“MPs will challenge in the Constitutional Court the law that deprives shareholders of banks undergoing liquidation of access to justice – MPPeople’s deputies plan to re-appeal to the Constitutional Court regarding Law No. 590-IX, which deprives shareholders of banks in
liquidation of access to justice. This happened after the Supreme Court closed proceedings in the Concord Bank case, citing a
legal conflict.
”, — write: unn.ua
ContextIn 2020, 64 people’s deputies appealed to the Constitutional Court of Ukraine with a constitutional submission regarding this draft law. In their appeal to the CCU, they warned that the new wording of Article 79 of the Law “On Banks and Banking Activity” and the introduction of Article 266-1 to the Code of Administrative Procedure create a dangerous legal conflict.
The law directly stipulates that even if a decision of the National Bank of Ukraine or the Deposit Guarantee Fund is recognized as unlawful, this does not restore the rights of shareholders and does not return the bank to its previous state, and the only way to protect remains only monetary compensation for damages. Thus, shareholders in the process of liquidation were effectively deprived of the opportunity to protect their rights in court by canceling the regulator’s decisions, even if the NBU’s decisions are illegal.
In their appeal, the deputies emphasized that such norms contradict Article 55 of the Constitution of Ukraine, which guarantees everyone the right to judicial protection, as well as Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms. The constitutional appeal emphasized that the parliament created a situation where citizens and investors can formally appeal to court, but in fact have no effective way to restore violated rights.
The CCU distanced itself from considering the submission and closed the proceedings, citing that the constitutional submission did not meet the requirements of the law. Therefore, the said law was never considered for compliance with the Constitution of Ukraine.
The panel of the Cassation Administrative Court within the Supreme Court closed the proceedings in the case of “Concord” bank, which is in the process of liquidation. The judges’ decision was written in such a way that it deprives the financial institution’s shareholders of access to justice. To do this, the panel used a legal conflict that arose due to the mentioned law.
Details
In fact, on this issue, we are looking for other grounds, if they have appeared, to appeal to the court again. Because we believe that it is wrong when bank shareholders are deprived of any legal protection. This is unfair to those people who trusted the banking system and the bank that had a license issued by the NBU. That is, in such a case, the state should protect these people.
According to him, the issue of protecting the rights of bank shareholders who are in the process of liquidation needs to be regulated, because currently the situation looks like even illegal decisions of the National Bank and the Deposit Guarantee Fund cannot be challenged in courts.
Therefore, for now, we are looking for legal mechanisms
AddThe panel of the Cassation Administrative Court within the Supreme Court made a decision in the case of “Concord” bank, which lawyers consider biased. They indicate that with its decision, the court effectively deprived the bank’s shareholders of access to justice.
Previously, the courts of first and appellate instances recognized the decision of the National Bank of Ukraine to revoke the license of “Concord” bank as illegal and ordered its cancellation. The NBU and the Deposit Guarantee Fund did not agree with these decisions and filed a cassation appeal. They demanded to cancel the court decisions and close the proceedings.
Friends, the Supreme Court canceled two previous court decisions, by which we proved the illegality of the NBU’s actions regarding the deprivation of the “Concord” bank’s license. After 7 months of waiting for cassation, we received a decision that not only contradicts the law, but also common sense. We were not even summoned to court. The consideration took place in written proceedings – without hearings, without arguments, without the participation of the parties.
In paragraph 56 of the resolution, the panel of judges directly stated that no court in Ukraine is empowered to consider claims of shareholders of banks that are in the process of liquidation regarding unlawful actions or decisions of the National Bank of Ukraine.
In this resolution, the Cassation Administrative Court within the Supreme Court set forth a legal conclusion that, according to the peculiarities of the legal regulation of disputed legal relations, the claims of a former shareholder of an insolvent bank (in this case, a liquidated bank) are not subject to consideration either in administrative or commercial proceedings, and by the subjective composition of the participants in legal relations do not fall under the jurisdiction of a civil court. That is, such claims are not subject to consideration by any court.
So the Supreme Court did not even consider the “Concord” case on its merits, but immediately closed the proceedings. That is, the panel did not evaluate the decisions of the courts of previous instances and did not recognize that they were illegal or unfounded.
RecallDespite the war in Ukraine, the process of withdrawing banks from the market has not stopped. Thus, since February 24, 2022, liquidation has been initiated for 8 banks. In 2023, for the first time in Ukraine, not only bankrupt banks but also profitable institutions fell under liquidation and license revocation – this refers to “Concord” bank. As stated by the co-founder of the bank, Olena Sosedka, at the time the regulator announced the decision to liquidate the bank, the financial institution had enough highly liquid assets to make all necessary payments within 2-3 weeks. However, the bank liquidation process is strictly regulated by law and can generally last up to three years.