FIFTH SECTION

CASE OF COSMOS MARITIME TRADING AND SHIPPING

AGENCY v. UKRAINE

(Application no. 53427/09)

JUDGMENT

STRASBOURG

27 June 2019

FINAL

27/09/2019
This judgment has become final under Article 44 § 2 of the Convention. It may be
subject to editorial revision.
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 1

In the case of Cosmos Maritime Trading and Shipping Agency

v. Ukraine,
The European Court of Human Rights (Fifth Section), sitting as a
Chamber composed of:
Angelika Nußberger, President,
Ganna Yudkivska,
André Potocki,
Síofra O’Leary,
Mārtiņš Mits,
Gabriele Kucsko-Stadlmayer,
Lado Chanturia, judges,
and Claudia Westerdiek, Section Registrar,
Having deliberated in private on 4 June 2019,
Delivers the following judgment, which was adopted on that date:

PROCEDURE
1. The case originated in an application (no. 53427/09) against Ukraine
lodged with the Court under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”) by a
Turkish company, Cosmos Maritime and Foreign Trading Ltd. (“the
applicant company”), on 25 September 2009.
2. The applicant company was represented by Mr V.V. Vasko, a lawyer
practising in Kyiv. The Ukrainian Government (“the Government”) were
represented by their Agent, most recently Mr I. Lishchyna.
3. The applicant company alleged, in particular, under Article 6 § 1 of
the Convention that the domestic courts which had dealt with its case had
lacked impartiality and that the proceedings concerning the recognition of
its claims in bankruptcy proceedings against a State-owned company had
been unreasonably lengthy. It also complained, under Article 1 of Protocol
No. 1, that its right to peaceful enjoyment of its possessions had been
breached in that the domestic courts had failed to recognise its claims in the
bankruptcy proceedings and the bankruptcy proceedings had not in
themselves been capable of protecting its interests.
4. On 19 January 2018 notice of the above complaints was given to the
Government and the remainder of the application was declared inadmissible
pursuant to Rule 54 § 3 of the Rules of Court. The applicant company was
called Cosmos Maritime Trading and Shipping Agency Ltd. when it lodged
its application. After communication, it changed its name to Cosmos
Maritime and Foreign Trading Ltd.
2 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

5. The Turkish Government were informed of their right to intervene in

the proceedings in accordance with Article 36 § 1. They chose not to avail
themselves of that right.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

6. The applicant company has its registered office in Istanbul.

7. Its case before the Court concerns its unsuccessful efforts to have its
claims against the Black Sea Shipping Company (“Blasco”), a Ukrainian
State-owned company which is subject to bankruptcy proceedings,
recognised and satisfied.

A. Background information

8. Blasco is the successor of a Soviet State-owned company which until

the late 1980s was one the largest shipping companies in the world and
operated hundreds of commercial vessels. Throughout the late 1980s and
early 1990s Blasco encountered serious legal and economic difficulties,
which resulted in the loss of a large proportion of its assets.
9. From October 1996 to April 1997 Blasco, as shipowners, and
Columbus − a Liberian company − as charterers, signed time charters for
four of Blasco’s ships. In August 1997 the applicant company also entered
into a bareboat charter agreement with Blasco for one of its ships.
10. On 13 November 1997 Columbus assigned all of its claims against
Blasco, without specifying their origin or amount, to the applicant company.
Blasco was informed of the assignment.
11. On 2 December 1997 and 22 October 1998 the applicant company
and Blasco signed agreements under which Blasco acknowledged owing
certain debts to the applicant company related to services provided to
Blasco’s vessels amounting to 3,466,754.93 United States dollars (USD). Of
that amount, USD 33,557.29 related to a ship not covered by the
above-mentioned charter agreements and USD 257,531.36 was identified as
expenses relating to the settlement of unspecified claims and agency costs.
The remainder of the claims had apparently arisen in the context of the legal
relationship created under the charterparties.
12. On 20 June 2001 the parties signed another agreement, reducing the
overall debt to USD 2,021,370.13, apparently to take into account the fact
that one of the ships to which the debt related had in the meantime been
transferred to the applicant company in partial settlement.
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 3

13. On 25 December 1998 bankruptcy proceedings were initiated in

respect of Blasco. They were suspended on 2 July 1999. It appears that they
were then reinitiated and discontinued at some point in 2001.
14. On 11 July 2003 a certain Mr P., Blasco’s creditor, initiated
bankruptcy proceedings against Blasco in the Odessa Regional Commercial
Court (“the Commercial Court”). The notice announcing the initiation of
proceedings was published, as required by law, in September 2003.

