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DESERVIRE S.R.L. v. MOLDOVA - 17328/04 [2009] ECHR 1457 (6 October 2009)
URL: http://www.bailii.org/eu/cases/ECHR/2009/1457.html
Cite as:
[2009] ECHR 1457
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FOURTH
SECTION
CASE OF
DESERVIRE S.R.L. v. MOLDOVA
(Application
no. 17328/04)
JUDGMENT
STRASBOURG
6 October
2009
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 Deservire S.R.L. v. Moldova,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas
Bratza,
President,
Lech
Garlicki,
Giovanni
Bonello,
Ljiljana
Mijović,
Ján
Šikuta,
Mihai
Poalelungi,
Nebojša
Vučinić,
judges,
and
Fatoş Aracı, Deputy
Section Registrar,
Having
deliberated in private on 15 September 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in an application (no. 17328/04) against the Republic
of Moldova lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a company registered in Moldova, Deservire SRL
(“the applicant company”), on 2 April 2004.
The
applicant company was represented by Mr V. Nagacevschi from Lawyers
for Human Rights, a non-governmental organisation based in Chişinău.
The Moldovan Government (“the Government”) were
represented by their Agent, Mr V. Grosu.
The
applicant company alleged, in particular, that the proceedings in its
case had been excessively long, that the courts had not given
sufficient reasons for their judgments, and that no effective
remedies existed to speed up the proceedings.
On
6 November 2007 the President of the Fourth Section decided to give
notice of the application to the Government. It was also decided to
examine the merits of the application at the same time as its
admissibility (Article 29 § 3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The facts of the case, as submitted by the parties, may
be summarised as follows.
1. The creation of the applicant company and the
original proceedings concerning its assets
On
13 October 1992 the local authorities of Briceni decided to split the
State-owned Regional Association for Production and Services (“the
Association”) into two companies, one of which was the
applicant company. On 28 December 1992 the applicant company was
officially registered with the authorities as a private company and
was subsequently assigned certain assets belonging to the
Association.
The
applicant company operated until 3 December 1993, when the local
authorities sealed its premises in order to recover State property
allegedly held by it. On 16 December 1993 the local authorities
decided to create a State-owned company (“the State company”)
with a similar name to that of the applicant company and to transfer
to it the Association's assets which had been assigned to the
applicant company in 1992.
The
applicant company claimed that its own property had been seized on 3
December 1993 together with the property that had formerly belonged
to the Association and had been assigned to it in 1992. It also
claimed that it had paid for the property assigned to it in 1992 and
that therefore the seizure of 3 December 1993 had been unlawful. When
the State company refused to return the seized assets, the applicant
company initiated court proceedings.
On
12 May 1994 the Briceni District Court allowed the applicant
company's claims. On 1 June 1994 the Supreme Court of Justice quashed
that judgment and ordered a full rehearing of the case.
On
15 February 1995 the Briceni District Court discontinued the
proceedings on the ground that the arbitration courts were competent
to examine such cases. On 22 March 1995 the Supreme Court of Justice
upheld that decision.
On
an unknown date in 1995 the applicant company initiated proceedings
before the Arbitration Court. On 27 November 1995 the Arbitration
Court partly allowed the applicant company's claims. On the same day
the court issued an enforcement order, which was amended on
19 December 1995.
On
5 February 1996 the enforcement of the decision of 27 November
1995 was suspended pending an appeal before the Supreme Court of
Justice.
On
2 July 1996 the decision of 27 November 1995 was amended by the
Arbitration Court, reducing the amount awarded to the applicant
company.
On 1 July 1997 the Arbitration Court of the Republic
of Moldova annulled all the previous judgments and ordered a full
rehearing of the case.
On
26 September 1997 the Chişinău Arbitration Court partly
allowed the applicant company's claims.
On 14 November 1997 the applicant company complained
to various authorities, including the Supreme Council of the
Judiciary, of unnecessary delays in the proceedings. The complaints
were forwarded to the court examining the case.
On 16 January 1998 the Appeals Chamber of the
Arbitration Court of Moldova quashed the judgment of 26 September
1997 and ordered a full rehearing of the case.
On
23 March 1998 the Chişinău Arbitration Court partly allowed
the applicant company's claims. On the same day the court issued an
enforcement order. No appeal was lodged and the judgment became final
fifteen days later.
