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Protection of Business Rights in Disputes with Public Authorities

The issue of relations with state and local authorities in obtaining various permits and approvals is increasingly important for business organisations. Despite the declared administrative, judicial and other reforms aimed at simplifying relationships in this area, obtaining permissive documents remains a rather complicated and bureaucratic procedure. Besides, often recourse to these bodies entails grounded refusal, since the authorities are not entitled to give a groundless refusal. Under these circumstances, the current procedural legislation provides the opportunity to appeal against decisions, acts or inactivity on the part of an authority or some of its provisions.

According to the results of a trial such decision, action or inactivity may be deemed illegal. The decision may also be revoked or declared void. Ukrainian procedural legislation also establishes that the defendant — even the authority — may be required to take certain actions.

The problem is that the court cannot take over the functions of a public authority and take a decision in its name, which is solely within the remit of this authority. For example, if the Constitution of Ukraine attributes a series of land issues to the jurisdiction of the subject of authority — in particular, a local council — a court may not take over these functions and solve the problem instead of the local council.

Therefore, a legal and logical conflict arises: if a court finds the decision of the authority unlawful and null and void, but does not stimulate this subject to take a correct and lawful decision, the court decision cannot be implemented because, in fact, it cannot be executed. The problem is that the authority is not prohibited from repeatedly refusing to satisfy a similar appeal — for example, with new arguments.

Legislative Regulation of a Problem

As long as the problem lies in the procedural field, its solution is governed mainly by the norms of the Code of Administrative Legal Procedure of Ukraine (CASU). According to Article 2 of the CASU, the task of administrative legal procedure is to protect the rights, freedoms and interests of individuals, the rights and interests of legal entities in the field of public and legal relations from violations by authorities of state power, bodies of local self-government, their officials and employees, other subjects in the exercise of the power managerial functions on the basis of legislation, including for fulfilment of delegated powers by means of fair, impartial and timely consideration of administrative cases. Any decisions, actions or inactivity on the part of  subjects of authority, except for cases when such decisions, actions or inactivity are regulated in different order according to the Constitution or laws of Ukraine, can be appealed in administrative courts. Pursuant to Article 17 of the CASU, the jurisdiction of administrative courts applies to public disputes, in particular, disputes between individuals or legal entities with the subject of authority as to the appeal of its decisions (normative and legal acts or legal acts of individual effect), actions or inactivity.

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Authors:
Yuriy Chumak - Partner, Law Firm Lexfor, advocate
Kseniya Zabrodska- Lawyer, Law Firm Lexfor, advocate