B. From the lodging of the applicant company’s claim to its

recognition

15. On 29 September 2003 the applicant company lodged an application

with the Commercial Court seeking recognition of the debt owed to it by
Blasco in the amount stipulated in the agreement of 20 June 2001
(see paragraph 12 above).
16. On 18 November 2004 the Commercial Court rejected the applicant
company’s claim without considering it on the merits. It held that it was
unsubstantiated and considered that the agreements provided by the
applicant company were insufficient proof that it had valid claims. In order
to show the latter, the applicant company would need to provide the original
documents showing the basis on which the debts had arisen.
17. On 14 March 2005, in an appeal, the applicant company explained
that the debt had arisen on the basis of charterparties between it and Blasco
in respect of a number of ships. Although under the terms of the
charterparties certain costs had to be borne by Blasco as the ship owner, the
latter had asked the applicant company to bear those costs and those sums
had accordingly become Blasco’s debt.
18. On 15 March 2005 the Odessa Commercial Court of Appeal (“the
Court of Appeal”) quashed the commercial court’s ruling, holding that −
since the claim had been lodged within thirty days of publication of the
bankruptcy proceedings notice − it could not be rejected without an
examination of the merits but rather had to be examined on the merits and
either allowed or dismissed. The case was remitted to the commercial court.
19. On 7 February 2006 the applicant company made written
submissions to the Commercial Court explaining the origin of the debt. It
explained, in particular, that the claim had its basis in services provided to a
number of vessels.
20. On 24 February 2006 the Commercial Court rejected the applicant
company’s claims as insufficiently substantiated. It held, in particular, that
the actual charterparties on which the claims were supposedly based had not
been submitted to the court.
21. On the same day the court ordered the initiation of a financial
rehabilitation procedure in respect of Blasco under a court-appointed
4 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

receiver. Such procedures are governed by the Bankruptcy Act and are
aimed at restoring a debtor’s solvency.
22. The applicant company appealed against the rejection of its claim.
23. On 12 August 2008 the Court of Appeal upheld the commercial
court’s ruling of 24 February 2006 concerning the applicant company’s
claims.
24. On 10 September 2008 the applicant company appealed to the High
Commercial Court (“the HCC”). Among other arguments the applicant
company further submitted that the courts dealing with its case lacked
impartiality. In that connection it referred to a number of letters from the
president of the Commercial Court to various executive authorities:
(i) A letter to the Ministry of the Economy of 19 January 2006 in which
the court president asked the Ministry − which at the time was the body
responsible for licensing bankruptcy receivers − for candidates to act as the
receiver in the proceedings concerning Blasco. In that letter the court
president referred to the instruction of the President to the Cabinet of
Ministers, the Prosecutor General and the central bank concerning the audit
of the debtor company;
(ii) A letter to the Prime Minister of 26 April 2005 in which the court
president stated that in the period prior to 2001, when the bankruptcy
proceedings were suspended, a major part of the debtor’s assets had been
transferred to the Ministry of Transport and certain State-owned and other
companies. He complained that in the course of the bankruptcy proceedings
the Ministry of Transport and Blasco’s management had failed to provide
sufficient information about the debtor’s assets and obligations and that
Blasco had been transferring assets to third parties outside of the bankruptcy
proceedings. The court president went on to inform the Prime Minister that
he had informed the law-enforcement authorities that there were indications
that Blasco’s management was engaging in criminal activity, and in
particular artificially driving the company into bankruptcy. Blasco’s
management and their superiors at the Ministry of Transport were not
interested in restoring the debtor’s solvency. The court president
accordingly asked the Prime Minister for her intervention in order to compel
those officials to comply with the law;
(iii) A letter to the President of Ukraine of the same date and with
similar content;
(iv) A letter to the President of Ukraine of 3 March 2006. In that letter
the court president pointed out that the President’s earlier instruction to the
Cabinet of Ministers concerning the need to take steps to improve the
Blasco situation had not been complied with and that the court had been
unable to obtain information from the authorities about the debtor’s assets
for more than seven years. In view of those facts the court president invited
the President to create a “National Council for the Restoration of Ukraine’s
Status as a Seafaring Nation”, which would be tasked with making
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 5

proposals as to how to return vessels transferred by Blasco to foreign

entities or to receive compensation for them. The President’s personal focus
on this issue would permit the Ukrainian nation and State to restore their
leading role as a seafaring nation among other countries of the world.
25. For the applicant company, the statements in the above letters were
evidence of the fact that the Commercial Court had failed to play an active
role in protecting the creditors’ interests. The court was addressing the
executive authorities as if it were their subordinate, merely reporting to
them instead of exercising the function of a body with effective power over
the process. The applicant company also pointed out that the decision of
24 February 2006 to initiate a rehabilitation procedure in respect of Blasco
(see paragraph 21 above) referred to the instruction of the President of
Ukraine in a way that suggested that it was a document that constituted
guidance to be followed by the court.
26. On the same day, 23 December 2008, the applicant company also
lodged a separate application with the HCC asking it to discontinue the
bankruptcy proceedings as they were unfair to the creditors and represented
an inadequate tool for protecting their interests and, instead, to recognise the
State’s direct responsibility for Blasco’s debts. The applicant company cited
examples of transfers of the debtor’s assets prior to the initiation of the
bankruptcy proceedings and the letters from the commercial court’s
president indicating that similar activities could be continuing. The
applicant company accordingly submitted that the State must bear full
liability for the entire debt owed by Blasco to the creditors.
27. On 21 January 2009 the HCC allowed the applicant company’s
appeal in part, quashed the Court of Appeal’s decision of 12 August 2008,
and remitted the case to the Court of Appeal on the grounds that the latter
had essentially required the applicant company to comply with the
requirements of domestic Ukrainian law concerning record-keeping and
submit documentary proof to prove its claims, whereas it should have
determined the applicable law and evaluated the claims in that light.
28. The applicant company lodged an appeal with the Supreme Court,
asking it to quash the HCC’s ruling, terminate the proceedings and hold the
State fully liable for Blasco’s debts.
29. On 2 April 2009 a panel of judges of the Supreme Court refused the
applicant company leave to appeal to the full Commercial Chamber of that
court.
30. On 27 October 2009 the Court of Appeal allowed the applicant
company’s application and recognised its claims against Blasco. However,
at the same time it refused to include them in the register of creditors’
claims, holding that the latter had to be done in separate proceedings. The
Ministry of Transport appealed, but on 10 November 2010 its appeal was
dismissed by the HCC. The ruling of 27 October 2009 then became final.
6 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

