Nugzar SULTANISHVILI v Georgia - 40091/04 [2010] ECHR 804 (4 May 2010)

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The European Court of Human Rights (Second Section), sitting on 4 May 2010 as a Chamber composed of:

Françoise Tulkens, President,
Ireneu Cabral Barreto,
Danutė Jočienė,
Dragoljub Popović,
András Sajó,
Nona Tsotsoria,
Kristina Pardalos, judges,
and Sally Dollé, Section Registrar.

Having regard to the observations submitted by the respondent Government on 3 October 2007 and the absence of those in reply of the applicant,

Having regard to the additional factual information submitted by the applicant on 31 August 2009,

The applicant, Mr Nugzar Sultanishvili, is a Georgian national who was born in 1943 and lives in Tbilisi. He was represented before the Court by Ms Tsira Javakhishvili, a lawyer practising in Tbilisi. The Georgian Government (“the Government”) were represented by their former Agent, Mr David Tomadze of the Ministry of Justice.

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicant is an executive director of a joint stock company specialised in the construction of small power plants in Georgia (“the company”). As disclosed by a record from the Corporate Register dated 28 July 2006, amongst fifty-four other shareholders, the applicant owns 9.878% of the company shares.

The company was established in the course of the privatisation of a Soviet enterprise run by the Soviet Ministry of Energy and Electrification in Moscow (“the Soviet Ministry”). Notably, under an agreement of 28 August 1991, the Moscow based enterprise transferred to its Georgian office the ownership over its assets situated in Georgia. The agreement was approved by the Soviet Ministry on 9 September 1991 and, on 16 December 1991, the Georgian office was registered as a private entity under the Georgian law. The latest registration changes, which gave rise to the company's current corporate structure, were effectuated by the Vake District Court in Tbilisi on 29 December 1997.

By resolutions of 27 November and 25 December 1995, the Georgian Ministry of State Property Management (“the Georgian Ministry”) declared that the company had unlawfully obtained the assets from the Soviet enterprise. The Ministry requested that the matter be investigated and the company's registration records be annulled by the competent authority.

On 7 October 1996 the Georgian Public Prosecutor's Office advised the Georgian Ministry that the transfer of the former Soviet assets to the company had been conducted in full compliance with the relevant privatisation law at the material time.

On 2 December 1996 the company sued the Georgian Ministry, requesting that the respondent confirm the validity of the property transfer in question. The Supreme Arbitration Court of Georgia (“the SAC”) allowed that claim on 3 April 1997, annulling the resolutions of 27 November and 25 December 1995 for unlawful obstruction to the company's enjoyment of its property.

The decision of 3 April 1997, having been upheld by the relevant appellate instances on 3 June and 13 November 1997, became binding.

3. The quashing of the final decision of 3 April 1997 and the reopened proceedings

On 26 April 1999 the Georgian Ministry filed a request to quash the final decision of 3 April 1997 on account of newly discovered circumstances. The Ministry claimed that a letter which it had received from the Russian Ministry of Energy and Fuel (“the Russian Ministry”) was a ground for the reconsideration of the terminated case.

As disclosed by the contents of that letter, dated 22 March 1999, the Russian Ministry stated that it was not aware of any formal decision issued by its predecessor Soviet Ministry authorising the transfer of the former Soviet property to the company. The letter advised the Georgian Ministry to address the Government of the Russian Federation for additional information.

In a decision of 26 October 1999, the Vake-Saburtalo District Court in Tbilisi granted the Georgian Ministry's request of 26 April 1999 by quashing the final decision of 3 April 1997 and reopening the civil case. The operative part of the decision noted that no appeal lay against it and that it became binding immediately.

In the course of the reopened proceedings, the respondent Georgian Ministry filed, on 11 January 2000, a counter claim against the company, requesting that the privatisation agreement of 28 August 1991 be annulled and the Georgian State be declared the sole owner of the disputed property.

After a series of remittals of the case between various judicial instances, the Tbilisi Court of Appeal delivered, on 27 December 2007, a judgment, dismissing the company's action of 2 December 1996 as ill-founded but allowing the Ministry's counter claim of 11 January 2000 in full. The judgment was finally upheld by the Supreme Court of Georgia on 15 January 2009.

On 29 July 2009 the enforcement authority invited the company to surrender its assets which had become State property by virtue of the binding judgment of 27 December 2007.

