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FOURTH
SECTION
CASE OF
MOLDOVAHIDROMAŞ v. MOLDOVA
(Application
no. 30475/03)
JUDGMENT
STRASBOURG
27
February 2007
This judgment will
become final in the circumstances set out in Article 44 § 2
of the Convention. It may be subject to editorial revision.
In the case of Moldovahidromaş v. Moldova,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Sir Nicolas Bratza, President,
Mr J.
Casadevall,
Mr K. Traja,
Mr S. Pavlovschi,
Mr L.
Garlicki,
Ms L. Mijović,
Mr J. Šikuta,
judges,
and Mr T.L. Early, Section Registrar,
Having
deliberated in private on 6 February 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 30475/03) against the Republic
of Moldova lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by S.A. “Moldovahidromaş”, a
company registered in Chişinău, on 18 September 2003.
- The
applicant was represented by Mr N. Moşcin, a lawyer practising
in Chişinău. The Moldovan Government (“the
Government”) were represented by their Agent, Mr V. Pârlog.
- The
applicant alleged, in particular, that its right to a fair hearing
and its right to the peaceful enjoyment of its possessions were
breached as a result of the quashing of the final judgment of 23
October 1992.
- The
application was allocated to the Fourth Section of the Court (Rule 52
§ 1 of the Rules of Court).
- On
12 October 2004 a Chamber of that Section decided to communicate the
application to the Government. On 4 April 2006 the application was
declared partly admissible. The Court found that the applicant could
claim to be a victim of a violation of Article 6 § 1 and Article
1 of Protocol No. 1 to the Convention as the current owner of the
property concerned by the original judgment, despite the fact that
the judgment as such did not concern the applicant.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
1. Events prior to the quashing of the 1992 judgment
- By
Government order of 19 June 1990 the Ministry of Heavy Industry of
the USSR was given the right to manage the property of
“Moldovahidromaş” (the State-owned legal predecessor
of the applicant, hereinafter “M.”). On 28 November 1990
the Ministry of Heavy Industry concluded with the staff employed
within M.’s scientific laboratory a contract for the creation
of a separate association (întreprindere de arendă)
to hold and manage the laboratory (“Hidrotehnica”,
hereinafter “H.”).
- The
Ministry of Industry of Moldova (“the Ministry”) later
considered that contract to be unlawful. On 1 September 1992 it
ordered H.’s liquidation. H. challenged that order in court.
The Ministry also initiated court proceedings for the annulment of
the contract creating H.
- On
23 September 1992 M. made a statement about its registration as a
shared company, 58.2% of the shares of which were to be distributed
to the staff and the rest remained State property. According to the
statement, the final evaluation of the company’s assets was to
be based on the accounting situation on 31 December 1992 and on the
assets evaluation document to be drawn up. The period for the staff
to subscribe for stock was set at between 25 September 1992 and
25 March 2003. M. also declared its right subsequently to be
privatised in accordance with the law by becoming a public limited
company.
- On
22 October 1992 the Economic Court of Moldova annulled the Ministry’s
order of 1 September 1992 since the Ministry had not been competent
to order the liquidation of a company.
- On
23 October 1992 the same court accepted the Ministry’s court
action and declared the contract for the creation of H. null and void
(“the 1992 judgment”). That judgment was not appealed
against and became final. The court also ordered the liquidation of
H., with the transfer of assets to the Ministry and the publication
of an announcement in the press about its liquidation, setting a
time-limit until 23 January 1993 for submitting any claims against H.
- On
11 December 1992 the Ministry ordered H.’s liquidation pursuant
to the court judgment of 23 October 1992 and the transfer of its
assets to M., which was declared to be the legal successor of H. M.’s
manager was ordered to create, on the basis of the property obtained
from H., a subsidiary without a separate legal personality, to manage
H.’s scientific laboratory and plant.
- On
29 December 1992 M. registered its statute with the State
Registration Chamber. The applicant company was thereby created and
it retained the name of its legal predecessor, “Moldovahidromaş”.
