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FOURTH
SECTION
CASE OF VRIONI AND OTHERS v. ALBANIA
(Applications
nos. 35720/04 and 42832/06)
JUDGMENT
(Just
satisfaction)
STRASBOURG
7 December
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 Vrioni and Others v. Albania,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Ljiljana Mijović,
David Thór
Björgvinsson,
Ledi Bianku,
Mihai
Poalelungi,
Vincent Anthony de Gaetano, judges,
and
Lawrence Early, Section
Registrar,
Having
deliberated in private on 16 November 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in two applications (nos. 35720/04 and 42832/06)
against the Republics of Albania and Italy lodged with the Court
under Article 34 of the Convention for the Protection of Human Rights
and Fundamental Freedoms (“the Convention”) by two
Albanian nationals,
Mr Shahin Vrioni and Mr Oliver Vrioni and two
Italian nationals,
Mr Giuseppe La Francesca and Mr Gherardo La
Francesca. The applicants complained that there had been violations
of Article 6 § 1 of the Convention, Article 1 of Protocol No. 1
to the Convention and Article 13 taken in conjunction with Article 1
of Protocol No. 1.
- The
applicants were represented by Ms L. Sula, a lawyer practising in
Tirana. The Albanian Government (“the Government”) were
represented by their Agent, Mrs E. Hajro.
- In a judgment delivered on 29 September 2009 (“the
principal judgment”), the Court held that there had been a
violation of Article 6 § 1 of the Convention and of Article 1 of
Protocol No. 1 to the Convention on account of the Albanian
authorities' failure to enforce a final court decision which had
awarded compensation to the applicants in lieu of the
restitution of property. The Court further found a violation of
Article 13 in conjunction with Article 1 of Protocol No. 1 (Vrioni
and Others v. Albania and Italy, nos. 35720/04 and 42832/06, §§
48-85, 29 September 2009). The Court rejected the applicants'
complaints against Italy as being incompatible ratione personae.
- Under
Article 41 of the Convention the applicants sought various sums by
way of just satisfaction.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it in whole and invited
the Government and the applicants to submit, within three months from
the date on which the judgment became final in accordance with
Article 44 § 2 of the Convention, their written observations on
the matter and, in particular, to notify the Court of any agreement
that they might reach (ibid., §§ 88-91, and point 9 of the
operative provisions).
- The
applicants and the Government each filed observations within the
extended time-limits allowed to them. No basis was found on which a
friendly settlement could be secured.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- On
18 March 1996 and 14 December 1999 the Tirana Property Restitution
and Compensation Commission (Komisioni i Kthimit dhe Kompensimit
të Pronave – “the Commission”), recognised
the applicants' title to two plots of land measuring 1,100 sq. m and
537 sq. m, respectively. The Commission held that it was impossible
for the applicants to have the whole of the original plot of land
allocated to them. It decided to restore to the applicants a vacant
plot of land (një truall i lirë) measuring 1,456 sq.
m., which was situated within the grounds occupied by the Italian
Embassy, and ordered the authorities to pay compensation in respect
of a plot of land measuring 181 sq. m. Moreover, it ordered that the
applicants' title to the property be entered in the Tirana Property
Register.
- The
applicants lodged a civil action in view of their impossibility to
recover the plot of 1,456 sq. m. By virtue of the Court of Appeal's
decision of 29 October 2002 it was decided that the applicants should
receive compensation in lieu of the original property in one
of the forms provided for by law in respect of the plot of land
measuring 1,456 sq. m. The Court of Appeal found that, in so far as
that plot of land was an integral part of the Italian Embassy's
premises, it could not be considered vacant and thus recoverable by
the applicants. This decision was upheld by the Supreme Court on 15
June 2004. Consequently, the applicants were to receive compensation
in accordance with the Property Act for the totality of the 1,637 sq.
m. of land (see §§ 24-25 of the principal judgment).
- Further
details are set out in the principal judgment.
II. RELEVANT DOMESTIC LAW
A. Act on the price of land to be compensated (Law no. 7832 of
16 June 1996 - Ligji për çmimin e truallit që
kompensohet), “The 1994 Act”
- The 1994 Act contained the criteria to be employed for
assessing the financial compensation to be awarded to former
landowners. According to the 1994 Act, Tirana was to be divided into
three zones A, B and C. The price reference for the property located
in zone A was fixed at 1,600 Albanian leks (ALL) per square metre.