“Proceedings, terminated by a final judgment (decision), may be reopened only if there are grounds for bringing either a request to render the final judgment null and void (Article 422) or a request to reopen the proceedings in view of newly discovered circumstances (Article 423).”

Subsequent to Article 423 § 1 (f), a final judgment (decision) could be reconsidered on the basis of newly discovered circumstances. Grounds for such reconsideration were, amongst others, factual circumstances or evidence which, had they been submitted to the domestic courts pending the original examination of the case, would have led to a different outcome. Pursuant to Article 423 § 3, the party requesting the quashing should prove in court that, despite having acted with requisite diligence, there had been no opportunity to refer to the relevant circumstances or evidence in due time, pending the original set of proceedings. According to Article 429 § 2, no appeal lay against the decision to quash a final judgment and to reopen the proceedings.

The applicant complained that the quashing of the final judgment of 3 April 1997 and the length of the reopened proceedings had breached his rights under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1.

Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 read, in their relevant parts, as follows:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by [a] ... tribunal...”

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. ...”

The Government submitted, in their observations dated 3 October 2007, that the applicant had prematurely complained about the quashing of the final judgment of 3 April 1997, and that he should first have waited for the outcome of the reopened proceedings. Alternatively, that complaint could also be considered belated, within the meaning of Article 35 § 1 of the Convention, in so far as the application was lodged with the Court on 2 November 2004, that is more than five years after the act of quashing had occurred. The Government also stated that Article 6 § 1 of the Convention did not apply to the domestic proceedings, in so far as they concerned the privatisation dispute which was a public-law relationship and could not affect the applicant's “civil rights” within the meaning of the invoked provision.

The applicant failed to submit his observations in reply to those of the Government but maintained his intention to pursue the proceedings.

The Court recalls that the quashing of a final judgment is an instantaneous act which does not create a continuing situation, even if it entails the reopening of the proceedings, as in the instant case (see Khanyan v. Armenia (dec.), no. 19065/05, 5 July 2007; Gargali v. Bulgaria (dec.), no. 67670/01, 5 June 2006; Nosov v. Russia (dec.), no. 30877/02, 20 October 2005). Consequently, it was the Vake-Saburtalo District Court's decision of 26 October 1999 which constituted the alleged breach of the applicant's rights under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1, without creating a continuous situation, and against which no appeal lay under the relevant Georgia law (see The Foundation Mrevli v. Georgia (dec.), no. 25491/04, 5 May 2009). However, the Court does not deem it necessary to rule on whether, in the circumstances of the present case, it was the decision of 26 October 1999 which triggered the start of the six-month time-limit laid down in Article 35 § 1 of the Convention with respect to the complaint about the quashing, as, in any event, the applicant cannot validly claim to have been a victim of the violations alleged in the present application.

Notably, the Court observes that the company, acting as a distinct legal entity, was the only party to the domestic proceedings, both before and after the quashing, rather than the applicant, its executive director. The company's own corporate interests were at stake in those proceedings, whilst the applicant was just one of the fifty-five shareholders, possessing only some 9.878% of shares.

The Court notes that the applicant lodged the present application in his own name and complained about violations of his personal rights. However, the Court reiterates that, according to its well-established case-law on the matter, if a company independently acted in the domestic proceedings at issue, the executive director of or a minority shareholder in that company cannot then claim before the Court to have been a victim of a violation of either Article 6 § 1 of the Convention or Article 1 of Protocol No. 1 (Agrotexim and Others v. Greece, 24 October 1995, § 66, Series A no. 330 A; Kidzinidze v. Georgia (dec.), no. 69852/01, 31 May 2007). Furthermore, there is no apparent reason to consider that the company, which duly acted in its own name before the domestic courts, should be excused for not having done the same before this Court (compare, for instance, with Kidzinidze, decision cited above; Bayramov v. Azerbaijan (dec.), no. 23055/03, 14 February 2006; Nosov v. Russia (dec.), no. 30877/02, 20 October 2005; Ankarcrona v. Sweden (dec.), no. 35178/97, ECHR 2000-VI; Amat-G Ltd and Mebaghishvili v. Georgia, no. 2507/03, § 33, ECHR 2005 VIII).

Consequently, the Court concludes that the present application is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

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You are here: BAILII >> Databases >> European Court of Human Rights >> Nugzar SULTANISHVILI v Georgia - 40091/04 [2010] ECHR 804 (4 May 2010) URL: http://www.bailii.org/eu/cases/ECHR/2010/804.html Cite as: [2010] ECHR 804