Challenges related to foreclosure moratoriums: Supreme Court representatives join presentation of EBRD project

The roundtable ‘’Lifting Moratoriums on Foreclosure and Bankruptcy of State-Owned Enterprises in Ukraine‘’, attended by Vitalii Urkevych, Secretary of the Grand Chamber of the Supreme Court, and Olena Tarasenko, Head of the ECHR and EU Court of Justice Case Law Analysis Unit of the Supreme Court's Department for Analytical and Legal Work, was dedicated to exchanging views on the challenges posed by moratoriums and the impact of moratoriums on foreclosure and bankruptcy of state-owned enterprises in Ukraine.

During the event, the European Bank for Reconstruction and Development's technical cooperation project ‘Ukraine - Assistance on Moratoriums on Foreclosure and Bankruptcy of State-Owned Enterprises’ was presented. The aim of the project is to support the Government of Ukraine in analysing the economic impact, establishing principles and policies for lifting moratoriums, and developing a phased roadmap for the gradual lifting of moratoriums.

During the discussion on moratoriums on the enforcement of court decisions, which is one of the issues under supervision in the context of the execution of ECHR judgments in the group of cases Yuriy Ivanov/Burmych and Others v. Ukraine, Vitalii Urkevych reminded that the Supreme Court had raised the issue of the constitutionality of the relevant legislative provisions in its constitutional submissions to the Constitutional Court of Ukraine.

Thus, in June 2020, the Supreme Court, on its own initiative, filed a constitutional petition with the CCU to declare the restrictions imposed by the quarantine due to the spread of COVID-19 as inconsistent with the Constitution of Ukraine, in particular, regarding the temporary non-application of Part 1 of Article 25 of the Budget Code of Ukraine, according to which the State Treasury Service of Ukraine indisputably wrote off funds from the state budget and local budgets on the basis of a court decision.

The Constitutional Court of Ukraine ruled that enforcement of a final court decision is a positive obligation of the state, but the disputed provision of the Law of Ukraine ‘On Amendments to the Law of Ukraine “On the State Budget of Ukraine for 2020” made it impossible for the State Treasury Service of Ukraine to indisputably write off state and local budgets on the basis of a court decision until 1 January 2021, which limited the constitutional right to judicial protection. Therefore, the CCU declared the relevant provision unconstitutional (CCU Decision of 28 August 2020 No. 10-р/2020).

Also in September 2020, the Plenum of the Supreme Court concluded that the restriction established by clause 3 of Section III ‘Final and Transitional Provisions’ of Law of Ukraine No. 145-IX dated 2 October 2019 (temporary ban on foreclosure on certain state property) contradicts the Constitution of Ukraine and the Convention for the Protection of Human Rights and Fundamental Freedoms and filed a corresponding petition with the Constitutional Court of Ukraine.

The Supreme Court stated that the enforcement of a court decision is an integral element of everyone's right to judicial protection. In its decisions, the CCU has already concluded that it is a clear violation of the principle of separation of powers if the legislature suspends the enforcement of final court decisions by its act. The ECHR notes that it is the state that is obliged to take all necessary measures within its competence to execute a final court judgement.

The ruling of the CCU panel of judges opened constitutional proceedings in the case; the case has been considered by the Grand Chamber of the CCU since 17 December 2020.

In December 2021, the Plenum of the Supreme Court filed a petition with the CCU regarding the constitutionality of clause 11 of part 1 of Article 34, clause 10-1 of Section XIII ‘Final and Transitional Provisions’ of the Law of Ukraine ‘On Enforcement Proceedings’, clauses 5-1, 5-2 of Section III ‘Transitional and Final Provisions’ of the Law of Ukraine ‘On Peculiarities of Formation of a Joint Stock Company of Public Railway Transport’.

The Plenum of the Supreme Court stated that the prohibition to take enforcement actions under the Law of Ukraine ‘On Enforcement Proceedings’ in the absence of effective mechanisms for the implementation of the right to full and timely enforcement of court decisions that have entered into force jeopardises Ukraine's compliance with the requirements of Article 6 of the Convention.

The Grand Chamber of the CCU ruled to open constitutional proceedings in the case; the case has been under consideration since 11 April 2023.

In addition, Vitalii Urkevych added that in September 2024, the Plenum of the Supreme Court addressed the CCU regarding the constitutionality of clause 12, part 1, article 34 of the Law of Ukraine ‘On Enforcement Proceedings’. According to the Plenum of the Supreme Court, this provision contradicts the Constitution of Ukraine in terms of the right of a person to access to court in the sense of the state's obligation to enforce a court decision against the state and state-owned enterprises.

The CCU panel of judges ruled to open constitutional proceedings in the case; the case has been under consideration by the Grand Chamber of the CCU since 10 December 2024.

The event was organised by the Ministry of Justice of Ukraine jointly with the EBRD.

Photo courtesy of the organisers.