FOURTH SECTION
CASE OF
NEDELCHEVA AND OTHERS v. BULGARIA
(Application no.
5516/05)
JUDGMENT
STRASBOURG
28 May 2013
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 Nedelcheva and Others v. Bulgaria,
The European Court of Human Rights (Fourth Section), sitting as
a Chamber composed of:
Ineta Ziemele, President,
David Thór Björgvinsson,
Päivi Hirvelä,
George Nicolaou,
Zdravka Kalaydjieva,
Vincent A. De Gaetano,
Krzysztof Wojtyczek, judges,
and Françoise Elens-Passos, Section Registrar,
Having deliberated in private on 7 May 2013,
Delivers the following judgment, which was adopted on that
date:
PROCEDURE
The case originated in an application (no.
5516/05) against the Republic of Bulgaria lodged with the Court under Article
34 of the Convention for the Protection of Human Rights and Fundamental
Freedoms (“the Convention”) by eight Bulgarian nationals, Ms Kera Genova
Nedelcheva, Mr Geno Moskov Dzhingov, Ms Minka Moskova
Halvadzhieva, Ms Frosina Dimitrova Gineva, Ms Magda Dimitrova Despotova, Mr
Raycho Ginev Kostov, Ms Ginka Dimitrova Georgieva and Ms Todorka Dimitrova
Dimitrova, (“the applicants”), on 14 January 2005.
The applicants were represented by Ms S.
Margaritova-Vuchkova, a lawyer practising in Sofia. The Bulgarian Government
(“the Government”) were represented by their Agent, Ms M. Dimova, of the
Ministry of Justice.
The applicants alleged, in particular, that they
had been unable to obtain the restitution of formerly collectivised land and
had not yet received compensation in lieu of restitution which was due to them.
On 14 October 2010 the application was
communicated to the Government. It was also decided to rule on the
admissibility and merits of the application at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The applicants were born in 1922, 1936, 1938, 1918, 1943, 1918, 1948 and 1946 respectively.
Two of the applicants, Ms Ginka Dimitrova Georgieva and Ms Todorka Dimitrova Dimitrova, live in Burgas, and the remaining applicants live in
Sozopol.
A. Expropriation of the land and creation of the Duni
resort and Duni AD
An ancestor of the applicants owned agricultural
land in the Sozopol district, situated close to the seashore. In the 1980s it
was included in the territory on which a new sea resort called Duni was
constructed.
The resort was initially managed by a State-owned
enterprise, which was, in 1990, transformed into a State-owned company called
Duni. The transformation entailed, under the relevant domestic provisions, the
company becoming an owner of the assets it had until then used and managed. In
1991 it was registered as a joint-stock company.
Until 1997 the State held all shares in Duni. 25%
of the company’s shares were transferred to private parties in 1997, in the
framework of a programme for “mass privatisation”. After that the company was
named Duni AD. In the following years the State transferred more of its shares and
by 2000 it was holding 25% of the company’s shares, a part of which were
designated for compensation of former owners of land included in the company’s
assets. In 2001 the State transferred a further 14% of its share in the
company.
The applicants have submitted a privatisation report
dated 8 March 1999. According to the document, at that time about one third of
the territory of the resort was comprised of land which had been restituted in
kind to its former owners under the Agricultural Land Act (“the ALA”). The report found this state of affairs problematic and considered it most
appropriate that the company should buy back that land.
B. Initial decisions on the applicants’ restitution
claims
In the meantime, the ALA entered into force in 1991
(see paragraph 37 below). On that basis, on 15 December 1991 the
applicants requested the restitution of 19,700 square metres of land taken from
their ancestor.
In a decision of 23 May 1992 the competent body,
the Sozopol agricultural land commission, adopted a decision to restore the
applicants’ property rights to land in the area of Duni totalling 11,517 square
metres (“Plot A”). This land adjoined the buildings of the resort. The land
commission did not provide reasoning as to why it considered that the criteria for
restitution in kind set in the law in force at the time were met.
In the same decision the commission refused to
restore the applicants’ property rights in respect of the remaining 8,183
square metres of land (“Plot B”), as there were buildings and infrastructure of
the resort constructed on it.
On 6 May 1993 the applicants wrote to the Council
of Ministers, with a copy to the Committee on Tourism, requesting (a) to be given
possession of Plot A, and (b) to receive in compensation for Plot B shares in the
State-owned company Duni, as they were entitled to under section 18 (2)
of the Transformation and Privatisation of State and
Municipally-Owned Enterprises Act (see paragraph 40 below). At the time
the applicants did not receive a response.
The applicants’ respective shares in the
properties above were as follows: Ms Kera Genova Nedelcheva and Mr Raycho Genov Kostov were entitled to one quarter
each, Mr Geno Moskov Dzhingov and Ms Minka Moskova Halvadzhieva - to one eighth each and the remaining applicants, Ms Frosina Dimitrova Gineva, Ms Magda Dimitrova Despotova, Ms Ginka Dimitrova Georgieva and Ms Todorka Dimitrova
Dimitrova - to one sixteenth each.
C. Developments concerning Plot A
On 10 October 1994 the Sozopol agricultural land
commission issued an act for the formal transfer to the applicants of
possession of that part of the land. On 25 November 1994 the applicants
obtained a notary deed. However, they were unable to assume actual possession
because the land, although not occupied by buildings or infrastructure of the
resort, remained within its fenced territory. The applicants did not bring
proceedings to challenge this situation.
