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R. KACAPOR AND OTHERS v. SERBIA - 2269/06 [2008] ECHR 34 (15 January 2008)
URL: http://www.bailii.org/eu/cases/ECHR/2008/34.html
Cite as:
[2008] ECHR 34
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SECOND
SECTION
CASE OF
R. KAČAPOR AND OTHERS v. SERBIA
(Applications
nos. 2269/06, 3041/06, 3042/06, 3043/06, 3045/06 and 3046/06)
JUDGMENT
STRASBOURG
15
January 2008
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 R. Kačapor and
others v. Serbia,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Françoise Tulkens,
President,
András Baka,
Rıza
Türmen,
Mindia Ugrekhelidze,
Vladimiro
Zagrebelsky,
Danutė Jočienė,
Dragoljub
Popović, judges,
and Sally Dollé, Section
Registrar.
Having
deliberated in private on 11 December 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in six separate applications (nos. 2269/06, 3041/06,
3042/06, 3043/06, 3045/06 and 3046/06) against the State Union of
Serbia and Montenegro, lodged with the Court, under Article 34 of the
Convention for the Protection of Human Rights and Fundamental
Freedoms (“the Convention”), by Ms Remka Kačapor
and 5 others (“the applicants”; see paragraph 5 below) on
30 December 2005.
As
of 3 June 2006, following the Montenegrin declaration of
independence, Serbia remained the sole respondent in the proceedings
before the Court (see paragraph 82 below).
The
applicants were represented before the Court by Ms R. Garibović,
a lawyer practising in Novi Pazar. The Government of the State Union
of Serbia and Montenegro and, subsequently, the Government of Serbia
(“the Government”) were represented by their Agent, Mr S.
Carić.
On
23 February 2007 the Court decided to communicate the applications to
the Government. Applying Article 29 § 3 of the Convention, it
decided to rule on their admissibility and merits at the same time.
THE FACTS
The
applicants, Ms Remka Kačapor (“the first applicant”),
Ms Huljka Kačapor (“the second applicant”), Ms Aziza
Elezović (“the third applicant”), Ms Senada Dolovac
(“the fourth applicant”), Ms Šaha Rizović
(“the fifth applicant”) and Ms Muška Crnovršanin
(“the sixth applicant”) are all citizens of Serbia who
were born in 1972, 1956, 1967, 1969, 1951 and 1950, respectively, and
currently live in the Municipality of Novi Pazar.
I. THE CIRCUMSTANCES OF THE CASE
A. Introduction
Between
1993 and 2002 the applicants, at that time employed with a
“socially-owned company” (društveno preduzeće;
see paragraphs 71-76 below), Vojin Popović-Domaća radinost,
were all “placed” by their employer on a “compulsory”
paid leave scheme “until such time” when this company's
business performance could be “improved sufficiently”.
Whilst
on leave, in accordance with the relevant domestic legislation, the
applicants were entitled to a significantly reduced monthly income,
as well as the payment by their employer of their pension, disability
and other social security contributions.
By
11 November 2002 all applicants had been dismissed. At the same time,
however, their employer apparently agreed to pay them 10,000
Dinars (“RSD”) each, as well as to cover their
respective social security contributions in exchange for their
undertaking not to seek their monthly paid leave benefits.
It
would appear that the applicants' employer honoured its former
commitment but failed to fulfil the latter. The applicants,
therefore, brought six separate civil claims before the Municipal
Court (Opštinski sud) in Novi Pazar.
B. As regards the first applicant
On
16 April 2003 the Municipal Court in Novi Pazar (hereinafter “the
Municipal Court”) ruled in favour of the applicant and ordered
her former employer to pay her:
i. the
monthly paid leave benefits (naknadu za vreme plaćenog
odsustva) due from 1 May 1993 to 16 June 1996 and 25 June 1998 to
31 May 2001, indexed in accordance with the relevant domestic
regulations, plus statutory interest; and
ii. RSD
8,650 (approximately 140 euros [EUR]) for her legal costs; as well as
iii. coverage
of her pension and disability insurance contributions (doprinosi
za penzijsko i invalidsko osiguranje) due for that period.
This
judgment became final on 23 June 2003.
On
5 February 2004 the applicant filed a request for the enforcement of
the above judgment, proposing that it be carried out by means of a
bank transfer and the auctioning of the debtor's specified movable
and immovable assets.