In respect of its assets, the statute referred to the statement of
23 September 1992.
- On
30 December 1992 an “Act for the transfer and receipt of [H.]”
was concluded. According to this Act, pursuant to the Economic
Court’s judgment of 23 October 1992, H. was transmitted to the
applicant. M.’s assets evaluation document was drawn up on 1
January 1993.
- In
an evaluation of the value of the applicant’s real estate dated
1 January 1994 referring to the accounting situation on 1
January 1993, subsidiary H.’s real estate was mentioned among
the applicant’s property. On 4 June 1994 the applicant’s
staff and the Government of Moldova signed the applicant’s
constitutive contract, which replaced certain parts of the
constitutive statement of 23 September 1992. In respect of the
property in the applicant company owned by the State, the
constitutive contract referred to the assets evaluation document of 1
January 1993.
- Also
in 1994 the applicant registered with the State Registration Chamber
a subsidiary under the name “Hidrotehnica” (hereinafter
“subsidiary H.”), to manage its laboratory and plant and
to act on the basis of the applicant’s statute and that of
subsidiary H. The applicant issued a general power of attorney to
subsidiary H.’s director, authorising him to sign contracts,
act in court and take financial decisions regarding H. In accordance
with subsidiary H.’s statute, should that subsidiary be
liquidated, its property was to be transferred back to the applicant.
In the applicant’s request to a bank to open a sub-account for
the use by its subsidiary H., the latter’s stamp was applied,
which referred to its status as the applicant’s subsidiary.
- In
1995 more of the State’s shares in the applicant company were
privatised, which raised the total percentage of private ownership in
the company to 75.3%.
- In
1997 the court file regarding the 1992 proceedings was destroyed
pursuant to regulations establishing a five-year limit for keeping
such files in court archives.
- On
30 June 1998 the applicant made changes to its statute. The new
statute declared that the company had been created through the
re-organisation of M. and H. and was the legal successor of both.
- By
2001, the company was 100% privately-owned. On 24 July 2001 the
Department of Privatisation and Administration of State Property
issued the applicant a privatisation certificate. It listed the real
estate included in the company’s constituting capital
(capitalul social) in accordance with the evaluation act of 1
January 1993. Five buildings of subsidiary H. were included in that
list. The certificate finally stated that the State had not entrusted
the management of any State property to the applicant. In a letter of
18 May 2002 the same Department informed the Government and the staff
of subsidiary H. that the latter could not claim the right to
separate from the applicant in order to become a State company unless
the applicant’s general assembly of stock holders decided so.
It added that the entire property of H. had been transferred to M.
following the 1992 judgment and the Ministry’s order of 11
December 1992 and that thereafter M. was privatised by selling stocks
to the staff and on the stock exchange.
2. The quashing of the 1992 judgment
- On
23 July 2002, on the initiative of a group in the staff of the
subsidiary H., the Prosecutor General filed a request with the
Supreme Court of Justice for the annulment of the 1992 judgment.
- On
25 September 2002 the applicant informed the Supreme Court of Justice
about the failure of the Prosecutor General to send it a copy of his
request for the annulment of the 1992 judgment, as he was obliged to
do by law, and asked to be recognised as a party to the proceedings.
It received no reply. The applicant submitted its arguments against
the annulment of the 1992 judgment and asked the court to reject the
Prosecutor General’s request. On 29 October 2002 the applicant
sent to the Supreme Court of Justice an addendum to its
request, relying, inter alia, on Article 6 § 1 of the
Convention and Article 1 of Protocol No. 1.
- On
11 October 2002 the Supreme Court of Justice informed the applicant
about the date of the hearing of the case. Similar letters were sent
to the applicant for the hearings of 11 December 2002, 22 January
2003 and 21 April 2003. In none of them was the applicant
mentioned as a party to the proceedings. According to the Government,
the applicant was represented before the Supreme Court of Justice in
all these hearings and was informed about the decision of 21 April
2003 by that court.
- On
an unknown date thereafter the Prosecutor General withdrew the
request. On 11 December 2002 the court upheld the Prosecutor
General’s withdrawal of the request for annulment. On 22
January 2003 the court rejected the request for revision made by the
“shareholders of H.” because they had no standing, not
having participated in the 1992 proceedings.