1. Rei vindicatio
proceedings
In December 2000 Duni AD brought rei
vindicatio actions against all persons who had had their property rights to
land in the area of the resort restored after 1991.
In the applicants’ case, Duni AD argued that the
applicants had not become owners of Plot A by virtue of the land commission’s
decision of 23 May 1992, because the commission had not been competent to
order the restitution of land which was no longer agricultural. The company claimed
that, on the contrary, it was the owner of the land at issue, which had been
included in its assets.
In addition, the company sought an interim
injunction and the stay of any procedures concerning construction permits for
that land. It is unclear whether the applicants had actually applied to receive
such permits. The request for injunction was granted in a decision of the
Burgas District Court of 15 December 2000.
The rei vindicatio action was allowed in
a judgment of the Burgas District Court of 18 October 2002. Upon an appeal by
the applicants, on 17 July 2003 that judgment was quashed in part by the
Burgas Regional Court, which upheld the lower court’s finding that Duni AD had
been the disputed land’s owner, but disallowed the rei vindicatio claim
itself because it found that the applicants were not holding the land. On 23
July 2004 that judgment was upheld by the Supreme Court of Cassation.
The domestic courts found, most notably, that the
land claimed by the applicants adjoined the buildings of the resort, and that
the resort, including the buildings and the land, represented a complex of
works within the meaning of section 10b of the ALA (see paragraph 38 below); it
was not permissible physically to separate parts of this complex and transfer them
to new owners. What was to be taken into account was the situation at the time
of the ALA’s entry into force. These considerations were sufficient to conclude
that the preconditions for restitution in kind had not been met and that the
Sozopol land commission’s decision of 23 May 1992, on which the applicants
based their property claims, was null and void in that part. The company Duni,
later Duni AD, had validly acquired property to the land.
2. Compensation
Following the developments above, on 23 August
2004 the Sozopol Agriculture and Forestry Department (former land commission),
relying on the Supreme Court of Cassation’s final judgment of 23 July 2004,
adopted a new decision on the applicants’ restitution claims concerning Plot A,
whereby it refused to restore the applicants’ property in kind.
In a new decision of 20 January 2005 it held
that the applicants were entitled to receive compensation for 6,653 Bulgarian
levs (BGN) for the entirety of the land claimed in December 1991, that is for
both Plot A and Plot B, through other comparable land or compensation bonds.
On 6 April 2005 the applicants applied for
judicial review of the decision of 20 January 2005, arguing, inter alia,
that the Agriculture and Forestry Department had wrongly assessed the value of
Plot A. On 30 November 2005 the Department’s decision was quashed by the
Burgas District Court insofar as it concerned Plot A. In respect of Plot B the
decision was upheld.
At the time of the latest communication from the
parties of September 2011, the Sozopol Agriculture and Forestry Department (as
from 2008 called Agricultural Department) had not yet adopted a new decision
setting the value of the compensation to be awarded to the applicants for Plot
A, or determining whether the compensation would be through other comparable
land or compensation bonds.
D. Developments concerning Plot B
As mentioned above (see paragraph 13), following
the Sozopol agricultural land commission’s refusal to restore their rights to Plot
B, on 6 May 1993 the applicants applied to receive compensation through
shares in the State-owned company Duni under section 18 (2) of the Transformation and Privatisation of State and
Municipally-Owned Enterprises Act (see paragraphs 12-13 above).
In 1995 and 1998 the applicants informed the
land commission that they had chosen to apply for compensation under the
privatisation legislation.
Their application in that regard was examined by
a commission of the Ministry of Economics, appointed in December 2003, which
took a decision on 5 October 2004. At that time the State retained 35,600
shares of BGN 1 each, equivalent to about 0.34% of Duni AD’s capital. The commission
allotted the applicants 17,700 shares (the remaining available State-owned
shares being designated for other former owners), in compensation for 5,401.6
square metres of Plot B, and stated that for the remaining 2,781.4 square
metres the applicants were to receive comparable land or compensation bonds
under the ALA.
On 10 December 2004 the applicants applied for
judicial review of that decision. They challenged the assessment of the value
of the shares due in compensation for their land and considered that the
partial satisfaction of their claim for compensation through shares was not
justified. In that latter regard they stated that they did not wish to have
their compensation claim referred to another body, where the procedure could
take a lengthy period of time.
On 28 June 2007 the Burgas Regional Court
quashed the above decision and held that the applicants were entitled to
receive 56,997 shares of BGN 1 each in compensation for the entirety of Plot B.
It found, in the first place, that the decision did not contain any justification
for awarding shares only for part of Plot B. As to the amount of compensation,
the Regional Court commissioned an expert report, which the Ministry of
Economics did not challenge, and which, by comparing the value of Duni AD’s
assets, calculated on the basis of a recent privatisation proposal, with the
value of Plot B, concluded that the applicants were entitled to the amount of
shares indicated above, which constituted 0.54926% of Duni AD’s shares at
the time.
