The European Court of Human Rights has found that the company M.S.L. had no effective remedies for its complaints in Ukraine

The European Court of Human Rights (ECHR) has found that the company M.S.L. had no effective remedies for its complaints in Ukraine; this is the first judgment on the merits in the ECHR's case law against Ukraine concerning the application of sanctions under the Law of Ukraine “On Sanctions.”

As reported to the agency “Interfax-Ukraine” by Elvira Lazarenko, partner at the Barristers law association, the ECHR published the relevant judgment in the case “M.S.L., TOV v. UKRAINE” on October 16, 2025 (https://hudoc.echr.coe.int/#{%22itemid%22:[%22001-245275%22]})

Lazarenko noted that “to date, a fairly well-established practice of the Grand Chamber of the Supreme Court has formed regarding ‘sanctions cases,’ which speaks of the limited possibility of judicial review of decisions of state bodies on the application of sanctions due to the discretionary powers of the National Security and Defense Council (NSDC) of Ukraine and the President of Ukraine to decide matters of national security.”

“This practice has long drawn criticism from lawyers, because it indicated a de facto refusal of Ukrainian courts to verify the factual grounds for imposing sanctions, that is, a refusal to administer proper justice. The decision in ‘M.S.L., TOV v. UKRAINE’ is important because it raises questions about the limits of judicial review by Ukrainian courts of decisions on the application of sanctions, and about the courts’ ability to assess the materiality of the risks that become the basis for imposing sanctions on persons under the Law of Ukraine ‘On Sanctions,’” she said.

Lazarenko recalled that the case “M.S.L., TOV v. UKRAINE” concerned the company “M.S.L.” challenging the sanctions imposed on it by a decision of the NSDC of Ukraine and put into effect in 2015 by a decree of the President of Ukraine, with the sanctions subsequently extended by decrees in 2016 and 2017.

The applicant company complained that the imposition of sanctions, in particular the freezing of assets, constituted an interference with its rights guaranteed by Article 1 of Protocol No. 1 to the Convention, because it had been prohibited from using and disposing of its assets. The applicant company also raised a complaint under Article 13 of the Convention on account of the lack of an effective remedy for the violation of its property rights.

At the national level, Ukrainian courts rejected the applicant company's claim concerning the first decree of the President of Ukraine, while the company withdrew its claims concerning the second and third decrees.

“The national courts, in rejecting the company's claim, refused to assess the factual grounds for imposing sanctions, citing the discretionary powers of the bodies that issued the contested decisions. The Grand Chamber of the Supreme Court indicated that the scope and results of the President's assessment of the significance of the risks that served as the basis for imposing sanctions on the applicant company fall outside judicial review, since an administrative court has no competence to take decisions on matters of national security and defense,” the lawyer explained.

She noted that, in applying to the ECHR, the company argued, among other things, that the national courts had evaded the administration of justice because they had not examined whether the state bodies had sufficient grounds for imposing sanctions and whether those grounds were supported by any evidence.

“Moreover, the restriction of the scope of judicial examination was not based on any provision of national legislation. In the company's view, the President's discretionary powers on national security matters should not limit the judicial review carried out by national courts, nor release the courts from the obligation to verify the grounds for sanctions under the sanctions law,” Lazarenko said.

The lawyer noted that the ECHR, for its part, pointed out that the decisions of the national courts lacked a substantive judicial assessment of the decision to apply sanctions to the applicant company. In particular, the Supreme Court limited its analysis to the sole question of whether the decision of the NSDC and the first decree of the President met the formal requirements of the sanctions law, and did not address the substance of the SBU's accusations against the applicant company.

“Because the courts had not verified whether the President's first decree had a solid factual basis, the ECHR concluded that such judicial review could not be regarded as a sufficient procedural safeguard against arbitrariness. Accordingly, the ECHR found the interference with the applicant company's right to peaceful enjoyment of property to be unlawful,” she said.

In addition, Lazarenko noted that the ECHR, referring to its conclusion that there were no adequate procedural safeguards against arbitrariness during the judicial review of the decision to apply sanctions, as well as to the ineffectiveness of the company's complaints to the SBU, concluded that the applicant company had no effective remedies for its complaints.

“Given the established status of ECHR case law as a source of law, we expect an appropriate response to the ECHR decision in ‘M.S.L., TOV v. UKRAINE’ from the Administrative Cassation Court and the Grand Chamber of the Supreme Court, as the courts of first and appellate instance designated to review decisions on the application of sanctions,” the lawyer summed up.