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AGURDINO S.R.L. v. MOLDOVA - 7359/06 [2011] ECHR 1455 (27 September 2011)
URL: http://www.bailii.org/eu/cases/ECHR/2011/1455.html
Cite as:
[2011] ECHR 1455
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THIRD
SECTION
CASE OF AGURDINO S.R.L. v. MOLDOVA
(Application
no. 7359/06)
JUDGMENT
STRASBOURG
27
September 2011
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 Agurdino S.R.L. v.
Moldova,
The
European Court of Human Rights (Third Section), sitting as a Chamber
composed of:
Josep Casadevall,
President,
Corneliu Bîrsan,
Alvina
Gyulumyan,
Ján Šikuta,
Luis López
Guerra,
Nona Tsotsoria,
Mihai Poalelungi,
judges,
and Santiago Quesada,
Section Registrar,
Having
deliberated in private on 6 September 2011,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in an application (no. 7359/06)
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
Agurdino S.R.L. (“the applicant company”),
a company incorporated in the Republic of Moldova,
on 16 February 2006.
The
applicant company was represented by Mr V. Nagacevschi and Mr I.
Chibac, lawyers practising in Chişinău. The Moldovan
Government (“the Government”) were represented by their
Agent, Mr V. Grosu.
3. The
applicant company alleged, in particular, that its right to a
fair hearing and its right to the peaceful enjoyment of its
possessions had been breached as a result of the wrongful quashing of
a final judgment in its favour.
On
21 April 2008 the Court
decided to give notice of the application to the Government.
It was also decided to rule on the admissibility and merits of the
application at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The
applicant company is specialised in the production of chemical
products in the Expo-Business-Chişinău Free Economic Zone.
On
15 October 2001 the State Tax Inspectorate (“the Inspectorate”)
ordered the applicant company to pay value-added tax in the amount of
2,021,312 Moldovan lei (MDL) (approximately 126,000 euros (EUR)) and
a fine of MDL 1,617,049 (approximately EUR 101,000) for failure to
pay the aforementioned value-added tax. The applicant company
disputed the tax assessment and argued that it was exempt from paying
value-added tax in accordance with the Act establishing the
Expo-Business-Chişinău Free Economic Zone (“the FEZ
Act”). As the Inspectorate did not accept the applicant
company’s arguments and its interpretation of the law, the
applicant company instituted proceedings.
On
19 June 2002 the Supreme Court of Justice issued a final ruling on
the case and found in favour of the applicant company. The applicant
was cleared of the obligation to pay the sums imposed by the
Inspectorate.
On
20 October 2005 Parliament adopted a bill on the interpretation of
the FEZ Act (“the Interpretation Act”), giving the FEZ
Act a different interpretation from that given by the applicant
company and the courts.
On 2 November 2005 the Inspectorate applied for review
of the judgment of the Supreme Court of 19 June 2002, on the basis of
the new interpretation given to the law by Parliament.
On
14 November 2005 the applicant company was informed by telephone by
the Registry of the Supreme Court that a hearing in the case would
take place on 16 November 2005. The company’s chief executive
officer applied for an adjournment, arguing that he would not be able
to participate in the hearing.
On
16 November 2005 the Supreme Court of Justice held a hearing in the
case, in the absence of the applicant company’s representative,
and upheld the application for review lodged by the Inspectorate. It
quashed the previous judgment and ruled in favour of the
Inspectorate.
On
30 November 2006 the Constitutional Court declared the Interpretation
Act unconstitutional. In view of that, on 12 December 2006 the
applicant company lodged an application for review of the judgment of
16 November 2005 with the Supreme Court of Justice. However, the
application was dismissed on 24 January 2007.
The
parties disagree on whether the judgment of 16 November 2005 was
enforced. According to the applicant company, it was partially
enforced and it paid 42,906 Moldovan Lei (MDL). The rest of the sum
sought by the Inspectorate could not be paid because the applicant
company became insolvent. The Government dispute this submission and
argue that the judgment of 16 November 2005 was never enforced.
II. RELEVANT DOMESTIC LAW
The relevant provisions of the Code of Civil Procedure
concerning the review of final judgments read as follows:
Article 449
“A request for
review shall be granted when:
...
(c) after a judgment
has been adopted, new documents have been discovered which were
withheld by one of the parties to the proceedings or which could not
have been submitted to the court during the proceedings because of
circumstances beyond the control of the interested party;
....”
