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THIRD
SECTION
DECISION
Application no.
32846/07
DANIEL-P S.A.
against Moldova
The
European Court of Human Rights (Third Section), sitting on 20 March
2012 as a Chamber composed of:
Josep
Casadevall,
President,
Corneliu
Bîrsan,
Alvina
Gyulumyan,
Ján
Šikuta,
Luis
López Guerra,
Nona
Tsotsoria,
Mihai
Poalelungi,
judges,
and Santiago Quesada,
Section Registrar,
Having
regard to the above application lodged on 6 July 2007,
Having
regard to the observations submitted by the respondent Government and
the observations in reply submitted by the applicant,
Having
deliberated, decides as follows:
THE FACTS
- The
applicant, Daniel-P S.A., is a company registered in Cahul, Moldova.
It was represented before the Court by Mr S. Cozma, a lawyer
practising in Cahul. The Moldovan Government (“the Government”)
were represented by their Agent, Mr V. Grosu.
A. The circumstances of the case
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
1. Privatisation by the applicant company
- In
1997 the Government of Moldova submitted to parliament a bill “On
the Privatisation Programme for 1997-1998”, which parliament
enacted in 1997. The appendix to the Act listed the State property to
be privatised, which included Zidarul-Cahul S.A. (“Z.”),
a company specialised in producing environmentally friendly building
materials. The state owned 97% of Z.’s shares. The Act provided
that the Department for the Privatisation of State Property (“the
Department”) would organise the privatisation of the property
listed in the appendix.
- The
Department created an Auction Commission. The Auction Commission
offered Z.’s shares belonging to the State on eight separate
occasions, but no one was interested in buying them. On one such
occasion, the starting price for the entire lot was 447,000 Moldovan
lei (MDL).
- Between
July and September 2004 the Auction Commission again offered the
State’s shares in Z. for sale, at a starting price of MDL
1,235,468 (approximately 84,700 euros (EUR) at the time). The
applicant company was the only interested buyer and made an offer to
buy the shares at their starting price set by the authorities. The
applicant company provided a list of appended documents which it
submitted together with its notification of intent to participate in
the auction. Amongst the documents listed in the appendices were
financial documents regarding the applicant company’s economic
performance during the year prior to making the privatisation
request. After additional negotiations, the applicant company agreed
to pay MDL 2,500,000 for the lot (approximately EUR 171,500 at
the time).
- On
8 October 2004 the applicant company and the Department concluded the
contract for the sale of Z.’s shares. Under the terms of the
contract, the applicant company undertook to keep and further develop
Z.’s production profile, to maintain the jobs of the 40 people
working for Z. and to hire 210 more, as well as to reduce the
ecological impact of production. According to the applicant company,
it has fully complied with these undertakings.
- In
accordance with the privatisation certificate issued by the
Department on 21 January 2005, Z.’s property bought by the
applicant company included, inter alia, over thirty buildings
and its own access to the railway network.
2. Annulment of the privatisation
- On
an unspecified date in 2005 the Agency for Construction and
Development of Territory (“the Agency”), which was the
central authority responsible for Z.’s management before its
privatisation, initiated court proceedings against the applicant
company and the Department, seeking the annulment of the sale of Z.’s
shares.
- On 11 May 2006 the Economic Court of Appeal allowed the
Agency’s request and annulled the sale of Z.’s shares.
The applicant company was ordered to return 97% of Z.’s shares
to the State in exchange for the price paid for those shares. The
court found that the sale had not taken place in accordance with the
law. In particular, the central authority responsible for Z.’s
management (the Agency) had not given its approval to the sale,
contrary to the law. Moreover, Z. had not been correctly valued
because an unfinished building belonging to it had not been reflected
in the valuation. Finally, the applicant company had failed to submit
financial documents regarding its economic performance during the
year prior to making the privatisation request, as required by law.
- The
applicant company appealed. It stated, inter alia, that it had
submitted all the necessary documents, and listed them in the
appendices to its notification of intent to bid. Had it not submitted
any of the documents required by law, the Auction Commission (which
included a representative of the Agency, an authority opposed to the
sale) would not have allowed it to participate in the auction. Also,
Z.’s detailed valuation had been carried out in compliance with
the relevant legislation. Moreover, it was clear from the financial
documents that Z. had had significant debts and that expensive
equipment had been unlawfully removed from it in the years before
privatisation. The relatively low starting price of the sale had been
the result of a lack of interest from potential buyers during the
eight previous attempts to sell Z. Finally, even assuming that an
unfinished building should have been included in the valuation, it
could not have doubled the overall value of the company. Hence, any
additional value from such a building would have been included in the
final price paid for the shares, which was more than double their
starting price set by the authorities.