On 28 April 2004 the Municipal Court accepted the applicant's request
and issued an enforcement order.
C. As regards the second applicant
On
7 February 2005 the Municipal Court ruled in favour of the applicant
and ordered her former employer to pay her:
i. the
monthly paid leave benefits due from 1 April 2000 to 11 November
2002 (RSD 59,672 in all - approximately EUR 745), plus statutory
interest; and
ii. RSD
20,250 (approximately EUR 252) for her legal costs.
This
judgment became final on 10 March 2005.
On
9 May 2005 the applicant filed a request for the enforcement of the
above judgment, proposing that it be carried out by means of a bank
transfer and the auctioning of the debtor's specified movable and
immovable assets.
On
6 September 2005 the Municipal Court accepted the applicant's request
and issued an enforcement order.
D. As regards the third applicant
On
27 January 2005 and 26 May 2005 the Municipal Court ruled in favour
of the applicant and ordered her former employer to pay her:
i. the
monthly paid leave benefits due from 30 August 2001 to 1 November
2002 (RSD 49,714 in all - approximately EUR 600), plus statutory
interest; and
ii. RSD
9,750 (approximately EUR 117) for her legal costs; as well as
iii. coverage
of her pension and disability insurance contributions due from 1
January 1995 to 1 November 2002.
This
judgment became final on 29 June 2005.
On
14 July 2005 applicant filed a request for the enforcement of the
above judgment, proposing that it be carried out by means of a bank
transfer and the auctioning of the debtor's specified movable and
immovable assets.
On
26 September 2005 the Municipal Court accepted the applicant's
request and issued an enforcement order.
E. As regards the fourth applicant
On
9 December 2004 the Municipal Court ruled in favour of the applicant
and ordered her former employer to pay her:
i. the
monthly paid leave benefits due from 1 June 1994 to 19 August 2002
(RSD 64,711 in all - approximately EUR 837), plus statutory interest;
and
ii. RSD
7,800 (approximately EUR 100) for her legal costs; as well as
iii
coverage of her pension and disability insurance contributions due
from 1 June 1994 to 11 November 2002.
This
judgment became final on 28 March 2005.
On
19 April 2005 the applicant filed a request for the enforcement of
the above judgment, proposing that it be carried out by means of a
bank transfer and the auctioning of the debtor's specified movable
and immovable assets.
On
26 September 2005 the Municipal Court accepted the applicant's
request and issued an enforcement order.
F. As regards the fifth applicant
On
24 September 2003 the Municipal Court ruled in favour of the
applicant and ordered her former employer to pay her:
i. the
monthly paid leave benefits due from 1 June 1994 to 31 May 2001, as
well as those from 1 June 2001 to 11 November 2002 (RSD 101,887 in
all - approximately EUR 1,625, as regards the latter period), plus
statutory interest; and
ii. RSD
7,800 (approximately EUR 125) for her legal costs; as well as
iii. coverage
of her pension and disability insurance contributions due for the
above periods.
This
judgment became final on 9 December 2003.
On
26 February 2004 the applicant filed a request for the enforcement of
the above judgment, proposing that it be carried out by means of a
bank transfer and the auctioning of the debtor's specified movable
and immovable assets.
On
15 March 2004 the Municipal Court accepted the applicant's request
and issued an enforcement order.
G. As regards the sixth applicant
On
17 May 2004 the Municipal Court ruled in favour of the applicant and
ordered her former employer to pay her:
i. the
monthly paid leave benefits due from 1 June 1994 to 11 November 2002
(RSD 74,850 in all - approximately EUR 1,050), plus statutory
interest; and
ii. RSD
16,200 (approximately EUR 227) for her legal costs; as well as
iii. coverage
of her pension and disability insurance contributions due for that
period.
This
judgment became final on 8 November 2004.
On
29 November 2004 the applicant filed a request for the enforcement of
the above judgment, proposing that it be carried out by means of a
bank transfer and the auctioning of the debtor's specified movable
and immovable assets.
On
6 December 2004 the Municipal Court accepted the applicant's request
and issued an enforcement order.
H. Other relevant facts as regards all applicants
On
30 November 2004 and 21 February 2005, respectively, the applicants
sent two separate letters to the Ministry of Finance, stating, inter
alia, that their former employer (hereinafter “the
debtor”):
i. had,
for the past ten years, deliberately avoided doing business through
its official bank accounts;
ii. had
instead, apparently, engaged in cash transactions or even used other
“secret” bank accounts, unknown to the tax authorities;
and
iii. that,
as a result, judicial enforcement by means of a bank transfer had
been rendered impossible.
