- Relevant domestic law and practice
- The Criminal Code of the Russian Federation provides as follows:
Article 33: Types of Accomplices to a Crime
“1. In addition to the perpetrator, organisers, instigators, and accessories shall be deemed accomplices.
- A person who has actually committed a crime or who directly participated in its commission with others (co-perpetrators), and a person who has committed a crime by using others who are not subject to criminal liability by reason of age, insanity, or other circumstances set out in this Code, shall be deemed to be a perpetrator.
- A person who has organised the commission of a crime or ordered its commission, and a person who has created an organised group or criminal community (criminal organisation) or has guided them, shall be deemed an organiser.
- A person who has abetted another into committing a crime by persuasion, bribery, threat or any other method shall be deemed an instigator.
- A person who has assisted in the commission of a crime by giving advice, instructions on committing the crime, or removing obstacles to it, and a person who has promised beforehand to conceal the offender, means of or instruments used in carrying out the crime, evidence of a crime, or objects obtained criminally, and equally a person who has promised beforehand to acquire or sell such objects, shall be deemed to be an accessory.”
Article 160: Misappropriation or embezzlement
“1. Misappropriation or embezzlement, that is, the theft of another’s property entrusted to the convicted person:
shall be punishable…
- The same acts committed in conspiracy or which cause significant damage to an individual…
- The same acts committed by a person by abuse of his official position or on a large scale…
- The acts set out in paragraphs 1, 2 or 3 of this Article committed by an organised group or on an especially large scale:
shall be punishable by up to ten years’ deprivation of liberty with or without a fine of up to one million roubles or up to three years’ wages/salary or other income with or without up to two years’ restriction of liberty.”
Article 165: Causing property damage by way of deception or abuse of trust
“1. Causing property damage to an owner or any other holder of property by way of deception or abuse of trust where there is no evidence of embezzlement on a large scale:
shall be punishable by a fine of up to 300 thousand roubles or up to two years’ wages/salary or other income… or by up to two years’ community work with or without up to a year’s restriction of liberty, or by up to two years’ deprivation of liberty with or without a fine of up to eighty thousand roubles or up to six months’ wages/salary or other income with or without up to a year’s restriction of liberty.
- The acts set out in paragraph 1 of this Article:
(a) committed by a group of persons in prior agreement or by an organised group;
(b) that has caused damage on a large scale;
shall be punishable by up to five years’ community work with or without up to two years’ restriction of liberty, or by up to five years’ deprivation of liberty with or without a fine of up to eighty thousand roubles or up to six months’ wages/salary or other income with or without up to two years’ restraint of liberty.”
- The Code of Criminal Procedure provided, at the material time, as follows:
Article 90: Prejudice
“Circumstances established in a judgment which has acquired legal force, given by a court in criminal proceedings, or in civil, commercial-court or administrative proceedings, shall be accepted by a court, prosecutor, investigator or inquirer without additional verification. However, such a judgment or decision cannot predetermine the guilt of persons who have not previously participated in the criminal case.”
Article 154: Disjoining a criminal case
- Material of a criminal case put into separate proceedings shall be admitted as evidence in the given criminal case…”
Article 240: Direct and oral hearing
“1. In judicial proceedings all evidence in a criminal case shall be subject to direct scrutiny, except as provided for in Section X of the present Code [plea-bargaining and accelerated proceedings]. The court shall hear the testimony of the defendant, victim, witnesses and experts, and shall examine the evidence and read out transcripts and other documents; it shall also carry out other judicial methods of examining evidence.
- Reading out statements given during the preliminary investigation shall only be possible in the cases specified in Articles 276 and 281 of the present Code.
- The court judgment may be based solely on evidence examined in a court hearing.”
Article 276: Reading out the defendant’s statement
“1. The defendant’s statement given in the course of the preliminary investigation… may be read out on the application of the parties in the following cases:
(i) where there are significant contradictions between the evidence the defendant gave in the course of the preliminary investigation and in court…”
Article 281: Reading out the victim or witnesses’ statement
A court may, on the application of the parties, decide to read out the evidence of the victim or a witness given earlier in the course of the preliminary investigation or in court where there are significant contradictions between the evidence previously given and the evidence given in court.
