European Court of Human Rights

 

 

 

FIFTH SECTION

 

 

 

 

 

 

CASE OF WERRA NATURSTEIN GMBH & CO KG v. GERMANY

 

(Application no. 32377/12)

 

 

 

 

 

 

JUDGMENT

 

 

 

 

STRASBOURG

 

19 January 2017

 

 

 

 

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 Werra Naturstein GmbH & Co KG v. Germany,

The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:

          Erik Møse, President,
          Angelika Nußberger,
          Khanlar Hajiyev,
          Ganna Yudkivska,
          Faris Vehabović,
          Síofra O’Leary,
          Carlo Ranzoni, judges,
and Milan Blaško, Deputy Section Registrar,

Having deliberated in private on 13 December 2016,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1.  The case originated in an application (no. 32377/12) against the Federal Republic of Germany lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a German company, Werra Naturstein GmbH & Co. KG (“the applicant company”).

2.  The applicant company was represented by Mr. I.-J. Tegebauer, a lawyer practising in Trier. The German Government (“the Government”) were represented by one of their Agents, Mr. H.-J. Behrens, of the Federal Ministry of Justice and Consumer Protection.

3.  The applicant company alleged, in particular, that the lack of compensation after it had had to stop quarrying a limestone deposit when a motorway had been planned across the quarry had infringed their rights guaranteed by Article 1 of Protocol No. 1 to the Convention.

4.  On 3 February 2016 the complaint concerning Article 1 of Protocol No. 1 to the Convention was communicated to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

5.  The applicant company is a German company based in Auengrund.

A.  Background to the case

6.  In July 1994 the applicant company purchased land underneath which lay a limestone deposit (Kalksteinvorkommen). It acquired a mining licence (Bewilligung) to quarry the deposit for twenty-five years. Subsequently the open-cast quarrying of limestone began. It was necessary that the applicant company operated a plant directly next to the quarry in order to process the limestone into construction material. In 1997 it received permission to use the quarry as a landfill (Deponiezulassung) using waste soil from earthworks at other sites.

7.  Meanwhile, the federal authorities began the planning of a new motorway with the preferred option being a route across the quarry. From 29 October until 6 December 1993 maps and documents were disclosed for public inspection in the municipality where the quarry was located. Additionally, on 28 October 1993 information about the planning process was published in the municipality’s gazette. It was apparent from the disclosed documents that the quarrying operation would be affected by the motorway. However, the extent of the adverse effects was not entirely foreseeable because the exact route had not been finalised. The applicant company claimed that it had not been aware of the planning process when it had bought the land in 1994.

8.  On 7 November 2000, in the light of the chosen route across the quarry, the Bad Salzungen Mining Authority (Bergamt) declined to approve the applicant company’s entire operation plan (Hauptbetriebsplan) for the years 2000-02, an administrative prerequisite to operate and continue operating a quarry. Only quarrying limestone in a specific area was approved and only to the extent that the route for the new motorway was not affected. Consequently, the applicant company had to stop quarrying limestone in 2001 and transferred its activity to another nearby mining site. At the old site, 4,700,000 cubic metres of limestone (67% of the original volume) remained in the ground. The applicant company had to bear the costs of relocating the plant, including the removal of machinery and the construction of roads and buildings. An administrative objection (Widerspruch) it lodged against the decision of the Mining Authority was never decided upon.

B.  Planning process concerning the motorway

9.  On 26 May 2003 the Land of Thuringia issued a planning decision (Planfeststellungsbeschluss) for the construction of the motorway, which stated, inter alia, that it would be too costly and time consuming to circumvent the applicant company’s land.

10.  The applicant company brought an action before the Federal Administrative Court. It requested the annulment of the planning decision; in the alternative that it be stipulated in the planning decision that the applicant company be compensated for the interference in its quarrying operation; or in the alternative that it be stipulated in the planning decision that the Land of Thuringia was obliged to take over the quarrying operation, the remaining land and the mining licence.