C. From recognition of the applicant’s claims to the quashing of that

decision

31. On 27 November 2009 the applicant company applied to have its

claims included in the register of creditors’ claims. Following an initial
rejection and appeals against that decision, on 11 January 2012 the
Commercial Court included the claims in the register. On 8 August 2012 the
Court of Appeal dismissed an appeal by the receiver and upheld that ruling.
32. On 22 February 2013 the applicant company requested the
withdrawal of Judge B., who was presiding over the bankruptcy
proceedings at the time, and all the judges of the Commercial Court. It
referred to the correspondence of the court president with the various
executive authorities (see paragraph 24 above). In addition, the applicant
company stated that the Commercial Court was operating in a building in
Odessa that had previously belonged to Blasco. It referred to a newspaper
article published in 2001. The article reported Blasco’s then CEO saying, at
a press conference, that the company was transferring that building to the
court in order to secure the court’s cooperation in accelerating the
examination of the company’s cases (see paragraph 42 below). For the
applicant company, those circumstances raised doubts as to the Commercial
Court’s impartiality.
33. On the same day Judge B. dismissed that request on the grounds that
she had only taken over the case in July 2011 and so was not affected by the
circumstances referred to by the applicant company, which dated back to
2006 and earlier. Moreover, the judge held that under domestic law it was
not possible to request the withdrawal of all the judges of a court, only the
judge sitting in the case.
34. On 29 March 2013 the Court of Appeal’s registry received Blasco’s
application requesting the court to set aside its ruling of 27 October 2009 to
recognise the applicant company’s claims (see paragraph 30 above) in the
light of “newly discovered circumstances”. In particular, according to
Blasco, the documents sent to Blasco by the prosecutor’s office on
18 October 2012 showed that the claims presented by the applicant
company were unfounded.
35. On 15 May 2013 the applicant company requested the withdrawal of
the panel of the Court of Appeal considering Blasco’s application for
reopening. It mainly focussed on the allegation that the debtor had missed
the three-year time-limit for lodging the application (see paragraph 49
below) and that, by examining such a belated request, the court was
discriminating against it and favouring a State debtor over a foreign
company.
36. On 30 May 2013 the Court of Appeal quashed its own decision of
27 October 2009 in the light of the “newly discovered circumstances”. The
court stated that the application had been lodged by Blasco within the
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 7

statutory three-year time-limit. On the substance, it found that the applicant

company’s claims had been based only on agreements signed by Blasco’s
managers between 1997 and 2001 acknowledging certain debts. However,
the documents discovered by the prosecutor’s office in 2012 showed that
there was no basis in fact for the alleged underlying debt: the applicant
company had acquired its claims from Columbus. Columbus’s claims, in
turn, had been based on charterparties for Blasco’s vessels (see paragraphs 9
and 10 above). The Court of Appeal found that charterers had presented
unsubstantiated bills to Blasco for vessel operating costs which were the
charterers’ responsibility to bear. The court concluded that the applicant
company’s claims could not be recognised in the bankruptcy proceedings.
37. On 17 June 2013 the applicant company appealed. It argued, in
particular, that it had acquired only Columbus’s claims against Blasco and
not its obligations vis-à-vis Blasco. Moreover, the charterparties to which
the Court of Appeal referred had been governed by English law and subject
to London arbitration. However, the Court of Appeal had failed to establish
that Blasco did in fact have valid claims against Columbus under those
contracts and, if so, whether it had attempted to settle them through
arbitration. Moreover, the circumstances on which the Court of Appeal had
based its decision were not really “newly established” as the courts had been
aware of them since at least 24 February 2006 (see paragraph 20 above).
38. On 8 October 2013 the HCC dismissed the appeal and upheld the
decision of 30 May 2013. The applicant company was served with the
earlier decision on 12 November 2013.
39. On 31 December 2013 the applicant company lodged an application
for a review of the HCC ruling by the Supreme Court (see the relevant
provisions of domestic law in paragraph 47 below). It argued that: (i) the
lower courts’ assessment that there were “newly established” circumstances
in the case justifying reopening had been erroneous, in particular because
Blasco had failed to prove that it had been unaware of the circumstances it
had cited as “newly established”; (ii) the courts had erred in their
assessment of the evidence in finding that Blasco had not missed the three-
year time-limit to request reopening; (iii) the courts’ conclusions concerning
the nature and origin of its claims against Blasco had been erroneous as they
had not been supported by the evidence in the file; (iv) the HCC had applied
the general provisions of the Code of Commercial Procedure concerning
evidence and the requirement that judicial decisions be lawful in a divergent
manner; (v) the applicant company had been discriminated against in breach
of international treaties.
40. On 11 February 2014 an HCC panel declared the applicant
company’s application for Supreme Court’s review inadmissible. It held
that the HCC’s ruling concerned the question of whether it was appropriate
to reopen proceedings in light of the newly established circumstances,
which was a matter of procedural rather than substantive law. There were,
8 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

therefore, no grounds to examine the petition by the Supreme Court

(see paragraph 47 below for the relevant provisions of the domestic law).
41. According to the applicant company, it only became aware of the
ruling of 11 February 2014 on 15 July 2014.