Article 450
A request for review
may be lodged:
...
(d) within three
months from the date on which the document was discovered – in
cases [falling within] Article 449 (c);
....”
The
relevant provision of the Legislation Act reads as follows:
Section 45. The retroactivity of interpretation acts
“An act
interpreting another act cannot have retroactive effect...”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
The
applicant company complained that the quashing of the final judgment
of the Supreme Court of Justice of 19 June 2002 had been wrongful and
had violated Article 6 § 1 of the Convention.
The
relevant part of Article 6 § 1 reads as follows:
“In the determination of his civil rights and
obligations or of any criminal charge against him, everyone is
entitled to a fair and public hearing within a reasonable time by an
independent and impartial tribunal established by law. ...”
A. Admissibility
The
Court notes that the complaint under Article 6 is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It further notes that it is not inadmissible on any other
grounds. It must therefore be declared admissible.
B. Merits
The
applicant company submitted that the quashing of the judgment of 19
June 2002 had violated its right to a fair trial as guaranteed by
Article 6 of the Convention. The Interpretation Act had not been
able to have retroactive effect and the use of it by the Supreme
Court of Justice for the purpose of review of the final judgment of
19 June 2002 had been contrary to section 45 of the Legislation Act.
The review procedure had in fact been an appeal in disguise.
The
Government argued that review was an effective way of challenging a
judgment where new facts were discovered after the judgment had
become final. They gave the example of the International Court of
Justice, which could review its judgments if new facts or
circumstances of decisive importance were discovered after the
adoption of a judgment. An application for review had to be made
within six months of the date on which the new facts or circumstances
were discovered, but not later than ten years from the date of
adoption of the judgment.
A
similar situation could be found in the Rules of the European Court
of Human Rights. If new facts concerning a case which had been
concluded were discovered, and if those facts could have had a
decisive effect on the outcome of the case and were unknown or could
not reasonably have been known, a party could ask the Court, within a
period of six months after that party had acquired knowledge of the
fact, to review its judgment.
The
Government also cited a recommendation of the Committee of Ministers,
according to which the Governments of the member States were advised
to ensure the existence of a procedure for the review and reopening
of cases.
The
Court notes that the present case concerns proceedings in which the
applicant company was found, following errors in its tax returns,
liable to pay a fine of MDL 1,617,049. The assessment of tax and the
imposition of surcharges fall outside the scope of Article 6 under
its civil head (see Ferrazzini v. Italy [GC], no. 44759/98, §
29, ECHR 2001-VII). The issue therefore arises whether the
proceedings in this case were “criminal” within the
autonomous meaning of Article 6 and thus attracted the guarantees of
Article 6 under that head.
The
Court observes in this respect that the Government did not contest
the applicability of Article 6 of the Convention to the proceedings
in the present case. It also notes that the fine imposed on the
applicant company had been intended as a punishment to deter
reoffending rather than a pecuniary compensation. In such
circumstances, and in so far as the proceedings concern the fine
imposed, the Court is prepared to consider that Article 6 applies
under its criminal head in the present case (cf. Jussila
v. Finland [GC], no. 73053/01, §§ 31-39, ECHR
2006 XIII).
The Court reiterates that Article 6 § 1 of the
Convention obliges courts to give reasons for their judgments. In
Ruiz Torija v. Spain (9 December 1994, Series A no.
303 A), the Court found that the failure of a domestic court to
give reasons for not allowing an objection that an action was
time-barred amounted to a violation of that provision.
The
right to a fair hearing before a tribunal as guaranteed by Article 6
§ 1 of the Convention must be interpreted in the light of
the Preamble to the Convention, which, in its relevant part, declares
the rule of law to be part of the common heritage of the Contracting
States. One of the fundamental aspects of the rule of law is the
principle of legal certainty, which requires, among other things,
that where the courts have finally determined an issue, their ruling
should not be called into question (see Brumărescu v. Romania
[GC], no. 28342/95, § 61, ECHR 1999 VII, and Roşca
v. Moldova, no. 6267/02, § 24, 22 March 2005).