That judgment was upheld on
4 January 2008 in a final judgment of the Supreme Administrative Court.
On 29 January 2009 the applicants deposited the
above judgments with the Ministry of Economics and demanded their
implementation. On 25 March 2009, 29 October 2010 and 22 March 2011 the
Ministry proposed to transfer to them the State’s remaining 17,700 shares in
Duni AD. It referred to the fact that the State did not hold any further
shares, although it did not appear to dispute its duty to transfer the remaining
shares. The applicants refused the partial settlement proposed. It appears that
no other settlement has been offered to them to date.
Upon a request by the applicants, on 24 June
2009 a judge at the Burgas Regional Court ordered the Minister of Economics to
pay a fine of BGN 2,000 for having failed to comply with the judgment of 28
June 2007, as upheld by the Supreme Administrative Court on 4 January 2008. On
31 March 2010 the order was upheld by a three-member panel of the Burgas Regional Court, which noted, in particular, that the unavailability of a sufficient
amount of State-owned shares did not absolve the Minister from his obligation
to comply with the judgments.
Parallel to the above developments, on 25 March
2000 the Sozopol land commission awarded the applicants compensation bonds for
BGN 3,601 for the entirety of Plot B.
In May 2004 the applicants requested from the Sozopol
Agriculture and Forestry Department (former land commission) official documents
concerning Plot B, which they needed to submit to the Ministry of Economics in
connection with the procedure described above for compensation through shares.
The applicants reminded the Department that they were entitled to choose and had
chosen to seek compensation for Plot B through shares, and did not wish to
receive compensation bonds under the ALA.
Subsequently, the Agriculture and Forestry
Department annulled its decision of 25 March 2000 and the compensation bonds
issued on its basis. Nevertheless, as already mentioned, on 20 January 2005 the
Department awarded once again to the applicants compensation for Plot B under
the ALA. That decision, upheld by the Burgas District Court in the respective
part, is still in force (see paragraphs 22-23 above).
After the present application’s communication,
on 4 November 2010 the Ministry of Economics requested from the Sozopol
Agricultural Department (formerly the Agriculture and Forestry Department)
information about any compensation procedures concerning Plot B. In a letter of
12 November 2010 the Department informed the Ministry of its decisions
concerning the plot.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. The Agricultural Land Act
The Agricultural Land Act (Закон
за
собствеността
и ползването
на земеделските
земи, “the ALA”), adopted in 1991, entitled
persons, or their heirs, whose land has been expropriated, to request
restoration of their ownership rights under certain conditions or, if the relevant conditions for that have not been met, to seek compensation.
Section 10b of the ALA, introduced on 3 April
1992, provides that former owners are not entitled to the restoration of their
property rights and are to receive compensation in cases where the land “has
been constructed upon or a complex of construction works (мероприятия)
which do not permit restoration of property have been carried out”.
Compensation in lieu of restitution under the ALA can be either through comparable municipally-own land, or through compensation bonds,
which can, most notably, be used as means of payment in the framework of the privatisation
of public enterprises or for the purchase of State-owned agricultural land.
B. Compensation under the legislation concerning
transformation and privatisation of former State and municipally-owned
enterprises
. The
Transformation and Privatisation of State and Municipally-Owned
Enterprises Act was adopted in 1992 and remained in force until 2002. It
regulated the transformation of State and municipally-owned enterprises
into companies and their privatisation. Section 18 (2) of the Act provided that
former owners of collectivised agricultural land included in the assets of State
or municipal enterprises could receive in compensation shares in the companies
into which those enterprises had been transformed. By section 18 (1), the
interested parties’ requests to that effect were to be made before or following
the transformation. The requests had to be submitted before 30 September 1994
and, as concerns State-owned enterprises, were to be addressed to the Council
of Ministers.
Following an amendment of 1999, paragraph 6 (6)
of the concluding and transitory provisions of the Act
provided that former owners of agricultural land which had been included in the
assets of State or municipally-owned companies, subsequently privatised, could
receive, in compensation in lieu of restitution, shares in these companies, or,
if the available shares held by the State and the municipalities were
insufficient, compensation bonds. An identical compensation scheme was provided
for in paragraph 11 of the concluding and transitory provisions of the
Privatisation and Post-Privatisation Control Act, which regulated the matter
after 2002. As to the modalities of that compensation scheme, the two Acts
above referred to other legislation regulating compensation available to former
owners of nationalised property. According to the procedure provided for
therein, requests for compensation were to be submitted to the regional
governor or the competent Minister. Any tacit or express refusal of these
bodies was amenable to judicial review.
. According
to the practice of the Supreme Administrative Court, when former owners were
entitled to compensation both under the ALA and the privatisation laws, it was
up to them to choose which of the two paths to pursue.
C. Other relevant provisions
The remaining relevant domestic law and practice concerning restitution of agricultural land and compensation in
lieu thereof under the ALA and the privatisation laws, and the transformation
and privatisation of former State or municipally-owned enterprises, have been summarised in
the Court’s judgments in the cases of Sivova and Koleva v. Bulgaria (no. 30383/03, §§ 29-54, 15 November 2011) and Lyubomir Popov v. Bulgaria (no. 69855/01, §§ 83-95, 7 January 2010).