2. Annulment of the final court judgment and the
subsequent proceedings
On 4 May 1998 the Prosecutor General's Office lodged
an application for annulment of the final judgment
and asked the Supreme Court of Justice
to reopen the proceedings. On 3 June 1998 the Supreme
Court of Justice allowed the request and quashed the final judgment
of 23 March 1998, ordering a full rehearing of the case.
The Chişinău Arbitration Court scheduled
some thirty-one court hearings in the months that followed, almost
all of which resulted in decisions to adjourn the proceedings and
summon the parties for another date, because more evidence was
necessary, or one of the parties was absent, or because a connected
set of proceedings to determine who should represent the State
company was in progress. This period lasted from 23 September
1998 until 25 March 1999.
During one of the hearings, on 8 October 1999, the
court noted that there was a disagreement between the parties as to
the correct valuation of the disputed property and concluded that an
expert valuation was necessary. It therefore suspended the
proceedings and ordered an expert report on the companies' accounts,
to be paid for by the applicant company. The report, dated 18 May
2000, confirmed that the State company owed the applicant company
778,877 Moldovan lei (MDL). According to the Government, the report
was submitted to the court on 21 July 2000.
On 15 December 2000 the applicant company sought leave
to pay the court fees by instalments, referring to its poor financial
state. The Court accepted the request, noting, inter alia,
that the proceedings had started in 1995, that the case had been
sent for a fresh examination and that the examination of the case had
already lasted for a long time.
On
19 November 2002 the Chişinău Arbitration Court partly
allowed the applicant company's claims.
On
12 February 2003 the Supreme Court of Justice decided to assign the
case to the Chişinău Court of Appeal in view of the fact
that all the judges of the Appeals Chamber of the Economic Court had
already examined the case earlier.
On
3 June 2003 the Chişinău Court of Appeal upheld the
judgment of 19 November 2002.
On
23 October 2003 the Supreme Court of Justice quashed the lower
courts' judgments and adopted a new one, rejecting all the applicant
company's claims as unfounded. It found, in particular, that it had
not been proved with sufficient certainty that the applicant company
had acquired any property of its own in addition to the property
which had been assigned to it in 1992 and which it had had to return
to the State company. Several items which the applicant company had
proved to be its own property had been returned by the State company
or compensation had been paid. The creation of the applicant company,
with State property but in private ownership, had been contrary to
the law, and a number of its claims concerning its financial dealings
with the State company could not be verified because the original
documents had been destroyed after the expiry of the relevant
time-limits for keeping them. The judgment of the Supreme Court of
Justice was final.
On 28 March 2008 the Appeals Chamber of the Economic
Court of Moldova decided to put the applicant company into
liquidation for non-payment of debts.
THE LAW
The
applicant company complained under Article 6 § 1 of the
Convention of the excessive length of the proceedings, the quashing
of the final judgment of 23 March 1998, and the insufficient reasons
in the judgment adopted by the Supreme Court of Justice on 23 October
2003.
The
relevant part of Article 6 reads as follows:
“In the determination of his civil rights and
obligations ... everyone is entitled to a fair ... hearing within a
reasonable time... by [a] ... tribunal ...”
The
applicant company also complained under Article 1 of Protocol No.
1 to the Convention of the loss of its property as a result of the
judgments adopted by the domestic courts. Article 1 of Protocol No. 1
to the Convention 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.”
Finally,
it complained that it did not have any effective remedies in respect
of its complaint regarding the length of the proceedings, contrary to
Article 13 of the Convention. Article 13 reads as follows:
“Everyone whose rights and freedoms as set forth
in [the] Convention are violated shall have an effective remedy
before a national authority notwithstanding that the violation has
been committed by persons acting in an official capacity.”
I. ADMISSIBILITY
In
its initial application, the applicant company had complained under
Article 6 § 1 of the Convention of the quashing of a final
judgment in its favour. However, in its observations on the
admissibility and merits, it asked the Court not to proceed with the
examination of this complaint. The Court therefore finds no reason to
examine it.
The
Court has examined the applicant company's complaints under Article 6
§ 1 of the Convention, concerning the insufficient reasons given
by the Supreme Court of Justice, and under Article 1 of Protocol No.
1 to the Convention, concerning the loss of property. However, having
regard to all the material in its possession, it finds that these
complaints do not disclose any 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 being
manifestly ill-founded, pursuant to Article 35 §§ 3 and 4
of the Convention.