B. Council of Ministers Decisions (“CMDs) on property
valuation maps (CMD no. 555 of 29 September 2007; CMD no. 653 of
29 August 2007; CMD no. 139 of 13 February 2008 and CMD no. 1620
of 26 November 2008)
- By virtue of three decisions, two of which were
adopted in 2007 and one in 2008, the Government approved and issued
property valuation maps as listed above. The maps, which were to be
used in the determination of the award of financial compensation by
the competent authorities, included the reference price per square
metre throughout the country.
- The first decision fixed the price of land for the
regions of Berat, Gjirokastër, Vlorë and Dibër; the
second decision fixed the price of land for the regions of Lezhë,
Dibër, Korçë and Kukës; the third decision
fixed the price of land for the regions of Fier, Elbasan, Tirana,
Vlorë, Durrës and Shkodër. The fourth decision
contained an updated price list for certain cities. According to that
decision, the reference price per square metre for the area in which
the applicants' property was located was valued at ALL 180,000.
THE LAW
- 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.”
Damage
The parties' submissions
a. The applicants
- The
applicants claimed 3,916,200 euros (EUR) in respect of pecuniary
damage and EUR 200,000 in respect of non-pecuniary damage.
- The
applicants submitted that compensation should be awarded in respect
of the totality of the plot of land measuring 1,637 sq. m, including
the plot of 182 sq. m. They stated that their right to compensation
in respect of the whole of this surface area had been recognised by
the Commission decisions of 1996 and 1999.
- The
applicants contended that pecuniary damage should be calculated on
the basis of the market value of the land at issue. They disagreed
with the Government's proposal to apply the criteria stated in this
Court's judgment in the case of Guiso-Gallisay v. Italy (just
satisfaction) ([GC] judgment, no. 58858/00, §§ 103-105, 22
December 2009), arguing that they had never been dispossessed of
their property as had the applicants in Guiso-Gallisay v. Italy,
no. 58858/00, §§ 78-97, 8 December 2005.
- During
the negotiations with the Government, the applicants had submitted
three methods for the calculation of pecuniary damage. They finally
proposed that the reference price per square metre for the
calculation of pecuniary damage should be 1,500 euros (EUR). In their
view, this corresponded to the reference price per square metre found
in CMD no. 1620 of 26 November 2008. Relying on that CMD, the
applicants contested the Government's proposal to apply the reference
price of ALL 1,600 per square metre as stipulated in the 1994 Act
(see paragraph 10 above).
- The
applicants further requested that loss of profits be added to the
amount of pecuniary damage. They contended that the location of their
property would have attracted property developers to construct
high-rise buildings, as had been the case with an adjacent plot of
land. As a result, they would have obtained high profits. The
applicants submitted an investment contract that they had concluded
on 17 May 2010 with a building company. In addition, the loss of
profits should include the rent they would have obtained by leasing
the property. Finally, the applicants submitted that an interest rate
should be applied starting from 1996, the year on which they had
instituted legal proceedings.
- In
sum, the applicants' estimates for pecuniary damage were as follows:
|
A plot of land measuring 1,456 sq .m x 1,500 EUR /
sq. m
|
EUR 2,184,000
|
|
Estimated rent for the period 1 June 1996 – 1
June 2006
|
EUR 535,500
|
|
Estimated rent for the period 1 June 2006 – 1
June 2010
|
EUR 274,200
|
|
A plot of land measuring 181 sq. m
|
EUR 271,500
|
|
Bank interest on the estimated rent for the period 1
June 1996 – 1 June 2010
|
EUR 651,000
|
|
Total
|
EUR 3,916,200
|
b. The Government
- The
Government submitted that the applicants were entitled to
compensation in respect of a plot of land measuring 1,456 sq. m, as
decided by the national courts. They opposed the applicants' claim to
be compensated also in respect of the plot of 181 sq. m, which, in
their view, had not been the object of the Court's examination in its
principal judgment.
- The
Government advanced two methods for calculating pecuniary damage.
According to the first method of calculation, they proposed the use
of the reference price per square metre as provided for by the CMDs
on property valuation maps (see paragraphs 11 and 12 above).
- The
second method of calculation, which they favoured, was based on this
Court's judgment in the case of Driza v. Albania, no.
