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THIRD
SECTION
CASE OF S.C. PRODCOMEXIM S.R.L. v. ROMANIA (no. 2)
(Application
no. 31760/06)
JUDGMENT
STRASBOURG
6 July 2010
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 S.C. Prodcomexim
S.R.L. v. Romania (no. 2),
The
European Court of Human Rights (Third Section), sitting as a Chamber
composed of:
Josep
Casadevall,
President,
Corneliu
Bîrsan,
Boštjan
M. Zupančič,
Egbert
Myjer,
Ineta
Ziemele,
Luis
López Guerra,
Ann
Power, judges,
and
Santiago
Quesada,
Section Registrar,
Having
deliberated in private on 15 June 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 31760/06) against Romania
lodged with the Court under Article 34 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Romanian company, S.C. Prodcomexim S.R.L.
(“the applicant company”), on 21 July 2006.
- The
applicant was represented by Mr Gheorghe Ungureanu, its managing
director. The Romanian Government (“the Government”) were
represented by their Agent, Mr Răzvan-Horaţiu
Radu.
- On
23 April 2008 the President of the Third Section decided to give
notice of the application to the Government. It was also decided to
examine the merits of the application at the same time as its
admissibility (Article 29 § 3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant company is a joint stock company based in Ploieşti.
A. Attempts to enforce the judgment of 24 June 1998
- On
24 June 1998 the Supreme Court of Justice, by a final decision,
ordered the S.C. Safa Impex S.R.L. company (“the S. company”)
to pay the applicant company 533,683,270 old Romanian lei (ROL) as
due payment resulting from a contract they had entered into and ROL
21,254,421 for the costs of proceedings. The court based its findings
on an expert report which had updated the due amount on the basis of
the inflation rate.
- In
August and September 1998 the S. company sold a part of its movable
and immovable property to the S.C. Safa Comimpex S.R.L. company,
which had as manager the wife of one of the two managers of the S.
company.
- Following
refusal of payment by the S. company, on 17 September 1998 the
applicant company requested the Prahova County Court to enforce that
judgment.
- On
19 January 1999 the S. company further sold a building to the same SC
Safa Comimpex SRL company.
- On
10 February 1999 the Ploieşti District
Court decided in private to attach the S. company's assets in the T.
bank up to the total due amount of ROL 554,937,691.
- On
5 April 1999, at the applicant company's request, the Ploieşti
District Court upheld that attachment and ordered the bank to
transfer that amount into the applicant company's account. An appeal
by the bank was dismissed as groundless on 12 October 1999.
- On
3 December 1999 the applicant company informed the Prahova County
Court that the debtor had taken its money out of the T. bank and
requested to continue enforcement by sale by public auction of
debtor's immovable and movable property.
- On
6 December 1999 the bailiff R. served notice to the S. company to pay
the debt. The debtor refused to receive that notice and the bailiff
posted it on its door.
- On
16 December 1999 the bailiff requested information from the public
finance office in respect of S company's movable and immovable
property. In the absence of an answer by the finance office, the
bailiff renewed that request on 15 February 2000.
- On
6 April 2000 the public finance office submitted to the bailiff the
debtor's balance sheet.
- On
1 May 2000 the S. company sold a vehicle to the wife of one its two
managers.
- On
18 May 2000 the public finance office informed the bailiff about the
S. company's assets, which included a building and four vehicles.
Therefore, at an unknown date the bailiff R. seized the four vehicles
and on 22 September 2000 he put them on sale by public auction. The
sale was scheduled for 13 October 2000.
- However,
on 13 October 2000, following a visit to the S. company's premises,
the bailiff R. certified in an official record that the debtor had
sold the four above-mentioned vehicles to the S.C. Safa Comimpex
S.R.L. company. The debtor also refused to pay, alleging that it had
no other assets and had ceased to function.
- It
appears from the file that the proceedings brought for the annulment
of those sales were dismissed by the courts.
- On
9 October 2002, following failure by the bailiff R. to enforce that
judgment, the applicant company requested his replacement. The
execution file was transferred to the bailiff M.