- On 29 June 2015 Article 90 of the Code of Criminal Procedure was amended as follows:
“Circumstances established in a judgment which has acquired legal force given by a court in criminal proceedings, except for a judgment given in accordance with Articles 226.9 [accelerated proceedings], 316 [court hearing in accelerated proceedings] or 317.7 [plea-bargaining] of this Code, or in civil, commercial-court or administrative proceedings, shall be accepted by a court, prosecutor, investigator or inquirer without additional verification. However, such a judgment or decision may not predetermine the guilt of persons who have not previously participated in the criminal case.”
- In ruling No. 51 of 27 December 2007, the Plenary of the Supreme Court adopted the following guidelines:
“19. Unlawful acts by a person pursuing his own mercenary ends who has dissipated property entrusted to him against the owner’s wishes by consuming it, spending it or transferring it to another must be classed as embezzlement.
- In deciding whether there was corpus delicti of theft in the form of misappropriation or embezzlement, a court must establish the circumstances confirming that the person’s intent covered the unlawful nature of his acts and the absence of consideration, [and] which acts are committed with the purpose of spending property entrusted to him or transferring it to another.
Taking property entrusted to the culprit by replacing it with less valuable property committed with the purpose of appropriation or turning it into the property of others must be classed as stealing.
- A perpetrator of misappropriation or embezzlement may only be a person entrusted with the assets of another legal person or individual, based on legal grounds for a specific purpose or for a defined activity. Based on the provisions of Article 34 § 4 of the Criminal Code, those who do not possess these special subjective characteristics qualifying [them] for misappropriation or embezzlement, but who directly participated in stealing assets in prior agreement with the person entrusted with the assets, must be criminally liable under Article 33 in conjunction with Article 160 of the Criminal Code in their capacity as organisers, inciters or facilitators.”
- The Civil Code of the Russian Federation provides as follows:
Article 10: Limits on exercising civil rights
- It is not permitted to exercise rights with the exclusive purpose of causing damage to another person, [act] in circumvention of the law with unlawful intent, [or] any other intentional exercise of civil rights in bad faith (abuse of rights). It is not permissible to use civil rights for the purpose of restricting competition, or abusing dominant market position.
- Failure to comply with the requirements in paragraph 1 of this Article, shall entitle a court, commercial court or arbitration tribunal to deny the person concerned the protection of the rights he possesses, fully or in part, taking account of the nature and consequences of the abuse committed, as well as to apply other measures provided for by law.
- If the abuse of rights takes the form of a circumvention of the law with unlawful intent, the consequences set out in paragraph 2 of this Article shall be applied in so far as this Code does not stipulate other consequences of such acts.
- If the abuse of rights entails a breach of another person’s rights the person concerned may claim [compensation].
- It shall be presumed that participants in civil legal relationships act reasonably and in good faith.
Article 50: Commercial and non-profit organisations
- Legal entities may either be organisations, which see deriving profits as the chief goal of their activity (commercial organisations), or organisations which do not see deriving profits as their goal and which do not distribute the derived profit among their members (non-profit organisations).
- Legal entities that are commercial organisations may be set up in the form of financial partnerships and companies, production cooperatives and State and municipal unitary enterprises…”
- Joinder of the Applications
- Given their similar factual and legal background, the Court decides that the two applications should be joined pursuant to Rule 42 § 1 of the Rules of Court.