The
Court considers that the applicant company's complaint under
Article 6 § 1 of the Convention (concerning the length of
the proceedings) and the complaint under Article 13 of the Convention
raise questions of fact and law which are sufficiently serious that
their determination should depend on an examination of the merits,
and that no grounds for declaring them inadmissible have been
established. The Court therefore declares these complaints
admissible. In accordance with its decision to apply Article 29
§ 3 of the Convention (see paragraph 4 above), the Court
will immediately consider the merits of these complaints.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
The applicant company complained that the proceedings
in its case, which had lasted for over nine years, six of which fell
within the Court's jurisdiction ratione temporis, had been
excessively long. It added that the case was not very complex,
involving only two parties, and that there had been only one
necessary delay - the nine months needed for the expert to assess the
value of the relevant property. Moreover, there were unexplained
decisions by the courts to adjourn proceedings for two to four
months, and other unexplained delays, such as the three-month delay
between the court's granting of the State company's request of 12
March 2001 to hear an expert and the hearing of that expert on 6 June
2001. The court made two other three-month adjournments at the State
company's request, on 16 July 2001 and 18 July 2002. It took the
court more than four months to begin the examination of the State
company's appeal of 4 December 2002, and almost four months passed
before the Supreme Court of Justice began its examination of the
appeal in cassation lodged by the State company on 18 June 2003.
The applicant company also referred to the annulment of a final
judgment in the present case by the Supreme Court of Justice on
3 June 1998.
The
Government submitted that the length of the proceedings should be
calculated from the date on which Moldova ratified the Convention,
that is, 12 September 1997. They considered that the proceedings were
rather complex, requiring expert reports and several re-examinations
of the case. Moreover, the proceedings had taken place against the
background of Moldova's emergence as an independent State, and an
evolving legal order based on new values, which required time to
settle.
According
to the Government, the applicant company had requested the
adjournment of the case on seventeen separate occasions, and the
resulting delays had amounted to two years. On eight other occasions
the State company had not been present, which the applicant company
had considered to be an obstacle to the court's examination of the
case. This had resulted in another nine-month delay, for which the
applicant company had been responsible, in addition to another
adjournment for the examination of a challenge to a judge. Another
ten adjournments had been requested by the defendant or ordered by
the courts in order to obtain additional evidence. The Government
thus submitted that the delays in the proceedings had been reasonable
given the complexity of the case and that the applicant company had
been responsible for a significant number of those delays.
The
Court reiterates that the reasonableness of the length of proceedings
must be assessed in the light of the circumstances of the case and
with reference to the following criteria: the complexity of the case,
the conduct of the applicant and the relevant authorities and what
was at stake for the applicant in the dispute (see, among many other
authorities, Frydlender v. France [GC], no. 30979/96, §
43, ECHR 2000-VII, and Cravcenco v. Moldova, no. 13012/02, §
44, 15 January 2008).
The
Court agrees with the parties that the period to be taken into
consideration in the present case started on 12 September 1997. The
resulting period therefore amounts to six years and forty-one days.
1. Complexity of the case
The
Court notes that the domestic courts considered it necessary to order
an expert report on the value of the disputed property, which
suggests a certain degree of complexity. However, such complexity
cannot, in itself, explain the total length of the proceedings,
particularly in the light of the fact that the expert took nine
months to complete the report and no further time-consuming
procedural actions appear to have taken place.
2. The applicant company's conduct
The
Court notes the Government's submission that the applicant company
was responsible for almost three years of the total delay in the
proceedings. It also notes that this includes the nine months it took
the expert to prepare his report. The Court observes that the
domestic court had noted a disagreement between the parties as to the
correct valuation of the disputed property and ordered the expert
report accordingly (see paragraph 21 above). The Court cannot,
in such circumstances, accept that the delay was due to the applicant
company, since it was the court which considered the report necessary
in order to resolve a disagreement on a point on which the court
lacked the necessary technical competence (valuation of property).
Moreover, the Supreme Court of Justice eventually chose not to follow
the findings of that report in its final judgment, which would
suggest that the lower courts' request for such a report may not have
been necessary.
From
the materials submitted by the parties the Court finds that the
applicant company is responsible for delays totalling approximately
ten months, most of which were spent gathering additional evidence,
calling for experts, or challenging in court evidence adduced by the
other party in the form of administrative decisions. This represents
a good faith exercise of procedural rights by the applicant company.
