LLC fined over 63 million UAH: The Grand Chamber explained why the decision was not reviewed even after the ECHR

On June 9, 2026, the Grand Chamber of the Supreme Court considered case No. 826/10658/17 and denied the Limited Liability Company a review of the final decision in the tax dispute concerning penalty charges for violating payment deadlines in foreign economic activity, despite the ECHR having found a violation of the Convention for the Protection of Human Rights and Fundamental Freedoms in the same case.

Essence of the dispute

In August 2017, the LLC filed a lawsuit with the Kyiv District Administrative Court against the Main Department of the State Fiscal Service in Poltava region (successor – Main Department of the State Tax Service in Poltava region) and the State Fiscal Service of Ukraine (successor – State Tax Service of Ukraine), requesting to declare unlawful and cancel the tax notice-decision and the decision following administrative appeal.

The basis for these decisions was an audit report, on the grounds of which the tax authority charged the LLC a penalty of 63,432,530.29 UAH for violating payment deadlines in foreign economic activity.

The company justified its claims by arguing that the tax authority incorrectly applied the provisions of the Law of Ukraine No. 185/94-VR. According to the LLC, it took all possible measures to collect debts from non-residents under export contracts with the Republic of Belarus.

In particular, the company noted that it applied to a notary in the Republic of Belarus to issue enforcement inscriptions, based on which enforcement proceedings were initiated against the debtors. According to the LLC, such actions should be considered a proper way to protect rights and equivalent to appealing to a competent authority under the law, and therefore should have suspended the accrual of penalties for violating currency payment deadlines.

Decisions of previous courts

The Kyiv District Administrative Court fully denied the LLC's claim to cancel the tax notice-decision.

Disagreeing with this decision, the LLC filed an appeal.

The Kyiv Administrative Court of Appeal satisfied the LLC's appeal, canceled the decision of the first instance court, and issued a new decision granting the claim and recognizing the tax notice-decision of the Main Department of the State Tax Service in Poltava region and the decision of the State Tax Service of Ukraine as unlawful and canceled them.

By an additional ruling, the appellate court partially satisfied the LLC's claim for court costs and recovered 2,382,963.00 UAH for court fees and 20,000.00 UAH for other expenses at the expense of budget appropriations, denying the rest of the claim.

The Main Department of the State Tax Service filed cassation appeals against the appellate court's ruling and its additional ruling, and the LLC filed a cassation appeal against the additional ruling on the allocation of court costs.

By the ruling dated July 12, 2024, the Administrative Cassation Court within the Supreme Court satisfied the cassation appeal of the Main Department of the State Tax Service, canceled the ruling of the Kyiv Administrative Court of Appeal, and upheld the decision of the first instance court, which denied the claim.

By another ruling on the same day, the court partially satisfied the cassation appeal of the Main Department of the State Tax Service, denied the cassation appeal of the LLC, and canceled the appellate court's additional ruling on the recovery of court costs in favor of the company. Subsequently, by the ruling dated October 17, 2024, the Supreme Court denied the LLC's request for clarification of the adopted rulings.

ECHR considered the complaint

However, the LLC applied to the European Court of Human Rights. In its application, the company claimed violations of Articles 6 and 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms and Article 1 of Protocol No. 1 during the consideration of its case.

The ECHR joined this application with five others in the case "Burkovskyy and Others v. Ukraine." The applicants primarily complained about the excessive length of judicial proceedings and the lack of an effective remedy in Ukraine against such delays. The ECHR declared the applications admissible and found violations of paragraph 1 of Article 6 and Article 13 of the Convention. The Court concluded that the length of proceedings did not meet the "reasonable time" requirement and that the applicants had no effective remedy. At the same time, the ECHR did not find violations regarding the substantive resolution of the disputes.

According to the ECHR decision, the state is obliged to pay the applicants specified amounts of compensation within three months, and in case of delay, simple interest will be charged at the rate of the European Central Bank plus three percentage points. According to the annex to the decision, the LLC was awarded 900 euros in compensation.

Review of the decision by the Grand Chamber

Motivating its decision, the Grand Chamber of the Supreme Court emphasized that an ECHR decision can be grounds for reviewing a national court decision only when such review can restore the violated right of the applicant. The court noted that in the case "Burkovskyy and Others v. Ukraine," the ECHR found violations of paragraph 1 of Article 6 and Article 13 of the Convention exclusively due to excessive length of judicial proceedings and lack of an effective remedy, but did not conclude the illegality of Ukrainian courts' decisions on the substance of the tax dispute.

The Grand Chamber noted that the ECHR did not examine the correctness of the application of national legislation in the dispute between the LLC and the tax authority and did not question the outcome of the case. Instead, the violations found related only to failure to comply with the requirement to consider the case within a reasonable time and the absence of an effective remedy against such violation.

The court stressed that a re-examination of the case cannot eliminate the already committed violation of the "reasonable time" requirement, and therefore canceling the ruling of the Administrative Cassation Court would not restore the violated rights of the applicant. Moreover, the ECHR already awarded the LLC 900 EUR of just satisfaction precisely for the excessive length of proceedings and lack of an effective remedy.

In view of this, the Grand Chamber of the Supreme Court concluded that there are no grounds for reviewing the ruling of the Administrative Cassation Court under exceptional circumstances and left the ruling in force.

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