- Alleged violation of Article 6 of the Convention
- The applicants complained under Article 6 §§ 1, 2 and 3 (d) of the Convention that the criminal proceedings against them had been arbitrary and unfair. They complained about the court’s manner of dealing with evidence. They also alleged a violation of the principle of the presumption of innocence referring, in particular, to the finding made in the judgment against X as to the applicants’ involvement in the crime and to the use of evidence originating from those proceedings, and the judgment itself, in the trial against them. Further, they complained about the procedure the court had followed when examining X and other witnesses, and its refusal to call and examine certain witnesses questioned during the investigation. Article 6 § 1 of the Convention reads as follows:
“1. In the determination of… any criminal charge against him, everyone is entitled to a fair… hearing… by [a]… tribunal…
- Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
- Everyone charged with a criminal offence has the following minimum rights:
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
- The Government put forward an admissibility objection as regards one specific complaint under Article 6 of the Convention. They contended that the applicants had not contested the decision to disjoin the case against X from the criminal proceedings against them. They claimed, in particular, that the first applicant had not challenged the rulings of 17 October 2012 and 10 December 2012 under the procedure set out in Article 125 of the Code of Criminal Procedure, and that the second applicant had not lodged any complaints at all. The Government therefore argued that the applicants had not exhausted domestic remedies as regards this complaint. If they had considered this remedy ineffective, the Government claimed in the alternative that they had missed the six-month time-limit for lodging their complaint with the Court.
- The Court considers that the decision to disjoin X’s case must be examined in the context of the complaint that the evidence originating from those separate proceedings had subsequently been used in the applicants’ own trial. It notes that both applicants filed applications with the trial court contesting the admission and use of that evidence and raised those objections in their grounds of appeal. Their appeal was examined and dismissed on 16 October 2013. The applications were lodged on 24 June 2013 by the first applicant and on 8 April 2014 by the second applicant. In these circumstances, the Court considers that the Government’s arguments as to the non-exhaustion of domestic remedies or failure to comply with the time-limit must be dismissed.
- The Court notes that the complaints under Article 6 of the Convention are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that they are not inadmissible on any other grounds. They must therefore be declared admissible.
- The parties’ submissions
- The Government submitted that the criminal proceedings against the applicants had been lawful and fair. The proceedings against X had had to be disjoined from the applicants’ case, to allow for plea-bargaining and the accelerated proceedings to be used in X’s case. They also stated that during the accelerated proceedings the trial court had not assessed the evidence or made any finding as to the applicants’ guilt or participation in the crime. They further submitted that the judgment of 24 December 2012 had been mentioned in the judgment against the applicants only to confirm that X had been convicted, not to transpose any other facts or corroborate the applicants’ guilt.
- The Government further alleged that no evidence originating from X’s case had been used in the proceedings against the applicants. In any event, the use of evidence from the disjoined proceedings would have been lawful under Article 154 § 5 of the Code of Criminal Procedure, subject to Article 240 of the Code which requires a judgment to be based solely on evidence examined in a court hearing. They submitted that under these conditions, using evidence from the disjoined proceedings was compatible with Article 6 of the Convention.
- The Government alleged that all the witness statements read out during the applicants’ trial had been obtained before the cases had been disjoined, and had only been read out in part. The defence could then cross-examine those witnesses and had had ample opportunity to comment on them.
- The applicants maintained their complaints. They alleged that the decision to disjoin the cases and the subsequent use of evidence originating from the accelerated proceedings against X had had a prejudicial effect on their case. The applicants contended that there had been no obligation to disjoin the proceedings, and that it had been done with the aim of compelling X to give false evidence against them. They pointed out that they had not been party to the proceedings against X and could not have challenged the decisions or the evidence relating to that case. Despite this, the judgment against X had formed the basis of their conviction. Moreover, the testimony of X, the key witness in their case, had been unreliable because he had previously entered into plea-bargaining in the same criminal case and had had a vested interest in the outcome of the applicants’ proceedings. In particular, his sentence could have been reversed in accordance with Article 317 § 8 of the Code of Criminal Procedure, if it had transpired that he had made false statements during his plea-bargaining. At the applicants’ trial, in his capacity as a witness, he had had no choice but to reiterate the statements he had previously made as an accused when not under oath. Moreover, before testifying as a witness at the applicants’ trial, the judge had not warned him about criminal liability for perjury.
