On 10 and 12 June, the NBU has moved forward a disciplinary hearing to the Supreme Council of Justice against judges of the District Administrative Court of Kyiv city I. Kachur, V. Keleberda, V. Ameliokhin and against judge of the Pecherskyi District Court in Kyiv city V. Pidpalyi.
On 18 April 2019, the District Administrative Court of Kyiv ruled in favor of the claim filed by Ihor Kolomoiskyi and declared unlawful and overruled the decision to conduct the government-assisted removal of the insolvent CB PrivatBank PJSC from the market. On 20 April, judge of the Pecherskyi District Court in Kyiv city V. Pidpalyi terminated the surety for Ihor Kolomoiskyi for PrivatBank refinancing loans.
The NBU regards the judge’s conduct as improper in the course of consideration of said cases, since their actions imply:
- postponement without foundation or failure to action to hear the case during the term set by law
- violation of equality of all parties of the proceeding in the eyes of the law and the court
- violation of jurisdiction rules.
The NBU points out that 22 months lapsed between initiating proceedings by the District Administrative Court of Kyiv under the claim filed by Ihor Kolomoiskyi (14 June 2017) and the ruling in favor (18 April 2019). Thus, the judges have violated the term for hearing on the case, considering that the court starts the hearing on the merits no later than 60 days after the proceeding was filed, and in case of extending the term for preliminary proceeding – not later than on the next day after the expiry of the mentioned term. Then, the court hears the case on the merits within 30 days on initiating the hearing on the merits.
Furthermore, during the hearing of the claim, the judges of the District Administrative Court of Kyiv failed to comply with the equality principle of parties, since the judges heard the increase in claims in the proceeding without taking jurisdiction over the claim In particular, on 21 June 2017 the plaintiff filed a motion to amend the claim, however at the preliminary hearing the court failed to take jurisdiction. At the same time, the NBU and other defendants discovered the court’s intention to hear the claim no earlier than on 12 March 2019, only during the hearing on the merits. Please be reminded that taking jurisdiction over a claim is drawn up as a written decision or on-the-record decision registered in the record of proceeding and takes place at the preliminary hearing.
Regarding the actions of the Pecherskyi District Court in Kyiv city the NBU notes as follows: after the respective ruling made on 20 April, judge V. Pidpalyi has not yet drawn-up the full text of the ruling on the case, however the drawing-up the ruling text cannot exceed 10 days after the case was closed. The NBU has already submitted to the court office three petitions to grant the full text, but received no answer.
Moreover, the NBU alleges that the judge committed a gross violation of the procedural law resulting in violation of the jurisdiction rules, since the claim regarding the surety agreement entered into by legal entities is to be heard according to business judicial procedure, and not the civil one.
Considering the above mentioned, the NBU calls for the Supreme Council of Justice to bring disciplinary charges against the said judges.
Please be reminded that the NBU has filed an appeal against the ruling of the court, since Kyiv District Administrative Court completely ignored the fact that the NBU determined that PrivatBank required a capital increase, and the fact that PrivatBank and its shareholders Kolomoiskyi and Boholiubov failed to implement the financial rehabilitation program to increase the bank’s capital, which was the reason the NBU classified the bank as insolvent. At the same time, the court falsely concluded that NBU units’ internal memos were the only documents that informed the NBU’s decision.
The court wrongfully applied the rules of substantive law to the definitions of credit risks and provisioning against those risks, and falsely inferred that banks calculate credit risks only for loans that are past due and that in all other cases, banks do not have to make loan loss provisions at all. In addition, the court failed to define exposures, equating them to outstanding transactions.
The timeline of events around PrivatBank is available here: http://pb.bank.gov.ua