CASE OF LYUBIMOV AND OTHERS v. RUSSIA
(Applications nos. 26374/04 and 46993/06)
20 December 2016
This judgment is final but it may be subject to editorial revision.
In the case of Lyubimov and Others v. Russia,
The European Court of Human Rights (Third Section), sitting as a Committee composed of:
Pere Pastor Vilanova,
Alena Poláčková, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having deliberated in private on 29 November 2016,
Delivers the following judgment, which was adopted on that date:
1. The case originated in two applications (nos. 26374/04 and 46993/06) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Russian national, Mr Viktor Leonidovich Lyubimov, and two Austrian nationals, Ms Larissa Sumann and Mr Christian Sumann (“the applicants”), on 27 May 2004 and 3 October 2006 respectively.
2. The first applicant was represented by Ms Ye. Shalaeva, a lawyer practising in Perm, Russia. The second and third applicants were represented by Dr K. Newole, a lawyer practising in Vienna, Austria. The Russian Government (“the Government”) were represented by Mr G. Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights.
3. On 26 September 2008 and 31 May 2011 the complaints concerning the confiscation of the applicants’ moneys were communicated to the Government.
4. The Austrian Government were informed of their right to intervene in the proceedings concerning application no. 46993/06 in accordance with Article 36 § 1 of the Convention. They chose not to avail themselves of that right.
THE CIRCUMSTANCES OF THE CASES
5. The facts of the applications, as submitted by the parties, may be summarised as follows.
A. The case of Mr Lyubimov
6. The first applicant was born in 1967 and lives in Perm.
7. On 6 May 2003 the first applicant was stopped by a customs officer at a Moscow international airport and found to be in possession of 10,200 euros (EUR) and 8,755 US dollars (USD) which he failed to report on his customs declaration.
8. On 4 December 2003 the Golovinskiy District Court in Moscow convicted the first applicant of smuggling and issued a confiscation order in respect of the foreign currency he had carried on him. On 5 February 2004 the Moscow City Court upheld the judgment on appeal.
9. Further to an application from a deputy Moscow prosecutor, on 5 December 2008 the Presidium of the Moscow City Court amended the judgment. Noting that there was no evidence that the confiscated currency had been the instrument of a crime or had been criminally acquired, it cancelled the confiscation order and ordered the confiscated money to be refunded to the first applicant.
10. On 3 June 2009 the amount of 628,750 Russian roubles (RUB) was credited into the first applicant’s bank account.
11. The first applicant sued the Ministry of Finance, seeking to recover the interest accrued on the retained amount during the period from 6 May 2003 to 3 June 2009, which he assessed at RUB 458,777.
12. On 25 August 2009 the Tverskoy District Court in Moscow granted his claim in part. It awarded the first applicant RUB 11,719.20 in respect of the period from 2 April 2009 when his representative had submitted the bank details to the Ministry of Finance until 3 June 2009 when the transfer had been made. The District Court did not say anything about the part of the claim concerning the previous six-year period.
B. The case of Ms and Mr Sumann
13. The second and third applicants were born in 1967 and 1971 respectively and live in Graz, Austria.
14. On 11 October 2004 the customs officer at a Moscow international airport stopped the second and third applicants as they were carrying EUR 14,600 and 14,980 euros in cash, respectively, which they had not reported on their customs declarations.
15. On 14 and 16 February 2006 the Golovinskiy District Court in Moscow found the second and third applicants guilty as charged and issued confiscation orders. On 10 April 2006 the Moscow City Court upheld the conviction on appeal.
16. On an application from a deputy Moscow prosecutor, on 26 August 2011 the Presidium of the Moscow City Court amended the judgments in respect of the second and third applicants. Noting that there was no evidence that the confiscated currency had been the instrument of a crime or had been criminally acquired, it cancelled the confiscation orders and ordered to refund RUB 526,471.62 to Ms Sumann and RUB 540,174.30 to Mr Sumann.
I. JOINDER OF THE APPLICATIONS
17. Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
18. The applicants complained about a violation of their right to peaceful enjoyment of possessions under Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“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.”
19. The Government claimed that the applicants had lost their status as “victims” of the alleged violations as a consequence of quashing of confiscation orders by Russian courts.