- The
Prosecutor General filed a further request with the Plenary Supreme
Court of Justice for the annulment of its judgment of 11 December
2002.
- On
9 April 2003 the Supreme Court of Justice upheld the request of the
managing director of subsidiary H. to freeze all the company’s
assets pending the court’s decision on the case.
- On
21 April 2003 the applicant asked the Plenary Supreme Court of
Justice to reject the Prosecutor General’s request for the
annulment of the 1992 judgment. It received no reply.
- On
the same day the Supreme Court of Justice upheld the Prosecutor
General’s request and quashed the judgment of 11 December 2002,
ordering a re-hearing of the case by its own Economic Chamber.
- On
23 April 2003 the applicant asked the Economic Chamber of the Supreme
Court of Justice to recognise it as a party to the proceedings and to
order the Prosecutor General to send it a copy of his request for the
annulment of the 1992 judgment. The applicant received no reply. The
Government have not commented on this in its observations.
- On
24 April 2003 the Economic Chamber of the Supreme Court of Justice
upheld the Prosecutor General’s request and quashed the 1992
judgment. It adopted a new judgment whereby it rejected the
Ministry’s request to declare null and void the contract
concluded in 1990 creating H. However, there was no annulment of the
privatisation of the applicant’s predecessor, M., nor was any
compensation awarded to the applicant.
3. Events after the quashing of the 1992 judgment
- On
7 May 2003 the applicant made a request for the annulment of the
judgment of 24 April 2003. On 26 June 2003 the court rejected that
request, referring to the new Code of Civil Procedure and the
introduction of a new form of court proceedings (revision, see
paragraph 41 below).
- On
6 June 2003 the newly created H. was registered in the State register
of companies and the subsidiary H. was deleted from that register.
According to a letter from the Chamber of Commerce of 28 May 2003,
there was no company called “Hidrotechnica” in the State
register on 1 May 2003 and no such company had been deleted from
the register. Moreover, no such company had been registered in
1990-1992. The applicant challenged in court the changes made to the
State register.
- On
26 June 2003 the applicant made a request for the revision of the
judgment of 24 April 2003 on the ground, inter alia, that
it had not been allowed to intervene in proceedings which affected
its pecuniary rights. On 10 July 2003 the Supreme Court of
Justice rejected the request as unfounded but gave no reasons.
- On
22 July 2003 the applicant was informed about the hearing by the
Supreme Court of Justice of H.’s request for an additional
ruling. By its judgment of 24 July 2003 the Supreme Court of Justice
decided that H., created by the 1990 contract, could be registered in
the State register under the same name and that the 1994 registration
of the applicant’s subsidiary H. should be deleted. At the same
time, the court declared null and void all the decisions concerning
the creation of the applicant’s subsidiary H., including the
applicant’s decisions of 1992-1994.
- On
18 February 2005 the Department of Privatisation of the Republic of
Moldova issued the applicant a new privatisation certificate.
According to this certificate, following the Supreme Court of Justice
judgment of 24 July 2003 and the registration, on 6 June 2003, of H.
in the State register, the previously issued certificate of 24 July
2001 had been amended to exclude from the list of the applicant’s
property the five buildings belonging to its subsidiary H.
- H.
also requested amendments to the State real estate register to
confirm its title to the buildings previously registered as belonging
to the applicant. On 25 March 2005 the Chişinău Court of
Appeal accepted that request. That judgment was upheld by the Supreme
Court of Justice on 22 June 2005. Both courts found that the
applicant had lost to H. the ownership over those buildings following
the judgment of 24 April 2003.
- H.
initiated court proceedings against the bank in which the applicant’s
subsidiary H. had had its account, asking for the transfer of all the
money in that account to its new account. The applicant was allowed
to intervene as a third party, claiming that the money belonged to
it, since its subsidiary had had to be closed following the annulment
of the 1992 judgment and since the newly registered H. had not been
declared to be the legal successor of subsidiary H. On 27 October
2005 the Regional Economic Court accepted the applicant’s
request. That judgment was quashed by the Chişinău Court of
Appeal on 19 December 2005. On 16 February 2006 the Supreme
Court of Justice upheld that judgment. The court relied on the
judgments of 24 April and 24 July 2003 which annulled the 1992
judgment and found that the money on H.’s account had been
earned after the annulment of the 1992 judgment and from H.’s
own resources.
