Current issues of the prosecutor’s participation in the commercial court procedure

Nina Kutcheruk
Leading scientific expert
Department of Scientific-methodical support
High Qualification Commission of Judges of Ukraine
National School of Judges of Ukraine

 

Current issues of the prosecutor’s participation in the commercial court procedure

 

One of the four constitutional functions of the prosecutor’s office of Ukraine is to represent the interests of citizens and/ or the State in court in matters determined by law [2, Art. 121]. The Constitution of Ukraine does not specify the cases in which prosecutor may represent the interests of citizens and/ or the State in court and, thus, the norm of article 121 of the Basic Law of Ukraine is referential, meaning that indicated cases should be provided for by the relevant legislative acts [13, p. 275]. Currently, they are the Law of Ukraine “On The Public Prosecutor’s Office” and the Commercial Procedural Code of Ukraine. However, despite the fact that prosecutor’s participation in commercial code procedure shall be regulated by the stated legislative acts, there is still no clear-cut definition of the prosecutor’s status and place among participants in a trial. The issue of the grounds for such participation also remains under discussion. These and other questions concerning the role of prosecutor in court procedure are the subject of study of scholars and practicing lawyers, including T. Dunas, V. Lelytsya, S. Malakhov, L. Netskya, M. Rudenko, V. Sukhonis etc.

The article aims to investigate and resolve the issues regarding the determination of prosecutors’ status and place among participants in a trial and their fulfillment of procedural rights. 

There are different approaches to the definition of prosecutor’s status in the commercial court procedure in literature. Some authors regard prosecutor as a party in the procedural sense [15], others regard him or her as a representative of the State [16]. V. Lelytsya differentiates between a procedural plaintiff and asubstantive plaintiff and indicates that the prosecutor, who is responsible for submitting and proving the statement of claim, is the procedural plainiff, whereas the person on behalf of which the prosecutor has submitted the statement of claim is the substantive plainiff[13, p. 277].

 The issue of prosecutor’s place in the commercial court procedure is also set up in legislation. Thus, in accordance with Part 1 of Article 18 of the Commercial Procedural Code of Ukraine the participants of a trial include the following: the Parties, third parties, prosecutor, any other person involved in the process, in cases provided for by this Code [3, Art. 18].

At the same time, in accordance with Part 2 of Article 29 of the Commercial Procedural Code of Ukraine in case when the Commercial Court accepts the statement of claim submitted by the prosecutor in the interest of the State, represented by the body authorized to exercise the functions of the State in disputable legal relations, the stated body acquires the status of the plaintiff. In case when the Commercial Courtaccepts the statement of claim submitted by the prosecutor in the interest of the State which states that there is no such body authorized to exercise the functions of the State in disputable legal relations or that such body has no power to appeal to the Commercial Courtthe prosecutor acquires the status of the plaintiff [3, Art. 29].

Thus, at present, the Law of Ukraine fixes the so-called “double” procedural status of the prosecutor: as a plaintiff and as a party in court procedure (the Prosecutor), which depends on the existence of a body authorized to exercise the functions of the State in disputable legal relations, or the endowment of such body with the power to appeal to the Commercial Court.

At the same time, taking into consideration the provisions of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms [1, Art. 6], Article 1 of the Commercial Procedural Code of Ukraine [3, Art. 1], Article 15 of the Civil Code of Ukraine [4, Art. 15] that provide for the right of everyone to protect their violated, unrecognized or disputed rights in court, it is difficult to conceive such body that would be deprived of the power to appeal to court. Furthermore, it is difficult to prove existence of functions of the state if there are no bodies authorized to exercise them in full or in part, as “the functions of the state are the main directions of its activity that determine the work of the whole state apparatus and each of its separate organs” [12, Art. 71].

It should be noted that the provisions defining prosecutor as a plaintiff are quite recent to the current legislation of Ukraine. They were introduced by the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine concerning improvement of the prosecution” from 18.09.2012 № 5288-VI [5]. Prior to the effectuation of the stated Law the prosecutor’s status in the commercial court procedure was defined solely as the party in court procedure along with the Parties and any other person taking part in the procedure.

However, these amendments are not entirely consistent with other provisions of the Commercial Procedural Code of Ukraine. Thus, it is unclear whether a prosecutor has the right to conclude a conciliation agreement in case when they act as a plaintiff in the process, since under Part 4 of Article 29 of the Commercial Procedural Code of Ukraine the prosecutor involved in the case is subject to the duties and shall enjoy the rights of the Party, except for the right to concludea conciliation agreement [3, Art. 29]. It can be assumed that as plaintiff, the prosecutor is not devoid of such right, since they acquire the status of the plaintiff with all due rights and obligations. In all these cases at any stage of the commercial process such participant of a trial shall not forfeit the status of the prosecutor and, thus, is subject to the relevant provisions of Part 4 of Article 29 of the Commercial Procedural Code of Ukraine.

