ASMAYEV v. RUSSIA - 44142/05 - HEJUD [2013] ECHR 227 (14 March 2013)

Relevant domestic law provisions governing the supervisory review procedure at the material time are summarised in the Court’s judgment in the case of Kot v. Russia (no. 20887/03, § 17, 18 January 2007).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1 ON ACCOUNT OF QUASHING OF THE JUDGMENT IN THE APPLICANT’S FAVOUR

The applicant complained that the quashing of the judgment of 9 October 2001 in his favour, as upheld on 26 December 2001, by way of supervisory review violated his “right to a court” under Article 6 § 1 of the Convention and his right to the peaceful enjoyment of possessions under Article 1 of Protocol No. 1. He further complained that he had not been informed of the date of the supervisory instance hearing and that the domestic courts had allowed the Bank’s request for restoration of the time-limit for lodging the supervisory review complaint in breach of the domestic law requirements. Relevant Convention provisions read as follows:

Article 6 § 1

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

Article 1 of Protocol No. 1

“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 ...”

A. The parties’ submissions

The Government submitted that the complaint was inadmissible. The quashing was necessary in order to correct a fundamental error in the lower courts’ reasoning, namely their failure to establish all relevant circumstances of the case correctly. The courts had omitted to establish whether the applicant had been fully informed of the conditions of the deposit agreement and whether, by accepting the deposit agreement terms, he had also authorised an eventual reduction of the interest rate by the bank in the absence of his prior explicit approval. Furthermore, the courts had disregarded the clarifications of the Presidium of the Supreme Court of the Russian Federation of 14 July 2004 providing authoritative interpretation of the relevant domestic law provisions and establishing, in particular, that the bank deposit agreements issue should have been governed by the Fundamentals of the USSR Civil Law of 31 May 1991 and not the Civil Code of the Russian Federation of 1996. The prohibition of a unilateral change of the interest rate was introduced by the Civil Code of the Russian Federation and could not be applied retroactively. Thus, the domestic courts’ retroactive reference to the provisions of the Civil Code constituted a manifestly wrong application of material law. Hence this judgment had had to be quashed. The quashing had been legitimate, lawful, necessary to ensure uniformity of the domestic courts’ case-law and compliant with the principle of legal certainty. The time-limit for lodging an application for supervisory review was restored in accordance with domestic law.

As regards Article 1 of Protocol No. 1, they submitted that the repayment of the judgment debt by the applicant to the respondent bank had been necessary in order to protect the property rights of a legitimate owner of the sum of money in question, i.e. the bank. They pointed out that the judgment of 9 October 2001 in the applicant’s favour had been enforced on 2 April 2002. In any event, first, they argued in broad terms that the amount at stake was insignificant. Second, they claimed that the respondent bank was a private company, and the Government was not responsible for its debts. Third, they submitted that the applicant’s claims had been rejected by the final decisions of the domestic courts and accordingly he did not have a legitimate expectation to have the initial interest rate reinstated. Thus, his claim was not sufficiently established to constitute a possession.

Finally, referring to the case of Merzhoyev (see Merzhoyev v. Russia, no. 68444/01, § 55, 8 October 2009), the Government submitted that the Savings Bank had had to change the interest rate on many occasions in view of the difficult economic situation in early 1990s in Russia. They considered that the reduction of the interest rate was justified by the extraordinary circumstances of deteriorating welfare of the State in 1990s and therefore the interference in the present case was justified by the need to protect public interests.

The applicant maintained his complaint. He argued that the quashing had been unjustified because the District Court based its decision on the relevant law, and because the interpretation of the law by the Supreme Court in 2004 had been given after the judgment. The supervisory instance’s judgment had been unfair and the Presidium misinterpreted both the facts and the domestic law applicable to his case. The procedural time-limit for lodging the supervisory-review appeal had been restored in violation of the time-limits set out in the domestic law. Finally, the applicant stressed that the amount at stake had been significant for him, given that he was a pensioner and needed to take care of his family.