Finally,
the applicants requested that urgent action be taken to secure the
enforcement of their final judgments.
On
23 December 2004 the Ministry of Finance (hereinafter “the
Ministry”) found that the debtor had failed to pay the total
amount of the taxes and social security contributions due.
On
12 January 2005 the Ministry ordered the debtor to pay the
outstanding sum.
On
25 January 2005 the Ministry filed a request for the formal
institution of misdemeanour proceedings, stating that the debtor had
failed to comply with this order.
On
21 March 2005 the Ministry sent a letter to the applicants, noting
that their submissions had been duly considered but that, in view of
the confidential nature of the information obtained, no details could
be disclosed.
On
6 June 2005 the applicants sent another complaint to the Ministry,
stating that the situation concerning the bank accounts had remained
unchanged.
I. The insolvency proceedings
On
28 October 2005 the Commercial Court (Trgovinski sud) in
Kraljevo (hereinafter “the CCK”) opened insolvency
proceedings in respect of the debtor. The effect of this was that the
ongoing enforcement proceedings before the Municipal Court were
stayed ex lege, in accordance with Article 73 of the
Insolvency Procedure Act (see paragraph 70 below).
This
decision was published in the Official Gazette of the Republic of
Serbia on 28 November 2005.
In
December 2005 the applicants duly submitted their respective claims.
On
22 December 2005 the insolvency proceedings conducted against the
debtor were joined with the insolvency proceedings pending in respect
of Vojin Popović-Holding AD,
hereinafter “the VPH Company” (see paragraph 56 below).
On
23 March 2006 and 8 June 2006, the CCK confirmed the applicant's paid
leave claims, but held that a part of their social security claims
were dubious, which is why they were informed that they could bring a
separate civil lawsuit in this regard.
On
20 July 2006 the High Commercial Court (Viši trgovinski
sud) ordered that the insolvency case in question be transferred
to the Commercial Court in UZice (hereinafter “the CCU”),
the reason apparently being that the CCK had been put under
increasing pressure locally.
On
8 September 2006 the CCU quashed the decisions adopted by the CCK on
23 March 2006 and 8 June 2006, respectively. It also disjoined the
proceedings in respect of the debtor from those pending against the
VPH Company.
On
26 January 2007, by means of a faxed note, an official involved in
the insolvency proceedings informed the applicants that their claims
were dubious in view of their “prior undertakings” (see
paragraph 8 above).
On
the same date the applicants informed this official that the final
judgments adopted in their favour had already taken these issues into
account, but had dismissed them on their merits (see paragraph 9
above).
Several
days later, the applicants filed a request with the CCU, seeking the
confirmation of their claims.
On
14 January 2007 the State apparently adopted a formal decision
accepting to cover the applicants' social security contributions.
This decision, however, has apparently yet to be served on the
applicants.
On
20 March 2007 the CCU ordered the valuation of the debtor's assets as
well as their subsequent sale.
On
20 April 2007, however, the CCU rejected the applicants' claims in
their entirety.
On
14 May 2007 the applicants filed a separate civil suit with the same
court, seeking confirmation of their claims as recognised in the
final judgments rendered in their favour.
On
18 May 2007 the CCU accepted to reconsider the applicants' claims
within the insolvency proceedings.
On
28 June 2007 the same court suspended the separate civil suit,
pending the imminent re-examination of the applicants' claims within
the insolvency proceedings.
J. The debtor's status
As
of September 2007, the debtor was incorporated as a limited liability
company (društvo sa ograničenom odgovornošću).
It was, however, owned solely by the VPH Company, approximately 87%
of which was itself socially-owned (u društvenoj
svojini; see also paragraph 75 below).
II. RELEVANT DOMESTIC LAW
A. Enforcement Procedure Act 2000 (Zakon o izvršnom
postupku; published in the Official Gazette of the Federal Republic
of Yugoslavia - OG FRY - nos. 28/00, 73/00 and 71/01)
Article
4 § 1 provided that all enforcement proceedings were to be
conducted urgently.
Article
30 § 2, inter alia, provided that it was up to the
enforcement court, ex officio, to choose the appropriate means
of enforcement, whenever a creditor proposed more than one avenue,
whilst taking into account the funds needed in order to cover the
claims in question.
