 2019 the applicant company initiated proceedings before the Kyiv City Commercial Court seeking to recover the amount that it had paid to the SPFU for the premises and the expenses incurred for permanent repairs.

12. The applicant company relied on Article 216 of the Civil Code as the basis for its claim. It also emphasised that Order no. 1701 referred to by the HCCU in its 2016 judgment had been revoked on 13 May 2013 and could not have been applied to its situation. At the same time the applicant company noted that the new privatisation legislation adopted in 2018 provided essentially the same reimbursement procedure as Order no. 1701, namely reimbursement was only possible after the relevant property had been re‑privatised. Given that in its case re-privatisation was not possible (based on the HCUU’s conclusions that the premises in question were not subject to privatisation under any conditions), the applicant company believed that the general provisions of civil law, namely Article 216 of the Civil Code, had to be applied.

13. On 24 February 2020, at the applicant company’s request, the court ordered a forensic technical expert examination which is apparently still pending.

3. Other relevant facts

14. The applicant company referred to a factually and legally similar case at the domestic level involving other premises in the same building that had been leased and later bought by the company Riotrade LLC, which belonged to the same shareholders as the applicant company. Unlike in the applicant company’s case, in the case concerning Riotrade LLC the prosecutor’s claims had been rejected; the courts had found that at the time of both lease and privatisation the disputed premises had not been subject to any restrictions imposed on educational establishments.

SCOPE OF THE CASE

15. The applicant company complained under Article 1 of Protocol No. 1 to the Convention that the deprivation of property to which it had been subject had been unlawful and that it had not received any compensation. It also complained under Article 6 of the Convention that the final judgment in its case had been unfair because the HCCU had relied on SPFU Order no. 1701 which had been revoked in 2013 and could not have been applied to its case. Furthermore, the HCCU’s conclusions that the disputed premises had not been subject to privatisation and that the compensation could only be paid to the applicant company in the event of the re-privatisation of the property in question had been mutually exclusive.

16. In its observations submitted after the communication of the case to the Government the applicant company contended that the prosecutor had missed the statutory limitation period for the submission of his action and that the courts had failed to duly address that issue. It alleged that that constituted a separate violation of Article 1 of Protocol No. 1.

17. The Court notes that the applicant company had not raised the latter argument in its initial complaints either under Article 6 of the Convention or under Article 1 of Protocol No. 1 to the Convention. It therefore considers that the applicant company’s new submissions regarding the limitation period cannot be seen as an elaboration of its original complaints. Consequently, they fall outside the scope of the present application (see, for example, Piryanik v. Ukraine, no. 75788/01, § 20, 19 April 2005).

18. Furthermore, the Court, being the master of characterisation to be given in law to the facts of the case, considers that the applicant company’s complaints as described in paragraph 15 above fall to be examined under Article 1 of Protocol No. 1 only (see, Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, 20 March 2018).

THE COURT’S ASSESSMENT

19. The Government argued that the application was inadmissible as the compensation proceedings, which intended to reimburse the applicant company for the money it had paid to the SPFU, were still pending. They contended that those proceedings were an effective remedy in the applicant company’s situation and provided reference to a similar case examined by the domestic courts (no. 910/17483/16) in which the claims against the SPFU to reimburse the claimant the money paid for reclaimed State property had been granted. They also noted that in its final judgment in the applicant company’s case the HCCU had made no actual conclusions as regards compensation as that question had not been the subject matter of the case. Overall, the application had to be rejected either as premature or for non-exhaustion of domestic remedies or as manifestly ill-founded.

20. The applicant company argued that its application could not be declared inadmissible for the reason of non-exhaustion of domestic remedies, because according to the Court’s case law, for example, Batkivska Turbota Foundation v. Ukraine (no. 5876/15, § 47, 9 October 2018), a remedy that cannot lead to a reinstatement of title was not required to be exhausted for the purposes of Article 35 § 1 of the Convention and that any damages that an applicant might be able to recover though use of such a remedy might only be taken into account for the purposes of assessing the proportionality of the interference and the calculation of pecuniary damage if a violation of Article 1 of Protocol No. 1 was found. In that connection it also noted that case no. 910/17483/16, referred to by the Government in support of their argument that compensation proceedings under Article 216 of the Civil Code were an effective remedy, was the only such example.

21. As regards the compensation issue the applicant company also argued that no automatic compensation for the reclaimed property existed, and the potentially available remedy, as referred to by the Government, required additional efforts on its part. Furthermore, case no. 910/17483/16 showed that that remedy could potentially only secure partial compensation: in that case the claimant had only been awarded an amount corresponding to the contract of sale, and its claims for inflation and interest had been rejected. The applicant company argued that that did not correspond to the Court’s approach as established in its case-law, namely in Guiso-Gallisay v. Italy ((just satisfaction) [GC], no. 58858/00, §§ 103-5, 22 December 2009).