The
Court also notes the Government's argument that the applicant company
considered it impossible for the case to be examined in the absence
of the State company's representative, and that any resulting delays
could also be attributed to the applicant company. However, the Court
considers that it is first for the domestic courts to decide whether
or not to adjourn proceedings, and they can do so regardless of the
position of any of the parties to the proceedings. At the same time,
had the applicant company asked the courts to proceed in the absence
of the defendant, it risked seeing the case sent back for a re-trial
because examination in the absence of the parties was a formal ground
for re-trial. Finally, the applicant company cannot be considered to
have been complacent or indifferent as to the length of the
proceedings, since it made an appropriate complaint (see paragraph 16
above).
The
Court considers that even though the applicant company is responsible
for delays of approximately ten months as a result of using its
procedural rights, this cannot explain the overall length of the
proceedings.
3. Conduct of the authorities
As
to the conduct of the judicial authorities, the Court reiterates that
it is for the Contracting States to organise their legal systems in
such a way that their courts can guarantee to everyone the right to a
final decision within a reasonable time in the determination of his
or her civil rights and obligations (see Frydlender v. France
[GC], no. 30979/96, § 45, ECHR 2000-VII). The manner in
which a State provides for mechanisms to comply with this requirement
– whether by way of increasing the numbers of judges, or by
automatic time-limits and directions, or by some other method –
is for the State to decide. If a State lets proceedings continue
beyond the “reasonable time” prescribed by Article 6 of
the Convention without doing anything to advance them, it will be
responsible for the resultant delay (see Price and Lowe v. the
United Kingdom, nos. 43185/98 and 43186/98, § 23, 29 July
2003).
The
Court notes that while numerous hearings were scheduled in the
present case, many of them had to be postponed, usually for a
one-month period. Some hearings were postponed for three or even four
months, without any explanation (see the applicant company's
submissions concerning some of those postponements in paragraph 34
above, and the Government's explanation that the courts had had a
heavy workload).
The Court further notes that the protracted length of
the proceedings was also due to the re-examination of the case. It
observes that, whilst the case cannot be said to involve issues of
any particular complexity apart from the valuation of the disputed
property, it was considered by the courts on three occasions (see
paragraphs 14, 17 and 19 above). Although the Court is not in a
position to analyse the quality of the case-law of the domestic
courts, it considers that, since the remittal of cases for
re-examination is usually ordered as a result of errors committed by
lower courts, the repetition of such orders within one set of
proceedings discloses a serious deficiency in the judicial system
(see, for instance, Wierciszewska v. Poland, no.
41431/98, § 46, 25 November 2003; Pavlyulynets v. Ukraine,
no. 70767/01, § 51, 6 September 2005; and Cravcenco,
cited above, § 50).
The
Court also notes that the case was once decided by a final court
judgment on 23 March 1998. The proceedings were subsequently
re-opened (see paragraph 19 above) through an extraordinary procedure
of a type that is in itself contrary to Article 6 of the Convention
(see, for instance, Brumărescu v. Romania [GC],
no. 28342/95, § 65, ECHR 1999 VII and Roşca v.
Moldova, no. 6267/02, § 29, 22 March 2005). The
applicant company lodged its complaint in this respect outside the
six-month period established in Article 35 of the Convention.
However, it remains true that, following the reopening of a final
court judgment, the judicial authorities need to take particular care
to ensure a swift conclusion to the reopened proceedings. The Court
assumes that since a final judgment was adopted in the case, the
factual and legal issues had largely been resolved. Unless new
important facts are discovered and form the ground for the reopening,
the courts do not have difficult issues to examine in any reopened
proceedings. However, in the present case, most of the delays
occurred after the quashing of the final judgment.
Finally,
the Court notes that the domestic courts were aware that the
proceedings had been protracted, and even mentioned that in their
decisions (see paragraph 22 above). Nonetheless, it took the Chişinău
Arbitration Court almost two years to adopt a judgment in the case,
even after acknowledging the excessive length of the proceedings.
4. Conclusion
The Court considers that the present case was not very
complex and that the applicant company was responsible for only a
relatively small number of the delays. Some of the delays which had
been expressly acknowledged by the judicial authorities remained
unexplained. Moreover, after the case was resolved by a final court
judgment, its reopening called for a swift determination of the
outstanding issues, rather than a lengthy fresh examination. In the
light of the above, the Court concludes that the requirement of a
“reasonable time” laid down in Article 6 § 1 of the
Convention was not complied with in the present case. There has
therefore been a breach of that provision.
III. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
The
applicant company complained of a lack of effective remedies in
respect of its complaint concerning the length of the proceedings.
