Implementation of the Rule of Law Principles by the Ukrainian Courts

Dmytro GadomskySenior Associate

Kyiv, 2011

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Definition - Wiki

The Rule of Law is a legal maxim which provides that no person is above the law, that no one can be punished by the state except for a breach of the law, and that no one can be convicted of breaching the law except in the manner set forth by the law itself. The rule of law stands in contrast to the idea that the leader is above the law, a feature of Roman Law, Nazi law, and certain other legal systems.

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Definition - Legal

"...the world may know, that so far as we approve of monarchy, that in America THE LAW IS KING. For as in absolute governments the King is law, so in free countries the law ought to be

King; and there ought to be no other."Thomas Paine, Common Sense, 1776

"Human dignity shall be inviolable. To respect and protect it shall be the duty of all state authority."

Basic Law of the Federal Republic of Germany, Article 1

"Government in Saudi Arabia derives power from the Holy Koran and the Prophet's tradition."The Basic Law of the Kingdom of Saudi Arabia, Article 7

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Definition – Ukrainian Legislation

Article 8. The rule of law shall be recognised and effective in Ukraine.

The Constitution of Ukraine shall be regarded as superior law. Laws and other regulatory legal acts shall be adopted on the basis of the Constitution of Ukraine and shall conform to it.

Norms of the Constitution of Ukraine shall be the norms of direct effect. Recourse to the court for protection of constitutional rights and freedoms of an individual and citizen directly on basis of the Constitution of Ukraine shall be guaranteed.

Constitution of Ukraine

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How to apply the Rule of Law principle in tax litigation

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Code of Administrative Litigation

Article 8. The Rule of Law

1. The court shall apply the rule of law principle. The rule of law principle means that, in particular, an individual, its rights and freedoms have the highest value and determine the substance and the direction of the activity of the state

2. The court shall apply the rule of law principle in accordance with the practice of the European Courts of Human Rights […]

The Code of Administrative Litigation of Ukraine

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How to let the rule of law principle work

• Strong and understandable legal position

• Reference to the European Convention of Human rights (First Protocol)

• Reference to the practice of the European Court of Human Rights

• PR campaign

• Drawing attention of the embassies, trade missions, etc.

• Discussion of the issue around the non-for-profit organizations: BBCU, EBA, AmCham, etc.

• Negotiations

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Practice of the European Court of Human Rights

• Ukrainian courts must apply all decisions, not only the ones, reached against Ukraine

• Courts of higher instances do apply the Convention and the case law

• Article 6. Right to a fair trial – everyone is entitled to a fair and public hearing– within a reasonable time (Dulsky vs. Ukraine, Krasnoshapka vs. Ukraine)– by an independent (Bilukha vs. Ukraine) and impartial (Naumenko vs. Ukraine) tribunal established

by law.– Etc.

• Protocol 1 (re tax disputes) – Schokin vs. Ukraine

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There are three kinds of lies: lies, damned lies and statistics

- Mark Twain

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Court vs. Administrative Appeal

Проект Податкового кодексу України від 07.10.2010: Податкові спори

Only 20,8% in favor of the tax payer

50% - in favor of the tax payer

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Tax dispute resolutions of the Higher Administrative Court

2008 2009 2010 20110

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Positive

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Our Contacts

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Arzinger - Offices