European Court of Human Rights

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URL: http://www.bailii.org/eu/cases/ECHR/2009/1721.html
Cite as: [2009] ECHR 1721

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SECOND SECTION

FINAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 109/04
by POWERACT INDUSTRIES
against Turkey

The European Court of Human Rights (Second Section), sitting on 6 October 2009 as a Chamber composed of:

Françoise Tulkens, President,
Ireneu Cabral Barreto,
Danutė Jočienė,
András Sajó,
Nona Tsotsoria,
Işıl Karakaş,
Kristina Pardalos, judges,

and Françoise Elens-Passos, Deputy Section Registrar,

Having regard to the above application lodged on 28 October 2003,

Having regard to the partial decision of 4 November 2008,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicant company, Poweract Industries, is a private company based in Hong Kong. It was represented before the Court by Mr S. Tepe, a lawyer practising in Mersin. The Turkish Government (“the Government”) were represented by their Agent.

I. Facts as submitted by the applicant company

1. X was a Turkish private company and owed the applicant company for 17,000 telephones which it had imported. Upon their arrival at customs on 16 November 2000, the telephones were registered as the property of X. On an unspecified date the owners of X disappeared without making any payment either to the Customs Office for the company’s outstanding customs duty or to the applicant company for the telephones.

2. On 24 January 2001 and 23 January 2002 respectively both the Customs Office and the applicant company initiated sequestration proceedings against X. The applicant company also requested a forced sale of the telephones in order to recuperate its losses.

3. On 13 March 2002 the applicant company paid the required charges to participate in a bidding process at the auction held by the Mersin Enforcement Directorate (İcra Müdürlüğü). There were no other participants and the applicant company’s bid for the telephones was accepted.

4. On 26 April 2002 the applicant company requested delivery of the telephones without paying the sum it had bid in the forced sale with a view to deducting this sum from X’s outstanding debt. The Mersin Enforcement Directorate refused delivery on the ground that the Customs Office had instituted sequestration proceedings against X because of non-payment of the outstanding customs duty and that a request had been made for the annulment of the sale and delivery of the telephones.

5. On 2 May 2002 the applicant company lodged a complaint with the Office of the Mersin Enforcement Judge (İcra Tetkik Mercii Hakimliği) against X and requested the annulment of the Mersin Enforcement Directorate’s decision.

6. On 7 May 2002 the Office of the Mersin Enforcement Judge acknowledged that the applicant company had participated in the bidding process with the intention of not paying the bidding amount and subsequently deducting it from X’s outstanding debt. It further held that the law did not provide for the annulment of a sale after a bidding process and that, according to the relevant provisions, customs duty deriving from the goods themselves took precedence over other claims. While ordering the telephones to be delivered to the applicant company, the domestic court also indicated that the Customs Office could request from the Mersin Enforcement Directorate that a priority list (sıra cetveli) be drawn up and its claim for customs duty be given priority over any other personal claim.

7. It appears from the applicant company’s submissions that it did not pay the amount it had bid for the telephones at any stage of the proceedings and, on an unspecified date, the telephones were sold to a third company.

II. Facts submitted by the Government after the communication of the application

8. Following the decision delivered on 7 May 2002 by the Office of the Mersin Enforcement Judge, the Customs Office requested the Mersin Enforcement Directorate to make a priority list of creditors as noted in the decision. The Mersin Enforcement Directorate rejected this request on 26 June 2002.

9. On 2 July 2002 the Customs Office lodged a complaint with the Office of the Mersin Enforcement Judge and requested the annulment of the Mersin Enforcement Directorate’s decision. The Customs Office relied on the relevant domestic law and stated that, due to the outstanding customs duty, the revenue made from the forced sale of the telephones in the bidding process had to be distributed in accordance with a creditors’ priority list.

10. On 15 July 2002 the Office of the Mersin Enforcement Judge accepted the complaint and held that, according to the relevant provisions of the Code on Execution and Bankruptcy, additional sequestration proceedings must be instituted and a creditors’ priority list must be drawn up where the revenue from the sale of certain goods in a bidding process does not fully cover the existing debts. In the instant case the fact that the applicant company had bought the telephones in the forced sale did not prevent such a priority list from being drawn up afterwards.

11. The applicant company appealed and on 12 December 2002 the Court of Cassation upheld the decision, which was deposited with the Office of the Mersin Enforcement Judge on 20 December 2002.