11.  On 2 February 2004, after the Federal Administrative Court had stated that the relevant part of the planning decision was not sufficiently precise, the Land modified it. It changed the wording that “the amount and scale of the compensation [had to] be agreed upon in a private-law agreement” and “if the parties d[id] not reach an agreement, the expropriation authorities [would] determine the compensation in separate compensation proceedings” into the wording that “the seizure [Inanspruchnahme] entitle[d] to compensation” and that “the amount and scale of the compensation w[ould] not be decided on in the planning decision”. Subsequently, the applicant company and the Land declared the matter resolved (erledigt) and the Federal Administrative Court therefore decided in 2004 to discontinue the proceedings. It split the costs of the proceedings between the applicant company and the Land.

C.  Expropriation proceedings

12.  In 2005 the Federal Government seized the applicant company’s land for road construction purposes after it had reached a settlement with the applicant company during the proceedings concerning provisional seisin (vorläufige Besitzeinweisung). On 19 June 2006, following the initiation of formal expropriation proceedings, a court-sworn expert’s report recorded losses and additional costs amounting to 3,589,566.42 euros (EUR), including the value of the limestone, and forgone profits from the landfill, relocation costs and interest.

13.  On 26 March 2008 the Administrative Office of Thuringia Land (Landesverwaltungsamt) expropriated the part of the applicant company’s land on which the motorway had been built and decided that the Federal Government should compensate the applicant company by a payment of some EUR 865,000. That amount included about EUR 22,800 in compensation for the land value as farmland and some of the costs of the relocation of the plant (new infrastructure, transport of machinery and opening the ground of the new mine). There was no formal expropriation of the mining licence.

14.  Both parties requested a judicial review. The Federal Government was, in particular, of the opinion that the cost of the quarrying plant’s relocation should not be compensated. The applicant company requested compensation of an additional EUR 2,301,649.53 plus interest, specifically EUR 1,108,297.00 for the loss of landfill capacity and the respective profits, EUR 492,763.22 for further relocation costs and EUR 700,589.31 for reduced delivery capacity during the transition period. Claims for compensation regarding the value of the land and the value of the limestone were dropped.

15.  On 18 February 2009 the Meiningen Regional Court dismissed the applicant company’s request and - on the request of the Federal Government - reduced the amount of compensation to about EUR 22,800. It held that only the value of the expropriated land - not taking into account that there existed a limestone deposit underneath it - had to be compensated. Pursuant to section 124(3) of the Federal Mining Act (Bundesberggesetz, see “Relevant domestic law”, paragraph 22), mining rights under the terms of that Act were granted only on the statutory condition that they would have to yield to a public infrastructure project without compensation. Consequently, the actual right to quarry and the linked costs and losses for relocation and the impeded landfill did not generate a compensation claim. While the acquired mining rights constituted “property” under Article 14 of the Basic Law, the holder of a mining licence could not rely on making unhindered use of his or her mining rights; he or she could only operate under the limitations stipulated, inter alia, under section 124(3) of the Federal Mining Act. The planning decision was therefore merely actualising the determination of content and limits already inherent in the acquired mining right.

16.  On 27 January 2010 the Thuringia Court of Appeal dismissed a prior appeal lodged by the applicant company. It held that the construction of the motorway had not led to a loss of the applicant company’s mining rights but only to a factual impairment in the exercise of those rights which followed from the preference given to transport infrastructure projects. The relevant provisions, section 124(3) and (4) of the Federal Mining Act, excluded compensation claims. The clarification of the planning decision had not generated a claim regarding the impairment of the applicant’s mining rights and the business operation linked to it, including the landfill. Article 14 of the Basic Law (see “Relevant domestic law”, paragraph 20) had not been infringed because the measure taken had not been unreasonable, even considering that 67% of the mining right had been rendered valueless.

17.  On 14 April 2011 the Federal Court of Justice dismissed an appeal on points of law by the applicant company. It rejected the claim for compensation for the alleged interference with the mining right, mainly relying on section 124(3) of the Federal Mining Act, and in particular on the grounds that an interference with the rights of an established and operational business enterprise (Eingriff in den eingerichteten und ausgeübten Gewerbebetrieb) should not be compensated either. The enterprise could not enjoy more extensive protection under the law than the economic basis it rested on: the mining right. Referring to its case-law, it reiterated that it made no difference that the applicant company was the owner of the land and, at the same time, the holder of the mining licence. Under German mining law, both entitlements needed to be assessed separately.