- The applicants further contested the Government’s allegation that the judgment against X had not contained a finding of their guilt. They quoted extracts from the judgment of 24 December 2012 in which they were referred to as X’s “partners in crime” and were clearly identifiable by their initials and jobs titles (see paragraph 42 above). The applicants submitted that, contrary to the Government’s claim, the court which had examined their case had been bound by the earlier judgment in X’s case, which, by operation of Article 90 of the Code of Criminal Procedure, was res judicata irrespective of whether the court had expressly referred to it as such.
- Next, the applicants pointed out that they had had no access to the material in X’s case file and could not verify its content. When the cases had been disjoined no list of the material transferred had been drawn up. Accordingly, the applicants had had no knowledge as to what evidence had been attached to X’s file. They suggested that some exonerating evidence could have been concealed from them. They specifically referred to the collection of telephone-tapping records that had been incomplete in their own case files but had been fully disclosed in X’s file; the trial court had refused to allow them to access or examine the missing records.
- The applicants also complained that the trial court had allowed X’s and other witness statements given during the investigation to be read out before the defence had had the opportunity to cross-examine them. The applicants submitted that those statements had reflected the investigators’, not the witnesses’ own accounts; reading them out during the applicants’ trial had thus served to “remind” the witnesses of the official interpretation. The applicants had insisted at the trial on having a chance to cross-examine the relevant witnesses before the earlier statements had been read out, but the court had decided otherwise.
- Lastly, the applicants submitted that the interpretation of the legal provisions governing liability for embezzlement had been arbitrary, without precedent or basis in domestic law and unforeseeable. They pointed out that VLK had provided collateral for Kirovles’ assets and contested that it had caused damage or transferred Kirovles’ property for its own, or a third party’s, benefit. They maintained, in particular, that VLK had entered into a lawful transaction with Kirovles, and that the parties had concluded, implemented and terminated the contract freely and in accordance with their discretion and commercial interests. This transaction had not been challenged as invalid, a sham, or irregular. In essence, the second applicant had been prosecuted for carrying out the ordinary activities of a commercial intermediary, and the first applicant for advising the parties to the transaction. They alleged, in conclusion, that the only purpose of their prosecution and conviction was to curb the first applicant’s public and political activity.
- The Court’s assessment
(a) General principles
- The Court reiterates that the presumption of innocence enshrined in Article 6 § 2 of the Convention and the guarantees relating to the examination of witnesses set out in Article 6 § 3 (d) of the Convention are elements of the right to a fair hearing set forth in Article 6 § 1 of the Convention and must be taken into account in any assessment of the fairness of proceedings as a whole (see Doorson v. the Netherlands, 26 March 1996, § 70, Reports of Judgments and Decision 1996-II; v. Germany [GC], no. 22978/05, §§ 162 and 175, ECHR 2010; Al-Khawaja and Tahery v. the United Kingdom [GC], nos. 26766/05 and 22228/06, § 118, ECHR 2011; Khodorkovskiy and Lebedev v. Russia, nos. 11082/06 and 13772/05, § 743, 25 July 2013; and Karaman v. Germany, no. 17103/10, §§ 42 – 43, 27 February 2014).
- In deciding whether applicants have received a fair hearing the Court does not take the place of the domestic courts, who are in the best position to assess the evidence before them, establish facts and interpret domestic law. Its task is to ascertain whether the proceedings as a whole, including the way in which evidence was taken, were fair (see, among other authorities, Van Mechelen and Others v. the Netherlands, 23 April 1997, § 50, Reports 1997-III; , cited above, § 162; Al-Khawaja and Tahery, cited above, § 118; and Schatschaschwili v. Germany [GC], no. 9154/10, § 101, 15 December 2015). As regards the use in evidence of statements obtained at the police inquiry and judicial investigation stages, it is not in itself inconsistent with Article 6 §§ 1 and 3 (d) of the Convention, provided that the rights of the defence have been respected (see v. France, 20 September 1993, § 43, Series A no. 261-C, and A.M. v. Italy, no. 37019/97, § 25, ECHR 1999-IX).