THE LAW
I. ALLEGED VIOLATIONS OF ARTICLE 1 OF PROTOCOL
NO. 1
The applicants raised several complaints,
relying on Article 6 § 1 of the Convention and Article 1 of Protocol
No. 1. They complained, first, that they had been unfairly deprived of
property of Plot A, without the possibility of obtaining effectively adequate
compensation. Secondly, the applicants complained that they had not yet
received compensation for Plot B, despite a final court judgment
determining the compensation due to them. The applicants also considered that
the restitution procedures had been excessively lengthy.
The Court is of the view that the complaints
above are most appropriately examined under Article 1 of Protocol No. 1 alone,
which reads as follows:
“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.
The preceding provisions shall not, however, in any way impair
the right of a State to enforce such laws as it deems necessary to control the
use of property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties.”
A. Admissibility
1. Government’s objection for non-exhaustion of
domestic remedies
Without specifying which of the complaints above
they referred to, the Government raised an objection for non-exhaustion of
domestic remedies, because the applicants had failed to bring an action for
damages against the State. The applicants disputed the objection.
The Court notes that the refusal to allow the restitution
in kind of Plot A and the failure, up to now, to provide compensation for Plot
B were not deemed unlawful under domestic law,
whereas one of the prerequisites for successfully pursuing a tort claim is to
establish the wrongfulness of the conduct causing the damage (see Valkov and Others v. Bulgaria, nos. 2033/04
et al., § 107, 25 October 2011). Moreover, the Government
have not specified the respondent to such a claim, or cited any decisions of
the Bulgarian courts showing its practicability in the present context. As to
the delays in the restitution process, the Court refers to its findings in
cases against Bulgaria concerning similar complaints (see Vasilev and Doycheva v. Bulgaria, no. 14966/04, §§ 26-30, 31 May
2012, with further references) that a tort claim could not be considered
an effective remedy, as it was of a purely compensatory nature and could not
bring about the completion of the restitution process. In addition, the Court recalls that in the cases of Vasilev and Doycheva (cited above, § 69) and Mutishev and Others v. Bulgaria ((just
satisfaction), no. 18967/03, § 38, 28 February 2012) it
urged the respondent State to introduce a remedy permitting any aggrieved
person to effectively obtain compensation in cases of delays in the restitution
proceedings.
Accordingly, the Court dismisses the Government’s
objection for non-exhaustion of domestic remedies.
2. Complaint of deprivation of property concerning
Plot A
As already mentioned, concerning this plot the
applicants complained of unjustified deprivation of property.
The Government considered that the case did not
concern deprivation of property because the Sozopol agricultural land commission’s decision of 23 May 1992
had not created title to property for the applicants. The Government argued
that the applicants could not have legitimately expected to have their property
restored, given that the land they claimed had been within the boundaries of
the Duni resort. They pointed out that Duni, later Duni AD, had not
participated in the restitution procedure and had not had an opportunity to
present its claims.
The Government pointed out also that the outcome
of the rei vindicatio proceedings did not preclude the applicants’
restitution claims, because the applicants remained entitled to receive
compensation for their land, through other comparable land or compensation
bonds.
The applicants contested the Government’s
arguments. They considered that they had acquired title to property to the land
at issue, on the basis of the Sozopol land commission’s decision for
restitution of 23 May 1992 and the subsequent formal transfer of possession.
They argued that the domestic courts’ decisions in the rei vindicatio
proceedings, and depriving them of this property, had been arbitrary, which had
rendered the interference with their rights under Article 1 of Protocol No. 1
unlawful. Lastly, the applicants considered that the compensation they remained
entitled to, through other land or compensation bonds under the ALA, was inadequate.
The Court has recapitulated the relevant principles applicable to restitution of nationalised property in the case of Kopecký v.
Slovakia ([GC], no. 44912/98, § 35, ECHR 2004-IX) in the following
manner (citations omitted):
“(a) Deprivation of ownership or of another right in
rem is in principle an instantaneous act and does not produce a continuing
situation of ‘deprivation of a right’.
(b) Article 1 of Protocol No. 1 does not guarantee
the right to acquire property.
(c) An applicant can allege a violation of Article 1
of Protocol No. 1 only in so far as the impugned decisions related to his ‘possessions’
within the meaning of this provision. ‘Possessions’ can be either ‘existing
possessions’ or assets, including claims, in respect of which the applicant can
argue that he or she has at least a ‘legitimate expectation’ of obtaining
effective enjoyment of a property right. By way of contrast, the hope of
recognition of a property right which it has been impossible to exercise
effectively cannot be considered a ‘possession’ within the meaning of
Article 1 of Protocol No. 1, nor can a conditional claim which lapses as a
result of the non-fulfilment of the condition.
(d) Article 1 of Protocol No. 1 cannot be
interpreted as imposing any general obligation on the Contracting States to
restore property which was transferred to them before they ratified the
Convention. Nor does Article 1 of Protocol No. 1 impose any restrictions on the
Contracting States’ freedom to determine the scope of property restitution and
to choose the conditions under which they agree to restore property rights of
former owners.
In particular, the Contracting States enjoy a wide margin of
appreciation with regard to the exclusion of certain categories of former
owners from such entitlement. Where categories of owners are excluded in this
way, their claims for restitution cannot provide the basis for a ‘legitimate
expectation’ attracting the protection of Article 1 of Protocol No. 1.
