CASE OF DACIA S.R.L. v. MOLDOVA
(Application no. 3052/04)
24 February 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 Dacia S.R.L. v. Moldova,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
Mihai Poalelungi, judges,
and Lawrence Early, Section Registrar,
Having deliberated in private on 3 February 2009,
Delivers the following judgment, which was adopted on that date:
I. THE CIRCUMSTANCES OF THE CASE
1. The events prior to the adoption of the principal judgment
2. Events after the adoption of the principal judgment
The valuation submitted by the applicant company on 26 November 2008 was prepared by an expert with 30 years' experience in intellectual property and business valuation and comprised 65 pages and a number of annexes. The final value of the hotel (MDL 98,700,000, approximately EUR 7,612,000) was calculated by using three separate methods of valuation.
On 26 November 2008 the Government asked for an extension until 2 December 2008 of the time-limit for submitting their valuation. However, they did not submit any observations by that date. They sent a “preliminary report” on 5 December 2008 on the value of the Dacia hotel. According to that “preliminary report”, made on 1 December 2008, the hotel was worth MDL 29,124,000 (EUR 2,219,191). The “preliminary report” included five pages, three of which were copies of licences held by the valuer, one page listed the “conditions and disclaimers” concerning the limits of the valuer's liability and another described the name and address of the Dacia hotel and the amount at which it had been valued. No calculations were included. At the date adoption of its judgment, the Court had not received the final report of the valuer hired by the Government.
II. RELEVANT DOMESTIC LAW
“(1) Default interest is payable for delayed execution of pecuniary obligations. Default interest shall be 5% above the interest rate provided for in Article 585 [National Bank of Moldova refinancing interest rate] unless the law or the contract provides otherwise. Proof that less damage has been incurred shall be admissible.
(2) In non consumer-related situations default interest shall be 9% above the interest rate provided for in Article 585 unless the law or the contract provides otherwise. Proof that less damage has been incurred shall be inadmissible.”
“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
1. The applicant company's submissions
(a) The court fees paid in 2003 and 2005 in defending the case against the annulment of the privatisation (a total of EUR 35,096.61, plus default interest, see paragraph 22 above, of EUR 58,469.16). In its observations of 29 July 2008 the applicant company submitted copies of documents confirming the payment of these court fees. It also submitted a copy of the Supreme Court of Justice's decision dated 10 May 2004, not enforced to date, ordering the return of MDL 50,000 paid in court fees.
(b) The money found in the hotel cashier's desk on the day when the State took over the hotel (a total of EUR 12,460.82), plus default interest (EUR 16,335.67).
(c) Default interest for the delay in transferring to the applicant company MDL 20,150,000 as ordered in the judgment of 6 June 2003, taking into account that the sum eventually transferred to the applicant company was reduced by MDL 350,000.60 on account of court fees which it had been ordered to pay (interest amounting to EUR 278,724.94). Since in their observations of 1 July 2008 the Government considered that interest for this delay in payment amounted to EUR 347,821, the applicant company also relied on this amount in its latest observations.
(d) Lost profit for the entire period during which the applicant company could not operate its hotel (EUR 693,010). In support of this claim, the applicant company relied on its tax returns for 1999-2003, during which it generated net profits of a total of MDL 9,564,250, or an average monthly net profit of MDL 180,457 (EUR 11,755 at the date of filing the applicant company's observations). The applicant company emphasised that it had not based its estimation on the last two years of its activity, during each of which it had more than doubled its net revenue, but relied on the overall performance during its entire period of operation. It also noted that it had excluded from its calculations the additional revenue which had been re-invested in the refurbishing and modernisation of the hotel. In response to the Government's submission that the calculation of lost profits was speculative since it was subject to unpredictable circumstances (see paragraph 31 below), the applicant company stated that there was a very reliable manner of determining the loss of profit, by examining the actual profits obtained by the State from operating the hotel since August 2003. The hotel apparently operated normally since 2003, was not the object of any bankruptcy proceedings and nothing indicated that it generated losses rather than profits. Since the applicant company's experts were not allowed to examine the hotel's documents, the Government alone, as owner of the hotel, could submit evidence helping the Court to determine the loss of profit more precisely. Since the Government had failed to do so, their argument that the manner of calculating the applicant company's lost profits had been speculative should not be allowed.
2. The Government's submissions
3. The Court's assessment
(a) Applicable principles
Account should be taken, however, of the sums paid back to the applicant company, which would be unjustly enriched were the Court to ignore these (compare Scordino v. Italy (no. 3) (just satisfaction), cited above, § 38).
(b) The value of the hotel
For these reasons, the Court is of the opinion that it should proceed with the case notwithstanding the fact that the proceedings are still pending at the domestic level.
(c) The applicant company's lost profits
(d) Court fees and money taken from the cashier's desk
(e) Default interest (the sum of MDL 20,150,000)
B. Non-pecuniary damage
C. Costs and expenses
D. Default interest
FOR THESE REASONS, THE COURT UNANIMOUSLY
(a) that the respondent State is to return to the applicant company, within three months from the date on which the judgment becomes final, in accordance with Article 44 § 2 of the Convention, the Dacia hotel and its equipment, together with the underlying land, plus any tax that may be chargeable, against simultaneous payment by the applicant company to the Government of the sum of EUR 374,299 (three hundred and seventy four thousand two hundred and ninety nine euros), to be converted into the national currency of the respondent State at the rate applicable at the date of such payment;
(b) that, failing restitution of the hotel as set out under (a) above, the respondent State is to pay the applicant company, within the same period of three months as that referred to under (a) above, EUR 7,237,700 (seven million two hundred and thirty seven thousand seven hundred euros) for pecuniary damage, 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;
(c) that the respondent State is to pay the applicant company, within the same three-month period as that referred to under (a) above, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:
(i) EUR 25,000 (twenty-five thousand euros) in respect of non-pecuniary damage;
(ii) EUR 6,000 (six thousand euros) in respect of costs and expenses;
(iii) any tax that may be chargeable on the above amounts;
(d) that from the expiry of the three-month period mentioned under (a) above and 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;
Done in English, and notified in writing on 24 February 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza