European Court of Human Rights

FIFTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 19108/04
by Todor Ivanov and Petranka Ruseva TODOROVI
against Bulgaria

The European Court of Human Rights (Fifth Section), sitting on 12 May 2009 as a Chamber composed of:

Peer Lorenzen, President,
Rait Maruste,
Karel Jungwiert,
Renate Jaeger,
Mark Villiger,
Mirjana Lazarova Trajkovska,
Zdravka Kalaydjieva, judges,
and Claudia Westerdiek, Section Registrar,

Having regard to the above application lodged on 5 May 2004,

Having deliberated, decides as follows:

THE FACTS

The applicants, Todor Ivanov Todorov and Petranka Ruseva Todorova, are Bulgarian nationals who were born in 1944 and 1948 respectively and live in Varna. They are represented before the Court by Mr M. Ekimdjiev and Mrs K. Boncheva, lawyers practising in Plovdiv.

A.  The circumstances of the case

The facts of the case, as submitted by the applicants, may be summarised as follows.

The applicants are spouses. In 1986 they bought from the Varna municipality a State-owned apartment, which had been managed by the company C.

On 7 January 1991 the applicants bought from the municipality an attic room in the same building for 4,034 old Bulgarian levs (“BGL”).

Apparently, following the legal reforms of the 1990s (see below, Relevant background facts, domestic law and practice), the company C. considered that it had become the owner of the attic room and on an unspecified date it granted the tenancy of the room to Mr and Mrs P.

In 1997 the applicants brought a rei vindicatio action against Mr and Mrs P. claiming the possession of the room.

In a judgment of 25 June 1998 the Varna District Court dismissed the claim. On 9 August 1999 the Varna Regional Court upheld the lower court’s judgment. It found, inter alia, that the sale contract of 7 January 1991 was null and void ab initio as it had not been signed by the mayor, as required by law, but by another official of the municipality. The applicants, thus, had not shown that they were the owners of the attic room.

In the meanwhile, on 30 April 1999 the company C. sold the attic room to Mr and Mrs P.

On 27 February 2001 the applicants brought an action against C. seeking back the price they had paid for the attic room in 1991, updated in accordance with the inflation indexes.

On 4 April 2002 the Varna Regional Court dismissed the claim finding that the 7 January 1991 sale contract had been found to be null and void in proceedings, which had not involved the company C.; it was not therefore bound by this founding of nullity.

Upon appeal by the applicants, on 16 January 2003 the Varna Court of Appeal reversed the judgment and held that the applicants were in principle entitled to recovery of the sum. It awarded them the amount they had paid for the attic in 1991, the equivalent of BGL 4,034. However, as a result of inflation and the depreciation of the Bulgarian currency after 1991, the sum amounted to approximately EUR 2.

In a final judgment of 18 March 2004 the Supreme Court of Cassation dismissed the applicants’ claim. It found that the action had been time-barred as the five-year time limit for seeking the recovery of what had been paid under a void contract started running from the day of payment, which in this case had been in 1991.

B.  Relevant background facts, domestic law and practice

1.  Recovery of sums under void contact and the effect of inflation

By section 55 (1) of the Obligations and Contracts Act, everyone who has paid a sum of money on a non-existent ground is entitled to seek its recovery. In a binding interpretative decision of 1979 the Supreme Court of Bulgaria (now Supreme Court of Cassation) held that the time-limit to bring such an action started running from the moment of payment (Interpretive Decision No. 1 of the Plenary of the Supreme Court of 28 May 1979, case No. 1/79).

In accordance with the Bulgarian courts’ established practice revalorisation of claims to reflect inflation and currency depreciation is not possible.

2.  Legal regulation on the assets of State enterprises

Until the beginning of the 1990s, all commercial assets were the property of the State and were only allocated to State enterprises for “use and management”. After the beginning of democratisation and economic change and the ensuing transformation of these enterprises into State-owned limited liability or joint stock companies, the transformed companies acquired ownership of real estate or other assets they had used and managed (see, for more detail, the Court’s description of this transformation in the case of Credit Bank and Others v. Bulgaria (no. 40064/98, ECHR 30 April 2002)).

COMPLAINTS

THE LAW

“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.”

In so far as the applicants may be understood as complaining that State officials committed an error in 1991, which led to the invalidation of their title, the Court notes that its competence ratione temporis covers the period after 7 September 1992, the date of the Convention’s entry into force with regard to Bulgaria.

The applicants contend that they were deprived of their property as a result of the domestic courts’ interpretation of Bulgarian law on two issues: (i) the validity of the 1991 contract (in the 1997-1999 proceedings brought by the applicants against and Mr and Mrs P.) and (ii) the starting point of the time limit for the recovery of what they had paid under that contract (in the 2001-2004 proceedings brought by the applicants against the C. company).

With regard to the first limb, the Court notes that the final domestic decision was given on 9 August 1999, more than six months before the introduction of the present application. This part of the complaint is therefore time barred.

With regard to the allegation that the applicants were deprived of their property – the sum of money they claimed – through arbitrary judicial decisions in the 2001-2004 proceedings, the Court notes that their complaint concerns essentially the manner in which the national courts interpreted and applied domestic law in proceedings between private parties.

The Court reiterates that in cases involving litigation between individuals and companies the obligations of the State under Article 1 of Protocol No. 1 entail affording the parties to the dispute judicial procedures which offer the necessary procedural guarantees and therefore enable the domestic courts and tribunals to adjudicate effectively and fairly in the light of the applicable law. The Court’s jurisdiction to verify that domestic law has been interpreted and applied correctly is limited, its role rather being to ensure that the decisions of the national courts are not arbitrary or otherwise manifestly unreasonable (Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83, ECHR 2007 ...).

The Court considers, however, that it is not necessary to examine in the applicants’ case whether the domestic courts’ interpretation of the starting point of the statutory limitation period disclosed arbitrariness, as it finds that this issue is not decisive with regard to the complaint under Article 1 of Protocol No. 1. In particular, even if the applicants’ action had not been found to be time-barred, they would in any event have been unable to obtain recovery of the sum they sought owing to inflation and the depreciation of the Bulgarian currency. In so far as the applicants may be understood as claiming that the courts should have awarded a revalorised sum, the Court has already held that Article 1 of Protocol No. 1 cannot be interpreted as to confer upon States a positive obligation to maintain the value of claims or any other assets in the face of inflation (see, Todorov v. Bulgaria (dec.), no. 65850/01, 13 May 2008 and O.N. v. Bulgaria (dec.), no. 35221/97, 6 April 2000).

In sum, the Court does not consider that the applicants were the victims of deprivation of property through arbitrary interpretation of national law by the courts, as alleged by them. It follows that there has been no State interference with the applicants’ rights under Article 1 of Protocol No. 1. This part of the complaint is therefore manifestly ill-founded.

Accordingly, the complaint under Article 1 of Protocol No. 1 must be rejected partly for failure to abide by the six-month time limit and partly for being manifestly ill-founded, in accordance with Article 35 §§ 1, 3 and 4 of the Convention.

It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court by a majority

Declares the application inadmissible.

Claudia Westerdiek Peer Lorenzen
Registrar President