Lecture at Belgravia business club

1. Implementation of the Rule of Law
Principles by the Ukrainian Courts
Dmytro Gadomsky
Senior Associate
Kyiv,
2011

2. 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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3. 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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4. 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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5. How to apply the Rule of Law principle in tax
litigation
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6. 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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7. 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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8. 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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9. There are three kinds of lies: lies, damned
lies and statistics
- Mark Twain
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10. Court vs. Administrative Appeal
50% - in favor of
the tax payer
Only 20,8% in
favor of the tax
payer
10 Проект Податкового кодексу України від
07.10.2010: Податкові спори

11. Tax dispute resolutions of the Higher Administrative Court
1800
1600
1400
1200
1000
Positive
800 Negative
600
400
200
0
2008 2009 2010 2011
11

12. Our Contacts
Arzinger - Offices
Head Office of Arzinger
75 Zhylyanska St., 5th Floor
Eurasia Business Center
Kyiv, 01032, Ukraine
Теl.: +38 (044) 390-55-33
Fax: +38 (044) 390-55-40
West Ukrainian Branch of Arzinger
6/1 Generala Chuprynki St.
Lviv, 79013, Ukraine
Tel.: +38 (032) 242-96-96
Fax: +38 (032) 242-96-95
South Ukrainian Branch of Arzinger 12
33 Zhukovskogo St., 6th floor, Office 601
Pokrovsky Business Center
Оdessa, 65045, Ukraine
Теl. / Fax: +38 (048) 711-74-74