- On
18 May 2006 the Agent of the respondent Government informed the
Prosecutor General about the Court’s decision of 4 April 2006
to declare partly admissible the present application. He annexed a
copy of that decision and requested the Prosecutor General’s
Office to contribute its comments as part of the Government’s
observations to the Court regarding the present case. On an unknown
date, the Prosecutor General’s Office asked the Supreme Court
of Justice to revise its judgments of 24 April and 24 July 2003,
invoking Article 449 (c) and (j) of the Code of Civil Procedure
(“CCP”, see paragraph 41 below) and the decision
declaring partly admissible the present application. He annexed the
Government Agent’s letter of 18 May 2006.
- On
29 June 2006 the Supreme Court of Justice rejected that request. It
found that the request had not been accompanied by sufficient
evidence of new and relevant facts in the form of an application
pending before the European Court of Human Rights regarding the case
at issue. Moreover, the Court had declared the application partly
admissible but had not adopted a judgment on the substance of the
complaints, which prevented the Supreme Court of Justice from
revising the judgments of 24 April and 24 July 2003 on the basis of
Article 449 (c) CCP.
- The
court also found that the documents annexed to the request did not
disclose the Government’s position that a provision of the
Convention had been violated as a result of the quashing of the 1992
judgment. Accordingly, Article 449 (j) CCP did not apply either.
B. Relevant domestic law
- The
relevant domestic law is summarised in the case of Roşca
v. Moldova (no. 6267/02, §§ 16 and 17, 22 March
2005).
In
addition, the provisions of the Code of Civil Procedure concerning
revision of final judgments, where relevant, read as follows:
“Article
446: Court decisions which may be subject to revision
Final
decisions ... and judgments of all courts may be subject to revision,
under the conditions of the present Chapter.
Article
447: Persons who may lodge a request for revision:
The
following have the right to lodge a request for revision:
...
(b)
persons who have not participated in the proceedings but whose rights
were violated by the relevant judgment;
...
Article
449: Reasons for granting a request for revision:
A
revision request shall be granted when:
...
(c) certain essential circumstances or facts of the case become known
which did not and could not have been known to the applicant;
...
(g) The court adopted a decision in respect of the rights of persons
not participating in the proceedings;
(j)
The Government of the Republic of Moldova, represented by their
Agent, or the European Court of Human Rights, have initiated a
friendly settlement procedure in a case pending against the Republic
of Moldova, which [the Government] consider that the court’s
judgment has seriously violated a right provided by the Constitution
of the Republic of Moldova or the European Convention for the
Protection of Human Rights and Fundamental Freedoms;”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the two judgments of the Supreme Court of
Justice of 24 April and 24 July 2003, which set aside the final
judgment of 23 October 1992, had violated its rights guaranteed under
Article 6 § 1 of the Convention.
The
relevant part of Article 6 § 1 reads as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair and public hearing
... by an independent and impartial tribunal established by law...”
- The
Government rejected the applicant’s claims and argued that in
the proceedings before the Supreme Court of Justice the parties had
enjoyed equal procedural rights and that the re-opening had been
justified. The aim of the procedure for the annulment of final
judgments was to offer additional protection to the weaker party in
the proceedings and to avoid arbitrariness. Moreover, the domestic
authorities had a certain margin of appreciation regarding the manner
in which the last-instance court examined an appeal. It was also
important that the Prosecutor General had not lodged his request on
his own motion but at the request of H.’s staff.
- The
Government underlined various violations of the law allegedly
committed by the court in its judgment of 23 October 1992, which were
the reason for the quashing of the judgment in 2003. Moreover, the
applicant’s claim that it had not been allowed to intervene in
the proceedings was untrue since the Supreme Court of Justice had not
adopted any preliminary decision either allowing or rejecting such a
request.
- Finally,
the Government submitted that domestic law and practice allowed the
courts to remedy violations resulting from the quashing of final
judgments, under Article 449 (c) and (j) of the Code of Civil
Procedure (see paragraph 41 above). They therefore considered that
there was no reason for the Court to continue the examination of the
complaints in this respect.
