A long and squalid wrangle over Artist Union’s property

19.02.2007 |
The right of private property in Ukraine is perhaps the least well-protected. It is not surprising that we often hear of “raider” assaults taking place apparently within the framework of Ukraine’s current, albeit inadequate legislation. Obviously with such legislation and often due to the shortcomings in the work of the state authorities and bodies of local self-government on defending property rights, the most defenceless are ordinary citizens, civic organizations, creative unions, local associations, etc
The lawyers’ association “Kozakov and partners” specializes in providing legal aid to people needing help primarily in protecting their property rights where these have been violated by the authorities. In this way we make our contribution to building civic society in Ukraine, and developing European legal awareness based on an understanding that the authorities must be responsible. Over more than 3 years, together with our colleagues, for example, from the Franko University, we have been defending the rights of the Ukrainian National Union of Artists, as well as its Lviv regional branch, They have been trying, through lawful juridical means to get back property lost as a result of various forms of manipulation in the past.
We were recently successful in defending the rights of the Union in a case involving the regional shop – salon “Artist”. The city authorities have been trying to take the building itself which the Union have used for more than half a century away from them and sell it. And this is despite the fact that previously following a decision by the local authorities, the Union used its own money to evict the tenants from several flats in the building and did major reconstruction work on the salon, with the full right to own the shop premises.
Even more so since in 1998 the Cabinet of Ministers passed a Resolution in which it recommended that the city hand the premises over to the National Union of Artists. However the city authorities had their own vision of our the property should be used, as a result of which the Union faced losing the place where they sell their artefacts. Having ended up in this vulnerable position, the Lviv regional branch of the Union, under Oleh Mykyta, initiated a civil suit to have the property declared theirs.
Over two years of court proceedings, both the city authorities and the Union understood that they needed to find a compromise. Therefore at the initiative of our company, all the parties signed an agreement according to which the Union, in enforcement of the above-mentioned Resolution, received property of 154 square metres on the ground floor of the building. Having ceded 90.9 square metres in dangerous condition (it has since been demolished), the Union gained the right to lease at a concessionary rate, not later than 31 March 2009, area on the ground floor which they will build directly behind the shop – salon.
This means that instead of a part of the shop in dangerous condition, the Union has gained the opportunity to open yet another decent shop on the ground floor of the building which is presently under construction. The city authorities have at the same time resolved the issue of the dangerous area of the building which they sold to the bank which is now carrying out the construction work.
By thus competently using a civil suit, we won a battle against the city authorities and also showed Lviv residents that the struggle with the bureaucratic machine for the restoration of justice is possible and needed, both for the victims and for the city authorities. The latter has always defended the right to be called democratic, and must therefore take into considerations those who at one time suffered as a result of their actions or omissions.
With the positive experience of cooperation between the Union of Artists, and “Kozakov and partners”, the board of the Lviv regional branch of the Union, as well as the Union’s own board, asked a lawyer to help them resolve yet another conflict between the city authorities and Union enterprise, the Lviv Experimental Ceramic Factory. In 1998 the sanitation inspectorate of the Chervonoarmiysky district in Lviv made a chek and decided that one of the buildings near where the factory functioned was not fit for habitation. The executive committee of the city council therefore ordered the factory to evict the tenants from the building.
The factory asked the local authorities to allocate living space for the evicted tenants. They even offered to move the tenants at their expense. The city authorities agreed to the Factory paying over to the Department for Major Construction of the City Council 150 thousand roubles in 1991. This amount included not only the cost of building new flats for the factory workers (on share participation in the construction), but to move the tenants from the problem building.
The same year, the factory paid the city council’s department for major construction 494 thousand roubles as payment for the transfer of the building unfit for habitation to the factory for carrying out production. The correspondence shows that the money was received by the correct department. However the factory’s attempts over subsequent years to receive the building ended in formal fob offs, about the possibility of receiving it later (although at one stage, there was some movement over the transfer of the building, and it was moved from residential to non-residential status). Meanwhile the city authorities surreptitiously sold the building in bad condition, which the new management of the Union and the factory only found out about in 2005.