- On
30 October 2002 the bailiff M. requested the Ploieşti
District Court to authorise the enforcement and the town council to
inform him about the debtor's assets. On 12 November 2002 the court
approved the enforcement by an interlocutory decision. By a letter of
18 December 2002 the town council informed the bailiff that the
debtor was listed as the owner of two vehicles.
- The
S. company made an objection to the execution, alleging prescription
of the applicant's right to claim enforcement. Eventually, on
25 April 2006 the Ploieşti
District Court found that the action had lapsed.
B. Criminal proceedings against the managers of the S.
company
- On
2 May 2001 the applicant company lodged a criminal complaint against
the two managers of the S. company, submitting that they had sold the
company's assets and thus prevented the applicant company to recover
the debt.
- On
29 November 2001 the public prosecutor found no reasons to start
criminal proceedings.
C. Civil proceedings against the managers of the S.
company
- In
2002 the applicant company brought proceedings against the managers
of the S. company, to hold them liable for the company's debts.
- By
an enforceable decision of 10 February 2005 the Prahova County Court
allowed that action and ordered the two managers to pay the debt out
of their personal property. The court based its findings on an
accounting expert report which had found that the two managers of the
S. company were at fault for its insolvency and that they had
transferred its assets to another company, managed by the wife of one
of them. Moreover, the value of those assets had not been updated to
their market value and the payment ordered by the judgment of 24 June
1998 had not been recorded in the company's book of accounts. The
court concluded that the aim of their entire activity was to avoid
paying the debt to the applicant company.
- On
7 December 2007 the applicant company requested the bailiff T. to
enforce that judgment. According to the applicant, one of the two
managers is retired and they also have sold their personal assets.
- Two
invoices of 26 September and 28 October 2008 certified payment of two
instalments of 117 new Romanian lei each.
D. Compulsory liquidation of the S. company
- On
8 November 2002 the applicant company presented a winding-up petition
against the S. company.
- On
11 December 2002 the Prahova County Court authorised the compulsory
liquidation and appointed a trustee. That judgment became final on 24
February 2003.
- On
9 February 2005 the S. company was declared bankrupt by the Prahova
County Court. The court appointed the same trustee.
- The
trustee drew up a final report in which she certified that the S.
company had no movable or immovable property to be sold. She
therefore proposed the court to terminate the bankruptcy proceedings.
- On
23 January 2006 the Prahova County Court, by an enforceable decision,
terminated the bankruptcy proceedings and ordered that the S. company
be struck off the trade register. The court also held that the
enforcement of the judgment of 10 February 2005 (see paragraph 25
above) would be carried out according to the Code of Civil Procedure.
- According
to the applicant company, the amount to which it was entitled was
recorded in its book of accounts and thus it had to pay corresponding
taxes to the State.
II. RELEVANT DOMESTIC LAW
- The
relevant domestic law is described in Topciov v. Romania
((dec.), no. 17369/02, 15 June 2006) and Elena Negulescu v.
Romania (no. 25111/02, §§ 20-22, 1 July 2008).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant company complained that that the non-enforcement of the
judgment in its favour had infringed its rights guaranteed by
Article 6 § 1 of the Convention, which, in so far as
relevant, reads as follows:
Article 6 § 1
“In the determination of his civil rights and
obligations ... everyone is entitled to a fair ... hearing ... by [a]
... tribunal...”
A. Admissibility
- The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
- The Government invoked the case of Topciov v.
Romania ((dec.), no. 17369/02, 15 June 2006) and argued that
neither the bailiffs nor the authorities were at fault for the
non-enforcement. They considered that the bailiff had taken measures
to enforce that judgment and to identify the debtor's assets, but the
latter had no pecuniary resources. Eventually the Government
submitted that the applicant had had the possibility to request
enforcement of the judgment of 10 February 2005, but remained
passive.
- The
applicant company alleged that the bailiff's failure to carry out his
tasks in due time had made possible for the debtor company to
transfer its assets and thus to prevent enforcement of the judgment
in its favour. It considered the present case as being similar with
the case of Ruianu v. Romania (no. 34647/97, 17 June
2003).