18.  The Federal Court of Justice further acknowledged that quarrying was de facto no longer possible. Mentioning that for reasons of proportionality the planning decision might in a case like the present one call for a formal expropriation of the mining rights with corresponding compensation, it found that such a claim - as well as the issue of disproportionality as such - should have been raised in the proceedings concerning the planning decision before the Federal Administrative Court (see paragraph 10). Lastly, it observed that the loss of future profits from the landfill was a mere hope for future returns and could thus not be considered a “property right” under Article 14 of the Basic Law, but fell only under Article 12 of the Basic Law (right to exercise one’s profession).

19.  On 21 December 2011 the Federal Constitutional Court declined to consider a constitutional complaint lodged by the applicant company without providing reasons (1 BvR 1499/11).

II.  RELEVANT DOMESTIC LAW AND PRACTICE

20.  Article 14 of the Basic Law reads as follows:

“(1) Property and the right of inheritance shall be guaranteed. Their content and limits shall be defined by the laws.

(2) Property entails obligations. Its use shall also serve the public good.

(3) Expropriation shall only be permissible in the public interest. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In a case of a dispute respecting the amount of compensation, recourse may be had to the ordinary courts.”

21.  Section 3 of the Federal Mining Act distinguishes between certain mineral resources which are “freely available for mining” (bergfrei) and those which belong to the property in question. While the latter may be mined by the owner without a licence from the Mining Authority, the former is not the property of the landowner. Resources which are “freely available for mining” may be extracted by anybody who acquires a licence (Bewilligung) for a specific site under section 8 of the Federal Mining Act. Only after extraction of the resource does the licensee acquire property rights to it.

22.  Section 124 of the Federal Mining Act, in so far as relevant, reads as follows:

“...

(3) In so far as a public transport infrastructure project and a mining operation cannot be operated simultaneously without a significant impairment of the transport infrastructure, the construction, significant modification or operation of the transport infrastructure has priority over the mine unless the public interest in the mine prevails.

(4) If the construction, significant modification or operation of a piece of public infrastructure requires that the entrepreneur installs, removes or modifies installations in his or her mining operation, he or she shall be reimbursed in so far as his or her measures serve the purpose of securing the transport infrastructure ...”

23.  According to the case-law of the Federal Court of Justice and the Federal Administrative Court (see Federal Court of Justice, case nos. III ZR 229/09, 14 April 2011; III ZR 158/75, 1 June 1978; III Z 176/70, 16 October 1972; Federal Administrative Court case nos. 4 A 2/97, 26 March 1998; 4 A 1/98, 30 July 1998), the first sentence of section 124(4) of the Federal Mining Act (as well as similar clauses in previous German mining laws) excludes any further compensation claim.

24.  In a case (4 A 2/97, 26 March 1998) governed by section 124 of the Federal Mining Act, the Federal Administrative Court, considered that the planning decision to allow a piece of transport infrastructure to cut through a mining site might have to provide for a formal expropriation and compensation of the mining rights in order to strike a fair balance between public and private interests if that project completely impeded further mining. As the case in question affected only 11% of the mining site the Federal Administrative Court did not find it necessary to come to a final conclusion on this issue.

THE LAW

I.  ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1

25.  The applicant company complained under Article 1 of Protocol No. 1 to the Convention that its property rights had been infringed because it had not received any compensation for the loss of its mining rights, the costs of relocating its quarrying operation to another site and the loss of earnings from the landfill on the site of the quarry after the seam had been exhausted, all due to the planning and construction of a motorway on its land by the domestic authorities. The compensation for the expropriated land had not been at stake.

26.  Article 1 of Protocol No. 1 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."

A.  Admissibility

27.  The Government argued that the applicant company had failed to exhaust domestic remedies because it had on its own initiative terminated the administrative court proceedings in respect of the planning decision. By declaring the matter resolved it had not only ceased to pursue its initial claim to annul the planning decision, but also to receive comprehensive compensation. Under domestic law, the claim for compensation had to be decided in administrative proceedings firstly, and on the amount in subsequent expropriation proceedings. The planning decision came into effect without explicitly stating that the interference with the business and the mining licence would be compensated. Consequently, the applicant company was barred from claiming compensation other than for the expropriated land.