20. The Court reiterates that a decision or measure favourable to an applicant is not in principle sufficient to deprive him or her of his status as a “victim” unless the national authorities have acknowledged, either expressly or in substance, and then afforded adequate redress for, the breach of the Convention (see Dalban v. Romania [GC], no. 28114/95, § 44, ECHR 1999-VI). In the instant case, the Russian courts did acknowledge that the confiscation orders had not had a lawful basis and ordered the confiscated amounts to be refunded to the applicants. However, while the amounts confiscated had been in euros and US dollars, the reimbursements were made in Russian roubles, without taking into account the depreciation of national currency in the intervening period, with the result that the applicants received lesser amounts that those taken from them. Nor were they given any compensation in respect of non-pecuniary damage. The first applicant’s claim for the interest accrued during the period of unlawful retention was not examined by a Moscow court. In these circumstances, the Court finds that the applicants were not afforded adequate redress for the breach of the Convention and that they may still claim to be “victims” of the alleged violation.
21. The Court considers that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
22. The Court reiterates that that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be “lawful” (see Adzhigovich v. Russia, no. 23202/05, § 28, 8 October 2009; Baklanov v. Russia, no. 68443/01, § 39, 9 June 2005; Frizen v. Russia, no. 58254/00, § 33, 24 March 2005).
23. In a case concerning a similar set of factual circumstances, the Court found that, under Russian criminal law, only instruments of the criminal offence or criminally acquired valuables were liable to confiscation or reversion to the State (see Adzhigovich, cited above, § 31). Since in the instant case the Presidium determined that the amounts seized from the applicants had been neither the instruments nor proceeds of a criminal offence, the confiscation orders were devoid of a legal basis.
24. The Court accordingly finds that the impugned interference with the applicants’ property rights was not “lawful” within the meaning of Article 1 of Protocol No. 1 and that has accordingly been a violation of that provision.
III. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
25. Lastly, the applicant Mr Lyubimov also complained about the unfavourable outcome of the domestic proceedings and the absence of an effective remedy for his grievances. However, in the light of all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that these complaints do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that these complaints are manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION
26. 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.”
27. The first applicant claimed EUR 10,200 euros and USD 8,755 in respect of pecuniary damage and EUR 20,000 in respect of non-pecuniary damage. The second and third applicants claimed the difference between the amount confiscated and the amount refunded, the interest on the amount retained at the marginal lending rate of the European Central Bank plus four percentage points, and compensation for inflation losses based on the Euro area inflation rate, and EUR 25,000 in respect of non-pecuniary damage.
28. The Government claimed that the finding of a violation would be sufficient just satisfaction and that the second and third applicants should have first lodged a claim for compensation before Russian courts.
29. The Court reiterates at the outset that the rule that domestic remedies should be exhausted does not apply to just satisfaction claims submitted to the Court under Article 41 (see Sylla v. the Netherlands, no. 14683/03, § 69, 6 July 2006, with further references). It further notes that all three applicants did not receive the full amount that had been taken from them because of fluctuations of the Russian rouble exchange rate. Accordingly, it awards the first applicant EUR 3,605, the second applicant EUR 2,010, and the third applicant EUR 2,060, plus any tax that may be chargeable, in respect of pecuniary damage, representing the difference between the confiscated amount in euros and the amount refunded to them at the then applicable exchange rate. The Court however rejects the second and third applicants’ claim for the interest and inflation losses because of their failure to specify the precise amount they claimed under that head. Finally, it awards each applicant EUR 500 in respect of non-pecuniary damage, plus any tax that may be chargeable.
30. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1. Decides to join the applications;
2. Declares the complaints concerning an interference with the applicants’ right to peaceful enjoyment of their possessions admissible and the remainder inadmissible;
3. Holds that there has been a violation of Article 1 of Protocol No. 1;
(a) that the respondent State is to pay, within three months, the following amounts:
(i) to the first applicant, EUR 3,605 (three thousand six hundred and five euros) in respect of pecuniary damage and EUR 500 (five hundred euros) in respect of non-pecuniary damage, plus any tax that may be chargeable, to be converted into the currency of the respondent State at the rate applicable at the date of settlement;
(ii) to the second applicant, EUR 2,010 (two thousand ten euros) in respect of pecuniary damage and EUR 500 (five hundred euros) in respect of non-pecuniary damage, plus any tax that may be chargeable;
(iii) to the third applicant, EUR 2,060 (two thousand sixty euros) in respect of pecuniary damage and EUR 500 (five hundred euros) in respect of non-pecuniary damage, plus any tax that may be chargeable;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
5. Dismisses the remainder of the applicants’ claim for just satisfaction.
Done in English, and notified in writing on 20 December 2016, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Helen Keller
Deputy Registrar President