FEODOSIYSKA SUDNOBUDIVNA KOMPANIYA MORE, VAT AND OTHERS v. RUSSIA

    FOURTH SECTION DECISION Application no. 19852/16 FEODOSIYSKA SUDNOBUDIVNA KOMPANIYA MORE, VAT against Russia and 2 other applications (see list appended)   The European Court of Human Rights (Fourth Section), sitting on 12 May 2026 as a Committee composed of:  Lorraine Schembri Orland, President,  Faris Vehabović,  Anne Louise Bormann, judges, and Uğur Erdal, Acting Deputy Section Registrar, Having regard to: the applications against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by the applicant companies listed in the appended table (“the applicant companies”) on the various dates indicated therein; the decision to give notice of the complaints under Article 1 of Protocol No. 1 to the Convention to the Russian Government (“the Government”), and to declare the remainder of the applications nos. 19852/16 and 53957/18 inadmissible; the observations submitted by the applicant companies; the third-party comments submitted by the Ukrainian Government; Having deliberated, decides as follows: SUBJECT MATTER OF THE CASE 1.  The case concerns the applicant companies’ allegations concerning the nationalisation of their possessions in Crimea by the Russian Federation, in violation of Article 1 of Protocol No. 1 to the Convention.    Background     Application no. 19852/162.  Feodosiyska Sudnobudivna Kompaniya More, VAT (“FSK More”) is a former State enterprise, incorporated under Ukrainian law as a joint-stock company in 2001, with its office in Prymorskyi, Crimea (currently based in Khmelnytskyi on account of the occupation). It was founded by the State Committee of Industrial Policy of Ukraine that approved its articles of association with 100% of its shares owned by the State. Its primary activity is building sea vessels and other watercraft, including warships. 3.  After an unsuccessful attempt to privatise in 2008, FSK More went into bankruptcy and has been involved in a financial recovery procedure ever since. Even though its articles of association provided for an independent board to be appointed after privatisation, it had been managed by State‑appointed directors and, subsequently, by a court-appointed bankruptcy officer.      Application no. 57293/174.  Production Association Pivdennyy Machine-Building Plant named after A. M. Makarov (“PA Yuzhmash”) is a State enterprise founded (in its current form) in 1993 by the National Space Agency of Ukraine. A national aerospace and defence manufacturer, PA Yuzhmash is managed by a State‑appointed general director and holds public assets under the right of economic management (see paragraph 8 below). Apart from defence projects, it also operates in the civilian sector, which includes space launches.      Application no. 53957/185.  State Firm Progress (“SF Progress”) is a State enterprise founded in 1995 by the Cabinet of Ministers of Ukraine for arms exports and imports. It has an arms trade licence and is managed by a State-appointed director, while holding public assets under the right of economic management.      Circumstances of the present case6.  The applicant companies complained of the nationalisation by Russia of their various possessions in Crimea (see the appended table for details). Whereas FSK More and SF Progress had attempted to challenge the respective measures before Russian courts, PA Yuzhmash asserted that courts of the occupying power could not provide an effective remedy and order compensation for the nationalised property.    Relevant domestic law7.  The 2003 Economic Code of Ukraine (“the Economic Code”) was in force between 1 January 2004 and 28 August 2025 and governed Ukraine’s transition from a socialist economy to a market economy. Law no. 4196‑IX of 9 January 2025, which repealed it, prescribes a three-year transitional period for State enterprises to be corporatised, that is, transformed into joint‑stock or limited liability companies whose shares are owned by the State. 8.  Article 73 of the Economic Code provided that commercial and non-commercial State enterprises were to be set up by a competent State authority and were to hold assets owned by the State under the rights of economic management (господарське відання) or operational management (оперативне управління). A State enterprise was to be managed by its director, who was to be appointed by and was to report to a State authority to which that enterprise was subordinate. 9.  Article 136 of the Economic Code stated that the right of economic management was a right in rem to possess and operate State assets with limitations on the disposal of assets subject to the owner’s (State’s) consent in accordance with the law. The owner controlled the use of assets without interfering in the “economic manager’s” activities, while the latter could protect that right in courts, including against the owner. 10.  Until 2022, the applicant companies were on the list of defence sector undertakings, approved by the Ukrainian Government’s decree no. 70‑p, dated 12 February 2014, which made them exempt from certain public procurement procedures.    