- The
Department also appealed. It submitted, inter alia, that the
Agency’s agreement had not been necessary for Z.’s
privatisation. The decision to include an object in the list of
privatised objects or to exclude it from that list belonged
exclusively to the Government. Moreover, the initial starting price
at which Z.’s shares had been offered for sale had been
calculated in strict compliance with the relevant Government
decision. Taking into consideration the eight failed attempts to sell
Z.’s shares and that the starting price had at some point been
MDL 447,000, the final price of MDL 2,500,000 for which the applicant
company had eventually bought them had been acceptable and real.
Finally, the unfinished building had been reflected in the valuation,
despite the fact that the building had in fact been unlawfully
transferred by the Cahul municipality for free to a private company.
Hence, the building should not have been included in the valuation in
any event.
- By
its final judgment of 25 January 2007 the Supreme Court of Justice
upheld the lower court’s judgment. The court noted that the
Agency had not agreed to the sale of Z.’s shares, as required
by law. Without giving a reasoned response to the Agency’s
position, the Department had decided to continue with the sale of
Z.’s shares. Moreover, Z.’s unfinished building had not
been reflected in the valuation of its shares, leading to a
diminished sale price. There was nothing in the file to confirm the
appellants’ contention that the building had in fact been
reflected in the valuation.
- The judgment of 11 May 2006 (as upheld by the judgment
of 25 January 2007) was partly enforced on 30 July 2007 by
transferring MDL 2,500,000 to the applicant company’s
account. According to the Government, and undisputed by the applicant
company, the State has never recovered any of Z.’s shares,
which have been in the applicant company’s possession since
their purchase. According to the applicant company, as a result of
the actions taken by the State authorities in view of enforcing the
judgment of 11 May 2006, its bank account had been frozen and other
property seized since January 2005, leading to the disruption of the
company’s activity.
3. Reopened proceedings
- On 24 September 2009 the Supreme Court of Justice
allowed the applicant company’s request for the reopening of
the proceedings. It found that the applicant company had previously
made similar requests, but that this time it had also invoked a
violation of its Convention rights. The court therefore decided to
apply the Court’s case-law in cases concerning the reopening of
final judgments in order to remedy miscarriages of justice. It then
directly relied on Article 1 of Protocol No. 1 to the Convention and
found that the applicant company had fully complied with the
conditions of the auction organised by the State authorities during
Z.’s privatisation. Any irregularities established in the
process of that privatisation had not been attributable to the
applicant company. The court annulled the judgment of 25 January
2007 and decided that it would re-examine the applicant company’s
appeal at a later stage.
- On 15 October 2009 the Supreme Court of Justice
examined the appeal lodged by the applicant company against the
judgment of 11 May 2006 and annulled that judgment. It ordered that
the parties be brought to the position in which they had been before
the enforcement of the judgment of 11 May 2006. The court found that
there had been no legal ground for annulling the sale of shares to
the applicant company, the property right of which had been “gravely
breached”, and that the lower court had allowed “a legal
error”. Relying on domestic legal provisions and Article 1 of
Protocol No. 1 to the Convention, it rejected all the claims
against the applicant company.
B. Relevant domestic law
- The relevant parts of the Civil Code read as follows:
“Article 267. The general limitation period.
1. The general limitation period for
protection through a court action of a person’s rights is three
years.
...
Article 1398. Grounds and general conditions for
responsibility.
1. A person who intentionally acts illegally
towards another shall compensate for any pecuniary damage caused, and
in the cases provided for by law shall also compensate for any
non-pecuniary damage caused through his or her action or failure to
act.
2. Compensation for damage caused by lawful
acts or in the absence of intent shall be paid only in the cases
expressly provided for by law.
...”
COMPLAINT
- The
applicant company complained under Article 1 of Protocol No. 1
to the Convention that it had been unjustly deprived of its property
even though it had complied with all the conditions for privatisation
established by the authorities.
THE LAW
- The
Government argued that following the adoption of the judgments of 24
September and 15 October 2009 (see paragraphs 14 and 15 above) the
applicant company could no longer claim to be a victim of a violation
of its Convention rights.