Articles
63-84, 134-176 and 180-188 contained details as regards enforcement
by means of a bank transfer, as well as through the auctioning of the
debtor's movable and immovable assets. Under Article 184 § 4, in
particular, the Central Bank (Narodna banka) was obliged to
respond to a creditor's request and inform him about the priority of
his bank transfer compared to any others.
B. Enforcement Procedure Act 2004 (Zakon o izvršnom
postupku; published in the Official Gazette of the Republic of Serbia
- OG RS - no. 125/04)
The
Enforcement Procedure Act of 2004 (“the 2004 Act”)
entered into force on 23 February 2005, thereby repealing the
Enforcement Procedure Act of 2000 (“the 2000 Act”).
Article
5 § 1 of the 2004 Act provides that all enforcement proceedings
are to be conducted urgently.
Article
8 § 2, in the relevant part, corresponds to the provisions of
Article 30 § 2 of the 2000 Act. In addition, it provides that
the court may choose the appropriate means of enforcement ex
officio or at the request of the parties.
Articles
69-153 and 196-204 set out the relevant details as regards
enforcement by means of a bank transfer as well as enforcement
through the auctioning of the debtor's movable and immovable assets.
Article 199, in particular, provides that the enforcement order shall
be forwarded to the Central Bank which shall then instruct the
debtor's bank to proceed with a wire transfer or a cash payment, as
appropriate.
In
accordance with Article 304 of the 2004 Act, all enforcement
proceedings instituted prior to 23 February 2005 are to be carried
out pursuant to the previous 2000 Act.
C. Relevant decisions adopted by the Central Bank
(Instrukcija direktora Odeljenja za prinudnu naplatu 10, broj 3-1593
od 19. novembra 2003, te Uputstvo za sprovođenje prinudne
naplate direktora glavne republičke filijale u Beogradu 40, broj
2/8-7 od 15. novembra 2004. godine)
These
internal decisions provide that the Central Bank shall be obliged to
respond to a creditor's request for an update as regards the current
status of a court-ordered bank transfer.
D. Financial Transactions Act (Zakon o platnom prometu;
published in OG FRY nos. 3/02 and 5/03, and OG RS nos. 43/04 and
62/06)
Articles
47-49 and 57, inter alia, regulate technical details as
regards the process of enforcement by means of a bank transfer. They
do not, however, specifically provide for an obligation on the part
of the Central Bank to inform the enforcement court about the current
status of the transfer in question.
Under
Article 54 § 1, inter alia, the Central Bank shall
monitor the solvency of all corporate entities and initiate judicial
insolvency proceedings in respect of those whose bank accounts have
been “blocked” due to outstanding debts for a period of
60 days consecutively, or for 60 days intermittently, within the last
75 days.
E. Insolvency Procedure Act (Zakon o stečajnom
postupku; published in OG RS no. 84/04)
Article
6 provides that insolvency proceedings cannot be instituted in
respect of State bodies, foundations and agencies and the Central
Bank, as well as legal entities established and exclusively or
predominantly funded by the State.
Article
19 states the conditions under which an insolvency administrator
(stečajni upravnik) can be sued for damages in a separate
civil suit.
Article
73 §§ 1 and 2 provides that “as of the day of
institution of the insolvency proceedings” the debtor cannot
simultaneously be subjected to a separate enforcement procedure. Any
ongoing enforcement proceedings shall thus be stayed, while new
enforcement proceedings cannot be instituted as long as the
insolvency proceedings are still pending.
F. The status of socially-owned companies (pravni
poloZaj društvenih preduzeća)
Socially-owned
companies, hereinafter “SOC”, as well as “social
capital”, are a relict of the former Yugoslav brand of
communism and “self-management”.
Their
current legal status in Serbia is primarily defined by: (i) Articles
392-400v and Article 421a of the Corporations Act 1996 (Zakon o
preduzećima; published in OG FRY nos. 29/96, 33/96, 29/97,
59/98, 74/99, 9/01 and 36/02); (ii) Articles 1, 3, 14 and 41b of the
Privatisation Act (Zakon o privatizaciji; published in OG RS
nos. 38/01, 18/03 and 45/05); and (iii) Article 456 of the
Corporations Act 2004 (Zakon o privrednim društvima;
published in OG RS no. 125/04).
