FIFTH SECTION DECISION Application no. 7622/18 VARITEK, TOV against Ukraine The European Court of Human Rights (Fifth Section), sitting on 6 March 2025 as a Committee composed of: Armen Harutyunyan , President , Andreas Zünd, Mykola Gnatovskyy , judges , and Martina Keller, Deputy Section Registrar, Having regard to: the application (no. 7622/18) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 1 February 2018 by Varitek, TOV (“the applicant company”), which was registered in 2008, is based in Dnipro and was represented by Mr V.V. Bobyl, a lawyer practising in Dnipro; the decision to give notice of the application to the Ukrainian Government (“the Government”), represented by their Agent, Ms Marharyta Sokorenko; the parties’ observations; Having deliberated, decides as follows: SUBJECT MATTER OF THE CASE 1. Under a contract of sale signed in June 2014, the applicant company undertook to deliver industrial equipment (which it was to order from a South Korean manufacturer) to company G. on the condition that the latter company pay, by 10 September 2014, seventy percent of the agreed price. 2. Having paid seventy percent of the agreed price on 4 April 2016, company G. demanded, on 8 April 2016, that the applicant company deliver the equipment within seven days. 3. After sending the above-mentioned demand, company G. agreed to sell the equipment to company S. and also entered into an agreement with company D., under which company D. guaranteed that it would indemnify company S. should the applicant company fail to deliver the equipment in time (this was done without the applicant company’s involvement and, apparently, its knowledge). 4. The applicant company delivered the equipment on 19 August 2016. 5. Company G. sued the applicant company for failure to deliver in time, seeking damages in respect of the compensation it had paid to company S. for late delivery, and damages in respect of its own lost profit. The applicant company denied company G.’s claims and counter-sued, arguing that the whole contract arrangement had been conditional on the agreed price being paid in time, so as to allow the applicant company time to have the equipment delivered from the manufacturer. The applicant company further argued that company G., in its demand of April 2016 – which had been sent eighteen months after the date by which payment had been due – had unilaterally established a time-limit for delivery which was many times shorter than the one initially agreed upon in the contract of sale. 6. Moreover, the applicant company argued that companies G., D. and S. were all controlled by the same individual and that their deals between themselves had been fictitious and merely designed to extort compensation in respect of non-existent damage from the applicant company. At the same time, the applicant company sought the opening of criminal proceedings in connection with those allegations. 7. The Kharkiv Regional Commercial Court allowed the claim against the applicant company, finding that it had breached the contract of sale by delaying delivery. The court based its finding on Article 530 of the Civil Code which provided that, if no time-limit for the performance of a contract was set in that contract, the creditor could demand performance at any time and performance had to be completed within seven days from the date of demand. Thus, according to the court’s reasoning, the due date for delivery was 15 April 2016, given that the time-limit for delivery initially agreed by the parties in the contract had expired and company G. had established a new date in its demand of April 2016. Furthermore, the court ordered that the applicant company pay company G. damages and penalties equal to those that it had had to pay to company S. for the delay in delivery, as well as compensation for profits that company G. had missed out on. 8 . The applicant company appealed against that judgment, but in a final decision of 2 August 2017 the Higher Commercial Court upheld the first-instance judgment. It rejected the applicant company’s allegations of fraud on the part of companies G., D. and S. with reference to two prior court decisions in other proceedings, in which, as summarised by the Higher Commercial Court, the relevant courts had found no signs of fictitiousness in deals between companies G., D., and S. The parties did not provide the Court with copies of the decisions in those other proceedings. 9. In the meantime, a criminal investigation had been opened into the applicant company’s allegations of fraud. On 18 August 2017 an accounting expert appointed in those proceedings found that the deals between companies G., D. and S. had been structured to generate artificial damage and had not been accompanied by any actual movements of funds. That criminal investigation was discontinued in 2020 on the basis that no constituent elements of a criminal offence had been established. THE COURT’S ASSESSMENT Alleged violation of Article 6 of the Convention 10. The applicant company complained that the domestic courts’ decisions had not been adequately reasoned, in breach of Article 6 of the Convention. 