B. The Court’s assessment

1. Admissibility

The Court notes the Government’s submission that the amount at stake was not significant for the applicant. In so far as they may be understood to claim that the applicant did not suffer significant disadvantage as a result of the quashing within the meaning of in accordance with Article 35 § 3 (b), as amended by Protocol 14, the Court observes that the amount of the judgment debt at stake was RUB 184,132.77, that is approximately 6,795 euros (EUR), if converted into euros at the rate applicable on 9 October 2001, the date of the consideration of his claims by the domestic court. Having regard to the amount at stake, the Court finds that the applicant, an old-age pensioner, cannot be deemed not to have suffered a significant disadvantage (see, by way of contrast, Korolev v. Russia (dec), no. 25551/05, 1 July 2010, and Vasilchenko v. Russia, no. 34784/02, § 49, 23 September 2010). It accordingly rejects the Government’s objection under this head.

As regards the Government’s arguments that they were not responsible for the bank’s debts, and so far as they may be understood to raise the ratione personae objection, the Court notes that, in the present case, it is not called upon to decide whether the State is to be held liable for the debts of the Savings Bank of Russia, nor was the issue matter of the State responsibility subject to examination in the impugned proceedings. The issue to be determined in this case is whether the supervisory review procedure in question infringed the principle of legal certainty and the applicant’s “right to a court” within the meaning of Article 6 § 1 of the Convention, as well as whether the interference with the applicant’s property rights as a result of the quashing was compatible with the requirements of Article 1 of Protocol No. 1 thereto. The court accordingly rejects the Government’s argument under this head.

In so far as the Government raise a ratione materiae objection under Article 1 of Protocol No. 1, the Court observes that by virtue of the judgment of 9 October 2001 the applicant obtained a lump sum which he would have received if the interest rate had not been reduced. The Court reiterates that that the existence of a debt confirmed by a binding and enforceable judgment constitutes the beneficiary’s “possession” within the meaning of Article 1 of Protocol No. 1 (see, among other authorities, Androsov v. Russia, no. 63973/00, § 69, 6 October 2005). It does not see any reason to depart from its established case-law and considers that the applicant’s claim was sufficiently established to constitute a possession within the meaning of Article 1 of Protocol No. 1 (see, by contrast, Cherkashin v. Russia (dec.), no. 7412/02, 30 March 2006, and Pupkov v. Russia (dec.), no. 42453/02, 17 January 2008). It accordingly decides to reject the Government’s argument under this head.

The Court further notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention and it is not inadmissible on any other grounds. It must therefore be declared admissible.

2. Merits

(a) Alleged violation of Article 6 of the Convention

(i) Supervisory review: legal certainty

The Court reiterates that the quashing by way of supervisory review of a judicial decision which has become final and binding may render the litigant’s right to a court illusory and infringe the principle of legal certainty (see, among many other authorities, Brumărescu v. Romania [GC], no. 28342/95, § 62, ECHR 1999-VII; Ryabykh v. Russia, no. 52854/99, §§ 56-58, ECHR 2003-IX). In certain circumstances legal certainty can be disturbed in order to correct a “fundamental defect” or a “miscarriage of justice”. Departures from the legal certainty principle are justified only when made necessary by circumstances of a substantial and compelling character (see Kot, cited above, § 24; Protsenko v. Russia, no. 13151/04, §§ 25-34, 31 July 2008; and Tishkevich v. Russia, no. 2202/05, §§ 25-26, 4 December 2008). In such cases, the Court has to assess, in particular, whether a fair balance was struck between the interests of the applicants and the need to ensure the proper administration of justice (see, mutatis mutandis, Kurinnyy v. Russia, no. 36495/02, §§ 13, 27-28, 12 June 2008). The judgment in question can be quashed exclusively in order to rectify an error of truly fundamental importance to the judicial system (see Shchurov v. Russia, no. 40713/04, § 21, 29 March 2011). The “right to a court” would be illusory if a Contracting State’s domestic legal system allowed a final and enforceable judicial decision to be quashed by a higher court merely on the ground of disagreement with the assessment made by lower courts with the view of carrying out a fresh examination (see Kot, cited above, §§ 27-30).