On the other hand, once a Contracting State, having ratified
the Convention including Protocol No. 1, enacts legislation providing for the
full or partial restoration of property confiscated under a previous regime,
such legislation may be regarded as generating a new property right protected
by Article 1 of Protocol No. 1 for persons satisfying the requirements for
entitlement. The same may apply in respect of arrangements for restitution or
compensation established under pre-ratification legislation, if such
legislation remained in force after the Contracting State’s ratification of
Protocol No. 1.”
In addition, the Court has held (see Kopecký,
cited above, § 52; and Maria Atanasiu and Others v. Romania, nos. 30767/05 and 33800/06, § 137, 12 October
2010) that
“where the proprietary interest is in the nature of a claim it
may be regarded as an ‘asset’ only where it has a sufficient basis in national
law, for example where there is settled case-law of the domestic courts confirming
it.”
Turning to the facts of the present case, the
Court notes that although the decision of 23 May 1992 in the applicants’ favour
served as a basis for the issuance of a notary deed, and the land commission issued
an act for the formal transfer to the applicants of possession of the plot (see
paragraph 15 above), the decision remained unenforced, as the applicants never
assumed actual possession. They did not bring proceedings to challenge that
state of affairs after their request to that effect to the Council of Ministers
and the Committee on Tourism was left unanswered (see paragraphs 13 and 15
above).
In its judgments in the cases of Lyubomir
Popov (§ 117) and Sivova and
Koleva (§ 74), both cited above, the Court observed that, under the
national law, administrative decisions determining claimants’ rights to
restitution under the ALA were given in ex parte proceedings
before the land commission and could be challenged either directly or indirectly
by another person claiming property rights over the same land. It noted further
that third parties claiming rights to the same land could defend these rights
in a subsequent procedure, such as rei vindicatio judicial proceedings
(see Sivova and Koleva, cited above, § 104). The possibility to
re-examine an administrative decision for restitution in kind in subsequent
judicial proceedings with third parties is the subject of well-established
practice of the national courts (ibid., §§ 102-103). Moreover, the
law explicitly provides for further proceedings to determine the compensation
due in lieu of restitution.
The Court is of the view that, given the
approach under domestic law, the administrative decision of 23 May 1992
allowing the applicants’ restitution claims could not be considered to have
validly created property rights for them prior to the examination of third
parties’ competing claims to the same land (see Sivova and Koleva, cited above, § 74). In the case, Duni did not participate in the procedure before the
land commission. Moreover, the land commission itself failed in its decision to
comment on any possible rights of the company (see paragraph 11 above). For
these reasons, and since, as in Sivova and Koleva, the applicants must
have been aware from the beginning of Duni’s competing claims because the
company was holding and using the land (see paragraph 15 above), the Court
considers that the applicants could not have legitimately expected that the
decision of 23 May 1992 determined with finality their restitution rights,
which were contested by a third party.
In fact, the question whether all the preconditions
for restitution in kind, as provided for by law, had been met, including
whether Duni, later Duni AD, had acquired rights to the land at issue which it
could oppose to the applicants, was for the first time examined in the rei
vindicatio proceedings brought by the company against the applicants (see Sivova
and Koleva, cited above, § 107). This situation is thus in contrast to
that in Kehaya and Others v. Bulgaria (nos. 47797/99 and 68698/01, §§
74-76, 12 January 2006), which concerned an attempt by the State to obtain
a fresh examination of the question, already examined in earlier judicial
proceedings, whether all the preconditions for restitution had been met.
Moreover, the Court notes that the domestic
courts’ decisions in the rei vindicatio proceedings do not appear to
have been arbitrary, but were based on what appears to have been a due
application of domestic law, namely section 10b of the ALA, as in force at the
moment of examination of the applicants’ restitution claims by the land
commission (see paragraph 38 above).
In view of the above, the Court agrees with the
Government’s position (see paragraph 50 above) that the land commission’s
decision of 23 May 1992 did not represent a stable legal basis which could
give rise to final and enforceable property rights for the applicants. This is
also evident from the fact that after the rei vindicatio proceedings the
authorities took further measures to determine the contents of the applicants’
restitution rights, in particular by preparing to award them compensation (see
paragraphs 21-24 above).
As to the applicants’ argument that the
compensation they can receive would be inadequate, the Court refers to its
findings in Sivova and Koleva (see §§ 109-114 of the judgment) that
the manner of compensation chosen by the Bulgarian legislator did not run
contrary to the requirements of Article 1 of Protocol No. 1. Moreover, the
Court refers to its findings cited in paragraph 56 above that States had freedom
to determine the scope of property restitution and to choose the conditions
under which they agreed to restore property rights of former owners.
In view of the above, the Court finds that the
applicants’ complaint concerning deprivation of property is manifestly
ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4
of the Convention.
3. Remaining complaints under Article 1 of Protocol
No. 1
The Court notes that these complaints are not
manifestly ill-founded within the meaning of Article 35 § 3 (a) of the
Convention, nor inadmissible on any other grounds. They must therefore be
declared admissible.
B. Merits
1. Complaint concerning the authorities’ failure to
provide the compensation due to the applicants for Plot B
In respect of Plot B the applicants complained,
first, that they had not received the compensation due to them.
The Government argued that the Ministry of
Economics had been unable to comply with the court judgments setting the amount
of compensation through shares in Duni AD, because the State no longer held the
necessary shares. They attached a statement of the Ministry of Economics to the
same effect dated 22 March 2011.