- The
Court reiterates that execution of a judgment given by any court must
be regarded as an integral part of the “trial” for the
purposes of Article 6 of the Convention (Hornsby v. Greece, 19
March 1997, § 40, Reports of Judgments and Decisions
1997 II). However, the right of “access to court”
does not impose an obligation on a State to execute every judgment of
civil character without having regard to particular circumstances of
a case (Sanglier v. France, no. 50342/99, § 39, 27
May 2003). The State has a positive obligation to organise a system
for enforcement of judgments that is effective both in law and in
practice and ensures their enforcement without undue delay (Fuklev
v. Ukraine, no. 71186/01, § 84, 7 June 2005). When the
authorities are obliged to act in order to enforce a judgment and
they fail to do so, their inactivity can engage the State's
responsibility on the ground of Article 6 § 1 of the Convention
(Scollo v. Italy, 28 September 1995, § 44, Series A no.
315 C).
- The
Court is not called upon to examine whether the internal legal order
of the State is capable of guaranteeing the execution of judgments
given by courts. Indeed, it is for each State to equip itself with
legal instruments which are adequate and sufficient to ensure the
fulfilment of positive obligations imposed upon the State (Ruianu
v. Romania, no. 34647/97, § 66, 17 June 2003).
The Court's only task is to examine whether the measures applied by
the Romanian authorities in the present case were adequate and
sufficient. In cases such as the present one, which necessitate
actions by a debtor who is a private person, the State, as the
possessor of the public force, has to act diligently in order to
assist a creditor in execution of a judgment (Fociac v. Romania,
no. 2577/02, § 70, 3 February 2005).
- In
the present case the Court notes that the applicant company was
entitled to recover a certain amount of money from another company,
which had deliberately provoked its insolvency in order to avoid
payment (see paragraph 25 above). Even though the courts ordered the
managers of the debtor company to pay the debt out of their personal
property, the applicant company has not recovered so far the amount
of money to which it was entitled and thus the judgment of 24 June
1998 remains unenforced. Therefore, the Court will examine whether
the authorities have acted diligently in order to assist the
applicant company in execution of that judgment.
- In
this respect, the Court notes the inconsistencies between, on the one
hand, the situation on paper in respect of the debtor's movable and
immovable assets and the fact that the bailiff had seized some of
those goods and, on the other hand, the fact that in reality the
debtor had sold those goods (see paragraphs 16 and 17 above).
Moreover, it appears from the file that no further action was taken
by the bailiff R. between 13 October 2000 and 9 October 2002, when
the applicant company requested his replacement. Therefore, the Court
concludes that the bailiff R. did not act diligently in order to
assist the applicant company in execution of the 1998 judgment.
- In
addition, the Court notes the delay of five months in which the
public finance office responded to the bailiff's request for
information regarding the debtor's assets (see paragraphs 13 and 16
above). Moreover, the bailiff had to ask twice for that information
(see paragraph 13 above). Therefore, the Court cannot consider that
the finance office acted with due diligence.
- The
Court finally observes that the debtor company was eventually
declared bankrupt and that the courts ordered its former managers to
pay the debt out of their personal property.
- Therefore,
the Court considers that the authorities did not act diligently and
in due time in order to assist the applicant company in execution of
the judgment in its favour. This failure by the authorities to act
promptly allowed the managers of the debtor company to transfer all
its assets, to drive it into bankruptcy and thus to prevent the
applicant company from recovering its debt (see paragraph 25 above).
- There
has accordingly been a violation of Article 6 § 1 of the
Convention.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
- The
applicant company further complained that as a result of the
non-enforcement of the judgment in its favour it had been deprived of
its property and suffered pecuniary losses in violation of Article 1
of Protocol No. 1.
- Having
regard to the findings in the paragraphs 41-46 above, the Court
concludes that this complaint must be declared admissible, but that
it is not necessary to examine it on the merits (see, mutatis
mutandis, Laino v. Italy [GC], no. 33158/96, §
25, ECHR 1999 I; Canea Catholic Church v. Greece, 16
December 1997, § 50, Reports 1997 VIII, and Ruianu,
cited above, § 75).