- The Convention does not prohibit presumptions of fact or of law in criminal cases, but it requires States “to confine them within reasonable limits which take into account the importance of what is at stake and maintain the rights of the defence” (see Salabiaku v. France, 7 October 1988, § 28, Series A no. 141-A, and Radio France and Others v. France, no. 53984/00, § 24, ECHR 2004-II).
- The Court accepts that in complex criminal proceedings involving several persons who cannot be tried together, references by the trial court to the participation of third parties, who may later be tried separately, may be indispensable for the assessment of the guilt of those on trial. Criminal courts are obliged to establish the facts of the case relevant for the assessment of the legal responsibility of the accused as accurately and precisely as possible, and they cannot present established facts as mere allegations or suspicions. This also applies to facts related to the involvement of third parties, though if such facts have to be introduced, the court should avoid giving more information than necessary for the assessment of the legal responsibility of those accused in the trial before it. Even if the law expressly states that no inferences about the guilt of a person can be drawn from criminal proceedings in which he or she has not participated, judicial decisions must be worded so as to avoid any potential pre-judgment about the third party’s guilt in order not to jeopardise the fair examination of the charges in the separate proceedings (see Karaman, cited above, §§ 64 – 65).
- As regards plea-bargaining, the Court has previously found it to be a common feature of European criminal justice systems allowing an accused to obtain a lesser charge or receive a reduced sentence in exchange for a guilty or nolo contendere plea in advance of trial or for substantial cooperation with the investigative authority. Where the effect of plea-bargaining is that a criminal charge against the accused is determined in an accelerated form of judicial examination, this amounts, in substance, to a waiver of a number of procedural rights. To be effective for Convention purposes, therefore, any waiver of procedural rights must always be established in an unequivocal manner, must be attended by minimum safeguards commensurate with its importance and must not run counter to any important public interest (see Scoppola v. Italy (no. 2) [GC], no. 10249/03, § 135, 17 September 2009, and Natsvlishvili and Togonidze v. Georgia, no. 9043/05, §§ 90 – 91, ECHR 2014 (extracts), with further references).
- Ultimately, the Court will not, in principle, contest the factual and legal findings of the domestic courts, unless their decisions appear arbitrary or manifestly unreasonable and provided that the proceedings as a whole were fair, as required by Article 6 § 1 of the Convention (see, mutatis mutandis, Van v. Germany, no. 35968/97, §§ 46 – 47, ECHR 2003-VII, and Khamidov v. Russia, no. 72118/01, § 170, ECHR 2007-XII (extracts)). That said, decisions that are “arbitrary or manifestly unreasonable” may be found to be incompatible with the guarantees of a fair hearing (see Khamidov, cited above, § 107; Berhani v. Albania, no. 847/05, §§ 50 – 56, 27 May 2010; v. Croatia, no. 20883/09, §§ 47 – 52, 13 December 2011; and v. Serbia, no. 1401/08, §§ 26 – 29, 9 April 2013).
(b) Application of these principles in the present case
- The Court observes that the applicants’ complaints about the manner in which evidence was admitted and assessed and the way the witnesses were examined converge on the same underlying allegation that the criminal proceedings against X and the two applicants had been structured in a way which rendered the proceedings as a whole unfair. They effectively alleged that X’s conviction in separate accelerated proceedings had been instrumental in circumventing important guarantees they would have been entitled to if all three co-accused had been tried together. Likewise, the complaint lodged under Article 6 § 2 of the Convention about the formulae used in the judgment against X and the prejudicial impact which that had on the applicants’ sentence, essentially refers to the same underlying issue. It follows that even though each of the complaints under Article 6 §§ 1, 2 and 3(d) of the Convention would in principle be capable of raising a separate issue under the Convention, in the present case it is appropriate to treat the specific allegations as elements of general fairness.