Complaints11.  Relying on Article 1 of Protocol No. 1 to the Convention, the applicant companies complained that the nationalisation without compensation of their property by the Russian Federation had been arbitrary, had not pursued a legitimate aim and had not been provided for by law. They also complained that they had fallen victims to a continuous violation of that Article, as their access to property in Crimea had continuously been denied. THE COURT’S ASSESSMENT 12.  Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single decision. 13.  The Court notes at the outset that the applicant companies lodged individual applications before it under Article 34 of the Convention, which reads as follows: “The Court may receive applications from any person, non-governmental organisation or group of individuals claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto. The High Contracting Parties undertake not to hinder in any way the effective exercise of this right.” 14.  An applicant’s locus standi before the Court is a matter which goes to its jurisdiction (see Satakunnan Markkinapörssi Oy and Satamedia Oy v. Finland [GC], no. 931/13, § 93, 27 June 2017). In that regard, the Court will examine of its own motion whether the applicant companies may be regarded as “non-governmental organisations” within the meaning of Article 34 of the Convention. 15.  The relevant principles have been summarised in Slovenia v. Croatia ((dec.) [GC], no. 54155/16, §§ 61-67, 18 November 2020). In particular, to determine whether any given legal person is “non-governmental”, account must be taken of its legal status and, where appropriate, the rights that status gives it, the nature of the activity it carries out, the context in which it is carried out and the degree of its independence from the political authorities. The Court has considered a company to be “non-governmental” where it was governed essentially by company law, did not enjoy any governmental or other powers beyond those conferred by ordinary private law in the exercise of its activities, and was subject to the jurisdiction of the ordinary rather than the administrative courts. The Court has also taken into account the fact that an applicant company carried out commercial activities and had neither a public service role nor a monopoly in a competitive sector. 16.  In what concerns the relevant national context, the Court has held previously that Ukrainian legal persons could be considered “governmental” where they participated in the exercise of governmental powers (see State Holding Company LUGANKSVUGILLYA v. Ukraine (dec.), no. 23938/05, 27 January 2009), performed specific public duties under State supervision (see Novoseletskiy v. Ukraine, no. 47148/99, § 82, ECHR 2005-II (extracts)), or did not enjoy “sufficient institutional and operational independence from the State” (see, for example, Mykhaylenky and Others v. Ukraine, nos. 35091/02 and 9 others, §§ 44-45, ECHR 2004-XII). 17.  In the latter case cited above, the Court considered whether a company’s debt could be attributed to the State under Article 1 of Protocol No. 1, rather than defining its status under Article 34 (ibid., §§ 41-42). The Court has since held that findings made in the context of State responsibility under Article 1 of Protocol No. 1 applied with equal force in determining if a (State-owned) company could be considered “non-governmental” within the meaning of Article 34 (see Ljubljanska banka d.d. v. Croatia (dec.), no. 29003/07, § 53, 12 May 2015, with further references). 18.  In that context, the Court has previously attributed a company’s debt to the State where only one-third of its shares were State‑owned (see Kosarevskaya and Others v. Ukraine, nos. 29459/03 and 2 others, §§ 24-25, 6 December 2005); this was rooted in a long-standing prohibition (“moratorium”) under Ukrainian law on the enforcement of judgment debts against undertakings in which the State holds at least 25% of the share capital (see Sokur v. Ukraine, no. 29439/02, §§ 18 and 34, 26 April 2005). At the same time, a joint-venture company with one-third of its shares being State‑owned was considered “non-governmental” within the meaning of Article 34, as it enjoyed institutional autonomy and carried out activities which could only be classified as business (see Ukraine-Tyumen v. Ukraine, no. 22603/02, § 27, 22 November 2007). 19.  The Court accepts that none of the applicant companies in the present case exercised governmental powers (compare Ärztekammer für Wien and Dorner v. Austria, no. 8895/10, § 41, 16 February 2016, and State Holding Company LUGANKSVUGILLYA, cited above); nor were they subject to the jurisdiction of administrative courts (compare Ärztekammer für Wien and Dorner, cited above, § 39). 20.  The Court observes that the applicant companies were on the defence sector list with preferential treatment from the State (see paragraph 10 above) and operated in a highly regulated sphere where the State plays a crucial role (see JKP Vodovod Kraljevo v. Serbia (dec.), nos. 57691/09 and 19719/10, § 26, 16 October 2018). Yet this factor alone is not decisive, as the defence sector has a considerable proportion of private participation and competition, as also revealed by the applicant companies’ commercial activities (see paragraphs 2 and 4-5 above). 