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.”
A. Damage
- The
applicant company claimed 234,711 euros (EUR) in respect of pecuniary
damage, namely EUR 183,555 for the updated debt, on the basis of an
accounting expert report from June 2008, and EUR 51,156 for the loss
of profit, representing interest in accordance with Government
Ordinance no. 9/2000 regarding the legal level of interest for
pecuniary obligations. The applicant company also claimed EUR 50,000
in respect of
non-pecuniary damage.
- The
Government submitted that the applicant company had requested
enforcement of the judgment of 10 February 2005, but that it had not
proved that the former managers of the S. company had no financial
assets to pay the debt. They considered that the applicant company
may claim only the sum of money provided by the 1998 judgment,
updated in accordance with the inflation rate, which amounted to
608.52% for the period of June 1998-November 2008. As for the loss of
profit representing the legal interest, that would lead to a second
updating of the debt and would turn into unjust enrichment. Further,
they considered that the finding of a violation would constitute in
itself sufficient just satisfaction for any non-pecuniary damage
which the applicant company might have suffered.
- The Court first notes that the judgment in favour of
the applicant company has been partially enforced (see paragraph 27
above). It is therefore still entitled to receive the outstanding
amount. It further points to the fact that following the debtor
company's bankruptcy, the domestic courts ordered by an enforceable
decision of 10 February 2005 the former managers to pay the debt out
of their personal property (see paragraph 25 above). The Court,
therefore, notes that the State's outstanding obligation to ensure
the effective enforcement of the judgment in the applicant company's
favour is not in dispute. Accordingly, the applicant company is still
entitled to recover the remaining part of its judgment debt in the
domestic proceedings. The Court reiterates that the most appropriate
form of redress in respect of a violation of Article 6 is to ensure
that the applicant as far as possible is put in the position he would
have been in had the requirements of Article 6 not been disregarded
(see Piersack v. Belgium (Article 50), 26 October 1984, §
12, Series A no. 85). Having regard to the violation found, the Court
finds that in the present case this principle applies as well. It
therefore considers that the Government must secure, by appropriate
means, the enforcement of the judgment of 24 June 1998, as provided
by the subsequent judgment of 10 February 2005 (see,
mutatis mutandis, Cebotari and Others v. Moldova,
nos. 37763/04, 37712/04, 35247/04, 35178/04 and 34350/04, § 55,
27 January 2009). The Court takes note, in this respect, of the
Government's allegations that it has not been proved that the former
managers of the debtor company had no financial assets to pay the
debt.
- As
regards the amount of money alleged by the applicant company for the
loss of profit, the Court notes that the applicant company did not
submit any supporting documents to substantiate its claim. In the
absence of any evidence, the Court will not speculate as to the loss
of profit and, therefore, will not make an award under this head (see
Dragne and Others v. Romania (just satisfaction),
no. 78047/01, § 18, 16 November 2006).
- The
Court considers that the serious interference with the applicant
company's right of access to a court caused moral prejudice to the
applicant company. Making an assessment on an equitable basis, as
required by Article 41 of the Convention, the Court awards it EUR
4,800 in respect of non pecuniary
damage.
B. Costs and expenses
- The
applicant company did not claim costs and expenses. Accordingly,
there is no call to make an award under this head.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the application admissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
- Holds that there is no need to examine on the
merits the complaint under Article 1 of Protocol No. 1;
- Holds
(a) that
the respondent State shall secure, by appropriate means, the
enforcement of the domestic court's judgment of 24 June 1998, as
provided by the subsequent judgment of 10 February 2005;
(b) that
the respondent State is to pay the applicant company, within three
months from the date on which the judgment becomes
final in accordance with Article 44 § 2
of the Convention, EUR 4,800 (four thousand eight
hundred euros) in respect of
non-pecuniary damage, to be
converted into the national currency of the respondent State at the
rate applicable at the date of settlement, plus any tax that may be
chargeable;
(c) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant's claim
for just satisfaction.
Done in English, and notified in writing on 6 July 2010, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Santiago Quesada Josep
Casadevall
Registrar President
