DECISION OF THE CONSTITUTIONAL COURT OF UKRAINE

of December 6, 2001 No. 17-rp/2001

On the case of the constitutional representation of People's Deputies of Ukraine concerning compliance of the Constitution of Ukraine (constitutionality) of part one of Article 5, Article parts three 6, article 32 of the Law of Ukraine "About agreements on distribution of products" (case on agreements on distribution of products)

Case No. 1-40/2001

NAME OF UKRAINE

Constitutional court of Ukraine as a part of judges of the Constitutional Court of Ukraine:

Victor Egorovich's buffoons - the chairman,

Voznyuk Vladimir Denisovich,

Evgrafov Pavel Borisovich,

Ivashchenko Vladimir Ivanovich,

Kozyubra Nikolay Ivanovich,

Korniyenkl Nikolay Ivanovich,

Kostitsky Mikhail Vasilyevich,

Malinnikova Lyudmila Fiodorovna,

Mironenk Alexander Nikolaevich,

Rozenko Vitaly Ivanovich,

Savenko Nikolay Dmitriyevich,

Selivon Nikolay Fedosovich,

Timchenko Ivan Artemyevich,

Silent Vladimir Pavlovich,

Chubar Lyudmila Panteleevna,

Yatsenko Stanislav Sergeyevich - the judge-speaker,

with the assistance of the representative of the person of law on the constitutional representation Semenyuk Valentin Petrovna - the People's Deputy of Ukraine, the representative of the Verkhovna Rada of Ukraine Selivanov Anatoly Aleksandrovich - the Permanent representative of the Verkhovna Rada of Ukraine in the Constitutional Court of Ukraine, and also the representatives of the President of Ukraine who are attracted to participate the Constitutional Court of Ukraine in consideration of the case: Karakaya Yury Vasilyevich - the head of department of Head department concerning economic policy of Administration of the President of Ukraine, Medvetsky Andrey Teodorovich - the head of Ministries of Economy and European Integration legal department of Ukraine; representatives of the Cabinet of Ministers of Ukraine: Efimenko Leonid Vasilyevich - the Deputy State secretary of the Ministry of Justice of Ukraine, Lyzun Stepan Alekseevich - the First Deputy State secretary of the Ministry of Ecology and Natural Resources of Ukraine; the representative of the Ministry of Foreign Affairs of Ukraine Shubenkov Mikhail Yuryevich - the adviser of department of contractual legal department of Legal department of the Ministry of Foreign Affairs of Ukraine,

considered at plenary meeting case on the constitutional representation of People's Deputies of Ukraine concerning compliance of the Constitution of Ukraine (constitutionality) of part one of Article 5, to Article part three 6, of article 32 of the Law of Ukraine "About agreements on distribution of products" of September 14, 1999 N 1039-XIV (In? домост? Verkhovno ї For the sake of Ukra§ni, 1999, N 44, the Art. 391).

Reason for consideration of the case according to Articles 39, 40 Laws of Ukraine "About the Constitutional Court of Ukraine" became the constitutional representation of People's Deputies of Ukraine.

The basis for consideration of the case according to Articles 71, 75 Laws of Ukraine "About the Constitutional Court of Ukraine" are availability of dispute on compliance of the Constitution of Ukraine (constitutionality) of the specified provisions of the law of Ukraine "About agreements on distribution of products".

Having heard the judge-speaker Yatsenko S. S., Efimenko L. V. explanations., Lizuna S. O., Medvetskogo A.T., Selivanov A. O., Semenyuk V. P., Shubenkova M. Yu. and having researched case papers, the Constitutional Court of Ukraine established:

1.1. The person of law on the constitutional representation - sixty seven People's Deputies of Ukraine - appealed to the Constitutional Court of Ukraine with the petition to consider question of constitutionality of part one of Article 5, of Article part three 6, of article 32 of the Law of Ukraine "About agreements on distribution of products" (further - the Law).