21.  While it is undisputed that the applicant companies were fully State-owned, the Court notes that FSK More was incorporated as a joint-stock company governed essentially by company law with a view to possible privatisation, which ultimately has not materialised (see paragraph 3 above). 22.  The Court reiterates that the fact that an applicant company is incorporated under domestic law as a legal entity separate from the State is not decisive in determining whether it is “non-governmental” within the meaning of Article 34 (see Slovenia v. Croatia, cited above, § 63). The Court observes in this regard that while the status of FSK More was changed from a State enterprise to a joint-stock company, the key provisions of its articles of association establishing a measure of independence from the State were conditional on its successful privatisation, which ultimately did not materialise (see paragraph 3 above). A corporation in form, it thus remained fully controlled by the State (see, mutatis mutandis, Ljubljanska banka d.d., cited above, § 54). Lastly, the Court considers that even if FSK More has been managed by a presumably independent bankruptcy officer since 2008 (see paragraph 3 above), the bankruptcy proceedings with an indefinite moratorium on the retrieval of a debtor’s debts as such are also indicative of a high degree of State involvement in a State-owned company (see Sokur, cited above, §§ 17 and 34). The Court considers, therefore, that FSK More did not enjoy “sufficient institutional and operational independence from the State” and must be classified as a “governmental organisation” within the meaning of Article 34. 23.  In contrast, the two other applicant companies were not corporations, but remained State enterprises under the Economic Code as in force at the material time (see paragraphs 7-9 above). The two companies’ relationship with State authorities, which founded, managed, appointed their directors, and entrusted public assets to them (see paragraphs 4-5 above), strongly indicates that they lacked independence from the political authorities (compare and contrast Ukraine-Tyumen, cited above, § 27). Therefore, they did not enjoy “sufficient institutional and operational independence from the State” and must be classified as “governmental organisations” within the meaning of Article 34 (see Zastava It Turs v. Serbia (dec.), no. 24922/12, 9 April 2013). 24.  Lastly, the applicant companies pleaded in the alternative that, if they were to be considered “governmental”, that should not impede their complaints against Russia, a respondent State that was different from their own. The Court rejects this argument, as it has already held that the term “non-governmental organisation” in Article 34 cannot be construed so as to exclude only those “governmental” organisations which could be regarded as a part of the respondent State or under the strict control thereof (see Slovenia v. Croatia, cited above, § 68). Thus, as “governmental”, the applicant companies do not have locus standi in proceedings against any State which is (or was) party to the Convention. 25.  In view of all of the above, it follows that these applications are incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected pursuant to Article 35 § 4 thereof. For these reasons, the Court, unanimously, Decides to join the applications; Declares the applications inadmissible. Done in English and notified in writing on 4 June 2026.    Uğur Erdal Lorraine Schembri Orland  Acting Deputy Registrar President AppendixList of cases: No. Application no. Case name Lodged on Applicant Company Year of Registration Place of Registration Represented by Properties Impugned nationalisation order(s) Final decision 1. 19852/16 Feodosiyska Sudnobudivna Kompaniya More, VAT v. Russia 05/04/2016 FEODOSIYSKA SUDNOBUDIVNA KOMPANIYA MORE, VAT 2001 Khmelnytskyi Ukraine Oleg Ivanovych TROKHYMCHUK A shipyard in Prymorskyi, Crimea, located on 1.553 ha of public land with various buildings, equipment, machinery, and vehicles Resolutions of the “State Council of the Republic of Crimea” nos. 2256-6/14 and 2356-6/14 dated 25/06/2014 and 09/07/2014 Supreme Court of Russia, 25/01/2016 2. 57293/17 PA Yuzhmash v. Russia 26/07/2017 PRODUCTION ASSOCIATION PIVDENNYY MACHINE-BUILDING PLANT NAMED AFTER A. M. MAKAROV 1993 Dnipro Ukraine Vadym Petrovych KOLOSHYN “Dnipro” and “Druzhba” sanatoriums in Yevpatoriya, Crimea, located on 12.9836 ha of public land with various buildings of 21,241.5 sq. m total surface Order of the “Council of Ministers of the Republic of Crimea” no. 547-p dated 18/06/2014 – 3. 53957/18 State Firm Progress v. Russia 31/10/2018 STATE FIRM PROGRESS 1997 Kyiv Ukraine Andriy SHULGA A patrol boat of “Marlin” type project 1100 armed with two machineguns Resolution of the “State Council of the Republic of Crimea” no. 2256-6/14 dated 25/06/2014 Supreme Court of Russia, 14/05/2018