NGOs may challenge a regulatory act in the interests of other persons if it is provided for by statutory documents or legislative norms and if this act applies to such persons - SC ACC

A non-governmental organisation has the right to file a lawsuit to challenge a regulatory act in the interests of other persons (not members of a non-governmental organisation), provided that such powers are provided for by statutory documents or legislative acts, and if the provisions of the regulatory act apply to persons in whose interests the public organisation acts.

This conclusion was reached by the Administrative Cassation Court of the Supreme Court.

In the case under consideration, the Odesa City Council decided to establish new rates of fees for parking spaces in Odesa. The NGO Corruption-Stop filed a lawsuit against the City Council, challenging the decision as unlawful on the grounds that it set a lower fee rate for specially designated car parks compared to paid parking areas, which creates opportunities for corruption schemes. The lawsuit was aimed at protecting the rights of the organisation's members and other persons who requested a review of the City Council's decision.

The Odesa District Administrative Court upheld the claim, recognising the challenged legal act as unlawful and invalid. The court of first instance recognised the right of an NGO to apply to the court to protect the rights of its members, which may have been violated by the challenged decision.

The Fifth Administrative Court of Appeal overturned the decision of the first instance court and dismissed the claim. The court came to the opposite conclusion: that the disputed regulatory act applies only to payers of the fee for parking spaces, which are legal entities or individual entrepreneurs.

In resolving the case, the Supreme Court noted that a non-governmental organisation has the right to file a lawsuit in the interests of other persons in two alternative cases: 1) in case of necessity to protect the rights and interests of members of a non-governmental organisation; 2) in case of necessity to protect the rights and interests of other persons (not members of a non-governmental organisation) who have applied.  

However, each of these situations when a non-governmental organisation can apply to the court is subject to the condition that such powers must be provided for in the statutory documents or legislative norms.

According to its constituent documents, the NGO Corruption Stop is authorised to represent and protect the rights and interests of only those persons who are its members. At the same time, only individuals can be members of the NGO. The statutory provisions do not provide for the right to represent and protect the rights and interests of persons who are not members of the NGO.

In justifying the purpose of the lawsuit, the plaintiff provided a list of the NGO's members, including 11 individuals with a residential address in Odesa. The case file also contains statements by some members of the NGO requesting an anti-corruption examination of the decision challenged in this case and, if necessary, to appeal the decision.

In assessing the connection of these persons directly with the subject matter of the claim, the Administrative Cassation Court noted that the decision that is the subject of the court appeal is a regulatory act. However, not every regulatory legal act applies to all persons without exception, since the act may create legal consequences only for certain subjects of law (it applies to a certain circle of persons).

In other words, when a non-governmental organisation appeals against a legal act in the interests of other persons, there is not only a condition that the non-governmental organisation has the authority to represent the interests of other persons, but also a condition that the provisions of the legal act must necessarily apply to the persons in whose interests the non-governmental organisation acts.

The range of entities covered by the contested decision of Odesa City Council includes only business entities - legal entities and/or individual entrepreneurs.

Following the consideration of the case, the Supreme Court found that the plaintiff is not a business entity and has no authority to interact with such entities, as the activities of the NGO are aimed at protecting only its members, who are individuals. Therefore, the challenged legal act does not apply to individuals who are members of the organisation. In the opinion of the Administrative Cassation Court, the said NGO does not have sufficient and reasonable grounds to apply to the court in the interests of its members. Therefore, neither the members of the organisation nor the NGO itself have violated their rights in these legal relations.

The Resolution of the Supreme Court of 10 May 2024 in case No. 420/18539/22 (administrative proceedings No. К/990/41741/23) - https://reyestr.court.gov.ua/Review/118962288.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.