Legal
certainty presupposes respect for the principle of res judicata
(see Brumarescu, cited above, § 62) – that is, the
principle of the finality of judgments. This principle insists that
no party is entitled to seek a review of a final and binding judgment
merely for the purpose of obtaining a rehearing and a fresh
determination of the case. Higher courts’ power of review
should be exercised to correct judicial errors and miscarriages of
justice, but not to carry out a fresh examination. The review should
not be treated as an appeal in disguise, and the mere possibility of
there being two views on the subject is not a ground for
re-examination. A departure from that principle is justified only
when made necessary by circumstances of a substantial and compelling
character (see Roşca, cited above, § 25).
The
above conclusion in Roşca was drawn in connection with
the procedure for annulment requests, under which the Prosecutor
General’s Office could seek review of final judgments with
which it disagreed. The Court held that this procedure, although
possible under domestic law, was incompatible with the Convention
because it resulted in a litigant’s “losing” a
final judgment in his favour.
As to the reopening of proceedings owing to newly
discovered circumstances, the Court observes that this issue was
considered in Popov v. Moldova (no. 2) (no. 19960/04, 6
December 2005), where it found a violation of Article 6 § 1 on
account of the misuse of review proceedings. The Court held in that
case that reopening was not, as such, incompatible with the
Convention. However, decisions to review final judgments must be in
accordance with the relevant statutory criteria and the misuse of
such a procedure may well be contrary to the Convention, given that
its result – the “loss” of the judgment – is
the same as that of a request for annulment. The principles of legal
certainty and the rule of law require the Court to be vigilant in
this area (see Popov (no. 2), cited above, §
46).
In
the present case, the Court notes that the review procedure provided
for by Articles 449-53 of the Code of Civil Procedure does indeed
serve the purpose of correcting judicial errors and miscarriages of
justice. The Court’s task, exactly as in Popov (no. 2),
is to determine whether this procedure was applied in a manner which
was compatible with Article 6 of the Convention, and thus ensured
respect for the principle of legal certainty. In doing so, the Court
must bear in mind that it is in the first place the responsibility of
national courts to interpret provisions of national law (see Waite
and Kennedy v. Germany [GC], no. 26083/94, § 54, ECHR
1999-I).
It
is noted that, under Article 449 (c) of the Moldovan Code of Civil
Procedure, proceedings can be reopened when new and essential facts
or circumstances have been discovered that were unknown and could not
have been known earlier. Under Article 450 of the same Code, a
request for review can be lodged “within three months from the
date on which the person concerned has come to know essential
circumstances or facts of the case which were unknown to him or her
earlier and which could not have been known to him or her earlier”.
The
decision of the Supreme Court of Justice of 16 November 2005 cited
the Interpretation Act adopted by Parliament on 20 October 2005 as
grounds for reopening the proceedings (see paragraph 9 above).
The
Court notes in the first place that according to section 45 of the
Legislation Act a law interpreting another law cannot have
retroactive effect and that, therefore, the new interpretation given
by Parliament to the FEZ Act on 20 October 2005 could not ordinarily
have affected the status of a dispute ended by a final judgment some
three years earlier.
However,
even assuming the contrary, the Court notes that there is no
indication in the Supreme Court’s judgment of 16 November 2005
whether the Interpretation Act contained “information”
that could not have been obtained earlier by the Inspectorate. Nor is
there any indication that the Inspectorate unsuccessfully tried to
obtain such “information” earlier. In such circumstances,
the Court considers that it cannot be said that the Interpretation
Act qualified as a “new [...] fact or circumstance that [was]
unknown and could not have been known earlier” by the parties
to the proceedings. Moreover, there is no mention in the Supreme
Court’s judgment of the three-month time-limit for requesting a
review or of any ground found by the Supreme Court to justify
extending the time-limit (see, mutatis mutandis, Ruiz
Torija, cited above).
Accordingly,
the Court considers that the review proceedings at issue were, in
essence, an attempt to re-litigate the case on points which the
Inspectorate could have but apparently did not raise earlier. It was
in effect an “appeal in disguise” whose purpose was to
obtain a fresh examination of the matter, rather than a genuine
review as provided for in Articles 449-53 of the Code of Civil
Procedure.
By
granting the Inspectorate’s request for review, the Supreme
Court of Justice infringed the principle of legal certainty and the
applicant company’s “right to court” under Article
6 § 1 of the Convention (see, mutatis mutandis, Roşca,
cited above, § 28). Moreover, by not giving any reasons for
extending the time-limit within which the Inspectorate could request
a review, the Supreme Court breached the applicant’s right to a
fair hearing (see paragraph 24 above).