Based
on this legislation, SOC are only those companies which are entirely
comprised of social capital (preduzeća koja u celini posluju
društvenim kapitalom). They are also independent legal
entities which are both owned and run by their own employees and can
be subjected to regular insolvency proceedings (see paragraph 68
above). Social capital, however, was to be privatised by March 2007
and the funds thus obtained paid into the State's budget.
Once
privatisation formally commences in respect of a given SOC, any and
all of its decisions amounting to an obstruction of the privatisation
process shall be deemed null and void. The Government shall also have
the right to appoint their own representatives to sit in the
governing bodies of the SOC in question, whenever the Privatisation
Agency finds that such obstruction has indeed taken place (see, in
particular, Article 400a of the Corporations Act 1996).
Further,
as of 2002, companies whose capital is predominantly socially-owned
(preduzeća koja posluju većinskim društvenim
kapitalom), but which are not formally being privatised, cannot,
without prior approval by the Privatisation Agency (Agencija za
privatizaciju), itself a State body, adopt their own decisions
concerning their: capital, reorganisation, restructuring and
investment, the partial sale or mortgage of their assets, the
settlement of their outstanding claims and the taking or giving of
loans and guarantees outside the scope of their “regular
business operations” (van toka redovnog poslovanja). Any
decisions adopted in the absence of such approval shall be declared
null and void by the Privatisation Agency (see, in particular,
Article 398a of the Corporations Act 1996). Finally, no decisions
concerning the status and organisation of such companies (odluke o
statusnim promenama i promenama oblika preduzeća) can be
adopted without the Government's prior approval (see, in particular,
Article 421a of the Corporations Act 1996).
The
above-described regime was in force until March 2007 (see Article 456
of the Corporations Act 2004 and Article 14 of the Privatisation
Act), the competent ministries having announced that its extension
was imminent.
G. Special Pension and Disability Insurance Act (Zakon
o uplati doprinosa za penzijsko i invalidsko osiguranje za pojedine
kategorije osiguranika - zaposlenih; published in OG RS no. 85/05)
Under
Articles 2 and 3 the State accepted to cover the minimum pension and
disability insurance contributions due from 1 January 1991 to 31
December 2003 in respect of certain categories of registered workers
whose employers had themselves failed to do so.
In
accordance with Articles 4-6 the employers, as well as the workers in
question, could have filed a request to this effect with the State
Pension and Disability Fund (Republički fond za penzijsko i
invalidsko osiguranje zaposlenih), the deadline for so doing
having expired in January 2006.
Pursuant
to Articles 7-9 the timing of the actual settlement of an applicant's
recognised claim would depend on the “liquidity of the State's
budget”
Under
Article 12 all workers whose claims had been accepted could not seek
any additional payments on the same grounds from their employers,
including by means of litigation.
H. Relevant provisions of the Rules of Court and the
Obligations Act
The
relevant provisions of this legislation are set out in the V.A.M. v.
Serbia judgment (no. 39177/05, §§ 68, 71 and 72,
13 March 2007).
I. The status of the State Union of Serbia and
Montenegro
The
relevant provisions concerning the status of the State Union of
Serbia and Montenegro are set out in the Matijašević
v. Serbia judgment (no. 23037/04, §§ 22-25, 19
September 2006).
THE LAW
I. JOINDER OF THE APPLICATIONS
The
Court considers that, in accordance with Rule 42 § 1 of the
Rules of Court, the applications should be joined, given their common
factual and legal background.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
The
applicants complained under Article 6 § 1 of the Convention
about the respondent State's failure to enforce the final judgments
rendered in their favour.
Article
6 § 1 of the Convention, in the relevant part, reads as follows:
“In the determination of his [or her] civil rights
and obligations .., everyone is entitled to a fair ... hearing ... by
[a] ... tribunal ...”
A. Admissibility
1. Exhaustion of domestic remedies
The Government referred to the Court's decision in the
Mota case (see Tomé Mota v. Portugal (dec.), no.
32082/96, ECHR 1999-IX) and submitted that the applicants had not
exhausted all effective domestic remedies. In particular, they
had failed to complain about the impugned delay to the presidents of
the courts in question, and had not made use of the possibility to
bring a separate civil lawsuit under Articles 154, 172, 199 and 200
of the Obligations Act or Article 19 of the Insolvency Procedure Act
(see paragraphs 69 and 81 above).
The
applicant contested the effectiveness of those remedies.
