The Riga Regional Court Criminal Chamber, at the third hearing of the appeal proceedings in the Lembergs case, heard requests from the defense and several owners of the infringed property to revoke the judgment and send the criminal case back to the first instance so that the irregularities could be corrected, including with regard to the owners of the infringed property.
The law provides that any owner of property infringed in criminal proceedings must be heard in the proceedings where the confiscation of the property is decided. This is also provided for by European Union directives and is clearly stated in the case-law of the European Court of Justice.
As has already been written, in 2007, prosecutors Andis Mežsargs and Māris Urbāns, and in 2008, prosecutor Juris Juriss, seized the rights of the true beneficiary of many foreign companies and even Latvian companies. In some cases, it was not the rights of the true beneficiary that were seized, but the shares and capital stock of the companies, including bearer shares.
The court of first instance in the Lembergs criminal case declared the seized assets confiscable. The court copied the list of assets to be confiscated verbatim from the seizure decisions drawn up by the prosecutors, without even resolving the contradictions with other procedural documents; without verifying whether such assets existed at all; and, above all, without ascertaining to whom they actually belonged.
A number of the true owners of the property had no opportunity to defend their interests at first instance, but the infringement of their rights could no longer be remedied on appeal - this was one of the arguments why the case should be referred back to first instance.
Three new parties have appeared before the court of appeal in the Lembergs case, and they are the owners of the infringed property.
The reason for the request was given by the lawyer Jānis Jurkāns, who represents the interests of SIA Kronomare (which owns the shopping center TC Tobago in Ventspils), that already on December 6, 2019, SIA Kronomare had applied to the Prosecutor General's Office with a request to cancel the seizure of property imposed in 2007, as it considered that the criminal proceedings under which the seizure was imposed (different from those currently before the court) had been terminated and no longer applied to SIA Kronomare in any way. However, on December 10, 2019, the Prosecutor General's Office forwarded the request to the Riga Regional Court. On December 13 of the same year, the Riga Regional Court replied that the issue of seizure of assets would not be decided as the case was being debated: "Subsequently, Kronomare learned from the media that its assets had been recognized as criminally acquired by a court judgment and were being confiscated. Kronomare tried to consult the case file, but was not allowed to do so. It lodged an appeal, which was sent back because the court of first instance found that Kronomare was not a party to the proceedings. It was only on appeal that Kronomare was found to be a person whose interests had been infringed. The situation now is that a legal person is having immovable property entered in the Land Registry confiscated and that legal person has never had the opportunity to participate and to comment on how the property was acquired, why it was not criminally acquired and, even more, I would say that Kronomare is currently unaware of the circumstances, proof and evidence why its property has been found to be criminally acquired and confiscated. I believe that this situation is absolutely incompatible with the requirements of the law. Kronomare had the right to be present at the first instance, to cross-examine witnesses, to make its observations and to give its explanations concerning the acquisition of the property, and it is now no longer possible to exercise this right at the appeal instance. The person whose property is declared to have been acquired criminally has the right to be heard at two instances on the merits and to lodge a cassation appeal. But the case is already on appeal, and I do not see how the requirements of the law can be met without sending the case back to the court of first instance. For these reasons, I ask the court to send the case back to the court of first instance and to revoke the judgment in the case," explained lawyer Jurkāns.
On January 28 this year, lawyer Vera Mihaiļenko, who represents six foreign companies, having found that the court of first instance had committed a fundamental violation of Section 111' and Section 455 of the Criminal Procedure Law, submitted a similar request to the court. In her reasons for the request, Mihaiļenko explained to the court: "The situation is similar to that of Mr Jurkāns. From publicly available information, my representatives have found out that their property has been confiscated as an additional punishment. Accordingly, my representatives have not participated in the pre-trial investigation or in the court of first instance. They have been prevented from exercising their rights as owners of the property infringed. When they became aware of this judgment, they turned to me for legal assistance and appeals were accordingly prepared from all the persons represented by me. Like my colleague, the appeals were returned. They were not accepted. The court found that the persons I represented at first instance were not parties to the proceedings. We appealed against the court's decision to return the appeals, but to no avail. The situation now is that my representatives are being denied the right to appear before the court of first instance on the merits. In my view, the court of first instance committed fundamental misconduct under Sections 111' and 455 of the CPL. This leads to the annulment of the judgment, since the confiscation of the property as an additional penalty imposed by the judgment of first instance confiscates the property belonging to my representatives, who were not invited to the hearing at first instance. The situation under Section 566 of the CPL has therefore arisen. In view of the fact that the court of appeal, when considering the merits of the case, cannot remedy the miscarriage of justice committed at first instance, I request the court, at this stage, to revoke the judgment of the court of first instance and to refer the case back to the court of first instance for a fresh hearing, without any judicial investigation having been initiated."
Oskars Rode, lawyer for businessman Anrijs Lembergs, and Jānis Rozenbergs, lawyer for businessman Ansis Sormulis, also asked the court of appeal to revoke the judgment of the first instance court and send the case back for a new hearing.
Rozenbergs also referred to a precedent from a well-known criminal case: "This issue can be decided now, without examining the merits of the case, saving the time of the parties and also the resources of the court, and exactly as provided for in Section 566 of the CPL. In order to establish that the operative part of the [first instance] judgment infringes on the interests of subjects who were not invited to participate in the proceedings, the court may also establish this simply by consulting the judgment itself, without examining the evidence.
This was precisely the ground for revoking the judgment in one case which had occupied the court for a long time: the so-called digital TV case,
where, among other things, the court of appeal had ordered the confiscation of funds from a legal entity that had never taken part in the proceedings. This was one of the reasons why the Senate revoked the court of appeal's decision, because it found that the rights of a person who had not participated in the proceedings and had not been able to exercise his rights under Section 111' of the CPL had been violated. Therefore, in order not to infringe on the interests of the owners of the property affected in this case as well, and in order not to further infringe on the interests of all the participants in the proceedings to conclude the case within a reasonable time, what the court of appeal can do now is to consider the similar requests made by myself, my colleague Rode and others, and to refer this case back to the court of first instance as soon as possible. Otherwise, we, and everyone here, understand with a sufficiently high degree of certainty that if we now examine the merits of the case, trying to deal with it somehow at appeal, giving the owners of the property affected the opportunity to explain something now - [that will achieve nothing], because they have that right to participate in all three instances, not just starting with the appeal.
It is quite clear that we will go back to the first instance after the Supreme Court.
Therefore, in order to remedy this error as soon as possible, I would ask that this appeal of mine and the application contained therein, and also the appeal of Rode and the application contained therein, as well as the applications of the several owners of the property infringed, be allowed and that the judgment of the first instance be referred back to the court of first instance for a fresh decision."
Lawyer Māris Grudulis explained to the court: "Mr Lembergs has been involved in this case for 20 years. For 12 years, this process has been in first instance. If it is now decided to send the case to the first instance, it definitely prolongs this process and significantly restricts [my defendant] Mr Lembergs' right to a trial within a reasonable time.
But it is better to do it today than when one of the owners of the property infringed files a cassation appeal on this issue a year, two, three, four, five years from now and then the Senate sends the case back to the first instance. And then we will conclude that we could have done it today."
Prosecutor Aivis Zalužinskis stated that the requests of the owners of the infringed property and of the other participants in the proceedings were unfounded, because the judgment of the court of first instance had already established that all the property either belonged to Lembergs or that he had control over it.
After deliberations, the court declared that there were no grounds for granting the requests, at least at this stage of the proceedings.