In particular, part one of article 5 of the Law provides education by the Cabinet of Ministers of Ukraine in certain structure of special body: "The permanent interdepartmental commission (further - the Interdepartmental commission) is created by the Cabinet of Ministers of Ukraine as a part of representatives of state bodies, local government bodies, People's Deputies of Ukraine and is authorized to resolve issue of the organization of the conclusion and agreement performance of distribution of products" (paragraph two).

People's Deputies of Ukraine consider that provision of part one of article 5 of the Law where formation of the permanent interdepartmental commission by the Cabinet of Ministers of Ukraine is provided, "which is allocated with powers of authority" on permission of questions of the organization of the conclusion and agreement performance about distribution of products and to which it is subordinated (is its working body) other central executive body in the field of investigation and use of subsoil, does not answer Item 15 parts one of article 106 of the Constitution of Ukraine according to which formation of the central executive bodies belongs to powers of the President of Ukraine. Besides, it is specified in the constitutional representation, inclusion in structure of the Interdepartmental commission of People's Deputies of Ukraine will not be approved with article 78 of the Constitution of Ukraine.

Explanations of representatives of the Verkhovna Rada of Ukraine, the President of Ukraine, the Cabinet of Ministers of Ukraine come down to the fact that the Interdepartmental commission is not the central executive body as it is only authorized to resolve issue of the organization of the conclusion and agreement performance of distribution of products which provides implementation only of organizational and expert functions. The interdepartmental commission is directly not allocated imperious powers, in particular to publish the legal acts obligatory to execution, to organize and control their accomplishment. At the same time its education does not require assignment from the Government budget of Ukraine.

1.2. The analysis of part one of Article 5, and also other provisions of the Law (Articles 6, of 7, of 10, of 11, of 13, of 15, of 28, of 29) gives to the Constitutional Court of Ukraine the grounds to consider that the Interdepartmental commission formed by the Cabinet of Ministers of Ukraine is its facilitative collegiate organ which members participate in its work on a voluntary basis; he is not legal entity, is not given state powers of authority, in particular to accept imperious instructions (to publish legal acts), does not perform state policy in certain sphere, and specializes in accomplishment of advisory and consultative and expert functions. Therefore, the Interdepartmental commission has no status characteristics of the central executive body.

Article 78 of the Constitution of Ukraine establishes implementation by People's Deputies of Ukraine of the powers on permanent basis and prohibits to them to have other representative mandate or to be in public service; requirements about incompatibility of the deputy mandate with other types of activity are established by the law. People's Deputies of Ukraine who are part of the Interdepartmental commission do not stop to perform the powers on permanent basis and do not violate the requirements about incompatibility of the deputy mandate provided in article 78 of the Constitution of Ukraine, in particular do not enter on public service.

Therefore part one of article 5 of the Law shall be acknowledged such which answers the Constitution of Ukraine.

2.1. The person of law on the constitutional representation considers that part three to article 6 of the Law who is forbidden to make changes in the lists of subsoil plots (mineral deposits) provided by this Article approved in accordance with the established procedure concerning subsoil plots concerning which the agreement is signed or competition on agreement signature about distribution of products is announced or on which the Interdepartmental commission or its working body conducted negotiations concerning the conclusion of such agreement, contradicts Articles 6, of 8, of 75, of 85, of 91 Constitution of Ukraine as the mentioned provision of the law limits the constitutional powers of the Verkhovna Rada of Ukraine.

As affirms as explanations of the Chairman of the Verkhovna Rada of Ukraine, the disputed provision of the law does not limit the constitutional powers of the Verkhovna Rada of Ukraine. The part two of article 6 of the Law provides that the List of subsoil plots (mineral deposits) which can be provided in use on the conditions determined by agreements on distribution of products affirms the Cabinet of Ministers of Ukraine, and the Verkhovna Rada of Ukraine approves only the List of subsoil plots which constitute special scientific, cultural or natural and reserved value and cannot be provided in use on the terms of agreements on distribution of products. Representatives of the President of Ukraine, the Cabinet of Ministers of Ukraine also consider that content of provision of part three of article 6 of the Law consists in prohibition to the Cabinet of Ministers of Ukraine to make changes in approved by it according to the first paragraph of part two of this article List of Subsoil Plots (Mineral Deposits) which can be provided in use on the conditions determined by agreements on distribution of products.

