ECHR Recognizes that Golden Mandarin Abused Its Right to Complain against Ukraine

On July 18, 2024, the European Court declared the application of Golden Mandarin Oil LLC (Zolotyy Mandaryn Oyl, TOV) inadmissible. The application dates back to 2013, when the company complained of prolonged non-enforcement of the decision of a Ukrainian court.

What decision was it?

In 2009, the Economic Court of Kyiv ordered Kyivenergo to pay more than UAH 54 million in compensation for fuel oil to Golden Mandarin Oil, controlled by former MP Heorhii Lohvynskyi. The latter did not receive the money because Kyivenergo was subject to a moratorium on debt collection. 

In 2015, Ukraine reached an amicable settlement of the dispute in the ECHR and undertook to pay the company at the expense of the budget. The NABU-SAPO believe that Lohvynskyi and other defendants misled the European Court and colluded with the employees of the Ministry of Justice, who arranged the settlement of the dispute. 

In 2020, the government of Ukraine appealed to the ECHR with a motion to return the application of the Golden Mandarin to the register of cases and declare it inadmissible, since the company lost the status of the victim and abused the right to appeal to the ECHR. 

The NABU investigation provides confirmation of this. Thus, the detectives found that before filing an application with the ECHR, Golden Mandarin Oil LLC signed an agreement with another company—Issachar-Zevulon Import-Export LLC. Thus, the company sold the right to claim the debt and received the amount that it had demanded to return in Ukrainian courts. 

In 2016, these companies terminated the said agreement and determined that the funds paid by Ukraine as a result of the friendly settlement of the dispute would be returned to Issachar-Zevulon Import-Export LLC as compensation for termination. According to the NABU, this was done to conceal the fact that Golden Mandarin LLC lost the status of a victim and, accordingly, could not file such an application with the ECHR.

Since 2020, the ECHR has asked the company’s representative several times to comment on the government’s motion. Having received no answers, the European Court decided that the applicant abused their rights in 2013, and the facts referred to by Ukraine are not denied. 

Although the court returned the application to the register of cases and declared it inadmissible, it noted that this decision could not affect the NABU’s internal investigations and other potential investigations into the fact of concluding an amicable settlement of the dispute.

What are the consequences?

Effectively, the ECHR decision provides law enforcement officers with arguments that Golden Mandarin LLC abused its powers by submitting an application to the ECHR. However, the European Court indicated that this cannot be used to achieve the goals in the criminal proceedings opened against Lohvynskyi.

Although the ECHR has no influence on any internal investigations, in the event of proving the guilt of Lohvynskyi and other persons, Ukrainian courts may apply special forfeiture to UAH 54 million previously paid. However, Kyivenergo has already been ordered to compensate UAH 54 million in losses to the state.