Turning to the present case, the Court observes that the Government did not advance any argument to the effect that the judgment of 9 October 2001 had been based on the fundamental defect rather than on a trivial mistake (see Shchurov, cited above, § 22). The Court does not find that the proceedings in question had been tarnished by a fundamental defect. Indeed, the judgment in the applicant’s favour was set aside on the ground that the Proletarskiy District Court had incorrectly applied the substantive domestic law and incorrectly established the facts of the case, that ground not constituting a fundamental defect within the meaning of the Court’s case-law (see Luchkina v. Russia, no. 3548/04, § 21, 10 April 2008). The Court has found on several occasions that a party’s disagreement with the assessment made by the lower courts is not a circumstance of a substantial and compelling character warranting the quashing of a binding and enforceable judgment and re-opening of the proceedings on the applicant’s claim (see, among others, Dovguchits v. Russia, no. 2999/03, § 30, 7 June 2007, and Kot, cited above, § 29).

Having regard to the above considerations, the Court finds that by quashing the judgment of 9 October 2001 by way of supervisory review the Presidium infringed the principle of legal certainty and the applicant’s “right to a court” within the meaning of Article 6 § 1 of the Convention.

There has accordingly been a violation of that Article.

(ii) Supervisory review: procedural issues

As to the alleged violation of the applicant’s procedural rights in the supervisory review proceedings, the Court considers that given the finding of a violation by the very use of supervisory review, it is unnecessary to examine the complaint in this part (see Ryabykh, cited above, § 59).

(b) Alleged violation of Article 1 of Protocol No. 1

The Court has already established that the judgment debt of 9 October 2001 amounted to “possession” within the meaning of Article 1 of Protocol No. 1 (see paragraph 52 above). The Court further observes that by virtue of the judgment of 9 October 2001 the applicant received a lump sum of RUB 184,132.77. The quashing frustrated the applicant’s reliance on a binding judicial decision. Furthermore, following the quashing, his claims were reconsidered and rejected by the domestic courts. Moreover, on 11 October 2005 the domestic court ordered the applicant to return to the respondent bank the amount he had already received pursuant to the judgment of 9 October 2001, and the applicant complied with the repayment order (see paragraphs 33 and 34 above). Thus, the applicant had to return the initial award through no fault of his own.

Turning to the “force majeure” argument raised by the Government, the Court rejects it since economic difficulties of 1990s were not subject to examination by the Presidium on 2 June 2005 and did not constitute a ground for the quashing in question. Indeed, this issue was in no way addressed by the Presidium of the Rostov Regional Court on 2 June 2005.

In these circumstances, even assuming that the interference was lawful and pursued a legitimate aim, the Court considers that the quashing of the enforceable judgment of 9 October 2001 by way of supervisory review placed an excessive burden on the applicant and was incompatible with Article 1 of Protocol No. 1 of the Convention.

There has therefore been a violation of that Article.

II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

The applicant complained under Article 6 and Article 1 of Protocol No. 1 of the Convention about the quashing of the judgment of 21 June 1999 by way of the supervisory review proceedings.

The Court notes that the quashing of a final judgment is an instantaneous act which does not create a continuing situation, even if it entails a re-opening of the proceedings as in the instant case (see Sitokhova v. Russia (dec.), no. 55609/00, 2 September 2004). In the present case the quashing by the Presidium took place on 22 March 2001, and the application was lodged in 2005, that is more than six months after the judgment had been annulled and ceased to be binding and enforceable. It follows that this part of the application has been introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

By letter of 12 April 2007 the applicant further complained that the bank had failed to comply with the judgment of 25 March 2004 in full.

