On July 4, the Department of Civil Cases of the Senate (Supreme Court) decided to address the Court of Justice of the European Union for a preliminary ruling regarding the application of restrictive measures set by the European Union for the implementation of the sanctions regime established in respect of actions that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.

The Riga District Court had decided to satisfy the claim of ČIEKURI-SHISHKI Ltd against COUNTRY HELI Ltd, recovering the debt, loan interest and court costs – in total of more than 3.5 million euros. The judgment entered into force. The Acting Prosecutor General filed a protest, since he believed that this judgment violates the restrictive measures set out in European Union law, taking into account that one of the defendant's participants is a commercial company whose true beneficiary is a natural person subject to European Union sanctions; in addition, the claimant also owns the shares of the defendant. Cassation proceedings are initiated and the execution of the appealed judgment is suspended until the case is examined in the Senate.

In the present case, the Senate submitted questions regarding the interpretation and application of the provisions of Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. The obligation to refer questions of interpretation to the Court of Justice of the European Union, in the event that a court, whose ruling is not subject to appeal, has doubts about the interpretation of the applicable European Union legal norms in a court case and such questions have not been answered in the current case-law of the Court of Justice of the European Union, is defined in Article 267 of the Treaty on the Functioning of the European Union.

In total, the Senate formulated 7 questions.

Three questions pertain to the understanding of the concept of related person within the context of natural persons subject to sanctions. In its decision, the Senate explained that the answers to these questions are required for assessing whether the claimant and the defendant are persons whose assets and economic resources can be frozen in accordance with the specified legal regulation.

A separate question was asked about duties of a court in the examination of parties to proceedings, that is, whether they cannot be recognized as related persons in the framework of application of the sanctions regime.

The essence of restrictive measures is to prevent resources from reaching the disposal of persons subject to the sanctions regime. Therefore, one of the restrictive measures is the "non-satisfaction of claims". In this regard, the Senate has formulated two questions regarding the interpretation and application of this autonomous concept of European Union law, namely the consequences of the restrictive measure in civil proceedings.

In order to verify the observance of the right to data protection of the persons subject to sanctions with regard to the availability of the court judgment, the Senate has also asked the question of the disclosure of the name and surname of the specific natural person to whom the European Union sanctions regime has been applied by the court judgment.

The proceedings in the present case have been suspended until the ruling of the Court of Justice of the European Union comes into force.

 Senate’s decision. Case No SPC-1/2024 (C33271023)

 

Ilze Butkus, Communication adviser of the Supreme Court

Telephone: +371 67020302; e-mail: ilze.butkus@at.gov.lv