- In the present case, the criminal charges against the applicants were based on the same facts as those against X, and the three individuals were accused of conspiring to steal the same assets. It is therefore undeniable that any facts established in the proceedings against X and any legal findings made therein would have been directly relevant to the applicants’ case. In such circumstances, it was essential for safeguards to be in place to ensure that the procedural steps and decisions taken in the proceedings against X would not undermine the fairness of the hearing in the subsequent proceedings against the applicants. This was particularly so, given that the applicants were legally precluded from any form of participation in the disjoined proceedings as they had not been granted any status which would have allowed them to challenge the decisions and findings made therein.
- The Court has previously highlighted the first and most obvious guarantee to be secured when co-accused are tried in separate sets of proceedings, notably the courts’ obligation to refrain from any statements that may have a prejudicial effect on the pending proceedings, even if they are not binding (see Karaman, cited above, §§ 42 – 43 and 64 – 56). If the nature of the charges makes it unavoidable for the involvement of third parties to be established in one set of proceedings and those findings would be consequential on the assessment of the legal responsibility of the third parties tried separately, this should be considered as a serious obstacle for disjoining the cases. Any decision to examine cases with such strong factual ties in separate criminal proceedings must be based on a careful assessment of all countervailing interests, and the co-accused must be given an opportunity to object to the cases being separated.
- The second requirement for the conduct of concurrent proceedings is that the quality of res judicata would not be attached to facts admitted in a case to which the individuals were not party. The state of the evidence admitted in one case must remain purely relative and its effect strictly limited to that particular set of proceedings. In other words, in the present case no finding of fact made in the proceedings against X could have been admitted in the applicants’ case without full and proper examination at the applicants’ trial. Moreover, the procedure followed by the court in X’s case had been accelerated, and the establishment of facts had been a result of plea-bargaining, not the judicial examination of evidence. Consequently, the facts relied on in that case had been legally assumed rather than proven. As such, they could not have been transposed to another set of criminal proceedings without their admissibility and credibility being scrutinised and validated in those other proceedings, in an adversarial manner, like all other evidence.
- These two basic requirements have not been complied with in the present case. The Court accepts the applicants’ argument that the Leninskiy District Court of Kirov had worded its judgment of 24 December 2012 as regards X so that no doubt could remain either about their identities or involvement in the crime of which X had been convicted. Although the said District Court, as the Government rightly pointed out, could not find the applicants guilty in those proceedings, it expressed its findings of fact and opinion about their participation in the offence in such terms which could not be defined as anything but prejudicial.
- Turning to the question of res judicata, the Court takes cognisance of the Government’s argument that the courts adjudicating the applicants’ criminal case had not been bound by the judgment in X’s case. It notes, however, that Article 90 of the Code of Criminal Procedure, as worded at the material time, expressly afforded the force of res judicata to judgments even if issued in accelerated proceedings (see paragraph 79 above). Moreover, by stating that “Circumstances established in a judgment… shall be accepted by a court… without additional verification”, it set forth the rule whereby not only a finding of guilt of an accused but also findings of fact would formally have potential prejudicial effect. Even though in accordance with Article 90, a judgment cannot predetermine the guilt of those who have not participated in the criminal case under consideration, the fact that the circumstances established in the judgment against X had the force of res judicata in effect contravened that prohibition.
- The Government argued that in the applicants’ case the trial court had been obliged to examine all evidence and witnesses and to base its assessment exclusively on the material and testimony presented at the hearing. Even so, the Court considers that in the circumstances, the courts acting in concurrent proceedings had an obvious incentive to remain concordant, because any conflicting findings made in related cases could undermine the validity of both judgments issued by the same court. The Court considers that in the present case, the risk of issuing contradictory judgments was a factor that discouraged the judges from finding out the truth and diminished their capacity to administer justice, thus causing irreparable damage to the court’s independence, impartiality and, more generally, its ability to ensure a fair hearing. In view of the foregoing, the Court finds that the judgment of 24 December 2012 had a prejudicial effect on the criminal proceedings against the applicants, and reference to that judgment in the applicants’ sentence, even without express reliance on it, accentuated that effect.