33771/02, § 137, ECHR 2007 XII (extracts), which referred
to the “prices on the ... property market at the time of the
relevant [domestic] judgments”. The Government further relied
on the recently established principle adopted by the Grand Chamber of
the Court in Guiso-Gallisay v. Italy (just satisfaction),
cited above, according to which “the date to be taken into
consideration in assessing the pecuniary damage should not be that on
which the Court's judgment is delivered, but the date on which [the
applicants] lost ownership of the land” (see § 103 of the
judgment).
- Consequently,
referring to the 1994 Act which continued to apply even when the
applicants' right to compensation was finally recognised by the
Supreme Court's decision of 15 June 2004, the Government submitted
that the reference price should be ALL 1,600 per square metre (see
paragraph 10 above). They rejected the application of the reference
prices contained in the 2008 property valuation maps, which had been
adopted as a consequence of the general measures indicated by the
Court in the Driza judgment (see paragraph 126 of the
judgment). However, they added that such maps were currently used to
calculate the award of financial compensation to former owners and
they reflected the real market value which had been both interest-
and inflation-indexed.
- The
Government considered the applicants' claim regarding the
construction of a high-rise building on the plot of land and the loss
of corresponding profits hypothetical. In the first place, they
argued that the applicants' property had been sold to the Italian
Embassy. Secondly, the construction of a building would be
conditional on the issuance of a building permit and there were no
guarantees that one would be granted.
- The
Government further maintained that loss of profit should be
calculated on the basis of an annual bank interest rate applied to
the compensation awarded. However, they disagreed with the applicants
as to the calculation of the rent they would have obtained had they
leased the property out.
- The
Government proposed that the applicants be awarded EUR 21,000 in
respect of non-pecuniary damage.
2. The Court's assessment
a. Applicable principles
- The
Court reiterates that a judgment in which it finds a breach imposes
on the respondent State a legal obligation to put an end to the
breach and make reparation for its consequences in such a way as to
restore as far as possible the situation existing before the breach
(Iatridis v. Greece (just satisfaction) [GC], no. 31107/96, §
32, ECHR 2000 XI).
- The
Contracting States that are parties to a case are in principle free
to choose the means whereby they will comply with a judgment in which
the Court has found a breach. This discretion as to the manner of
execution of a judgment reflects the freedom of choice attaching to
the primary obligation of the Contracting States under the Convention
to secure the rights and freedoms guaranteed (Article 1). If the
nature of the breach allows of restitutio in integrum, it is
for the respondent State to effect it. If, on the other hand,
national law does not allow – or allows only partial –
reparation to be made for the consequences of the breach, Article 41
empowers the Court to afford the injured party such satisfaction as
appears to it to be appropriate (see Brumărescu v. Romania
(just satisfaction) [GC], no. 28342/95, §§ 20, ECHR
2001 I).
- Among
the matters which the Court takes into account when assessing
compensation are pecuniary damage (the loss actually suffered as a
direct result of the alleged violations) and non-pecuniary damage
(reparation for the anxiety, inconvenience and uncertainty caused by
the violation) and other non-pecuniary loss (see, among other
authorities, Ernestina Zullo v. Italy, no. 64897/01, §
25, 10 November 2004). In addition, if one or more heads of damage
cannot be calculated precisely or if the distinction between
pecuniary and non-pecuniary damage proves difficult, the Court may
decide to make a global assessment (see Comingersoll v. Portugal
[GC], no. 35382/97, § 29, ECHR 2000-IV).
- The
Court notes that the respondent Government raised two principal
strands of argument. The first concerns the plots of land to be
compensated and the second relies on the method of calculation of
pecuniary damage. The Court will therefore consider both issues
below.
b. Scope of the case
- The
Court notes that in the principal judgment it found a violation of
Article 6 § 1 of the Convention and Article 1 of Protocol No. 1
to the Convention on account of the authorities' failure to pay
compensation to the applicants in lieu of the restitution of
property, notwithstanding a final domestic court decision in the
applicants' favour (see paragraph 3 above). The Court further notes
that the final domestic court decision recognised the applicants'
right to compensation only in respect of 1,456 sq. m. Their right to
compensation in respect of the plot measuring 181 sq. m, as accepted
by the Commission decisions of 1996 and 1999, remained unaffected.
