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The Supreme Court of Ukraine confirmed the possibility of appealing of the verdict on approval of plea agreements with the prosecutor by a person who was not involved in the case

27 April, 2016 Newsletters

The Supreme Court of Ukraine (hereinafter – “the SCU”) in its Resolution as of March 3, 2016 in case No. 5-347кс15 confirmed the right of a person who was not involved in the case, to appeal the verdict which approves the plea agreement, if such verdict affects the interests of that person.

The main points of the decision:

the court provided the “other person” the right, under which the courts of higher jurisdiction shall revise verdicts which concerned rights, freedoms and interests of such “other person”;
absence of “other persons” in the exhaustive list of subjects of appeal under article 394 of the CCP is not an obstruction to justice and appeal to a court of superior jurisdiction, as provided by part 2 of Article 24 of the Code, provided that the judgment relates to rights, freedoms and interests of these “other persons”;
the key moment is to find out whether the verdict regarding the respective person concerns interests of “other person” to such an extent that provides the latter, under part 2 of Article 24 of the CCP, the right to appeal against courts of higher jurisdiction.

Informative: in the aforementioned case, the verdict of the Boryspil District Court of Kyiv region approved the plea agreement and the employee of the prosecutor’s office for joint participation in rendering unlawful court decision. However the judge, who rendered the unlawful decision, judging from the plea agreement, approved by the verdict, was not involved in the case.

The aforementioned decision of the SCU concerns not only the described case, but it is of precedential value for the practice of particular category of tax disputes resolution.

Rather common is practice of tax surcharges rendering to sham transactions with the supplier, the director (founder, member) of which composed plea agreement, approved by the court verdict, in which admitted fictitious nature of own enterprise and/ or failure to implement respective business transactions.

Yet diligent taxpayers could not appeal the verdicts which de facto stated unreality of such transactions with the suppliers.

The decision of the SCU provides the real possibility for the taxpayers to appeal such verdicts concerning the third persons which prejudiced these taxpayers.

II.

We hope that such approach, approved by the SCU, will be established at the legislative level for the avoidance of doubt. This is envisaged by the respective provisions of the draft law 3448 “On amendments to the Tax Code of Ukraine related to peculiarities of the criminal proceeding in tax relations and issues of tax and duties administration”.

Such development would be to some extent similar to the historical development of the possibility to appeal a resolution on opening of criminal proceedings (under the previous version of the Code for Criminal Proceedings) in view of the fact that such decision may infringe rights and interests of such person. This question was once considered by the Constitutional Court of Ukraine, which by its Decision as of January 30, 2003 in case No. 1-12/ 2003 pointed out at unconstitutionality of the CPC rules that prohibited at the stage of pretrial investigation to appeal the court decision on initiating criminal proceedings. Considering the aforementioned decision of the Constitutional Court of Ukraine, respective amendments have been made to the CCP (Articles 236⁷ and 236⁸) in 2006 on appeal against the court decision on initiating criminal proceedings.

We hope that the position of the court (the SCU) concerning the abovementioned issue will be established at legislative level with the adoption of the draft law 3448.

The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.

Kind regards,

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