Having understood that the factory would not be given the building, and that it would be impossible to get it from the new owners by legal means, the Lviv and National Unions of Artists set out to get back the money which the city council’s department for major construction had, as it turned out unfoundedly, received and held. Some simple arithmetic calculations make it possible to establish that the department earned itself 344 thousand roubles, this taking the rate of inflation into account.
Bearing in mind that neither the Union nor the factory had nor have the money to pay for professional legal representatives in court, in July 2005 the Union’s Board understood that the only way to fight the local bureaucracy to get their money back was to sell their right of demand to the city council’s department for major construction to a lawyer from “Kozakov and Partners” so that after the successful conclusion of the court case he would return a part to the Union and keep a part for the legal services provided.
In a year the Economic Court of the Lviv region, having carefully studied them material of the claim, fully allowed the claim against the city council’s department for major construction. The court ordered the department to pay the claimants the entire debt. In October 2006, the Lviv Appeal Economic Court, having examined by the appeal from the department, upheld the ruling of the regional appeal court. However after this the department turned to the Higher Economic Court of Ukraine with a cassation appeal. Since the July ruling was in force, and the department did not intend to comply with it, the bailiffs’ service began forcibly extracting the money, by freezing its accounts. Overcoming the resistance shown, they were able to retrieve 600 thousand UH which is only however a drop in the ocean of the money owed by the department.
Having approached the Higher Economic Court, the latter at the beginning of this year went beyond its legal powers, as set out in the Economic Procedure Code, and revoked the rulings of the previous two courts and returned the case for another judicial investigation to the Lviv Regional Economic Court. The court’s main “argument” was that the term for lodging a claim for the money unfoundedly held by the Department had supposedly expired in 1991, on the day when the money had been transferred.
We would point out that, in accordance with current legislation, the period for a civil claim is calculated from the time when the party whose rights have been violated, found out or should have found out about such a violation. Since the correspondence between the Lviv Experimental Ceramic Sculpture Factory and the city authorities, the possibility is constantly confirmed that the factory will have the building transferred to them, the time period cannot possibly be calculated from the day when the factory’s funds were handed over, but should be from 2005, from the response to an official request for information when it became clear that the reason for the department holding the factory’s money from 1991 was not valid.
In addition, according to Economic Procedure Code, the Higher Economic Court does not have the right to revoke court rulings of two lower courts and return the case to a court of first instance again.
A cassation appeal against the ruling of the Higher Economic Court has therefore been lodged with the Supreme Court. We are all waiting for the possibly final decision on this case and are convinced that it must be fair and should ensure the restoration of the violated rights of the union business.
It is galling, but, as can be seen, civilized struggles in court have never been and have not become an achievement of the new city authorities who so recently ran an election campaign with high-sounding democratic slogans. The new authorities do not intend to repay the debts of their predecessors, but are instead trying to obstruct the restoration of justice for the factory. Lviv police officers, on the application of the “aggrieved” Department for Major Construction of the City Council (!?) launched a criminal investigation into a supposed attempt to swindle money out of this Department. At present a criminal investigation is underway. The head of the Union of Artists, and Director of the Factory, the claimant, and lawyer have been summoned for questioning many times. And all of this is while the case remains unresolved in the Economic Court.
A number of questions come to mind. Who are the authorities hoping to set up? Whose reputation are they trying to dirty, by calling them swindlers, in order to return their own debt? Since when is a civil suit against the authorities a fraudulent action? Or do the authorities perhaps consider the court to be a swindler? Why are the authorities manufacturing a criminal investigation to obstruct the lawful actions of both a civic organization and a creative union and a business? Are there mercantile interests behind this criminal investigation? Or is this case an attempt by the city authorities to break down the course of economic court proceedings still in progress, without getting their hands dirty? Or is this a prerequisite for yet another “privatization” by the city of the Union’s property? Or perhaps this is the already familiar way (practiced both in the pre-Orange and Orange periods) of putting pressure on the factory, the Union, the claimant, the lawyer, and at the end of the day, on the court to convince them that it is useless to fight with these “democratic authorities”?
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