- In the same vein, the Court considers that the separation of the cases, particularly X’s conviction with the use of plea-bargaining and accelerated proceedings, compromised his competence as a witness in the applicants’ case. As noted above, his conviction was based on the version of events formulated by the prosecution and the accused in the plea-bargaining process, and it was not required that that account be verified or corroborated by other evidence. Standing later as a witness, X was compelled to repeat his statements made as an accused during plea-bargaining. Indeed, if during the applicants’ trial X’s earlier statement had been exposed as false, the judgment issued on the basis of his plea-bargaining agreement could have been reversed, thus depriving him of the negotiated reduction of his sentence. Moreover, by allowing X’s earlier statements to be read out at the trial before the defence could cross-examine him as a witness, the court could give an independent observer the impression that it had encouraged the witness to maintain a particular version of events. Everything above confirms the applicants’ argument that the procedure in which evidence had been obtained from X and used in their trial had been suggestive of manipulation incompatible with the notion of a fair hearing.
- Turning to the point of the allegedly arbitrary application of criminal law, the Court observes that the second applicant, Mr Ofitserov, was convicted of facilitating embezzlement committed by X. The acts imputable to him consisted of setting up a timber trading company VLK, concluding on behalf of that company a framework contract with a timber supplier, Kirovles, and buying Kirovles’ timber and reselling it to customers at 7% commission, in accordance with the framework contract and its annexes containing specific sales contracts based on its heads of terms. The first applicant, Mr Navalnyy, was convicted of introducing the second applicant to X, Kirovles’ director, and of fostering commercial ties between VLK and Kirovles, acts defined as organising embezzlement.
- In the original charges, these acts had been defined as deception or abuse of trust, an offence under Article 165 of the Criminal Code, allegedly committed against X, but those charges were dropped for lack of corpus delicti. Subsequently, the prosecution and the courts decided that it had been X who had embezzled Kirovles’ assets by entering into a loss-making transaction, and the applicants were assigned the roles of his accomplices.
- The Court observes that under Russian law, limited liability companies such as VLK are defined as commercial entities whose main purpose is deriving profits (Article 50 of the Civil Code). The Court also notes that the domestic courts did not establish, and it was not even argued, that VLK by signing the contract and charging commission had pursued a goal other than deriving profit from timber resale. Moreover, neither the validity of the sales contract between VLK and Kirovles, nor its legal nature, were called into question. It had not been imputed to either X or the applicants that they had concluded a sham transaction or that it had implied a money laundering, tax evasion or kick-back scheme, or that the parties had conspired in advance to turn the proceeds from VLK’s commission to some other unlawful or dubious purpose. On the contrary, it transpires from the material in the case file that the two parties to the contract had pursued commercial goals independently of each other and that those goals were precisely those that had been stipulated in the contract. It is also noteworthy that when the court referred to Article 10 § 1 of the Civil Code and found that the transaction had caused damage to Kirovles, it had not established that doing so had been the applicants’ exclusive goal, or that they had acted in bad faith or in breach of fair competition rules, contrary to that Article.
- As regards Kirovles’ losses imputed to VLK and, ultimately, the applicants, the Court observes that neither the nature of the transaction nor the context in which it was concluded imposed or implied a requirement that the buyer, VLK, would have to exercise a special duty of care towards the seller, Kirovles, to ensure that the latter sold the timber at the best possible price. Such a requirement would have indeed been an exception to the principle that each party carries the risks associated with a transaction in accordance with the terms of contract. In the present case, there was no basis for such an exception or legal obstacle for the parties to agree on VLK’s commission and set it out in the contract the way they did.
- It may be derived from X’s statements at the applicants’ trial that he concluded the contract with VLK because he was under the impression that he was obliged to do so by the first applicant because he had associated him with the Governor’s team. However, the trial court also found that the first applicant had no mandate to compel X to choose VLK as a commercial partner and had not made any false representations to the contrary. Accordingly, even if X’s assertions were true and he had indeed entered into an unprofitable transaction for the wrong reasons, no causal link was established between the applicants’ conduct and Kirovles’ losses, if any. Moreover, the losses of Kirovles were not established on the basis of VLK’s commission, inter alia, but were found to constitute the total amount payable for the timber under the contract.
