Prosecutor's appeal to court in the interests of the state, represented by a state-owned company, was allowed until 15 July 2015 - SC GC

During the period of validity of the Law of Ukraine No. 1789-XII of 5 November 1991 "On the Prosecutor's Office" (until 15 July 2015), it was possible for the Prosecutor's Office to represent the interests of the state represented by state-owned companies (enterprises) in court in case of violation or threat of violation of the state's interests, as there were no relevant prohibitions or certain restrictions in the legislation.

This legal conclusion was made by the Grand Chamber of the Supreme Court.

In the present case, in June 2015, the prosecutor filed three lawsuits on behalf of the state, represented by a SOE, which were consolidated by the court into one lawsuit, in particular to recover forest land from citizens.

The prosecutor identified the SOE as the entity entitled to represent the interests of the state in the disputed legal relations, as he believed that under the Forestry Code of Ukraine it was the entity entrusted with the functions of controlling the proper use of forest land, protection and reproduction of forests.

In dismissing the claims, the court of first instance, upheld by the court of appeal, relied on the fact that under Article 36-1 of Law of Ukraine No. 1789-XII "On the Prosecutor's Office" of 5 November 1991, the prosecutor was entitled to represent in court only the interests of citizens and the state. Instead, the prosecutor's claims were filed not on behalf of and in the interests of the state, but in the interests of a state-owned enterprise.

The Grand Chamber of the Supreme Court pointed out that Law No. 1789-XII, which was in force at the time the prosecutor filed the lawsuits in this case, did not contain any prohibitions (restrictions) on the prosecutor filing lawsuits to protect the interests of the state represented by state-owned companies (enterprises).

Subsequently, in the new Law of Ukraine No. 1697-VII "On the Prosecutor's Office" of 14 October 2014, which entered into force on 15 July 2015, the legislator expressly limited the rights of the prosecutor to represent the interests of the state represented by state-owned companies in court.

Instead, Law No. 1789-XII, in particular Article 36-1 of this Law, only stipulated that the representation of the state's interests in court by the prosecutor's office consists in the performance by prosecutors on behalf of the state of procedural and other actions aimed at protecting the interests of the state in court in cases provided for by law, and the basis for representation of the state's interests in court is the existence of violations or threats of violations of the state's interests.

That is, Law No. 1789-XII, unlike Law No. 1697-VII, did not specify that the prosecutor represents the interests of the state in the person of a state authority, local self-government body or other subject of power. For the prosecutor to represent the interests of the state in court, it was sufficient to justify the violation or threat of violation of the state's interests.

Therefore, if the interests of the state coincide with the interests of a state-owned enterprise, then until 15 July 2015, the prosecutor could not be deprived of the right to apply to court in the interests of the state represented by such a state-owned enterprise, since the legislation in force at that time did not provide for any prohibitions or restrictions on such an application.

The Grand Chamber of the Supreme Court noted that in this case, the prosecutor was protecting the violated interests of the state, which consisted in the withdrawal from state ownership of land plots used by the SOE as a specialised forestry enterprise that performs the functions assigned to it by the state to control the proper use of forestry land, protection and reproduction of forests. Therefore, taking into account the proper justification provided by the prosecutor in the statements of claim for the need to protect the interests of the state, the SC GC concluded that the prosecutor had the authority to represent the interests of the state represented by the SOE in the disputed legal relations at the time of filing the claims with the court.

Resolution of the SC GC of 25 September 2024 in case No. 587/1382/15-ц (proceedings No. 14-60цс24) - https://reyestr.court.gov.ua/Review/122434170.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.