The Court has already held that the above remedies
could not be deemed effective within the meaning of its established
case-law under Article 35 § 1 of the Convention (see V.A.M. v.
Serbia, cited above, §§ 85-86, 13 March
2007; see also Horvat v. Croatia, no. 51585/99, §§ 47
and 48, ECHR 2001 VIII). It sees no reason to depart from those
findings in the present case and concludes, therefore, that the
Government's objection must be rejected.
2. Compatibility ratione personae (the applicants'
“victim status”)
The
Government noted that the State had accepted to cover the applicants'
social security contributions in accordance with the Special Pension
and Disability Insurance Act (hereinafter “the SPDIA”;
see paragraphs 77-80 above). The applicants were therefore no longer
“victims”, within the meaning of Article 34 of the
Convention.
The
applicant stated that the SPDIA was meant to tackle pension
entitlements primarily, which is why the pension and disability
insurance contributions would not be settled prior to their
retirement. In any event, this legislation did not envisage any
compensation for the lack of the applicants' past social coverage.
Since
the impugned non-enforcement concerns monthly paid leave benefits, as
well as the said social security contributions, and given the fact
that both have apparently yet to be settled, it is clear that the
applicants have not obtained any meaningful redress or, indeed, even
a comprehensive acknowledgment of the violations allegedly suffered
(see Dalban v. Romania [GC], no. 28114/95, § 44, ECHR
1999-VI).
The
Court therefore finds that the applicants have retained their victim
status and dismisses the Government's objection in this regard.
3. Compatibility ratione personae (responsibility of
the State)
The
Government argued that the State could not be held responsible for a
socially-owned company. In particular, the debtor was neither
State-owned nor State-controlled. Its insolvency was also not caused
by the State and the State itself was not entitled to a share of its
profits nor obliged to cover its losses.
Further,
the debtor was not in the process of being privatised, which was why
some of the most significant potential restrictions of its
operational independence were irrelevant (see paragraph 74 above).
Lastly,
the Government acknowledged that any funds obtained through the
privatisation of the debtor would have been transferred to the State
budget, but maintained that this was not decisive as the entire
process was merely a means to transform one “type of property”
into another.
The
applicants submitted that the debtor was a socially-owned entity and,
as such, fully controlled by the State.
The
issue arises therefore whether the State is liable for the
outstanding obligations of the debtor, in particular whether it can
be held responsible for the non-enforcement of the final judgments
rendered in favour of the applicants.
The
Court notes, in this respect, that the debtor is currently owned
by a holding company predominantly comprised of social capital (see
paragraph 56 above) and that, as such, it is closely controlled by
the Privatisation Agency, itself a State body, as well as the
Government (see paragraph 75 above), irrespective of whether any
formal privatisation had been attempted in the past.
The
Court therefore considers that the debtor, despite the fact that it
is a separate legal entity, does not enjoy “sufficient
institutional and operational independence from the State” to
absolve the latter from its responsibility under the Convention (see,
mutatis mutandis, Mykhaylenky and Others v. Ukraine,
nos. 35091/02, 35196/02, 35201/02, 35204/02, 35945/02, 35949/02,
35953/02, 36800/02, 38296/02 and 42814/02, § 44, ECHR
2004 XII).
Accordingly,
the Court finds that the applicants' complaints are compatible
ratione personae with the provisions of the Convention, and
dismisses the Government's objection in this respect.
4. Conclusion
The
Court considers that the applicants' complaints are not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention and finds no other ground to declare them inadmissible.
The application must therefore be declared admissible.
B. Merits
1. Arguments of the parties
The
Government pointed out that the applicants had requested enforcement
by means of a bank transfer and the auctioning of the debtor's
movable and immovable assets. The auction, however, could not be held
until it became clear that a bank transfer was no longer possible.
The
Government further noted that the applicants themselves did nothing
to inform the Municipal Court that there was no money on the debtor's
account, even though they could have asked the Central Bank to
provide them with information of this sort.
The
Government observed that the Central Bank itself had no obligation
under domestic law to inform the Municipal Court about the current
status of the attempted bank transfer, that the debtor was also not
prohibited from partly conducting its business in cash, and that the
applicants themselves had not requested that the enforcement by means
of a bank transfer be discontinued and an auction be held instead.
Finally,
the Government noted that the failure to enforce the judgments in
question was primarily due to the debtor's indigence and emphasised
that the subsequent insolvency proceedings were of particular
complexity.