The Court notes that the judgment in question was quashed on 18 October 2005 (see paragraph 35 above). Bearing in mind that the quashing is an instantaneous act (see paragraph 64 above), the Court notes that the applicant only raised this grievance on 12 April 2007, that is more than six months after the judgment had been quashed and the judicial award in his favour had ceased to exist. Similarly, in so far as the applicant’s claims against the bailiffs might be concerned, the final judgment in the respective set of proceedings had been issued on 15 March 2006 (see paragraph 41 above), that is outside the six-month time limit set out in Article 35 § 1 of the Convention.

. It follows that this part of the application has been introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

Lastly, the applicant submitted a number of additional complaints under Article 6 of the Convention and Article 1 of Protocol No. 1. In particular, he complained in broad terms that the proceedings in their entirety were excessively long and unfair.

However, having regard to all the material in its possession, and in so far as these complaints fall within its competence, the Court finds that there is no appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be rejected as manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of 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.”

A. Damage

In respect of pecuniary damage, the applicant claimed the arrears “in respect of the bank’s debt for the period until 9 February 2005”. He also claimed interest in respect of the arrears at the annual rate of nine percent for the period between 9 February 2005 and the date of the payment of the arrears, as well as index-linking of the arrears for the same period. He further claimed 500,000 Russian roubles (RUB) in respect of non-pecuniary damage.

The Government contested the claim as excessive and ill-founded. In particular, their reiterated in respect of the claim for pecuniary damage that they were not responsible for the bank’s debts, since the latter was a separate legal entity. They further pointed out that the applicant had failed to submit itemized particulars in respect of his claims, nor did he indicate the exact amount claimed.

As regards the claim for pecuniary damage, the Court reiterates that the most appropriate form of redress in respect of the violations found would be to put the applicant as far as possible in the position he would have been if the Convention requirements had not been disregarded (see Piersack v. Belgium (Article 50), 26 October 1984, § 12, Series A no. 85, and, mutatis mutandis, Gençel v. Turkey, no. 53431/99, § 27, 23 October 2003). The Court finds that in the present case this principle applies as well, having regard to the violations found.

It observes that as a result of the annulment of the judgment on supervisory review the applicant had to repay the award paid to him under the judgment of 9 October 2001 in the amount of RUB 184,132.77 (see paragraphs 33 and 34 above). In these circumstances, the Court decides that the amount of the judgment debt of 9 October 2001 should be repaid to him and awards him 6,795 euros (EUR) under this head, plus any tax that may be chargeable on this amount. As regards the remainder of the claim in respect of pecuniary damage, the Court agrees with the Government that the applicant had failed to submit itemized particulars in respect of his claims or to indicate the amount claimed. Furthermore, the Court does not see a causal link between the amounts claimed and the violation found, and rejects the claim in this part.

The Court further considers that the applicant suffered distress and frustration resulting from the quashing of the judicial decision in his favour by way of supervisory review proceedings. The damage can not be sufficiently compensated by a finding of a violation. Making its assessment on an equitable basis, the Court awards the applicant EUR 2,000 in respect of non-pecuniary damage plus any tax that may be chargeable on this amount, and rejects the remainder of the claims under this head.

B. Costs and expenses

The applicant did not seek reimbursement of costs and expenses, and this is not a matter which the Court is required to examine of its own motion (see Motière v. France, no. 39615/98, § 26, 5 December 2000).

C. Default interest

The Court considers it appropriate that the default interest rate 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

1. Declares the complaint under Article 6 of the Convention and Article 1 of Protocol No. 1 concerning the supervisory review of the judgment of 9 October 2001 admissible and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention on account of the quashing of the final judgment in the applicant’s favour;

3. Holds that there has been a violation of Article 1 of Protocol No. 1 on account of the quashing of the final judgment in the applicant’s favour;

4. Holds

(a) that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into Russian roubles at the rate applicable at the date of settlement:

(i) EUR 6,795 (six thousand seven hundred and ninety-five euros), plus any tax that may be chargeable, in respect of pecuniary damage;

(ii) EUR 2,000 (two thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

5. Dismisses the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 14 March 2013, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

André Wampach Khanlar Hajiyev
Deputy Registrar President

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