DETERMINATION OF THE KIEV ECONOMIC COURT OF APPEAL OF UKRAINE

of May 17, 2007 No. 21/638-A

Name of Ukraine

The Kiev Economic Court of Appeal as a part of board of judges:

the chairman - Maletich M. M.,

judges,

in case of the secretary,

with participation of representatives:

the claimant - [...],

chairman of the board,

the protocol No. 1 of 26.04.2004,

the defendant - [...], the third party - [...], considered in proceeding in open court the petition for appeal of Credit union of Dnepropetrovshchina on the resolution of economic court of Kiev of 24.01.2007 in the matter of No. 21/638-A in the claim of Credit union of Dnepropetrovshchina to State commission on regulation of the markets of financial services of Ukraine, the third party - the Ministry of Justice of Ukraine, about recognition of the act illegal and such which does not answer the regulatory legal act.

Essence of the decision and claim:

The credit union of Dnepropetrovshchina (further - Credit union, the Claimant) appealed to economic court of the city of Kiev with the claim to State commission on regulation of the markets of financial services of Ukraine (further - the Commission, the Defendant), the third party without independent requirements on the party of the defendant: The Ministry of Justice of Ukraine (further - the Ministry, the Third party), about recognition of the act illegal and such which does not answer the regulatory legal act.

By the resolution of economic court of the city of Kiev of 24.01.2007 in the matter of No. 21/638-A satisfaction of the claim it was refused.

Without agreeing with the court order, the Credit union of Dnepropetrovshchina made about it the petition for appeal in which it asked to repeal the resolution of economic court of the city of Kiev of 24.01.2007 in the matter of No. 21/638-A and to collect the court costs incurred by the Claimant at the expense of the government budget.

In reasons for the requirements the Claimant referred to the fact that the disputed resolution of economic court of the city of Kiev is illegal and unreasonable as the court incorrectly established circumstances on case and is incomplete the proofs moving the parties for consideration of court that is the bases for cancellation of such judgment are researched.

The defendant in the objections did not agree with arguments and requirements which were stated by the Claimant in its petition for appeal and considered that the resolution of economic court of the city of Kiev of 24.01.2007 in the matter of No. 21/638-A is legal, objective and such which answers the valid facts of the case, and therefore asked to leave this court order without changes, and the petition for appeal made about it - without satisfaction.

The representative of the Third party on case provided to court the written explanations on the petition for appeal in which objected in satisfaction of the petition for appeal and considered that the disputed resolution on this case is legal, objective and such which answers the valid facts of the case, and therefore asked to leave this resolution without changes, and the made petition for appeal - without satisfaction.

Having heard explanations of agents of the parties and the Third party in judicial session, having researched and having studied case papers, the Kiev Economic Court of Appeal

ESTABLISHED:

As it was stated above, the Credit union of Dnepropetrovshchina appealed to economic court of the city of Kiev with the claim to State commission on regulation of the markets of financial services of Ukraine, the third party without independent requirements on the party of the defendant: The Ministry of Justice of Ukraine, about recognition illegal and such which does not answer the legal act of the highest legal force of item 2.6 of the Order of the Defendant of 25.07.2006 with No. 6039 regarding "purpose of the credits which the credit union can provide" and the resolution of economic court of the city of Kiev of 24.01.2007 in the matter of No. 21/638-A was refused satisfaction of this claim.

Accepting the disputed resolution, the Trial Court recognized that the Defendant, accepting 25.07.2006. The order No. 6039, which is disputed regarding, in particular, its item 2.6 of the item 2, made changes to subitem 1.4 of item 1 of the Order No. 116 "About approval of the List of domestic situations of credit union", regarding conditions of provision of separate types of financial services concerning purpose of the credits which the credit union can provide, was effective within the powers conferred to it by legal acts of Ukraine in this connection requirements of the Claimant are unreasonable and such which are not subject to satisfaction.

With respect thereto, the board of judges of Economic Court of Appeal agrees with the specified conclusion of local economic court about groundlessness of requirements of the Claimant and considers them such which are not subject to satisfaction, considering the following.

According to case papers, 11.11.2003. The commission the Order No. 116 "About approval of the List of domestic situations of credit union" which provided the exhaustive list of financial services and condition of provision of separate types of financial services which are provided by credit union was accepted.

Further, 25.07.2006. The defendant the Order No. 6039 "About modification of the order of State commission on regulation of the markets of financial services of Ukraine of 11.11.2003 No. 116" which, in particular, approved changes in the List of domestic situations of credit union (according to changes - the List of domestic situations and procedures of credit union (further - the List) approved by the Order No. 116 of 11.11.2003 was accepted and subitem 1.4 of item 1 of the specified List in the new edition where it was noted that the Regulations on financial services, shall contain, in particular is stated: a) the exhaustive list of financial services which are provided by credit union; b) conditions of provision of separate types of financial services relatively: effective periods of agreements on provision of financial services; purpose of the credits which the credit union can provide; ensuring accomplishment of obligations according to credit agreements; criteria of determination of the size of interest rate for each of separate types of financial services.

The complainant in the action for declaration and the petition for appeal did not agree with the specified changes and, in particular, in part about loan granting with indication of purpose of means, and noted that having obliged credit unions to specify in Regulations on purpose of the credits which the credit union can provide, thereby the Defendant went beyond the powers, having violated also at the same time the Claimant's right to independently establish conditions of loan granting and to present them on the terms of the paid nature, urgency and security.

At the same time, according to Art. 19 of the Constitution of Ukraine public authorities and local government bodies, their officials shall act only on the basis of the, within powers and method which are provided by the Constitution and the laws of Ukraine.

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