The applicants reiterated their complaint. They pointed
out that it was not disputed that the State remained bound by the court judgments
finding that the applicants were entitled to receive 56,997 shares in
Duni AD and that a fine had been imposed on the Minister of Economics for
his failure to abide by those judgments. As to the Government’s argument that
the State could not enforce the judgments because it did not hold a sufficient
amount of shares, the applicants pointed out that the authorities had, though
their own actions, placed themselves in that position, because they had
privatised parts of Duni AD prior to meeting their obligations to provide
compensation to former owners of land included in the company’s assets.
The Court notes that the parties to the case
seem to agree on the fact that the Burgas Regional Court’s judgment of 28 June
2007, confirmed by the Supreme Administrative Court on 4 January 2008 (see
paragraphs 29-30 above), determined with finality the extent of the applicants’
right to compensation in lieu of restitution. The applicants complained of the
authorities’ failure, for several years, to abide by those judgments.
The Court recalls that it examined a similar
situation, namely where the administrative authorities refused to comply with a
final court judgment determining the contents of the applicants’ restitution
rights, in Mutishev and Others v. Bulgaria (no. 18967/03, 3
December 2009). In that case the Court reiterated that the principle of
legal certainty required, inter alia, that where the courts have
finally determined an issue, their ruling should not be called into question,
save for reasons of a substantial and compelling character (see also, mutatis
mutandis, Brumărescu v. Romania [GC], no. 28342/95, § 61,
ECHR 1999-VII; Ryabykh v. Russia, no. 52854/99, § 52, ECHR
2003-IX; and Mancheva v. Bulgaria, no. 39609/98, § 59, 30 September
2004).
. No such reasons were indicated in
the present case. In particular, the Court cannot accept that the fact
that the State was not holding the necessary amount of shares could absolve it
from the duty to comply with the court judgments mentioned above. This was also
the finding of the Burgas Regional Court, which imposed a fine on the Minister
of Economics for failing to comply with the judgments (see paragraph 32 above).
The Court observes that the State could, for example, seek to purchase the
necessary shares or replace them with other assets, and that this possibility remains
open to the present date. Instead, the authorities remained inflexible and have
not shown that they sought a solution. Moreover, the Court notes that the
authorities used as grounds for non-compliance their own earlier behaviour, namely
the sale or transfer of almost the entirety of their shares in Duni AD prior to
having satisfied all compensation claims from former owners of land included in
the company’s assets (see paragraphs 8 and 26 above). The authorities’ failure
to comply with the final court judgment affected the applicants’ legitimate
expectation to receive compensation in lieu of restitution, as determined in
accordance with the applicable domestic law.
Accordingly, the Court considers that in respect
of the authorities’ failure to provide the compensation due to the applicants
for Plot B there was a violation of Article 1 of Protocol No. 1.
2. Complaint concerning the delays in the procedures
for restitution and compensation
In respect of both Plot A and Plot B, the
applicants complained of excessive delays in the procedures for restitution and
compensation in lieu thereof.
As concerns Plot A, the Government submitted that
the delays were due to numerous applications for judicial review of decisions
of the Agriculture Department by former owners who were to receive land in the
Sozopol area. In addition, in 2009 the boundaries of the Sozopol administrative
district were modified, which reduced the quantity of land available for
compensation. The Government submitted a letter from the Sozopol Agriculture
Department, which considered that this latter development would lead to the
modification of all decisions concerning compensation in the area.
The Government did not comment on the delays in
the procedures concerning Plot B.
The applicants repeated their complaint that the
delays in the procedures were excessive. As regards Plot B, they pointed out in
particular that they had expressed their preference to receive compensation
through shares as early as 6 May 1993, and had since awaited that compensation.
The Court has, in numerous cases against
Bulgaria, found violations of Article 1 of Protocol No. 1 on the ground of
lengthy delays in the procedures concerning restitution of agricultural land
which affected the applicants’ legitimate expectations to restitution or
compensation (see Sivova and Koleva, Vasilev and Doycheva and Lyubomir Popov, all cited above; Naydenov v. Bulgaria, no. 17353/03,
26 November 2009; Petkova and Others, nos. 19130/04, 17694/05 and
27777/06, 25 September 2012; and Ivanov v. Bulgaria, no. 19988/06, 11 December 2012). In the case of Vasilev and Doycheva (see § 69 of the judgment) the Court concluded that the problem was recurrent and
expressed the view that the Bulgarian authorities had to provide for clear time-limits for the adoption and enforcement of
administrative decisions necessary for the completion of the process of
restitution of agricultural land.
In the present case, as concerns Plot A, as of
September 2011, the date of the latest communication from the parties, the
compensation due to the applicants had not yet been provided. Moreover, the
procedure seemed to be in a standstill, as no decision had been adopted since
2005. In particular, it had not been determined whether and when the applicants
would receive other comparable land or compensation bonds, and for what value
(see paragraph 24 above).
As concerns Plot B, the Court notes that the
applicants applied to receive compensation through shares in Duni AD on 6 May
1993 (see paragraph 13 above). Their application was examined only in 2004,
when a decision on the amount of shares to be transferred was taken by a
commission of the Ministry of Economics (see paragraph 27 above). After the
applicants’ application for judicial review, the question concerning the amount
of shares to be transferred was settled with finality only in 2008 (see
paragraphs 28-30 above). However, as already discussed, the applicants have not
yet received anything and the procedure is still pending.