- The
applicant considered that the annulment of the 1992 judgment had been
contrary to the principle of legal certainty and had violated its
right to take part in the proceedings concerning its assets.
- The
Court notes that the Government have not referred to Article 449
CCP at the admissibility stage. They are therefore estopped from
raising the issue of non-exhaustion of available domestic remedies at
this stage of the proceedings. In such circumstances, the Court
considers it appropriate to continue the examination of the
complaints.
- The
Court recalls that it has found violations of Article 6 § 1 of
the Convention in numerous cases raising issues similar to those in
the present case (see, among other authorities, Brumărescu v.
Romania [GC], no. 28342/95, § 61, ECHR 1999 VII
and Roşca v. Moldova, no. 6267/02, 22 March 2005, §
29).
- Having
examined the material submitted to it, the Court notes that the
Government have not put forward any fact or argument capable of
persuading it to reach a different conclusion in the present case. It
is particularly disturbing that a judgment which has remained res
judicata for over ten years could be annulled on grounds which
were known at the time of adoption of that judgment.
- Having
regard to its case-law on the subject and to its decision of 4 April
2006 regarding the present application, the Court finds that the
annulment of the 1992 judgment breached the applicant’s rights
under Article 6 § 1 of the Convention.
- There
has accordingly been a violation of Article 6 § 1 of the
Convention.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO
THE CONVENTION
- The
applicant also claimed that the annulment of the 1992 judgment had
violated its right guaranteed under Article 1 of Protocol No. 1 to
the Convention, which provides:
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties.”
- The
applicant relied on various documents in the case file proving its
ownership over its subsidiary H., as well as on a report made by an
expert contracted by it, confirming its submissions.
- The
Government disagreed. They submitted that the quashing had not
affected the applicant’s pecuniary rights since the 1992
judgment had not given any such rights to the applicant but concerned
the Ministry. Moreover, H. de facto continued to be an
independent company throughout the relevant period and it was never
included in the privatisation of M. In support of that submission
they relied on a report made by an expert working for the Ministry of
Justice and who had been duly warned of his criminal responsibility
for false statements. According to that report, when the applicant
company was created on 29 December 1992 it had not yet included the
property of H., which was only transferred the next day. After 1992
H. functioned independently of the applicant and had the right to
sign contracts and use its own stamp and based its relations with the
applicant on a contractual footing. The value of the applicant’s
constituent assets did not change since its creation, which showed
that H. had not been taken into consideration during the
privatisation.
- The
Court recalls its finding in the admissibility decision of 4 April
2006 regarding the present application that the applicant could claim
to be a victim of an alleged violation of its rights guaranteed,
inter alia, by Article 1 of Protocol No. 1 to the
Convention.
- It
notes the Government’s submission that the applicant had not in
practice been deprived of any “possessions” within the
meaning of Article 1 of Protocol No. 1 to the Convention despite
the annulment of the 1992 judgment. The Court needs to verify that
submission in order to determine whether the case requires a
different approach to be taken from that adopted in other cases
regarding the quashing of a final judgment.
- The
Court notes that M.’s statement of 23 September 1992 expressly
mentioned the date of 31 December 1992 as the date of assessing the
value of its assets for the purposes of creating the applicant
company (see paragraph 9 above). Such an evaluation in fact took
place on 1 January 1993, following the transfer of H. to the
applicant on 30 December 1992 (see paragraph 14 above). In addition,
on 11 December 1992 the Ministry, which was the owner of H. following
the 1992 judgment, ordered its liquidation and the transfer of its
assets to M., while expressly declaring M. to be the legal successor
of H. (see paragraph 12 above). The date of 1 January 1993 also
appears to be the reference date used in the applicant’s
constitutive contract of 4 June 1994 (see paragraph 15 above).
Moreover, while H. was no longer an independent company following the
Ministry’s order of 11 December 1992, creditors could still
lodge claims against its property until 23 January 1993 (see
paragraph 11 above). It appears that any such claim lodged in 1993
would have been paid by M. as H.’s legal successor.