D. The Commercial Court’s building

42. In May 2005 the Commercial Court and the Court of Appeal moved
into an office building at 29 Shevchenko Boulevard in Odessa. According to
the applicant company, that building used to belong to Blasco and remained
on Blasco’s balance sheet. According to a clipping from an Odessa
newspaper submitted by the application company, at a press conference in
2001 Blasco’s then CEO stated that, while the bankruptcy proceedings were
pending against Blasco, the Commercial Court was looking for new
premises. Accordingly, Blasco transferred that building to the court in order
to secure the court’s cooperation in accelerating the examination of the
company’s cases.

II. RELEVANT DOMESTIC LAW

A. Constitution of 1996

43. Article 126 of the Constitution declares the principle of the

independence of judges and provides that they can be removed only in the
cases explicitly defined in the Constitution, such as expiry of term of office,
disability and so forth.

B. Code of Commercial Procedure of 1991

44. At the material time the Code contained the following rules.
45. Article 17 of the Code provided that where, in the case of a
successful request for the withdrawal of a judge, a commercial court is
unable to examine a case, the case shall be transferred to the closest other
court.
46. Article 20 required judges who were related to the parties or whose
impartiality could be doubted for other reasons to withdraw. The parties
could request the withdrawal of the judges on the same grounds. In such
cases the judicial formation dealing with the case decided the request.
47. The Law of 7 July 2010 reformed the procedure for the review of
decisions in commercial cases.
The reformed provisions provided for the examination of commercial
cases at first instance by regional commercial courts, on appeal by
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 9

commercial courts of appeal and, in cassation, by the High Commercial

Court (“the HCC”).
Following a review in cassation by the HCC, the parties could lodge an
application for a review of the case by the Supreme Court in the following
cases:
(i) in the event of a divergent application of the same provisions of
substantive law by the courts of cassation (at the time HCC, High
Administrative Court and the High Court on Civil and Criminal Matters)
which led to divergent decisions on the merits of cases; or
(ii) in the event of finding of a violation of an international treaty by an
international judicial institution in the course of the examination of the
case (Article 111-16).
Applications could be lodged within three months of the delivery of the
relevant decision of the HCC or, if the divergence in the case-law occurred
after the delivery of that decision, within a year of its delivery
(Article 111-17 § 1 of the Code).
The question of whether an application was to be admitted for
examination by the Supreme Court was assessed by a panel composed of
five HCC judges. The panel examined the application in camera and had to
give its ruling, which had to be reasoned, within fifteen days of the
applicant’s submission (Article 111-21).
48. The provisions which governed the review of decisions in
commercial cases prior to the 2010 reform can be found in MPP
Golub v. Ukraine ((dec.), no. 6778/05, 18 October 2005).
49. Article 112 § 2 (1) of the Code defined “newly established
circumstances” as circumstances material for the case which were not
known and could not be known to the party requesting a reopening of
proceedings at the time the case was examined. Article 113 § 1 of the Code
provided that a reopening could only be requested based on such
circumstances within three years of the judicial decision in the case
becoming final.

THE LAW

I. SCOPE OF THE APPLICATION TO THE COURT

50. In its application form of 25 September 2009 the applicant company

alleged, in particular, under Article 6 § 1 of the Convention that the
domestic courts which had dealt with its case had lacked impartiality,
because they were allegedly using the debtor’s building and because the
first-instance court president had corresponded with executive authorities
(as described in paragraphs 24 and 42 above). They also complained that the
10 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

proceedings concerning the recognition of its claims in the bankruptcy

proceedings had been unreasonably lengthy.
The applicant company also complained in the same application form,
under Article 1 of Protocol No. 1 to the Convention, that its right to
peaceful enjoyment of its possessions had been breached in that (i) the
domestic courts had failed to recognise its claims against Blasco in the
bankruptcy proceedings and (ii) the bankruptcy proceedings had not in
themselves been capable of protecting its interests.
51. In letters of 19 November 2010, 29 April and 13 September 2011,
29 February, 25 July and 28 December 2012, 30 April and 30 July 2013 and
21 January and 7 July 2014 the applicant company maintained those
complaints, stating in particular that there had been “no substantial
developments” in the bankruptcy proceedings and that the “Ukrainian courts
at all instances [had] failed to provide fair, adequate and lawful bankruptcy
proceedings and to protect the property rights of the applicant”.
52. In its letter of 10 December 2014 the applicant company complained
that its rights under Article 6 § 1 and Article 1 of Protocol No. 1 had been
breached on account of the quashing of the final decision of the Court of
Appeal of 27 October 2009 which recognised the applicant company’s
claims.

II. ALLEGED VIOLATIONS OF ARTICLE 6 OF THE CONVENTION

53. The applicant company complained that the domestic courts which
had dealt with its case had lacked impartiality and that the proceedings
concerning the recognition of its claims in the bankruptcy proceedings
against Blasco had been unreasonably lengthy. It relied on Article 6 § 1 of
the Convention, which reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a
fair ... hearing within a reasonable time by an independent and impartial tribunal
established by law.”

A. Admissibility

1. The parties’ submissions

54. The Government submitted that the applicant company’s complaints
concerning the quashing of the Court of Appeal’s decision of 27 October
2009 had been lodged out of time as they had been submitted on
10 December 2014 (see paragraph 52 above), that is to say more than
six months from the HCC’s final decision on the matter, adopted on
8 October 2013 (see paragraph 38 above).
55. The applicant company argued that its submissions in respect of the
quashing of the decision which had recognised its claims were merely an
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 11

elaboration and development of the original complaints contained in its

application form (see paragraph 50 above). The quashing itself had merely
been another episode in what it believed was a continuing situation  the
ineffectiveness of bankruptcy proceedings as a process. In any event, a
further appeal lay against the HCC’s decision to the Supreme Court
(see paragraph 47 above). That remedy was effective in theory even though
it had proven without result in practice as the HCC had refused it leave to
apply for a Supreme Court review and it had only become aware of that
decision on 15 July 2014 (see paragraph 40 above). As there was still no
decision by the Supreme Court on the substance of its application for
review, the situation of unfairness still persisted.

