“The new law on the prosecutor's office is hardly perfect, but the inherent ideas allow businesses to look to the future with optimism,” Olena Pertsova, the Head of Dispute Resolution practice of Pavlenko Legal Group, believes.
— Business and society at large expected reform of the prosecutor's office this year. Were these expectations, from your point of view, realized?
— Despite some steps in this direction we cannot talk about qualitative reform of the prosecutor's office at the moment yet. The fact is that the bar set by society and business is too high, and the current system obviously falls short of it.
— How do you assess the new law on the prosecutor's office?
— It is hardly perfect, but the inherent ideas allow businesses to look to the future with optimism.
Firstly, the business finally got rid of the prosecutor's supervision. It is exactly the feature that created opportunities for dishonest prosecutors to abuse, and for business additional risks in their business activities.
Secondly, new rules on representing the interests of the state by a prosecutor in court encourage optimism. Business is already used to the fact that any deal, at first glance, having no relation to the state, may be appealed by the prosecutor. However, from July 15, 2015 the rules were changed: it is not enough to state a claim to the prosecutor as though in the interests of the state. Now the prosecutor must preliminarily agree such action with the agency or public officer, as well as to clearly define what exactly is a violation of these interests. The same rules are provided for the submission of appeal claims and cassation appeals. Failure to comply with these requirements provides a withdrawal of statement or claim at the stage of the decision on the opening of the proceedings.
— Have these novels already been reflected in dispute resolution practice?
— There really are the first signs. And we are especially pleased with the fact that practice in favor of business is formed in courts of all instances, whereas in the past self-defence against unreasonable demands by the prosecutor's office was, as a rule, only possible for cassation.
But there is another factor that we should not forget: since 1 September 2015 the prosecutor's office is obliged, on a par with other stakeholders, to pay the court fee. It has had the lightning-fast effect in practice: claims and complaints by prosecutors filed after September 1 can be counted on one’s fingers. In this regard, it is still too early to evaluate globally judicial practice in disputes with the Prosecutor's Office. The abolition of payment of the court fee privileges for the prosecution and the Antimonopoly Committee of Ukraine (ACU) is certainly a plus for business. Have customers valued it highly?
— Naturally. But, in my opinion, this is temporary euphoria. The prosecutor's office and the ACU have no possibility to pay the court fee, especially using the new rates. In fact, as we would have liked it, Parliament will have no choice but to return the privileges. Alas, this is not about lowering the rates for the other participants in the process.
— What are the trends in the practice of consideration of disputes with state authorities?
— As in the case with the prosecution, they are generally positive.
In particular, administrative courts have paid more attention to the practice of the European Court of Human Rights. Moreover, judges are increasingly not only evaluating the formal aspect of a case, but also qualitatively get to the bottom of relationships, which enables the adoption of a just decision.
Of course, the conclusions of the Supreme Court of Ukraine (AFU) have a positive impact on dispute resolution practice. For example, this year the AFU has finally put an end to the multiyear debate on the jurisdiction over disputes with the same Antimonopoly Committee of Ukraine - appeals against the decisions of this authority shall be submitted to economic and not administrative courts. Such decisions are important for businesses because they bring clarity and allow a clear line of defense to be built without the wasting of time on technical issues.
— There have been a lot of talks about judicial lustration. Are judges not afraid to go against the government, pronouncing judgments that are not in its favor?
— In my opinion, lustration has not only failed to meet expectations of society, but in many ways to harm it. Unfortunately, in some cases, judges really do follow the government or so-called civil society activists, allegedly defending the interests of the country. And the presence of activists in a public hearing, followed by specific slogans and calling for the imposition of a decision, is often enough for pronounce judgments. If the decision is correct and fair, and is taken not in favor of the government, the judge automatically is declared a public enemy in some instances.
— What are the most common cases?
— Russian companies and their structures have been strongly affected. The situation is no better for businesses involved or attributable to the former political elite of the country. It is worth noting that companies do not need to be of Russian origin, or belong to former officials. It is enough to declare them as such. And then civil society activists and the press get involved.
It is worth noting that similar actions cause suffering to not only pro-Russian and parapolitical businesses, but companies with no relation to them are affected too. In fact, over the last year we have created a new ‘revolutionary’ form of illegal takeovers that has an essential feature of ‘activists’ of all sorts who are directly involved in the process of court cases.
— Is the prosecutor's office involved in these proceedings?
— In some cases. In particular, prosecutors initiate claims in respect of such companies. Cases of re-privatization and invalidation of transactions are specifically popular. The number of cases of recovery of property from illegal possession has increased too.
— And what about the government authorities? What are the trends in this direction?
— Government authorities also exert a certain kind of pressure on ‘unpopular’ business. Among the most common examples are revocation of licences and other permits, imposition of various kinds of instructions and prohibitions. As an example, the State Aviation Administration of Ukraine has shown an overactive attitude this year.
In a separate direction we may exalt the actions of the National Bank of Ukraine and the Deposit Guarantee Fund, that have established a range of serious problems for banks. Especially alarming for bankers is the unpredictability of the regulator who actually announced the global cleanup of the market.
— Judicial disputes involving the Deposit Guarantee Fund are actually allocated in a separate direction. Who does dispute resolution practice stand for?
— This year really stands out for the rapid increase in the number of disputes with the Deposit Guarantee Fund. Business is trying to return money from troubled banks by using all means, but the lack of assets and holes in the budget make it turn increasingly to the courts. Dispute resolution practice is not formed definitively in this direction, and the position of the Supreme Court of Ukraine is required on many issues. The only thing we can say with confidence is that the Deposit Guarantee Fund does not want to make payments. As a result, this has created a new lever of pressure in this direction. That is, criminal cases initiated against depositors and bankers. Such instruments are sometimes extremely effective, because not everyone is ready to fight the state at the expense of their freedom and serenity.
— Is it worth fighting in such a case? After all, the guarantees of the money being returned are meagre.
— An absolute guarantee of dispute resolution and criminal practices does not exist in principle. But there are no guarantees of political stability and the preservation of certain trends in the behavior of the government authorities and the prosecutor's office either. The situation in the country may change promptly and we do not recommend missing the chance to protect vital interests. Moreover, if we as a society are yearning for a state based on the rule of law, the protection of legitimate rights by legal methods is a prerequisite for the further development of this form of state.