- The
Court also notes that H. was not registered as an independent company
in the State register until after the annulment of the 1992 judgment
(see paragraphs 16, 32 and 34 above). At the same time, that register
contained the name of H. as the applicant’s subsidiary, a fact
reflected also on its official stamp. Moreover, subsidiary H.’s
director acted on the basis of a general power of attorney issued by
the applicant (see paragraph 16 above). That situation persisted for
at least eight years after the 1994 registration of the applicant’s
subsidiary, without being challenged by anybody. In addition,
subsidiary H.’s real estate was registered as belonging to the
applicant until the courts adopted separate judgments to confirm H.’s
ownership over that property, based on the annulment of the 1992
judgment (see paragraphs 35 and 36 above). Moreover, the account used
by subsidiary H. prior to the annulment had been opened in the bank
as a sub-account of the applicant. H. had to claim in court the money
left on that account and the courts accepted that claim relying
expressly on the annulment of the 1992 judgment (see paragraph 37
above).
- It
is clear from the privatisation certificate issued by the Department
of Privatisation (see paragraph 35 above), that H.’s buildings
had been included in the privatisation of M. and were thus part of
the assets acquired by the applicant from the State. According to the
same certificate, no State property was entrusted for the applicant’s
temporary management. The certificate had to be amended following the
annulment of the 1992 judgment to exclude H.’s real estate from
the list of assets included in the privatisation (see paragraphs 34
and 35 above). In its letter dated 18 May 2002 the same
Department informed the Government that all H.’s assets had
been transferred to M., which was subsequently privatised (see
paragraph 20 above).
- In
the Court’s opinion, if the Government’s argument, that
H. had not been part of the applicant’s assets, were to be
accepted, then H. would be left having had no legal status at all for
over ten years: H. was not part of the applicant’s property,
neither was it State property since the applicant had not been given
any such property for administration (see the preceding paragraph)
and neither was it an independently registered company (see paragraph
58 above). However, a company cannot function in a legal vacuum.
Indeed, the applicant, the staff of subsidiary H. and the State
authorities acted, for over ten years, in a manner consonant with the
applicant’s claim of ownership over subsidiary H. Had H. been
an independent company, as argued by the Government, there would have
been no need, after the annulment of the 1992 judgment, for the
various administrative decisions and court judgments ordering the
deletion of the registration of the applicant’s subsidiary, the
change of ownership over the buildings of H. and the change of bank
account owner (see paragraphs 32 37 above).
- The
above finding is not in contradiction with the materials in the file
regarding a certain degree of independence which was granted by the
applicant to its subsidiary and which, according to the Government,
constituted evidence of H.’s independence from the applicant.
Indeed, the internal organisation of a private company’s
sub-divisions is exclusively that company’s concern.
- In
view of its findings in paragraphs 57-63 above, the Court concludes
that H. was part of the applicant’s property at the moment of
privatisation of M. and that the applicant lost its ownership over
that property as a result of the annulment of the 1992 judgment and
the subsequent decisions based on that annulment.
- The
Court recalls that it has found violations of Article 1 of Protocol
No. 1 to the Convention in numerous cases raising issues similar to
those in the present case (see, among other authorities, Brumărescu,
cited above, § 80, ECHR 1999 VII and Roşca,
cited above, § 32). Having examined the material
submitted to it, and having regard to its finding in paragraph 65
above and in its admissibility decision of 4 April 2006 regarding the
applicant’s victim status (see paragraph 5 above), the Court
notes that the Government have not put forward any fact or argument
capable of persuading it to reach a different conclusion in the
present case.
- There
has accordingly been a violation of Article 1 of Protocol No. 1
to the Convention.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
- The
applicant claimed the restitution of H. or compensation for its
market value and the difference in value of the applicant company
before and after the annulment, as well as the sums of money left on
H.’s bank account. The total sum claimed amounted to EUR
4,843,040. The applicant also claimed EUR 2,379,000 for non-pecuniary
damage and EUR 11,000 for costs and expenses.
- The
Government submitted that H. had functioned independently of the
applicant since 1991 and was not included in the privatisation of M.
in 1992. Therefore, no damage had been caused to the applicant by the
annulment of the 1992 judgment.