- As such, the courts found the second applicant guilty of acts indistinguishable from regular commercial middleman activities, and the first applicant for fostering them. The Court considers that in the present case the questions of interpretation and application of national law go beyond a regular assessment of the applicants’ individual criminal responsibility or the establishment of corpus delicti, matters which are primarily within the domestic courts’ domain. It is confronted with a situation where the acts described as criminal fell entirely outside the scope of the provision under which the applicants were convicted and were not concordant with its intended aim. In other words, the criminal law was arbitrarily and unforeseeably construed to the detriment of the applicants, leading to a manifestly unreasonable outcome of the trial.
- The foregoing findings demonstrate that the domestic courts have failed, by a long margin, to ensure a fair hearing in the applicants’ criminal case, and may be taken as suggesting that they did not even care about appearances. It is noteworthy that the courts dismissed without examination the applicants’ allegations of political persecution which were at least arguable for the following reasons.
- The Court observes that the anti-corruption campaign run by the first applicant gained its momentum in the course of 2010; that year it targeted high-ranking officials, including the President of the Russian Federation, the Deputy Prime Minister and the Chief of the Investigative Committee. Mr Navalnyy’s investigations attracted the increasing attention of his Internet blog followers, but also a wider audience through other media republishing the blog content and giving him airtime. Irrespective of whether the officials concerned acknowledged the publications, and whether or not they contested the allegations, they undoubtedly found them unwelcome. Furthermore, it was becoming clear that the first applicant would not confine his revelations to the audience of a niche press, but that his aspiration was to become an acting politician at the national level, capable of reaching out to a wider public. Since the conviction came into force he has been ineligible to stand for elections and has been restricted in his freedom of movement. It is also relevant that his criminal record has been relied on to justify his house arrest, the terms of which included, among other restrictions, a ban on making public statements, even those unrelated to the criminal proceedings.
- It appears that the first applicant’s publications were a regular feature, and virtually any date on which his prosecution would begin would inevitably coincide with some of his articles appearing in the media. Even so, it is impossible to overlook that the first Kirovles inquiry was opened on 9 December 2010, three weeks after the publication of the big-time financial scandal relating to the East Siberia-Pacific Ocean oil pipeline project and implicating Russia’s top officials. Over the next two years the inquiry stopped and restarted several times, but in 2012 it was resolutely reopened under the direct orders of Mr Bastrykin, the Chief of the Investigative Committee. This upsurge came at a period when the first applicant was investigating Mr Bastrykin’s own off-duty activities; this investigation resulted in the publication of 26 July 2012 exposing Mr Bastrykin’s business and residence status as incompatible with his office (see paragraph 31 above). The criminal case was reopened under Mr Bastrykin’s direct orders, and this was reflected in his speech of 5 July 2012 when he deplored its termination and unequivocally pledged to take disciplinary action against any investigator failing to pursue the first applicant.
- It is obvious for the Court, as it must also have been for the domestic courts, that there had been a link between the first applicant’s public activities and the Investigative Committee’s decision to press charges against him. It was therefore the duty of the domestic courts to scrutinise his allegations of political pressure and to decide whether, despite that link, there had been a genuine cause for bringing him to justice. The same goes for the second applicant who had an arguable claim that he was only targeted as a vehicle for also bringing the first applicant into the orbit of the criminal case, a reason equally unrelated to the true purposes of a criminal prosecution. Having omitted to address these allegations the courts have themselves heightened the concerns that the real reason for the applicants’ prosecution and conviction was a political one.
- The foregoing considerations lead the Court to conclude that the criminal proceedings against the applicants, taken as a whole, constituted a violation of their right to a fair hearing under Article 6 § 1 of the Convention.
121. In view of this, the Court does not consider it necessary to address separately the remainder of the applicants’ complaints under Article 6 §§ 1 – 3 of the Convention.