Relevant domestic law and practice

Article 140 of the Enforcement and Bankruptcy Act (Law no. 2004) provides that a creditors’ priority list must be drawn up where revenue from a forced sale cannot fully cover existing debts. According to Article 142, parties can object to that list. Article 206 provides that the State is given priority to pursue its claim where the claim concerns taxes, such as customs duty, deriving from the goods themselves. Former Article 118, in force at the material time, provided that goods sold in a bidding process were to be delivered upon payment. A new bidding process is held if the buyer does not pay the sum bid during the previous process.

Although it is not expressly mentioned in the Enforcement and Bankruptcy Act, according to general practice and jurisprudence, a claimant who is the sole participant in a forced sale may, for practical purposes, choose not to pay the sum he or she bid during the bidding process but may request delivery of the goods if that individual’s prior claim against the purported current owner of the goods exceeds the bid. However, this is not possible where there are other claimants who had previously instituted sequestration proceedings against the debtor or where there is outstanding tax due on the auctioned goods. In that case, a creditors’ priority list is drawn up and the claimant who placed the bid during the bidding process must produce the money so that it can be distributed according to the priority list.

COMPLAINT

The applicant company complained under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 that the non-enforcement of the decision delivered on 7 May 2002 by the Office of the Mersin Enforcement Judge had violated its right to the peaceful enjoyment of its possessions.

THE LAW

The Government rejected this allegation and submitted that the decision of 7 May 2002 relied on by the applicant company had not been the final one concerning the dispute over the telephones. The Government claimed that the applicant company had attempted to mislead the Court by only submitting facts in its favour.

The applicant company did not make any comments on the Government’s submissions about the subsequent judicial developments. While reiterating its previous complaint, the applicant company also claimed that X had never become the lawful owner of the telephones as it had not paid for them. Therefore the non-delivery of the telephones, which had always belonged to the applicant company, had violated its right to the peaceful enjoyment of its possessions.

Concerning the applicant company’s complaint, mentioned in paragraph 2 above, the Court notes that it is not a matter of dispute between the parties that, upon their arrival at customs, the telephones were registered as the property of X. The Court observes that at no point before the domestic proceedings did the applicant company challenge the ownership of the telephones by X or claim that it was still their rightful owner. On the contrary, it acted in a manner which acknowledged X’s ownership. In this connection the Court observes that the applicant company instituted sequestration proceedings against X, requested the forced sale of the telephones at an auction and even participated in the bidding process, placing a bid to buy the telephones. Moreover, the applicant company did not provide the Court with any details of the sales contract, which would have given an indication about the time of transfer of ownership.

The Court observes that under Article 35 § 1 of the Convention, it “may only deal with [a] matter after all domestic remedies have been exhausted ... and within a period of six months from the date on which the final decision was taken”. In light of the above, the Court finds that the applicant company did not exhaust the domestic remedies available to it, as it failed to institute any proceedings, either against X or against the Customs Office at the national level, claiming ownership of the telephones. Assuming that there were no domestic remedies available to the applicant company in respect of this matter, the Court is nonetheless unable to consider this complaint since this part of the applicant company’s complaint relates to the registration of the telephones as the property of X on 16 November 2000, which occurred more than six months before the application was lodged with the Court on 28 October 2003.

It follows that this part of the complaint is inadmissible for non-compliance with the six-month rule set out in Article 35 § 1 of the Convention and must be rejected pursuant to Article 35 § 4.

As to the applicant company’s complaint about the non-enforcement of the judicial decision of 7 May 2002, and hence the non-delivery of the telephones, the Court notes that the applicant company requested delivery of the telephones without paying the amount it had bid for them. However, the domestic law required the applicant company to pay this amount in order to render the judicial decision enforceable. The applicant company failed to inform the Court of this essential element.

According to the relevant law and practice, had the applicant company paid the amount it had bid in the forced sale, the Customs Office could have collected the outstanding duty and then the Enforcement Directorate could have delivered the telephones to the applicant company. Yet the applicant company did not make this payment and it seems the telephones were consequently sold to a third company, possibly at another auction.

In these circumstances, the Court holds that the State cannot be held responsible for the non-enforcement of the impugned decision since that decision was unenforceable due to the non-compliance of the applicant company with formal requirements. In any event the applicant company complains about a situation which it has itself helped to bring about. It cannot therefore claim to be the victim of a violation within the meaning of Article 34 of the Convention (see, mutatis mutandis, Olivier Dupuis v. Belgium (dec.), no. 12717/87, D.R. no. 57, p 196).

It follows that this complaint is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court unanimously

Declares the remainder of the application inadmissible.

Françoise Elens-Passos Françoise Tulkens
Deputy Registrar President