2. The Court’s assessment

(a) Reconsideration of the decision to recognise the applicant company’s claim
in the bankruptcy proceedings
56. The Court reiterates that it is the facts alleged by the applicant and
not their legal characterisation under the Convention proposed by the
applicant that are key to the application of the six-month rule
(see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12,
§§ 115 and 120, 20 March 2018). The mere fact that the applicant invoked
Article 6 in his or her application is not sufficient to constitute introduction
of all subsequent complaints made under that provision where no indication
has initially been given of the factual basis of the complaint and the nature
of the alleged violation (see Ramos Nunes de Carvalho e Sá v. Portugal
[GC], nos. 55391/13 and 2 others, § 103, 6 November 2018). The
complaints the applicant proposes to make under Article 6 of the
Convention must contain all the parameters necessary for the Court to
define the issue it will be called upon to examine, as will the Government
should the Court decide to invite them to submit observations on the
admissibility and/or merits of the case (ibid., § 104).
57. The applicant company did not provide the Court with any
information concerning the quashing of the ruling recognising its claims
until 10 December 2014 (see paragraph 52 above). Before that date, the
Court had no factual information related to the quashing of that decision.
Indeed, the original application was based on quite a different factual basis
since, at the time it was lodged, on 25 September 2009, the courts were still
refusing to recognise the applicant company’s claims. Fundamental changes
in that situation occurred on 27 October 2009, when the claims were
recognised, and on 30 May 2013, when that decision was quashed
(see paragraphs 30 and 36 above).
58. The applicant company’s argument that the quashing was a mere
episode in the “overall situation” of ineffectiveness of the bankruptcy
proceedings is unconvincing. The Court considers that the two questions are
12 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

quite distinct: before asking the question of whether the proceedings were
an effective tool for the protection of the rights of creditors it had to be
determined whether the applicant company was such a creditor.
59. It remains to be determined whether the applicant company’s new
complaint, lodged on 10 December 2014, was lodged within the six-month
time-limit. The ruling recognising the applicant company’s claim was
quashed on 30 May 2013 and that ruling was upheld by the HCC on
8 October 2013 (see paragraphs 36 and 38 above respectively). That
decision was served on 12 November 2013, more than six months before the
introduction of this new complaint. Therefore, the answer to the question of
whether the new complaint was lodged out of time depends on whether an
application for review to the Supreme Court was an effective remedy to be
exhausted at the relevant time.
60. The applicant company submitted that it was, but the Court is not
convinced by that argument. The rules applicable to such applications at the
relevant time were analogous to those examined in Karuna v. Ukraine
((dec.), no. 43788/05, 3 April 2007). In that case the Court concluded that at
the relevant time, applications for a rehearing by the Supreme Court were
akin to requests for a reopening of the proceedings and Article 6 did not
apply to the proceedings concerning them. In Bulanov and
Kupchik v. Ukraine (nos. 7714/06 and 23654/08, § 32, 9 December 2010)
the Court found that such applications were not an effective domestic
remedy to be used in administrative cases.
61. The Court sees no reason to reach a different conclusion in the
present case. While prior to the legislative changes of 2010 an appeal in
cassation to the Supreme Court was an effective remedy in commercial
cases (see MPP Golub v. Ukraine (dec.), no. 6778/05, 18 October 2005), the
legislative changes of 2010 (see paragraph 47 above) made the situation of
the Supreme Court in commercial proceedings fully analogous to the one
which it had previously played in administrative proceedings.
62. In fact, under the provisions which were applicable in the present
case the role of the Supreme Court was even more restricted than its role in
administrative proceedings as analysed in Karuna and Bulanov: while in
administrative proceedings, as examined in those two cases, the only
grounds for a review by the Supreme Court was divergence in the case-law
of higher courts (including on matters of both substantive and procedural
law), in the post-2010 commercial proceedings, such a divergence had to be
limited to substantive law only, to the exclusion of procedural matters.
63. To be sure, there can be circumstances where even a request to
reopen proceedings which ended in a final decision can exceptionally be
considered an effective remedy, in the light of particular features of the
domestic law (see, for example, Barać and Others v. Montenegro,
no. 47974/06, § 28, 13 December 2011). However, that was not the case
here. The applicant company’s application for review did not meet the very
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 13

restrictive criteria for the admissibility of such applications, as it concerned

matters of fact and the application of procedural law in the company’s case
rather than any divergence in the high courts’ interpretation of the
substantive law (see paragraphs 39 and 40 above).
64. To recap, the applicant company lodged its complaint concerning the
quashing of the final judicial decision recognising its claims in the
bankruptcy proceedings on 10 December 2014, more than six months after
12 November 2013, the date when the HCC’s decision dismissing its appeal
in that respect was served on it (see paragraphs 52 and 38 respectively).
65. It follows that this part of the application it was lodged outside of the
six-month time-limit and must therefore be rejected as inadmissible
pursuant to Article 35 §§ 1 and 4 of the Convention.
(b) Independence, impartiality and the length of proceedings
66. However, the same conclusion cannot be reached in respect of the
applicant company’s complaints concerning the independence and
impartiality of the domestic courts and the length of proceedings. Those
complaints, including all the key arguments and facts on which the applicant
company continues to rely, were included in the application form lodged on
25 September 2009 (see paragraph 50 above).
67. The Court notes that this part of the application is not manifestly
ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It
further notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.