In our opinion, a prosecutor that is concurrently a plaintiff in the case shall enjoy the right to concludea conciliation agreement, because in the absence of “another plaintiff” a defendant would be unable to exercise their right to a peaceful resolution of the dispute. However, this right must be expressly provided for in the Commercial Procedural Code of Ukraine.

While exploring the issue of the prosecutor’s participation in the commercial court procedure, special attention should be paid to types and forms of their representation in the procedure.

Based on the content of Article 121 of the Constitution of Ukraine [2, Art. 121], and Article 5 of the Law of Ukraine On The Public Prosecutor’s Office [6, Art. 5], we may conclude that the legislature has provided for two types of prosecutor’s representation in court, i.e. representation of interests of the state and representation of interests of citizens, both of which are to be done with in commercial court procedure.

Thus, in accordance with Part 1 of Article 2 of the Commercial Procedural Code of Ukraine the commercial court opens the case in interests of the state after an appeal by the provider (the prosecutor, in particular) [3, Art. 2]. In the referenced Article, there is no provision as to the prosecutor’s appeal in the interests of citizens. However, the fact of endowment of the prosecutor with such power derives from Article 1 of the Commercial Procedural Code of Ukraine. In accordance with Part 2 of the referenced Article in cases provided for by the legislative acts of Ukraine, governmental and other bodies, and physical persons who are not entrepreneurs have the right to appeal to the commercial court [3, Art. 1]. Besides, this right is provided for by Part 1 of Article 29 of the Commercial Procedural Code of Ukraine which says that “the prosecutor participates in the procedure that has been raised by their appeal or by the appeal of other persons at any stage of the trial to represent interests of the state or interests of citizens” [3, Art. 29].

At the same time, the possibility of the prosecutor’s representation of interests of citizens in the commercial court procedure is limited, due to the subjective requirements to a commercial dispute (e.g. such representation is possible in resolving corporate disputes) and existing conditions for such representation.

In accordance with Part 2 of Article 36 of the Law of Ukraine “On The Public Prosecutor’s Office” the condition for the prosecutor’s representation of the interests of the citizens is their incapability due to a physical condition, nonage, old age, incapacity or limited legal capacity to protect their violated or disputed rights and/ or exercise their procedural powers. The prosecutor must prove the existence of such conditions by providing the corresponding evidence [6, Art. 36].

Thus, the law determines general provisions for the prosecutor’s representation of interests of citizens that contain evaluative notions and must be proven with acceptable and admissible evidence by the prosecutor in court.

Violation or threat of violation of interests of the state is the condition for the prosecutor’s representation of interests of the state in court. However, the notion of “interests of the state” is also evaluative. In accordance with the decision of the Constitutional Court of Ukraine in the case of the constitutional petition of the Supreme Arbitration Court of Ukraine and the Prosecutor General of Ukraine concerning the official interpretation of the official interpretation of the provisions of Article 2 of the Arbitration Procedural Code of Ukraine (Case of representation  of interests of the state by the prosecutor’s office of Ukraine in the Arbitration Court) from 08.04.1999 № 3-рп/99 “the interests of the state are secured by the norms of the Constitution of Ukraine and the norms of other legislative acts. Interests of the state differ from interests of other participants in social relations. In the basis of the former is always the need to implement national (political, economic social and so forth) action programs aimed at protecting the sovereignty and territorial integrity of Ukraine, ensuring its national, economic, informational and environmental security, protection of land as national wealth, protection of the rights of all subjects of ownership and management, and so forth. Interests of the state may coincide entirely, partially or not coincide at all with the interests of state authorities, state enterprises and organizations or with the interests of companies with the state share in the statutory fund. But the state may perceive their interests not only in their operations, but also in private enterprises, societies" [7].

The referenced decision states that in view of the fact that “interests of the state” are the evaluative notion, the prosecutor or their deputy determines in each case, with the reference to the law under which the statement of claim is filed, what has caused or may cause the violation of material or other interests of the state. The need of their protection and the body authorized by the State to exercise the corresponding functions in disputable legal relations are to be referenced in the statement of claim [7].

