European Court of Human Rights

Information Note on the Court’s case-law No. 169

December 2013

Köksal v. Turkey (dec.) - 30253/06

Decision 26.11.2013 [Section II]

Article 1 of Protocol No. 1

Positive obligations

Inability to claim additional compensation in respect of depreciation of compensation award through inflation: inadmissible

 

Facts - The applicant obtained a judgment debt against a privately owned bank together with interest which, though high, nevertheless remained below the annual inflation rate. He subsequently brought an action under Article 105 of the former Code of Obligations for additional compensation in respect of the disparity between the interest and inflation rates and, after four years’ litigation, received a further award, which was paid. He then brought a second action under Article 105 to cover the erosion in the value of the additional compensation award by the time it was paid. This claim failed, however, as the Court of Cassation ruled that the Article 105 remedy was only available in respect of the principal debt.

Law - Article 1 of Protocol No. 1: The applicant did not contest the availability of a judicial mechanism to submit his claims against the bank, which had allowed their contractual dispute to be adjudicated effectively and fairly in full respect of procedural guarantees. Furthermore, despite the absence of any general obligation on States to prevent loss of value of a private claim as a result of market factors, the respondent State had introduced a safeguard under Article 105 of the former Code of Obligations to protect creditors against the effects of inflation where interest awarded on a judgment debt failed to cover additional loss arising from depreciation. This had enabled the applicant to bring an action for compensation - with interest at the highest rate - in respect of the losses he had incurred on the judgment debt because of the disparity between the interest and inflation rates. In view of these remedies and the absence of an obligation under Article 1 of Protocol No. 1 to apply an inflation-proofed default interest rate to private claims, the additional loss the applicant had incurred as a result of the failure of his second action under Article 105 could not be considered to engage the State’s responsibility under Article 1 of Protocol No. 1.

Conclusion: inadmissible (manifestly ill-founded).

 

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