B. Merits

1. Impartiality
(a) The parties’ submissions
68. The applicant company submitted that the courts which had dealt
with its case had not been independent and impartial. In its application form,
it pointed to the wording of the letters from the president of the Commercial
Court to various executive authorities (see paragraph 24 above), which
showed, according to the applicant company, the court’s servile rather than
impartial attitude towards the executive. It also alleged that the Commercial
Court and the Court of Appeal were using as their offices the building
which used to belong to the debtor, Blasco, and which had been made
available for the court’s use in 2005, while the bankruptcy proceedings were
pending (see paragraph 42 above).
69. The Government described the constitutional and legislative
guarantees of the judges’ independence and impartiality, notably the
procedures for their appointment and removal, as well as their duty to be
impartial and to withdraw if there are any justified doubts in that respect
14 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

(see paragraphs 43 and 46 above). In their view, those provisions adequately

secured the judges’ independence and impartiality. There was no evidence
that the judges in charge of the case had failed to comply with their duties in
that respect or that the guarantees were insufficient. As to the court
president’s letters referred to by the applicant company, they merely showed
the efforts of the court president to ensure the lawful conduct of the debtor
and State authorities in the context of the bankruptcy proceedings. The
applicant company had repeatedly requested the withdrawal of the judges
and those requests had been duly examined and found to be groundless.
(b) The Court’s assessment

(i) Relevant general principles

70. In order to establish whether a tribunal can be considered to be
“independent” within the meaning of Article 6 § 1, regard must be had, inter
alia, to the manner of appointment of its members and their term of office,
the existence of guarantees against outside pressures and the question
whether the body presents an appearance of independence. The Court
observes that the notion of the separation of powers between the executive
and the judiciary has assumed growing importance in its case-law.
However, neither Article 6 nor any other provision of the Convention
requires States to comply with any theoretical constitutional concepts
regarding the permissible limits of the powers’ interaction (see Ramos
Nunes de Carvalho, cited above, § 144).
71. The existence of impartiality for the purposes of Article 6 § 1 must
be determined according to both (i) a subjective test, where regard must be
had to the personal conviction and behaviour of a particular judge (that is to
say whether the judge held any personal prejudice or bias in a given case);
and (ii) an objective test – that is to say by ascertaining whether the tribunal
itself (and, among other aspects, its composition) offered sufficient
guarantees to exclude any legitimate doubt in respect of its impartiality (see,
for example, Morice v. France [GC], no. 29369/10, § 73, ECHR 2015). As
to the objective test, it must be determined whether, quite apart from the
judge’s conduct, there are ascertainable facts which may raise doubts as to
his or her impartiality. This implies that, in deciding whether in a given case
there is a legitimate reason to fear that a particular judge, or a body sitting as
a bench, lacks impartiality, the standpoint of the person concerned is
important but not decisive. What is decisive is whether this fear can be held
to be objectively justified (ibid., § 76). The objective test mostly concerns
hierarchical or other links between the judge and other protagonists in the
proceedings. In this connection even appearances may be of a certain
importance or, in other words, “justice must not only be done, it must also
be seen to be done”. What is at stake is the confidence which the courts in a
democratic society must inspire in the public (ibid., § 77 and 78).
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 15

72. The concepts of independence and objective impartiality are closely

linked and, depending on the circumstances, may require joint examination
(see Ramos Nunes de Carvalho, cited above, § 150).
(ii) Application of the above principles to the present case
73. The applicant company did not put forward any arguments to show
that the domestic courts or judges that examined its case lacked
independence from the executive in terms of the manner of their
appointment, term of office or the existence of formal guarantees against
outside pressures. Indeed, domestic law, as pointed out by the Government,
provides guarantees in that respect (see paragraph 43 above).
74. There is no material before the Court which would call into doubt
the impartiality of the judges who dealt with the applicant company’s case
under the subjective test.
75. It remains to ascertain whether the judges and the courts met the test
of objective impartiality.
(α) Commercial court’s president’s correspondence with executive authorities
76. The Court observes that the correspondence in question (see
paragraph 24 above) was mainly dedicated to the court president’s efforts to
ensure that the bankruptcy proceedings unfolded in a lawful manner. In that
regard the situation in the present case is different from those cases where
the Court found violations of the principle of impartiality because executive
authorities made direct interventions in cases and the court presidents
responded to them with reports on measures taken (see Sovtransavto
Holding v. Ukraine, no. 48553/99, § 80, ECHR 2002-VII, and
Agrokompleks v. Ukraine, no. 23465/03, § 130, 6 October 2011). That being
said, certain formulations used in the court president’s correspondence in
the present case can be seen as open to cricitism. However, there is no need
for the Court to take a definitive stance on this issue in view of its
conclusion below that the principle of impartiality has, in any case, been
breached for other reasons.
(β) Alleged use of the debtor’s building
77. Turning to the question of the alleged use by the court of the
debtor’s former building, the Court finds it particularly relevant that the
proceedings in question concerned bankruptcy, a procedure in which the
function of the domestic courts was to ensure an orderly distribution of the
debtor’s assets between its creditors.
78. The applicant company provided, both to the domestic court and this
Court, prima facie evidence that the commercial court in charge of the
bankruptcy case was itself housed in a building that had been transferred
from the debtor to the courts not long before the launch of the bankruptcy
proceedings, when the debtor was already in financial distress, and that that
16 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

