European Court of Human Rights

Information Note on the Court’s case-law No. 172

March 2014

Vistiņš and Perepjolkins v. Latvia (just satisfaction) [GC] - 71243/01

Judgment 25.3.2014 [GC] See: [2014] ECHR 302

Article 41

Just satisfaction

Compensation for expropriation based on equitable considerations

Facts - Under contracts of donation signed in 1994 the applicants acquired five plots of land on an island that is mainly occupied by port facilities and is part of the city of Riga. In the 1990s the applicants’ properties were expropriated in connection with the enlargement of the Free Port of Riga in accordance with a new special law that derogated from the normal rules of expropriation. The compensation awarded to the applicants was fixed at EUR 850 and EUR 13,500 respectively. They were also awarded, respectively, the equivalent of EUR 85,000 and EUR 593,150 in rent arrears for the use of their land. Following its incorporation into the Port of Riga, the value of the first applicant’s land was estimated at EUR 900,000 and the value of the second applicant’s land at a total of EUR 5,000,000.

In a judgment on the merits delivered on 25 October 2012, the Grand Chamber of the Court found, by twelve votes to five, a violation of Article 1 of Protocol No. 1 owing to the unjustified disproportion between the official cadastral value of the land and the compensation awarded to the applicants (see Information Note 156).

Law - Article 41

(a)  Pecuniary damage - Since in the principal judgment the Court had not declared the expropriation incompatible with the principle of legality, the criteria laid down in Guiso-Gallisay v. Italy, could not be transposed to the instant case since they applied to expropriations that were unlawful per se. The redress to be provided by the State was thus limited to the payment of appropriate compensation which should have been awarded at the time of the expropriation. By contrast, there was no basis on which the applicants could claim any loss of income (lucrum cessans) in respect of the period subsequent to the expropriation. That part of their claims was rejected.

The compensation to be determined in the instant case would not have to reflect the idea of a total elimination of the consequences of the impugned interference, nor the full value of the property. The Court deemed it appropriate to fix sums that were, as far as possible, “reasonably related” to the market value of the plots of land. It also decided to have recourse to equitable considerations in calculating the relevant sums, whilst taking into account the findings in the principal judgment to the effect that the Latvian authorities had been justified in deciding not to compensate the applicants for the full market value of the expropriated property and that much lower amounts could suffice to fulfil the requirements of Article 1 of Protocol No. 1. The Court thus reduced by 75% the economically-based effective average cadastral value per square metre of the land in question, established on the basis of an expert report. The amounts already paid to the applicants by way of compensation at domestic level were deducted. The sums were adjusted to offset the effects of inflation and statutory interest was added. Lastly, the Court did not see any reason to deduct from these sums the rent arrears that had been paid to the applicants at national level, as their claim derived from a separate legal basis from that of the compensation for expropriation.

The first applicant was thus awarded EUR 339,391 and the second applicant EUR 871,271 in respect of pecuniary damage.

(b)  Non-pecuniary damage - EUR 3,000 to each applicant.

(See Guiso-Gallisay v. Italy (just satisfaction) [GC], 58858/00, 22 December 2009, Information Note 125)

 

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