The
applicants disagreed and reaffirmed their original complaints. In
addition, they argued that that it was up to the domestic authorities
to provide them with the relevant information concerning the
enforcement sought, as well as to proceed ex officio given
that several means of enforcement were proposed simultaneously.
2. Relevant principles
The
Court recalls that the execution of a judgment given by a court must
be regarded as an integral part of the “trial” for the
purposes of Article 6 (see Hornsby v. Greece, judgment of
19 March 1997, Reports of Judgments and Decisions 1997-II, p.
510, § 40).
Further,
a delay in the execution of a judgment may be justified in particular
circumstances. It may not, however, be such as to impair the essence
of the right protected under Article 6 § 1 of the Convention
(see Immobiliare Saffi v. Italy [GC], no. 22774/93, § 74,
ECHR 1999-V).
Finally,
irrespective of whether a debtor is a private or a State-controlled
actor, it is up to the State to take all necessary steps to enforce a
final court judgment, as well as to, in so doing, ensure the
effective participation of its entire apparatus (see, mutatis
mutandis, Pini and Others v. Romania, nos. 78028/01 and
78030/01, §§ 174-189, ECHR 2004-V (extracts); see also
mutatis mutandis, Hornsby, cited above, p. 511, §
41).
3. The Court's assessment
The
Court first notes that the final judgments given in favour of the
applicants remain unenforced in full or to large extent (see
paragraphs 88-91 above).
Secondly,
notwithstanding the Governments submissions to the contrary, the
enforcement court was obliged to proceed ex officio with other
means of enforcement, had any one of those proposed by the applicants
already proved impossible (see paragraphs 58 and 62 above).
Thirdly,
the relationship between the enforcement court and the Central Bank
was an internal one, between two Government bodies, and, as such,
beyond the scope of the applicants' influence who, in any event, did
everything in their power to expedite the impugned proceedings (see
paragraphs 34-39 above).
Fourthly,
while the Central Bank may not have had an obligation under domestic
law to inform the enforcement court about the status of the bank
transfer in question, it clearly could have requested the opening of
the insolvency proceedings much earlier (see paragraphs 66 and 67
above).
Fifthly,
there was no reason why the applicants should have requested updates
from the Central Bank in respect of the said bank transfer merely in
order to fill the communication void between two branches of
Government.
Sixthly,
given the finding of State liability for the debts owed to the
applicants in the present case, it is noted that the State cannot
cite either the lack of its own funds or the indigence of the debtor
as an excuse for the non-enforcement in question.
Finally,
the period of non-execution should not be limited to the enforcement
stage only, but should also include the subsequent insolvency
proceedings (see Mykhaylenky and Others v. Ukraine,
cited above, § 53). Consequently, the period of debt
recovery in the applicants' cases has so far lasted between two years
and four months and three years and eight months since the Serbian
ratification of the Convention on 3 March 2004 (the period which
falls within this Court's competence ratione temporis).
In
view of the above, the Court finds that the Serbian authorities have
failed to take necessary measures in order to enforce the judgments
in question. There has, accordingly, been a violation of Article 6 §
1 of the Convention.
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
The
applicants further complained that the State had infringed their
right to the peaceful enjoyment of their possessions, as guaranteed
by Article 1 of Protocol No. 1, which provides 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
The
Court notes that these complaints are linked to those examined above
and must, therefore, likewise be declared admissible.
B. Merits
The
Court reiterates that the failure of the State to enforce the final
judgments rendered in favour of the applicants constitutes an
interference with their right to the peaceful enjoyment of
possessions, as provided in the first sentence of the first paragraph
of Article 1 of Protocol No. 1 (see, among many other authorities,
Burdov v. Russia, no. 59498/00, § 40, ECHR
2002-III).
For
the reasons set out above in respect of Article 6, the Court
considers that the said interference was not justified in the
specific circumstances of the present case. There has, accordingly,
been a separate violation of Article 1 of Protocol No. 1.
IV. 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
The
Court points out that under Rule 60 of the Rules of Court any claim
for just satisfaction must be itemised and submitted in writing,
together with the relevant supporting documents, failing which the
Court may reject the claim in whole or in part.
1. Pecuniary damage
The
applicants requested that the State be ordered to pay, from its own
funds, the sums awarded by the final judgments rendered in their
favour.