transfer was completed when the bankruptcy proceedings were already

under way (see paragraphs 42 and 32 above). There was no response to the
applicant company’s arguments in that respect, other than one judge’s ruling
that she was not affected by that transfer as she had taken over the case at a
later date (see paragraph 33 above).
79. It is notable that the judge, even in dismissing the request for
withdrawal, did not question that the transfer had indeed happened as
alleged by the applicant company.
80. In such circumstances the Court must conclude that, despite the
absence of reasons to doubt the impartiality of the individual judges
concerned, the applicant company’s perception that the court dealing with
its case lacked impartiality can be seen, by an objective observer, as not
manifestly devoid of merit (compare, for example, Belukha v. Ukraine,
no. 33949/02, § 54, 9 November 2006, where a violation was found because
a court president had requested and received free of charge equipment for
the court from the defendant in Ms Belukha’s case). This perception
concerned the first-instance court itself, as opposed merely to any individual
judge (see, mutatis mutandis, Boyan Gospodinov v. Bulgaria, no. 28417/07,
§ 55, 5 April 2018).
81. For that reason the only response of the domestic courts to the
applicant company’s concerns in that respect, to the effect that one
individual judge of the Commercial Court was not personally affected by
the transfer, cannot be seen as sufficient. The Court reiterates that Article 6
§ 1 of the Convention imposes an obligation on every national court to
check whether, as constituted, it is "an impartial tribunal" within the
meaning of that provision where, as in the instant case, this is disputed on a
ground that does not immediately appear to be manifestly devoid of merit.
However, in the present case neither the Commercial Court nor the Court of
Appeal conducted such a check which would have made it possible to
remedy, if it proved necessary, a situation contrary to the requirements of
the Convention (see, mutatis mutandis, Remli v. France, 23 April 1996,
§ 48, Reports of Judgments and Decisions 1996-II).
82. Regard being had to the confidence which the courts must inspire in
those subject to their jurisdiction, these considerations are sufficient for the
Court to find that there has been a violation of Article 6 § 1 of the
Convention in respect of the impartiality requirement.

2. Length of proceedings
(a) The parties’ submissions
83. The applicant company complained that the proceedings in its case
had started in September 2003 and had still been ongoing when it had
submitted its observations in reply to those of the Government (10 July
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 17

2018) and, therefore, in its estimation, the proceedings had been ongoing for
fifteen years.
84. The Government submitted that the subject matter of the
proceedings was complex – the bankruptcy case file ran to 120 volumes,
and there were many parties involved. The applicant company had itself
contributed to the length of the proceedings by lodging various applications
and requests.
(b) The Court’s assessment
85. The applicant company sought recognition of its claim against the
debtor company on 29 September 2003. Those claims were finally
recognised on 8 August 2012 (see paragraphs 15 and 31 above). However,
then the proceedings for a reopening in view of “newly established
circumstances” started on 29 March 2013, when the debtor lodged a request
to that effect. They ended on 8 October 2013, when the HCC upheld the
decision to quash the decision recognising the applicant company’s claims
(see paragraphs 34 and 38 above).
86. The Court reiterates that extraordinary appeals seeking the reopening
of terminated judicial proceedings do not normally involve the
determination of “civil rights and obligations” or of “any criminal charge”
and therefore Article 6 is deemed inapplicable to them
(see Bochan v. Ukraine (no. 2) [GC], no. 22251/08, § 44, ECHR 2015).
However, should an extraordinary appeal actually result in reconsidering the
case afresh, Article 6 applies to the “reconsideration” proceedings in the
ordinary way (ibid., § 46).
87. It follows that in the present case Article 6 was applicable to the
proceedings for review in the light of the newly established circumstances
and that, including those proceedings, the proceedings overall lasted for ten
years and one month.
88. The Court reiterates that the reasonableness of the length of
proceedings must be assessed in the light of the circumstances of the case
and with reference to the following criteria: the complexity of the case, the
conduct of the applicants and the relevant authorities and what was at stake
for the applicants in the dispute (see Frydlender v. France [GC],
no. 30979/96, § 43, ECHR 2000-VII).
89. In Svetlana Naumenko v. Ukraine (no. 41984/98, 9 November 2004),
the Court already found a violation in respect of issues similar to those in
the present case.
90. Having examined all the material submitted to it, the Court has not
found any fact or argument capable of persuading it to reach a different
conclusion. Having regard to its case-law on the subject, the Court considers
that in the instant case the length of the proceedings was excessive and
failed to meet the “reasonable time” requirement.
18 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

91. There has, therefore, been a violation of Article 6 § 1 of the

Convention in respect of the length of proceedings.