- The
Court considers that the question of the application of Article 41
of the Convention is not ready for decision. The question must
accordingly be reserved and the further procedure fixed with due
regard to the possibility of agreement being reached between the
Moldovan Government and the applicant.
FOR THESE REASONS, THE COURT
- Holds by six votes to one that there has been a
violation of Article 6 § 1 of the Convention on account of the
annulment of the judgment of 23 October 1992;
- Holds by six votes to one that there has been a
violation of Article 1 of Protocol No. 1 to the Convention as a
result of the same annulment;
- Holds unanimously that the question of the
application of Article 41 of the Convention is not ready for
decision;
accordingly,
(a) reserves
the said question;
(b) invites
the Moldovan Government and the applicant to submit, within the
forthcoming three months, their written observations on the matter
and, in particular, to notify the Court of any agreement they may
reach;
(c) reserves
the further procedure and delegates to the President of the Chamber
power to fix the same if need be.
Done in English, and notified in writing on 27 February 2007,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
T.L. Early Nicolas Bratza
Registrar President
In accordance with Article 45 § 2 of the Convention and Rule 74
§ 2 of the Rules of Court, the dissenting opinion of Mr
Pavlovschi is annexed to this judgment.
N.B.
T.L.E
DISSENTING OPINION OF JUDGE PAVLOVSCHI
It
would not be an exaggeration to say that the present case is one of
the most difficult and complex cases I have ever been called upon to
examine during my time at the European Court of Human Rights.
The
complexity of this case derives from the economic character of legal
disputes that arose during and were provoked by the period of
transition from a state-regulated economy to a free market one that
the Republic of Moldova had to go through during a certain phase of
its history.
That
period was one of radical political, social and economic
transformation. It could be called a period of initial accumulation
of capital.
That
period was marked by a lack of clear legal provisions regulating the
economic sphere of activity or responsibility of either the State or
private persons.
The
beginning of the 1990s in the last century in Moldova, like in many
other post-Soviet countries, could also be called the period of
struggle between old conservative and new progressive forces, and the
case before us presents a very clear illustration of this struggle.
A
group of persons tried to create a joint stock company: Hidrotehnica
SA, and during the transition from a state-controlled economy to one
based on the principles of a free market they were confronted with
every kind of surmountable and insurmountable difficulty, including
some of a legal and judicial nature.
All
these circumstances should have been taken into consideration by the
Court because they are really decisive for a proper understanding of
the case before us.
Of no
less importance is the substantial amount of money that is at stake
in the present case. The financial repercussions and consequences of
this case make it even more difficult to decide.
Unfortunately,
the majority, when adopting its judgment, preferred not to look into
the above-mentioned particularities of the substance of the case and
limited itself exclusively to the examination of a legal certainty
problem from the angle of the Brumarescu v. Romania
case – that is, the res judicata nature of a final
judicial decision.
The
entire thinking behind the present judgment is concentrated in just
one single paragraph, namely paragraph 48, which states: “...The
Court recalls that it has found violations of Article 6 § 1
of the Convention in numerous cases raising issues similar to those
in the present case (see, among other authorities, Brumarescu v.
Romania [GC], no. 28342/95, §§ 61, ECHR 1999 VII,
and Roşca v. Moldova, no. 6267/02, 22 March 2005, §§
29).”
I
respectfully disagree with my colleagues that the Court has already
found violations of Article 6 § 1 “...in numerous cases
raising issues similar to those in the present case...” In
my view, this is simply not so.
Of course, in principle, the majority’s approach would have
been correct had certain legal conditions been met. However, I regret
to say that this was not the case.
I
consider that before taking a position in the present case the
majority should have looked into the question of what the principle
of res judicata means in terms of Convention jurisprudence.
The
answer to this question can be found in the judgment in the case of
Ryabykh v. Russia (application no. 52854/99, §52,
ECHR 2003-IX), which states the following: “... Legal
certainty presupposes respect for the principle of res
judicata ... that is the principle of the finality of
judgments. This principle insists that no party is entitled to seek a
review of a final and binding judgment merely for the purpose of
obtaining a rehearing and a fresh determination of the case...”