In the light of the above the Court considers that
there has been a violation of Article 6 § 1.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO
THE CONVENTION
The
applicant company complained that the Supreme Court’s judgment
of 16 November 2005 had had the effect of infringing its right to
peaceful enjoyment of its possessions as secured by Article 1 of
Protocol No. 1 to the Convention which, in so far as relevant,
provides:
“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....”
A. Admissibility
The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
The
Government argued that there has been no breach of Article 1 of
Protocol No. 1 to the Convention.
The
Court considers that the applicant company had a “possession”
for the purposes of Article 1 of Protocol No. 1, namely the amount of
money which it had been absolved from paying to the Inspectorate by
virtue of the Supreme Court’s judgment of 19 June 2002.
Quashing such a judgment after it has become final and unappealable
constitutes an interference with the judgment beneficiary’s
right to the peaceful enjoyment of that possession (see Brumărescu,
cited above, § 74). Even assuming that such an interference may
be regarded as serving the public interest, the Court finds that it
was not justified, as a fair balance was not preserved and the
applicant company was required to bear an individual and excessive
burden (compare Brumărescu, cited above, §
75-80).
It
follows that there has been a violation of Article 1 of Protocol
No. 1 to the Convention.
III. OTHER COMPLAINTS
In
its initial application, the applicant company had also complained
under Articles 6 § 3 and 7 of the Convention and under Article 4
of Protocol No. 1 to the Convention. However, in its observations on
the admissibility and merits, it asked the Court not to proceed with
the examination of these complaints. Therefore and in the absence of
any special circumstances regarding respect for the rights guaranteed
by the Convention or its Protocols which would require the continued
examination of this part of the application, the Court considers that
it is no longer justified to continue the examination of this part of
the application within the meaning of Article 37 § 1 (a) of
the Convention.
Accordingly
this part of the application should be struck out.
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.”
The
applicant company claimed EUR 5,840.50 for pecuniary damage suffered
as a result of the abusive quashing of the judgment of 22 June
2002. This amount, calculated as of the date on which the applicant
company submitted its claims under Article 41 of the Convention,
included the amount claimed by the applicant to have been paid
to the Inspectorate following the judgment of the Supreme Court of 16
November 2005 and default interest calculated in accordance with
Moldovan legislation. The applicant company also claimed EUR 2.14 per
day, to be calculated after the date on which it submitted its claim
for just satisfaction until such date as the Court would determine
the issue of just satisfaction in the case.
The
applicant company also claimed EUR 10,000 for non-pecuniary damage
and EUR 1,795 for costs and expenses.
The
Government disputed the amounts claimed by the applicant company and
submitted that the judgment of 16 November 2005 had never been
enforced and that, therefore, the applicant company was not entitled
to any pecuniary damage. As to the rest of the applicant company’s
claims, the Government submitted that they were excessive and
unfounded.
The
Court notes the dispute between the applicant company and the
Government concerning the enforcement of the judgment of 16 November
2005. The documents submitted by the applicant company prove the
payment of MDL 42,906 to the Inspectorate. However, it is not
entirely clear from those documents whether the entire amount
represented a payment in connection with the judgment of the Supreme
Court of Justice of 16 November 2005. Accordingly, the Court
considers that the question of the application of Article 41 is
not ready for decision. The question must accordingly be reserved and
a further procedure fixed, with due regard to the possibility of an
agreement being reached between the Moldovan Government and the
applicant company.
FOR THESE REASONS, THE COURT UNANIMOUSLY
Declares the complaints under Article 6 and
under Article 1 of Protocol No. 1 to the Convention admissible;
Decides to strike out the remaining complaints;
Holds that there has been a violation of Article
6 § 1 of the Convention;
Holds that there has been a violation of Article
1 of Protocol No. 1 to the Convention;
Holds that the question of the application of
Article 41 in the instant case is not ready for decision and
accordingly,
(a) reserves
the said question in whole;
(b) invites
the Government and the applicant company to submit, within three
months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention,
their written observations on the matter and, in particular, to
notify the Court of any agreement that they may reach;
(c) reserves the further procedure and delegates
to the President of the Chamber the power to fix the same if need be.
Done in English, and notified in writing on 27 September 2011,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Santiago Quesada Josep
Casadevall
Registrar President