The
Government considered that the applicant company had not submitted
sufficient arguments in respect of this complaint and asked the Court
to reject it, given also that no violation of its rights under
Article 6 of the Convention had taken place. They also referred to
the power of the higher courts to verify compliance with the
reasonable-time requirement, as expressly provided for in Article 192
of the Code of Civil Procedure (as cited in Boboc v. Moldova,
no. 27581/04, § 17, 4 November 2008).
The
Court observes that the applicant company's complaint regarding the
excessive length of the proceedings contrary to Article 6 of the
Convention was undoubtedly an arguable one (see paragraph 49 above).
The applicant company was therefore entitled to an effective domestic
remedy within the meaning of Article 13. Accordingly, the Court
will examine whether such a remedy was available to the applicant
company.
The
Court notes the Government's argument concerning the remedies
available to the applicant company under the domestic law. However,
it observes that it has already rejected a similar argument in Boboc
(cited above, § 41). It finds, in particular, that the applicant
company complained to various authorities, including the Supreme
Council of the Judiciary (see paragraph 16 above), and that a court
had expressly noted the excessive length of the proceedings (see
paragraph 22 above) without however accelerating the proceedings or
awarding any compensation. The Court therefore finds that the
applicant company did not have at its disposal effective remedies in
respect of its complaint about the length of the proceedings.
There
has, accordingly, been a violation of Article 13 taken in conjunction
with Article 6 § 1 of the Convention.
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. Pecuniary damage
The applicant company claimed 85,301 euros (EUR) for
pecuniary damage, which included the sums awarded by the first and
second-instance courts before the judgment of the Supreme Court of
Justice of 23 October 2003, and statutory interest.
The
Government challenged the applicant company's claims as unfounded and
excessive.
The
Court notes that it has found a violation of Article 6 of the
Convention in respect of the excessive length of the proceedings in
the applicant company's case and also a violation of Article 13 taken
in conjunction with Article 6. However, no other violation has been
found and since the domestic courts rejected all the applicant
company's claims as unfounded, it could not expect to obtain the sums
awarded by the judgments which were subsequently annulled, or any
late-payment interest.
The
Court considers that there is no causal link between the violations
it has found in the present case and the applicant company's claims
for compensation for pecuniary damage. This claim must therefore be
rejected.
B. Non-pecuniary damage
The
applicant company claimed EUR 20,000 for non-pecuniary damage,
claiming that its activities had been paralysed for many years, which
eventually led to the company's liquidation.
The
Government considered that there was no causal link between the
alleged violations and the claims under this head, which had,
moreover, not been substantiated by clear evidence.
The
Court considers that the applicant company's administration must have
been caused a certain level of stress and frustration as a result of
the excessive length of the proceedings, during which it was unclear
whether and to what extent the company would obtain compensation for
property which it claimed to own. Considering the above and the total
length of the proceedings, and deciding on an equitable basis, the
Court awards the applicant company EUR 600 for non-pecuniary damage.
C. Costs and expenses
The
applicant company claimed EUR 1,575 for legal costs and EUR 50 for
translation services.
The
Government disagreed and considered the amount claimed to be
exaggerated when compared to the fees charged at domestic level. They
also questioned the number of hours needed to prepare the
observations in this relatively simple case.
The
Court reiterates that in order for costs and expenses to be
reimbursed under Article 41, it must be established that they were
actually and necessarily incurred and were reasonable as to quantum
(see Croitoru v. Moldova, no. 18882/02, § 35,
20 July 2004).
In
the present case, regard being had to the relative lack of complexity
of the case and the issues involved, but also to the volume of the
materials which had to be dealt with, the Court awards the applicant
company EUR 1,000 for costs and expenses.
D. 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
Declares inadmissible the applicant company's
complaints under Article 6 § 1 (concerning reasons for
judgments) and Article 1 of Protocol No. 1 to the Convention, and the
remainder of the application admissible;
Holds that there has been a violation of
Article 6 § 1 of the Convention as regards the length of
the proceedings;
Holds that there has been a violation of
Article 13 taken in conjunction with Article 6 of the
Convention;
Holds
(a) that
the respondent State is to pay the applicant company, within three
months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention,
EUR 600 (six hundred euros) in respect of non-pecuniary damage and
EUR 1,000 (one thousand euros) for costs and expenses, to 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;
(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;
Dismisses the remainder of the applicant
company's claim for just satisfaction.
Done in English, and notified in writing on 6 October 2009, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Nicolas Bratza
Deputy Registrar President