2.2. Based on the analysis of the text of article 6 of the Law the Constitutional Court of Ukraine determined that provision of its part three "modification of the lists of subsoil plots (mineral deposits) provided by this Article approved in accordance with the established procedure... it is forbidden" are covered both provided (called) in same Article lists, namely: "The list of subsoil plots (mineral deposits) which can be provided in use on the conditions determined by agreements on distribution of products" which affirms the Cabinet of Ministers of Ukraine (the first paragraph of part two) and "The list of subsoil plots which constitute special scientific, cultural or natural and reserved value and cannot be provided in use on the terms of agreements on distribution of products" which affirms the Verkhovna Rada of Ukraine (the last paragraph of part two).

The constitutional court of Ukraine came to conclusion that the challenged provision of part three of article 6 of the Law limits legislative powers of the Verkhovna Rada of Ukraine (Article 75, Item From Article part one 85, article 91 of the Constitution of Ukraine) and, in particular, provides restriction of powers of the Verkhovna Rada of Ukraine to change (to supplement) the List of subsoil plots approved by it which constitute special scientific, cultural or natural and reserved value and cannot be provided in use on the terms of agreements on distribution of products, carrying to such sites those which will contain in the List of subsoil plots (mineral deposits) approved by the Cabinet of Ministers of Ukraine which can be presented in use on the conditions determined by agreements on distribution of products.

The specified restriction in part three of article 6 of the Law can also make impossible accomplishment of the constitutional debts by the state on providing ecological safety and support of ecological equilibrium in the territory of Ukraine, assistance to development of science, preserving historical monuments and other objects which constitute cultural value (Article 16, of part three, the fifth article 54 of the Constitution of Ukraine) in aspect of protection of subsoil plots which constitute special scientific, cultural or natural and reserved value, from use on the terms of agreements on distribution of products.

Therefore the provision of part three of article 6 of the Law which limits legislative powers of the Verkhovna Rada of Ukraine shall be acknowledged unconstitutional.

3.1. The person of law on the constitutional representation claims that article 32 of the Law according to which "in agreements on distribution of products which are signed with the assistance of the foreign investor, the refusal of the state of legal immunity, immunity on provisional remedy of the claim and accomplishment of the judgment is provided", does not answer Articles 8, of 24, 124 Constitutions of Ukraine ("does not provide its supremacy") and therefore this regulation is unconstitutional.

In explanations of the Chairman of the Verkhovna Rada of Ukraine such approval is confuted: article 32 of the Law is lawful and logical as one of agreement parties about distribution of products is the state on behalf of the Cabinet of Ministers of Ukraine and consequently, both one, and second parties will have opportunity to solve disputes judicially. Representatives of the President of Ukraine and the Cabinet of Ministers of Ukraine supported opinion that the bases for recognition of the unconstitutional disputed regulation are not visible, and explained that this regulation is directed to realization of provisions of article 31 of the Law according to which disputes between agreement parties on distribution of products are subject to consideration in courts of Ukraine if another is not provided by terms of agreement about distribution of products. The representative of the Ministry of Foreign Affairs of Ukraine noted that both in international law, and in the national legal system of many states and their court practice number of exceptions of general regulation on immunity of the state on the basis of its consent is allowed; certainly, immunity extends to the relations in which the state acts as the carrier of the sovereign power (acta jure imperii), and distribution of immunity on the relations of commercial nature (acta jure gestionis) can lead to the fact that legal entities and physical persons which will enter such relations with the state will be deprived of possibility of judicial protection of the rights.

3.2. Specifies constitutional court of Ukraine that immunity of the state follows from bases of the state sovereignty (Article 1, 2 Constitutions of Ukraine) though it is directly not enshrined in the Fundamental Law of Ukraine. Immunity of foreign state consists that it is not subject to jurisdiction of other state. So, the foreign state cannot be taken to court other state as the defendant, except cases of consent (refusal of immunity) which is directly provided on it. Provisions on immunity of the states contain in the legislation of Ukraine (Article 425 "The claim to foreign states. Diplomatic immunity" Code of civil procedure of Ukraine, article 125 "Legal immunity" of the Economic Procedure Code of Ukraine.