11. The relevant principles of the Court’s case-law have been summarised in Bochan v. Ukraine (no. 2) ([GC], no. 22251/08, § 61, ECHR 2015) and Ramos Nunes de Carvalho e Sá v. Portugal ([GC], nos. 55391/13 and 2 others, §§ 185-86, 6 November 2018). 12. The applicant company’s key argument before the domestic courts was that the deals between companies G., D., and S. had been fictitious and had been designed to obtain compensation in respect of non-existent damage from the applicant company. 13. However, when rejecting that argument the Higher Commercial Court stated that it had already been addressed in detail in separate civil proceedings (see paragraph 8 above). The applicant company did not elaborate on that fact in the present application, let alone provide any of the relevant documentation. Thus, the domestic courts did provide adequate reasoning on this key issue in the case, while the applicant company failed to present any arguments or evidence to cast doubt on that reasoning. 14. The Court reiterates that it is not its function to deal with errors of fact or law allegedly made by a national court, unless and in so far as they may have infringed rights and freedoms protected by the Convention. The Court should not act as a court of fourth instance and will not therefore question under Article 6 § 1 the judgment of the national courts, unless their findings can be regarded as arbitrary or manifestly unreasonable (see Lupeni Greek Catholic Parish and Others v. Romania [GC], no. 76943/11, § 90, 29 November 2016). 15 . In view of the considerations set out above, the Court does not find that the domestic courts acted arbitrarily or in a manifestly unreasonable manner, although they interpreted the domestic provisions on contractual liability rather strictly and to the disadvantage of the applicant company. While the applicant company disagreed with the outcome of the proceedings, there is no indication that there were any restrictions on its ability to participate in them effectively and make submissions. 16. Accordingly, this part of the application is manifestly ill ‑ founded and should be rejected pursuant to Article 35 §§ 3 (a) and 4 of the Convention. II. Alleged violation of Article 1 of Protocol No. 1 17. As to the applicant company’s related complaint of a violation of Article 1 of Protocol No. 1 to the Convention, the Court reiterates that when the State, through its judicial system, provides a forum for the determination of an applicant’s rights and obligations, this does not automatically engage its responsibility under Article 1 of Protocol No. 1. Although the Court has also stated that the State could be held responsible for losses caused by such determinations if the court decisions amounted to an arbitrary and disproportionate interference with possessions (see Breierova and Others v. the Czech Republic (dec.), no. 57321/00, 8 October 2002), that is not the case here. 18. Having examined the relevant domestic decisions, the Court has already found that in the present case the national courts did not come to conclusions which could be regarded as arbitrary or manifestly unreasonable (see paragraph 15 above). Those findings are equally pertinent to the applicant company’s complaint under Article 1 of Protocol No. 1. 19. The Court also observes that Article 1 of Protocol No. 1 may, in certain circumstances, impose on the authorities the positive obligation to conduct an effective criminal investigation and, if appropriate, prosecution, where the interference with property rights is of a criminal nature (see Korotyuk v. Ukraine , no. 74663/17, §§ 36, 37 and 55-57, 19 January 2023). 20. In the present case, the applicant company did not allege that the criminal investigation had been ineffective and did not point out any deficiencies in it. The applicant company submitted the expert opinion produced during the criminal proceedings to argue before the Court that the deals between companies G., D. and S. had been fictitious and, thus, sought to cast doubt on the domestic courts’ decisions in the civil proceedings. However, as the Court has already found, the domestic courts’ decisions in those proceedings cannot be regarded as arbitrary or manifestly unreasonable. 21. Therefore, there is no indication that the State failed to fulfil its positive obligations as regards the criminal investigation. 22. Accordingly, this part of the application is manifestly ill‑founded pursuant to Article 35 §§ 3 (a) and 4 of the Convention. For these reasons, the Court, unanimously, Declares the application inadmissible. Done in English and notified in writing on 27 March 2025. Martina Keller Armen Harutyunyan Deputy Registrar President