The
Government maintained that the State should not bear responsibility
for the debts of a socially-owned company.
The
Court reaffirms its rejection of this preliminary objection (see
paragraphs 92-99 above) and, for same reasons, rejects this argument
under Article 41.
Having
regard to the violations found in the present case and its own
jurisprudence (see, mutatis mutandis, Mykhaylenky and
Others v. Ukraine, cited above, §§ 67-70), the
Court considers that the applicants' claims must be accepted. The
Government shall, therefore, pay in respect of each applicant the
sums awarded in the said final judgments (see paragraphs 10, 14, 18,
22, 26 and 30 above).
2. Non-pecuniary damage
The
applicants claimed EUR 5,000 each for the non-pecuniary damage
suffered as a result of the impugned non-enforcement.
The
Government contested these claims.
The
Court takes the view that the applicants have suffered some
non-pecuniary damage as a result of the violations found which cannot
be made good by the Court's mere finding of a violation. The
particular amounts claimed, however, are excessive. Making its
assessment on an equitable basis, as required by Article 41 of the
Convention, the Court makes the following awards depending on the
length of the periods of non-enforcement in each case, which varied
from approximately two years and four months to three years and eight
months:
i. the
first applicant: EUR 1,600;
ii. the
second applicant: EUR 1,000;
iii. the
third applicant: EUR 800;
iv. the
fourth applicant: EUR 1,000;
v. the
fifth applicant: EUR 1,600; and
vi. the
sixth applicant: EUR 1,000.
B. Costs and expenses
Each
applicant also claimed the costs and expenses incurred in the
domestic civil proceedings (as recognised in the final judgments
rendered in their favour), an unspecified amount for the costs
incurred in the subsequent insolvency procedure, as well as EUR 919
each for those incurred in the course of their “Strasbourg
case”.
The
Government contested these claims.
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 were
also reasonable as to their quantum (see, for example, Iatridis v.
Greece (just satisfaction) [GC], no. 31107/96, § 54,
ECHR 2000-XI).
Regard
being had to the information in its possession and the above
criteria, the Court considers it reasonable to award each applicant
the sum of EUR 300 for the costs and expenses incurred in the
proceedings before this Court.
As
regards the costs and expenses incurred domestically, the Court notes
that those concerning the civil proceedings are an integral part of
the applicants' pecuniary claims which have already been dealt with
above.
Finally,
the Court finds that the costs and expenses allegedly incurred in
connection with the subsequent insolvency proceedings are
unsubstantiated and do not, as such, merit recovery.
C. Default interest
The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
Decides to join the applications;
Declares the applications admissible;
Holds that there has been a violation of Article
6 § 1 of the Convention;
Holds that there has also been a violation of
Article 1 of Protocol No. 1;
Holds
(a) that
the respondent State shall, from its own funds and within three
months as of the date on which this judgment becomes final, in
accordance with Article 44 § 2 of the Convention,
pay in respect of each applicant the sums awarded in the final
domestic judgments rendered in their favour;
(b) that
the respondent State is to pay each applicant, within the same
period, the following amounts:
(i) to
the first applicant, EUR 1,600 (one thousand six hundred euros) for
non-pecuniary damage and EUR 300 (three hundred euros) for costs and
expenses;
(ii) to
the second applicant, EUR 1,000 (one thousand euros) for
non-pecuniary damage, and EUR 300 (three hundred euros) for
costs and expenses;
(iii) to
the third applicant, EUR 800 (eight hundred euros) for non-pecuniary
damage and EUR 300 (three hundred euros) for costs and expenses;
(iv) to
the fourth applicant, EUR 1,000 (one thousand euros) for
non-pecuniary damage and EUR 300 (three hundred euros) for costs
and expenses;
(v) to
the fifth applicant, EUR 1,600 (one thousand six hundred euros) for
non-pecuniary damage and EUR 300 (three hundred euros) for costs and
expenses;
(vi) to
the sixth applicant, EUR 1,000 (one thousand euros) for
non-pecuniary damage and EUR 300 (three hundred euros) for costs and
expenses;
(c) that
the above amounts shall be converted into the national currency of
the respondent State at the rate applicable at the date of
settlement, plus any tax that may be chargeable;
(d) 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;
Dismisses the remainder of the applicants' claim
for just satisfaction.
Done in English, and notified in writing on 15 January 2008, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Sally Dollé Françoise
Tulkens
Registrar President