Proceeding from regulations of the Section 1 "General Basis" of the Constitution of Ukraine the state is effective not only according to the procedure of implementation of the sovereign power and also as the subject of the civil relations (in particular in realization of the relations of the property right - Article 13, 14 Constitutions of Ukraine). The possibility of refusal of the state of immunity in the relations of civil nature, including external economic and economic in which the state acts as the party as the subject of the civil relations, quite answers the constitutional basis of equality of all persons of law of property before the law (part four of article 13 of the Constitution of Ukraine).

Therefore the provision of article 32 of the Law on refusal of the state in agreements on distribution of products from legal immunity, immunity on provisional remedy of the claim and accomplishment of the judgment cannot be considered as it which contradicts article 8 of the Constitution of Ukraine which has the highest legal force.

The disputed Article does not break the principles of equality of constitutional rights of citizens and equality of the citizens before the law enshrined in article 24 of the Constitution of Ukraine as the regulation of article 32 of the Law does not concern the civil laws.

Article 32 of the Law does not contradict also article 124 of the Constitution of Ukraine which determines justice implementation by exclusive function of courts establishes distribution of their jurisdiction on all legal relationship which arise in the state, and also other bases of legal proceedings. The disputed Article does not determine jurisdiction of courts or other bodies for the dispute resolution between the parties of agreements on distribution of products.

3.3. At the same time the Constitutional Court of Ukraine states that the provision of article 32 of the Law establishes unconditional refusal of the state of legal immunity, immunity of rather provisional remedy of the claim and accomplishment of the judgment which is surely provided in agreements on distribution of products which are signed with the assistance of the foreign investor.

The state which on behalf of the Cabinet of Ministers of Ukraine and with the assistance of the Verkhovna Rada of the Autonomous Republic of Crimea or local government body acts as the agreement party about distribution of products (Article part one 4, part one of article 5 of the Law) as the person of law of property (Article 20, 23 Laws) is delivered in uneven conditions before the law as it is deprived of opportunity freely to provide essential terms of agreement. It narrows also powers of the Cabinet of Ministers of Ukraine which according to article 116 of the Constitution of Ukraine exercises control of objects of state-owned property according to the law will organize and provides implementation of foreign economic activity of Ukraine (Items 5, 8).

Therefore article 32 of the Law shall be recognized unconstitutional regarding establishment as its provision of obligatory refusal of the state of legal immunity, immunity on provisional remedy of the claim and accomplishment of the judgment in agreements on distribution of products which are signed with the assistance of the foreign investor.

Based on stated and being guided by Articles 147, of 150, 152 Constitutions of Ukraine, Articles 51, of 61, of 63, of 65, 73 Laws of Ukraine "About the Constitutional Court of Ukraine", the Constitutional Court of Ukraine solved:

1. Recognize such which answers the Constitution of Ukraine (is constitutional), part one of article 5 of the Law of Ukraine "About agreements on distribution of products".

2. Recognize such which does not answer the Constitution of Ukraine (is unconstitutional), provision of part three of article 6 of the Law of Ukraine "About agreements on distribution of products" which limits legislative powers of the Verkhovna Rada of Ukraine.

3. Recognize such which does not answer the Constitution of Ukraine (is unconstitutional), provision of article 32 of the Law of Ukraine "About agreements on distribution of products" regarding establishment of obligatory refusal of the state of legal immunity, immunity of rather provisional remedy of the claim and accomplishment of the judgment in agreements on distribution of products which are signed with the assistance of the foreign investor.

4. Provisions of Articles 6, 32 Laws of Ukraine "About agreements on distribution of products" which are recognized as unconstitutional lose force from day of acceptance by the Constitutional Court of Ukraine of this Decision.

5. The solution of the Constitutional Court of Ukraine is mandatory in the territory of Ukraine, final and cannot be appealed.

The solution of the Constitutional Court of Ukraine is subject to publication in "In? to snik Konstituts? yny to Ukra§ni's Court" and in other official publications of Ukraine.

 

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