In
the case of Popov v. Moldova, the Court, referring to the
annulment procedure, stated precisely the following: “...this
procedure, although possible under domestic law, was incompatible
with the Convention because it resulted in a litigant’s
“losing” a favourable judgment. ...” (see Popov
v. Moldova (no.2), application no. 19960/04, §46).
It is
clear from the above-mentioned provisions that when the Court speaks
of a breach of the principle of res judicata - in the light of
its case-law – it is referring to “parties” in the
sense used in the Ryabykh judgment or of “litigants”
“losing a favourable judgment” in the sense used in the
Popov (no.2) judgment.
So,
in order to allege any violation of its rights resulting from a
breach of the principle of res judicata, the applicant should
have shown that in the 1992 proceedings it had the procedural status
of a litigant or a party. The applicant failed to do so, however,
because it is impossible to prove a fact that simply did not exist.
According
to paragraphs 7 and 8 of the present judgment, the 1992 proceedings
took place between the Ministry of Industry of Moldova and the joint
stock company Hidrotehnica SA. At that time our applicant was a
state-owned entity which had no standing in the 1992 proceedings,
and, moreover, which, in its current capacity as a privately owned
entity simply did not exist.
As is
clear from paragraph 1 of the present judgment, Moldovahidromaş
SA was registered in Chişinău on 18 September 2003, that
is, practically 11 years after the 1992 proceedings had come to an
end.
So
the fact that the applicant was not a party or a litigant in the 1992
proceedings makes this case different not only from Brumarescu and
Rosca, to which reference is made in paragraph 48 of the present
judgment, but also from many other Brumarescu-type cases
previously examined by the Court.
The
legal situation before us presents a novelty which deserves the
attention of the Grand Chamber.
The
second question which I would like to raise is the following. In this
case we are dealing with a very interesting and unusual situation. In
the 1992 proceedings, as I have mentioned above, there were two
parties: the State in the person of the Ministry of Industry and a
newly created joint stock company, Hidrotehnica SA.
All
the steps taken by the Moldovan authorities from 1992 to 2003 were
directed against the owners of the joint stock company, Hidrotehnica
SA, which, in practical terms, cannot be seen as anything other than
a manifestation of attempts to protect so-called state interests
against the interests of the owners of the joint stock company
Hidrotehnica SA. The one and only judicial decision that put an end
to the violations of the rights of these persons was the Supreme
Court’s decision of 24 April 2003 – a decision taken, in
the majority’s view, in violation of the principle of legal
certainty.
I am
very sorry to say so, but I cannot share the majority’s view on
this issue. In my opinion, if a prosecutor belatedly intervenes in a
set of proceedings between the State and a joint stock company and
tries to protect that joint stock company’s lawful interests
against the interests of the State, this situation has nothing in
common with the Brumarescu situation, where the prosecutor
acted in the diametrically opposite way, to the detriment of the
applicant, who, by the way – unlike in our case – did
have the procedural status of a “party”.
I
find it very difficult to agree that the protection of private
owners’ legal interests against breaches committed by State
authorities can be regarded as a violation of the principle of legal
certainty.
Of
course, it would have been better had the Prosecutor General
intervened earlier, but it should never be too late to protect
legitimate interests of private owners against abusive acts by the
State. And in this sense – and for our situation – I find
the saying “better late then never” to be very apt.
In
theory, I would agree that the belated restoration of the
Hidrotehnica SA owners’ rights might, to some extent, have
affected the rights of the current owners of Moldovahidromaş SA.
This is particularly true if one takes into consideration that in the
meantime a state-owned entity, Moldovahidromaş, has also become
a joint stock company. But I would not like to speculate on this
issue and prefer to stop here.
We
are now dealing with the competing interests of two joint stock
companies: Hidrotehnica SA and Moldovahidromaş SA. But this is a
slightly different issue, which, again, has nothing to do with the
Brumarescu case-law on which the present judgment is based.
The
above reasons explain why I am not able to share the majority’s
findings in the present case. In my view, in the present case there
has been no violation of the applicant’s rights in the manner
alleged by it and upheld by the majority.