. The
Court notes that the delays in the present case, most notably in respect of
Plot A, were to a great extent due to the fact that the processes of
restitution of nationalised property and of transformation and privatisation of
public enterprises, as regulated by the Bulgarian legislator, were carried out
in a parallel manner, and that it was foreseen that any conflict between the
interests of the parties to such procedures would be settled in separate
judicial proceedings. Acknowledging to the States a wide margin of appreciation
in regulating important social and economic reforms such as the ones introduced
in Bulgaria after the fall of communism, the Court recalls nevertheless that
States remain bound to organise their judicial and administrative systems in
such a way so as to guarantee the rights provided for under the Convention (see
Sivova and Koleva, cited above, § 116). In the case at hand, by requiring
that the applicants participate in two procedures, first a restitution
procedure and then rei vindicatio judicial proceedings aimed at specifying
the rights recognised in the restitution procedure, the authorities delayed
significantly the effective exercise of the applicants’ restitution rights.
Moreover, even after the conclusion of the rei
vindicatio proceedings the delays continued and the restitution process has
not yet been completed. The Court takes note of the Government’s explanations
for that particular period of delay (see paragraph 72 above); however, it does
not consider them sufficient to justify the absence of any effective steps
towards providing compensation to the applicants for such a lengthy period of
time, namely at least seven years after the conclusion of the rei vindicatio
proceedings in 2004.
The Court is of the view that the significant
delays in the procedures concerning Plot B were also imputable to the
authorities, who appear not to have examined the matter in a prompt and
diligent manner. The Government have not provided any explanation for the
initial lengthy delay between 1993 and 2004. Moreover, the Court already found
(see paragraphs 69-70 above) that the delay after 2008 was also unjustified.
The Court finds in addition that the applicants
were not responsible for any of the delays incurred in respect of Plot B. It is
true that they could have brought about a partial completion of the
compensation process by accepting the 17,700 shares the State was prepared to
transfer to them after 2008 (see paragraph 31 above). However, this would only have
represented a partial solution. At the same time, the Court notes that the
applicants attempted to prompt the Ministry of Economics to act, by
successfully suing the Minister for failure to abide by the Burgas Regional
Court’s final judgment on the amount of compensation (see paragraph 32 above).
The Court considers that the situations
described above must have placed the applicants in a situation of lengthy
uncertainty (see Sivova and Koleva, § 116, and Lyubomir Popov,
§ 122, both cited above). The relevant authorities also acknowledged that the
applicants and the other persons awaiting compensation in lieu of restitution
in the area of Sozopol under the ALA (in the case at hand for Plot A) were
placed in a situation of uncertainty. Moreover, they admitted that all
decisions taken in that regard had to be yet re-examined (see paragraph 72
above).
As to Plot B, the Court notes in addition the
apparent confusion caused by the actions of the Sozopol agricultural land
commission (later Agriculture and Forestry Department), which, in disregard of
the applicants’ choice of shares as means of compensation, awarded them
compensation under the ALA through compensation bonds. Subsequently, the
decision was annulled, but in 2005 the Agriculture and Forestry Department
adopted another decision, which is still in force (see paragraphs 33-35 above).
This occurred despite the fact that on several occasions the applicants informed
that body that they had chosen to seek compensation through shares under the
privatisation laws (see paragraphs 26 and 34 above). In fact, it appears that
it was only in 2010, after the present application’s communication to the
Government by the Court, that the Sozopol Agriculture and Forestry Department
attempted to co-ordinate its actions with those of the Ministry of Economics
(see paragraph 37 above).
In view of the considerations above, the Court
concludes that there has been a violation of Article 1 of Protocol No. 1 in
respect of the lengthy delays in the procedures for restitution and
compensation, which affected the applicants’ legitimate expectations in that
regard.
II. 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
Reiterating that they had been arbitrarily
deprived of their title to Plot A, the applicants claimed the land’s market
value, which they assessed at 735,740 euros (EUR) on the basis of a valuation
report prepared by an expert appointed by them, or, alternatively other land
comparable to Plot A.
In respect of Plot B, the applicants claimed that
the Government should buy and transfer to them the amount of shares in Duni AD
indicated in the judgments of 28 June 2007 and 4 January 2008 (see paragraphs
29-30 above) or, alternatively, pay them the face value of the unavailable
shares, plus interest, in the total amount of BGN 58,965.12 (the equivalent of
about EUR 30,000).
In respect of non-pecuniary damage, the
applicants claimed EUR 5,000 each, or EUR 40,000 in total.
The Government contested the above claims and
considered them exaggerated.
In particular, in respect of Plot B they
submitted a document prepared by the Ministry of Economics, dated 30 August
2011, in which the Ministry reiterated its readiness to transfer to the
applicants the 17,700 remaining shares held by the State. As to the
applicants’ proposal that the authorities pay to them the shares’ face value,
the Ministry considered that “this could seem acceptable”. At the same time,
the Ministry contested the applicants’ claim for interest, asserting that it
had no valid legal ground.