III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

92. The applicant company complained that the domestic courts had
quashed the final domestic decision recognising its claims in the bankruptcy
proceedings and had failed to recognise its claims. It also complained that
the bankruptcy proceedings had been ineffective as a tool for protecting the
creditors’ rights. It relied on Article 1 of Protocol No. 1, which reads, in so
far as relevant:
“Every natural or legal person is entitled to the peaceful enjoyment of his
possessions. No one shall be deprived of his possessions except in the public interest
and subject to the conditions provided for by law and by the general principles of
international law.
...”
93. The Government contested those arguments. Subject to their
submissions on admissibility (see paragraph 54 above), they were prepared
to acknowledge that the quashing of the final decision in the applicant
company’s favour had constituted an interference with its right to peaceful
enjoyment of its possessions. However, that interference had been lawful,
had pursued the public interest in the legality of the bankruptcy proceedings
and protection of the interests of the debtor’s other creditors, and had been
proportionate.
94. As far as the first aspect of the complaint is concerned, it was lodged
outside of the six-month time-limit for the same reasons as the analogous
complaint under Article 6 (see paragraphs 56 to 65 above) and must
therefore be rejected as inadmissible pursuant to Article 35 §§ 1 and 4 of the
Convention.
95. Even assuming that the second element of applicant company’s
complaint under Article 1 of Protocol No. 1, namely that the bankruptcy
proceedings were an ineffective tool for protecting the creditors’ rights, can
be seen as distinct and, therefore, assuming that it was not lodged out of
time, the Court still needs to ascertain that the applicant company had a
“possession” so as to make Article 1 of Protocol No. 1 applicable in respect
of that complaint.
96. Article 1 of Protocol No. 1 does not guarantee the right to acquire
property. An applicant can allege a violation of Article 1 of Protocol No. 1
only in so far as the impugned decisions related to his “possessions” within
the meaning of this provision. “Possessions” can be either “existing
possessions” or assets, including claims, in respect of which the applicant
can argue that he or she has at least a “legitimate expectation” of obtaining
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 19

effective enjoyment of a property right (see Kopecký v. Slovakia [GC],

no. 44912/98, § 35, ECHR 2004-IX).
97. The proprietary interest relied on by the applicant company was in
the nature of a claim and cannot be characterised as an “existing possession”
within the meaning of the Court’s case-law (ibid., § 41). It remains to
ascertain whether the applicant company nevertheless had a “legitimate
expectation” to obtain recognition of that claim.
98. The domestic courts eventually concluded that its claim was
unfounded. The operation of the six-month rule, which marks out the
temporal limit of the supervision exercised by the Court (see
Sabri Güneş v. Turkey [GC], no. 27396/06, § 40, 29 June 2012) prevents the
Court from reviewing the merits of that decision (see paragraphs 56 to 65
above).
99. According to the Court’s case-law, no “legitimate expectation” can
be said to arise where there is a dispute as to the correct interpretation and
application of domestic law and the applicant’s submissions are
subsequently rejected by the national courts (see Béláné Nagy v. Hungary
[GC], no. 53080/13, § 75, 13 December 2016).
100. Therefore, this part of the application is incompatible with the
Convention ratione materiae and must be rejected as inadmissible pursuant
to Article 35 §§ 3 (a) and 4.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

101. Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols
thereto, and if the internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford just satisfaction to
the injured party.”

A. Damage

102. The applicant company claimed 3,895,026.33 United States dollars

(USD) in respect of pecuniary damage, comprising the amount of the
original claim, USD 2,021,370.13 (see paragraphs 12 and 15 above),
increased to compensate for the delay in payment. The applicant company
also claimed EUR 65,000 in respect of non-pecuniary damage.
103. The Government submitted that those claims were excessive and
unsubstantiated and that there was no causal link between the violations the
applicant company alleged and its pecuniary damage claim.
104. The Court does not discern any causal link between the violations
found and the pecuniary damage alleged; it therefore rejects this claim. On
the other hand, ruling on an equitable basis, it awards the applicant company
EUR 10,000 in respect of non-pecuniary damage.
20 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT

B. Costs and expenses

105. The applicant company also claimed 17,365.44 hryvnias (UAH –

approximately EUR 558) for the costs and expenses incurred before the
domestic courts and UAH 15,791.72 (approximately EUR 507) for those
incurred before the Court. It submitted documentary evidence in support of
the claims.
106. The Government considered that those claims were
unsubstantiated.
107. According to the Court’s case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been shown
that these have been actually and necessarily incurred and are reasonable as
to quantum. In the present case, regard being had to the documents in its
possession and the above criteria, the Court considers it reasonable to award
the sum of EUR 650 covering costs under all heads.

C. Default interest

108. The Court considers it appropriate that the default interest rate
should be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the complaints under Article 6 § 1 of the Convention in respect
of the independence and impartiality of the domestic courts and in
respect of the length of proceedings admissible and the remainder of the
application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention

in respect of the impartiality requirement;

3. Holds that there has been a violation of Article 6 § 1 of the Convention

in respect of the length of proceedings;

4. Holds
(a) that the respondent State is to pay the applicant company, within
three months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention, the following
amounts:
(i) EUR 10,000 (ten thousand euros), plus any tax that may be
chargeable, in respect of non-pecuniary damage;
 COSMOS MARITIME TRADING AND SHIPPING AGENCY v. UKRAINE JUDGMENT 21

(ii) EUR 650 (six hundred and fifty euros), plus any tax that may
be chargeable to the applicant company, in respect of costs and
expenses;
(b) that from the expiry of the above-mentioned three months until
settlement simple interest shall be payable on the above amounts at a
rate equal to the marginal lending rate of the European Central Bank
during the default period plus three percentage points;

5. Dismisses the remainder of the applicant company’s claim for just

satisfaction.

Done in English, and notified in writing on 27 June 2019, pursuant to

Rule 77 §§ 2 and 3 of the Rules of Court.

Claudia Westerdiek Angelika Nußberger

Registrar President