European Court of Human Rights

Information Note on the Court’s case-law No. 167

October 2013

Likvidējamā p/s Selga and Others v. Latvia (dec.) - 17126/02 and 24991/02

Decision 1.10.2013 [Section IV] See: [2013] ECHR 1201

Article 1 of Protocol No. 1

Positive obligations

Inability to recover frozen foreign-currency savings following the dissolution of the former USSR: inadmissible

 

Facts - During Soviet rule in Latvia, the applicants - a company and a natural person - held foreign-currency savings in the Latvian section of Vneshekonombank, a State bank, which was dealing with foreign-currency transactions throughout the former USSR in accordance with the rules applicable at the time. Following the restoration of Latvian independence in 1991, the Vneshekonombank froze the applicants’ foreign-currency savings disabling them from withdrawing their funds until the Latvian and Russian Governments had settled the issues related to the external foreign-currency debt and assets of the former USSR on the inter-State level. An intergovernmental commission was established to this end, but no agreement was ever reached and the commission had not met since 1998. Meanwhile, the Bank of Latvia accepted to pay certain monthly amounts to natural, but not legal, persons whose foreign-currency savings had been frozen. The applicants’ civil claims lodged with the Bank of Latvia with a view to recovering their frozen assets were unsuccessful.

Law - Article 1 of Protocol No. 1: The applicants’ complaint was twofold. They claimed, firstly that Latvia was responsible for the freezing of their foreign-currency savings and, secondly, that the Latvian authorities had failed to take effective measures to enable them to obtain access to those assets. As regards the first limb of their complaint, the Court found it established that the applicants’ foreign-currency assets had been frozen by the Vneshekonombank, an entity operating in another country, and that its actions could thus not be attributed to Latvia. As regards the second limb of the complaint, there had been no suggestion that the Latvian authorities had ever accepted any liability for public debt incurred during the period when its territory was under Soviet rule. Latvia and the Russian Federation had not been able to reach any agreement on this issue due to their apparently diverging views on this matter. Moreover, unlike States successors of the former Social Federal Republic of Yugoslavia, Latvia had never demonstrated any sign of acceptance or acknowledgement of claims such as those made by the applicants. While the Bank of Latvia had agreed to pay some money to private individuals whose foreign-currency assets had been frozen by the Vneshekonombank, these payments had been made with the aim of reducing social tensions and compensating, from the State’s own resources, damage sustained by individuals residing in Latvia as a result of the collapse of the USSR. Given that the Convention did not impose any specific obligation on States to right injustices or harm caused before they ratified the Convention, the decisions taken by the Bank of Latvia could not be interpreted as implying that there was a positive obligation under international law incumbent on the respondent State to make any payments at all, let alone such as would equal the total amount of the frozen foreign-currency assets in another State.

Conclusion: incompatible ratione personae and ratione materiae (unanimously).

 

 

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