- The
applicant company claimed that it had suffered damage as a result of
the actions taken by the State authorities in view of enforcing the
judgment of 11 May 2006 (see paragraph 13 above).
- The Court reiterates that under Article 34 of the
Convention it may receive applications from any person claiming to be
the victim of a violation by one of the High Contracting Parties of
the rights set forth in the Convention or the Protocols thereto. It
falls first to the national authorities to redress any alleged
violation of the Convention. In this regard, the question whether an
applicant can claim to be a victim of the violation alleged is
relevant at all stages of the proceedings under the Convention (see,
among others, Burdov v. Russia (no. 2), no. 33509/04, §
54-60 and 100, ECHR 2009 (extracts)). A decision or measure
favourable to an applicant is not, in principle, sufficient to
deprive him of his status as a “victim” unless the
national authorities have acknowledged, either expressly or in
substance, and then afforded redress for, the breach of the
Convention (see Dalban v. Romania [GC], no. 28114/95, §
44, ECHR 1999-VI). As to the redress which is appropriate and
sufficient in order to remedy a breach of a Convention right at
national level, the Court has generally considered this to be
dependent on all the circumstances of the case, having regard, in
particular, to the nature of the Convention violation at stake (see,
as recent authorities, Gäfgen v. Germany [GC], § 116
et seq., ECHR 2010, and Sakhnovskiy v. Russia [GC], no.
21272/03, §§ 76-84, 2 November 2010).
- Turning
to the circumstances of the present case, the Court notes that the
applicant company had fully exhausted available domestic remedies
before lodging its application with the Court. It therefore did not
have to attempt to exhaust any other remedy available at the domestic
level (see, for example, Airey v. Ireland, 9 October 1979, §
23, Series A no. 32). Nonetheless, it lodged a request with the
Supreme Court of Justice asking for the reopening of the proceedings.
That court fully accepted the applicant company’s request and
quashed the final judgment in the original proceedings (see
paragraphs 14 and 15 above). In doing so, it also expressly
established a violation of the applicant company’s right
protected under Article 1 of Protocol No. 1 to the Convention
(see paragraph 14 above). The above-mentioned decisions were taken
prior to communication of the present application to the respondent
Government.
- The
Court needs to verify whether the applicant company was offered
redress for the damage caused to it by the established violation, so
as to determine whether it has lost its victim status. It notes first
that the applicant company was offered partial redress in the form of
restoration of its ownership of the disputed property.
- In
respect of monetary compensation, it appears from the materials in
the file that the applicant company has never asked for compensation
from the State for any damage caused to it as a result of the
proceedings against it. The Supreme Court of Justice adopted a
well-reasoned judgment in which it relied on the Convention and
clearly found a violation of the applicant company’s rights.
However, it could not award any compensation in the absence of a
claim and supporting evidence, since it would then act ultra
petita. Under domestic law (see paragraph 16 above) and practice
(see paragraphs 14-15 above, where the Supreme Court of Justice
directly applied the Convention), the applicant company had the right
to claim compensation for the decisions of the domestic courts, which
have been established as wrongful by the Supreme Court of Justice.
Since the general limitation period in Moldova for claiming damages
is three years, the applicant company can still lodge with the
domestic courts a claim for damages from the State until 24 September
2012 (see paragraph 16 above).
- The
Court observes that it has already declared inadmissible complaints
where a violation of Convention rights had been fully established by
the domestic courts and where the applicant had not attempted to
obtain compensation at the domestic level (see, mutatis mutandis,
Mătăsaru and Saviţchi v. Moldova, no. 38281/08,
§§ 75-76, 2 November 2010, and Bisir and Tulus v.
Moldova, no. 42973/05, §§ 36-37, 17 May 2011). It
has also found in the past that the domestic courts’ decisions
awarding no compensation in the absence of a claim or awarding only a
part of the sum claimed in compensation corresponding to the evidence
submitted to them, could be accepted as offering sufficient redress
(see, for instance, Vladimir Kolobov v. Russia (dec.), no.
26528/03, 28 June 2011). It does not see any compelling reason to
depart from its findings in the above-mentioned cases.
- In
view of the foregoing, the applicant company should be considered as
having lost its victim status in relation to the present application.
Thus, the Court concludes that the applicant company is no longer a
victim of the alleged violation and that the application must be
rejected in accordance with Article 35 §§ 3 (a) and 4 of
the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Santiago Quesada Josep Casadevall
Registrar President