22. The Court notes at the outset that at the time of lodging its application the applicant company complained that there had been an unlawful deprivation of its property and a lack of compensation for that, particularly in the context of the HCCU’s mention in its 2016 judgment of Order no. 1701 which, even despite no longer being in force at the time of examination of the case, established a very specific compensation procedure in the event of the privatisation of State property being invalidated. Later, however, the applicant company initiated separate proceedings seeking to obtain compensation under Article 216 of the Civil Code, which are still pending. The Court will therefore examine the case in the light of those new developments.

23. The Court agrees with the applicant company’s argument that the domestic remedies have been exhausted as regards the interference with its property rights, even though the proceedings regarding compensation remain pending (see paragraph 20 above). The Court reiterates in that connection its findings in Batkivska Turbota Foundation (cited above, § 47).

24. At the same time, in assessing compliance with Article 1 of Protocol No. 1, the Court must make an overall examination of the various interests in issue, bearing in mind that the Convention is intended to safeguard rights that are “practical and effective”. It must look behind appearances and investigate the realities of the situation complained of. That assessment may involve not only the relevant compensation terms – if the situation involves, or is akin to, the taking of property – but also the conduct of the parties, including the means employed by the State and their implementation (see, among other authorities, Broniowski v. Poland (dec.) [GC], no. 31443/96, § 151, ECHR 2002‑X). As in Lithgow and Others v. the United Kingdom (8 July 1986, Series A no. 102), the Court considers that it would be artificial in the present case to divorce the decision as to the compensation terms from the actual decision to invalidate privatisation, since the factors influencing the latter will of necessity also influence the former (ibid., § 122; see also Adorisio and Others v. the Netherlands (dec.), nos. 47315/13 and 2 others, § 48, 14 January 2014).

25. In the present case, the privatisation by the applicant company of the premises in question was invalidated by the final HCCU judgment. The Court observes that the question of compensation was not examined by the lower courts which consistently ruled against the prosecutor, so the need to consider that issue never arose. In its reasoning the HCCU mentioned that compensation in the event of invalidation of the privatisation of the property was subject to a special procedure established by certain bylaws (see paragraph 9 above), but it had not made any specific conclusions on that matter in the operative part of the judgment. In such circumstances the Court has doubts whether that could be considered, as claimed by the applicant company, as a proper “ruling” on the matter. At the same time, the Court is mindful of the applicant company’s assertion that if compensation was conditional on further re-privatisation of the same property, it would have never been able to obtain it as the premises it had privatised are considered, by way of the HCCU’s interpretation, not subject to privatisation under any conditions. It appears that neither at the time of events nor as of to date, the relevant bylaws established any special rules for cases such as that of the applicant company.

26. That brings the Court to the assessment of the compensation proceedings under Article 216 of the Civil Code initiated by the applicant company in 2019. The applicant company argued that those compensation proceedings might not lead to compensation in respect of the damage that it had suffered since it could not be said that domestic practice in that area had been settled, or, in any event, the proceedings would not result in the full compensation for all types of damage, such as inflation or interest (see paragraphs 20-21 above).

27. Indeed, the Court was provided with one example from the domestic case-law relating to the issue of compensation under Article 216 of the Civil Code following the invalidation of the privatisation of property by way of a buyout, namely above-mentioned case no. 910/17483/16. The Court notes that that case is factually and legally similar to the applicant company’s case and that there are no elements that would make the Court rule out that a similar approach could be applied to the applicant company’s case (see, mutatis mutandis, P. v. Ukraine (dec.), no. 40296/16, § 53, 11 June 2019). Moreover, although arguing that that one example was not sufficient, the applicant company did not assert that there was any case law indicating a contrary approach. In any event, the Court considers that it is in the applicant company’s interests to apply to the appropriate domestic court to give it the opportunity to develop existing rights through its power of interpretation (see Ciupercescu v. Romania, no. 35555/03, § 169, 15 June 2010), including, as the case may be, to return to the question of compensation for other types of damage, including inflation or interest.

28. In that connection, the Court also reiterates its subsidiary role and that it is fundamental to the machinery of protection established by the Convention that the national systems themselves provide redress for breaches of its provisions (see A. and Others v. the United Kingdom [GC], no. 3455/05, § 174, ECHR 2009).

29. Lastly, the Court takes due note of the fact that the compensation proceedings initiated by the applicant company have been pending for more than five years before the first-instance court, but observes that the applicant company has not raised any complaints in that connection.

30. In view of the above, the applicant company’s complaints are premature and must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies (see, for example, Ruci and Others v. Albania (dec.), no. 56937/10, § 28, 20 April 2021, and Adorisio and Others, cited above, § 49). The Court notes that that conclusion is without prejudice to any future complaints that the applicant company might be willing to submit in relation to the interference in question and application of compensatory remedies.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 20 November 2025.

Martina Keller Kateřina Šimáčková
Deputy Registrar President