Thus, in the case of representation of both the interests of citizens and the state, specific conditions and, hence the cases for prosecutor’s representation shall be determined by the prosecutor, and not by the law, as provided for by the Constitution of Ukraine. The issue of the very representation in court is to be determined by the relevant court. In case if the prosecutor has not indicated the circumstances of violation or the grounds for protection of interests of the state in the statement of claim, the court shall return the claim without consideration in accordance with Paragraph 3 of Part 1 of Article 63 of the Commercial Procedural Code of Ukraine, and in case of infringement proceedings for such statement of claim the court shall leave the claim without consideration in accordance with Paragraph 1 of Part 1 of Article 81 of the referenced Code (paragraph 3 of the resolution of the Plenum of the Supreme Economic Court of Ukraine from 23.03.2012 № 7) [9]. The Commercial Court has the same powers in case of the prosecutor’s incorrect indication of the plaintiff, i.e. the body authorized by the State to exercise the corresponding functions in disputable legal relations.

There is no accord among scientists as to the definition of the forms of prosecutor’s representation. For example, M. Rudenko and Th. Dunas single out two forms of prosecutor’s participation in court procedure, i.e. opening a case and entering into a commercial court procedure at any stage of its consideration [19, с. 27, 11, с. 48], while V. Lelytsya distinguishes three forms of prosecutor’s representation, i.e. submitting a statement of claim to court, participation in consideration of claims by other persons, appealing judgments in case of new or exceptional circumstances [13, p. 278].

The Law of Ukraine "On Prosecutor's Office" singles out four forms of prosecutor’s representations: appealing to the court (statements of claim, suits); participating in consideration of claims by other persons at any stage of the proceedings; initiating judicial review in cases, including the cases initiated by appeals (statements of claim, suits) of other persons; participating in legal procedure [6, Art. 36¹].

The Order of the Prosecutor General of Ukraine “On organization of operation of the prosecution agencies in the sphere of representation of interests of citizens and the state and their protection in legal procedures” from 28.11.2012  № 6 provides for four forms of prosecutor’s representation: preparation and presentation of claims, suits, statements;  participation in consideration of claims, suits, statements by other persons at any stage of the proceedings; initiating judicial reviews; participation in cases initiated by prosecutor’s claims, suits, statements and in the review of cases initiated by the prosecutor; protection of the rights of citizens and the state in execution of court decisions [8, P. 4].

All cited in the legislation forms of prosecutor’s representation are provided for in Article 29 of the Commercial Procedural Code of Ukraine that has much more content than any other procedural code [20, p. 129]. In accordance with the referenced Article a prosecutor participates in cases initiated by the claims of their own, in particular, and on their own initiative may enter the proceedings initiated by the claims of other persons at any stage of their consideration to represent interests of citizens or the state. To enter a case a prosecutor shall make an appeal, referral or application for the review of the decision by the Supreme Court of Ukraine, or to inform the court and participate in the proceedings initiated by the claims of other persons [3, Art. 29].

However, despite the fact that in accordance with Article 29 of the Commercial Procedural Code of Ukraine the prosecutor involved in the case is subject to the duties and shall enjoy the rights of the Party, except for the right to conclude aconciliation agreement[3, Art. 29], the legislation has provided for other restrictions of the prosecutor’s rights. In this context, the right of appeal and cassational appeal of court decisions is under discussion. Thus, in accordance with Article 93 and Article 110 of the Commercial Procedural Code of Ukraine if the appeal (cassational appeal) is made by a prosecutor or public authority or local authority after the expiry of one year term from the date of announcement of the appealed judgment (as to appeals), or after the judicial decision has entered into force (as to cassational appeals), regardless of the validity of the reason for missed deadline for appeal (cassational appeal) the Appeal Commercial Court returns the appeal (cassational appeal). In case if such appeal is made by the other party of litigation it can be accepted by court on condition that there are reasons to renew the deadline regardless of the expiry of one (two, three, etc.) year term from the date of announcement (entry into force) of the judicial decision.

Albeit, we consider that such “temporary” restrictions are not only inconsistent with Article 29 of the Commercial Procedural Code of Ukraine, but also violate the principle of equality that is provided for in Article 129 of the Constitution of Ukraine, Article 42 of the Commercial Procedural Code of Ukraine, and Article 35 of the Law of Ukraine "On Prosecutor's Office".

The analysis of the provisions of the Commercial Procedural Code of Ukraine suggests that prosecutor can participate in the commercial court procedure as an independent party in a trial or have a “double” procedural status of both, the plaintiff and the prosecutor simultaneously. In the latter case remains the uncertainty as to their right to conclude a conciliation agreement. The cases in which a prosecutor shall becomea plaintiff are not clearly defined, as it is difficult to conceive such body that would be deprived of the power to appeal to the commercial court. In our opinion, such discrepancies in the legislation are to be solved by making the appropriate changes to the Commercial Procedural Code of Ukraine.

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