The Court recalls that it found inadmissible the
applicants’ complaint that they had been deprived of property in respect of Plot
A. Accordingly, it dismisses their claim to receive that plot’s market value or
other comparable land and notes that the applicants are still entitled to
compensation in lieu of restitution for Plot A (see paragraphs 24 and 60 above).
As concerns the complaint about delays and
uncertainty in the restitution process, both in respect of Plot A and Plot B,
the Court notes that the applicants must have suffered some damage, which is,
however, difficult to assess in exact figures. Judging
on the basis of equity, it therefore awards them EUR 12,000. That amount is to
be divided among the applicants in accordance with their inheritance shares.
Lastly, as concerns the complaint of
non-enforcement of the court judgments setting the amount of shares due to the
applicants in compensation for Plot B, the Court considers that the question of
the application of Article 41 is not ready for decision. Seeing that the
Government did not contest, in principle, its obligation to transfer to the
applicants the full amount of shares and that the Ministry of Economics considered
acceptable their proposal to pay those shares’ value, the Court takes note of
the possibility of an agreement between the respondent State and the applicants
(Rule 75 § 1 of the Rules of Court). Accordingly, the Court reserves this
question and invites the Government and the applicants to notify it, within three
months from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, of any agreement that they may reach.
B. Costs and expenses
For the costs and
expenses incurred before the Court, the applicants claimed EUR 3,560 for
the legal work of their representative, Ms Margaritova-Vuchkova, and BGN
594.10 (the equivalent of approximately EUR 303) for translation and postage.
In support of this claim they presented a contract for legal representation, a
time-sheet for their representative’s work and the necessary receipts. They
requested that the amount for postage and translation and EUR 460 of the sum to
be awarded for legal fees be paid to them, and the remainder be transferred
directly to Ms Margaritova-Vuchkova’s bank account.
In addition, the applicants claimed BGN 41.20
(the equivalent of EUR 21) for expenses for copying in relation to the
2000-2004 rei vindicatio proceedings before the domestic courts
(see paragraphs 16-20 above), and BGN 610,94, the equivalent of approximately
EUR 310, for expenses incurred in the judicial review procedures described in
paragraphs 23 and 28-30 above. In respect of these claims the applicants
presented the relevant receipts.
The Government considered that the amount sought
for legal fees was excessive and that the expenses for postage and translation
were reasonable and necessary.
According to the Court’s case-law, an applicant
is entitled to the reimbursement of costs and expenses only in so far as it has
been shown that these have been actually and necessarily incurred and are
reasonable as to quantum. In the present case, regard being had to the
documents in its possession and the above criteria, and noting also that some
of the complaints in the present case have been dismissed, the Court finds it
reasonable to award the sum of EUR 3,000 for legal representation. In
accordance with the applicants’ request (see paragraph 94 above), EUR 460 of
this sum is to be paid to the applicants and the remainder, namely EUR 2,540,
is to be transferred directly into their representative’s bank account. The
Court finds further that the expenses for translation and postage in the amount
of EUR 303 were reasonable and necessary and, seeing also that the Government
did not dispute them, awards them in full.
As to the remaining claims, the Court considers
it reasonable to award to the applicants the expenses, amounting to EUR 21, claimed
in respect of the rei vindicatio proceedings. The Court dismisses the
claims concerning the proceedings described under paragraphs 23 and 28-30
above, as the applicants were successful in those proceedings and could have
claimed the reimbursement of the expenses incurred by them on the domestic
level.
D. 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 admissible the application, in so
far as it concerns the authorities’ refusal to provide to the applicants the
compensation due for Plot B and the delays in the restitution process, and the complaint
concerning deprivation of property in respect of Plot A inadmissible;
2. Holds that there has been a violation of
Article 1 of Protocol No. 1 on account of the authorities’ refusal to provide
to the applicants the compensation due to them for Plot B;
3. Holds that there has been a violation of
Article 1 of Protocol No. 1 owing to the delays in the restitution process;
4. Holds that
the question of the application of Article 41, in so far as it concerns the claim arising from the
authorities’ failure to enforce the court judgments setting the amount of
shares in compensation for Plot B, is not ready
for decision;
accordingly,
(a) reserves the said question;
(b) invites the Government and the
applicants to notify the Court, within three months from the date on which the
judgment becomes final in accordance with Article 44 § 2 of the Convention, of
any agreement that they may reach;
(c) reserves the further procedure and delegates
to the President of the Chamber the power to fix the same if need be;
5. Holds
(a) that the respondent State is to pay the
applicants, within three months from the date on which the judgment becomes
final in accordance with Article 44 § 2 of the Convention, the following
amounts, to be converted into Bulgarian levs at the rate applicable at the date
of settlement:
(i) EUR 12,000 (twelve thousand euros), plus any
tax that may be chargeable, in respect of any damage related to the delays in the
restitution process, the sum thus indicated to be divided among the applicants
in accordance with their inheritance shares;
(ii) EUR 3,324 (three thousand three hundred and
twenty-four euros), plus any tax that may be chargeable to the applicants, in respect
of costs and expenses, EUR 2,540 (two thousand five hundred and forty euros) of
which is to be transferred directly to the bank account of the applicants’
legal representative;
(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;
6. Dismisses the remainder of the applicants’
claims for just satisfaction.
Done in English, and notified in writing on 28 May 2013,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Françoise
Elens-Passos Ineta
Ziemele Registrar President