- The
Court will therefore examine the calculation of pecuniary damage in
respect of the plot measuring 1,456 sq. m in accordance with its
findings in the principal judgment, no complaint having been made as
regards the authorities' failure to pay the applicants compensation
in respect of the plot of land measuring 181 sq. m.
c. Method of calculation
- The
Court notes that in the present case restitutio in integrum
cannot be effected in view of the findings of the domestic courts. It
is for this reason that the domestic courts ordered compensation to
be paid to the applicants in accordance with the Property Act. The
Court will therefore make an award of compensation.
- The
Court cannot accept the respondent State's proposal to apply the
method of calculation of pecuniary damage as adopted by the Grand
Chamber of the Court in the case of Guiso-Gallisay (just
satisfaction), cited above. It notes that in the Guiso-Gallisay
judgment (merits) of
8 December 2005 and other similar Italian
cases of constructive expropriation, a public authority had occupied
land for the purpose of carrying out public works without having
completed the formal expropriation process. As a result, ownership
passed to the public authority automatically, either when the public
works were completed or after a lapse of time, depending on the
circumstances. Contrary to Guiso-Gallisay (merits), the
present case does not relate to such constructive expropriation.
- The
Court notes that it is the failure to pay compensation and not the
inherent unlawfulness of the taking of land, as in Guiso-Gallisay,
that was at the origin of the violation found under Article 6 §
1 and Article 1 of Protocol No. 1 to the Convention in the instant
case (see, mutatis mutandis, Scordino (no. 1),
cited above, § 255).
- In
calculating the amount of pecuniary damage, the Court considers that,
given the particular circumstances of the Albanian context, it is
desirable to depart from the method of calculation described in Driza
(cited above, § 137) according to which the amount of
compensation should correspond to the value of the plot of land at
the time of the domestic authorities' decisions. The Court notes that
at the relevant time the property valuation maps did not exist. It
was precisely for the purpose of calculating the amount of financial
compensation to be awarded and for avoiding any speculation that the
Court indicated under Article 46 of the Convention that the
respondent State should adopt such maps as a matter of urgency (see
Driza, cited above, § 126).
- The
Court notes with interest that the authorities have adopted property
valuation maps in respect of the entire territory of Albania. The
reference price, as stated by the Government, reflects the real
market value and was interest-and inflation-indexed at the time of
adoption of the maps. The Court will therefore base its findings for
the calculation of pecuniary damage on the property valuation maps
adopted in respect of the Tirana region in 2008.
- The
Court rejects the applicants' claim for compensation for the damage
resulting from the impossibility of using and enjoying the plot of
land. It notes that the domestic courts' findings were clear as
regards the applicants' entitlement to compensation in lieu of
the restitution of land and the applicants cannot interpret those
judgments as giving rise to an expectation that they would lease the
plot of land or construct a building on it.
- Having
regard to those factors, and ruling on an equitable basis, the Court
considers it reasonable to award the applicants EUR 1,900,000 in
respect of pecuniary and non-pecuniary damage, plus any tax that may
be chargeable on that amount.
B. Costs and expenses
- The
applicants claimed a lump sum of EUR 18,000 for costs and expenses
incurred in the domestic and Strasbourg proceedings. However, they
failed to submit any supporting documents.
- The
Government submitted that the amounts claimed were baseless.
- According
to the Court's case-law, an applicant is entitled to reimbursement of
his costs and expenses only in so far as it has been shown that these
have been actually and necessarily incurred and were reasonable as to
quantum (see Gjyli v. Albania, no. 32907/07, § 72, 29
September 2009). To this end, Rule 60 §§ 2 and 3 of the
Rules of Court stipulates that applicants must enclose with their
claims for just satisfaction “any relevant supporting
documents”, failing which the Court “may reject the
claims in whole or in part”.
- In
the present case, noting that the applicants have failed to produce
any documents – such as itemised bills or invoices – in
support of their claim, the Court does not award any sums for costs
and expenses.
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
- Holds
(a) that
the respondent State is to pay the applicants jointly, within three
months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention,
EUR 1,900,000 (one million nine hundred thousand euros), plus any tax
that may be chargeable, in respect of pecuniary and non-pecuniary
damage, to be converted into the national currency of the respondent
State at the rate applicable at the date of settlement;
(b) 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 applicants' claim
for just satisfaction.
Done in English, and notified in writing on 7 December 2010, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza
Registrar President