28.  The applicant company maintained that it had made use of the legal remedies afforded by the national legal system. After the wording of the planning decision had been modified, it had declared the matter resolved because it had then been satisfied that it would be entitled to comprehensive compensation. Only the amount had to be determined in the course of the expropriation proceedings.

29.  The Court has recognised that the rule of exhaustion of domestic remedies contained in Article 35 § 1 of the Convention must be applied with some degree of flexibility and without excessive formalism. In reviewing whether it has been observed it is essential to have regard to the particular circumstances of each individual case (see, for example, Bistrović v. Croatia, no. 25774/05, § 27, 31 May 2007).

30.  The Court notes at the outset that the Meiningen Regional Court and the Thuringia Court of Appeal examined on the merits whether losses other than the value of the land should be compensated. With the exception of the Federal Court of Justice, the domestic courts did not consider the compensation claim to be unfounded on the sole grounds that comprehensive compensation should have already been claimed in the proceedings in respect of the planning decision. Initially, the Administrative Office of Thuringia Land had even awarded the applicant company compensation for some of the relocation costs.

31.  In addition, the Federal Court of Justice’s case-law on the necessary content of compensation schemes in planning decisions does not appear to be fully consistent with the case-law of the Administrative Courts. In one case (see Federal Administrative Court, case no. 4 A 2004/05, 27 June 2007) the domestic court found that it was for the expropriation proceedings to decide on the compensation for adverse effects on a business linked to the expropriation of land. In another case, where a plot of land was partly expropriated (see Munich Administrative Court of Appeal, case no. 22 B 05.233, 18 October 2006), the domestic court found that it was not even obligatory to challenge the planning decision in order to claim compensation for the adverse effects of the expropriation on the remaining land.

32.  Lastly, in the proceedings before the Federal Administrative Court, the applicant company sought in the first place the annulment of the planning decision and in the alternative compensation for the interference with its right to an established and operational business enterprise. Following the modification of the wording, the applicant company declared the matter resolved as, although the annulment had not been granted, the entitlement to compensation had been explicitly stated. The Federal Administrative Court split the costs of the proceedings between the applicant company and the Land. This was common practice if the outcome was open or if the applicant had been partially successful.

33.  The Court observes that the decision on the costs and the modified wording of the planning decision could be reasonably understood as giving the applicant company the impression that there would in fact be compensation in the course of the subsequent expropriation proceedings. It can therefore not be blamed not to have pursued the claim before the Federal Administrative Court further.

34.  It concludes in the light of all these circumstances that the application cannot be rejected for non-exhaustion of domestic remedies.

35.  The Court notes that the application 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.

B.  Merits

1.  Ambit of Article 1 of Protocol No. 1

36.  It was not contested that the applicant company’s mining licence and its quarrying operation were to be regarded as property rights under domestic law.

37.  The Court accepts that the economic interests connected with the running of the limestone quarry were “possessions” for the purpose of Article 1 of Protocol No. 1 (see Tre Traktörer AB v. Sweden, 7 July 1989, § 53, Series A no. 159, and Fredin v. Sweden, no. 12033/86, § 40, 18 February 1991). These not only included the mining licence, but also the continued operation of the plant, machinery, roads and buildings in order to extract and process the limestone.

38.  With regard to the loss of profits from the landfill business, the Federal Court of Justice has ruled (see paragraph 18) that these were mere hopes for profits and as such not protected under Article 14 of the Basic Law, only under Article 12 of the Basic Law (right to exercise one’s profession).

39.  In the light of the Court’s jurisprudence a legitimate expectation of being able to continue having peaceful enjoyment of a possession must have a sufficient basis in national law (see, for example, Kopecký v. Slovakia [GC], no. 44912/98, §§ 45-52, ECHR 2004-IX). The Court takes therefore the view that the applicant company did not have legitimate expectations as regards possible future profits from the landfill business. This part of its complaint therefore does not fall under the ambit of Article 1 of Protocol No. 1.

2.  Interference with the peaceful enjoyment of the applicant company’s possessions

40.  The Court reiterates that the expropriation of the land in the applicant company’s possession is not an issue before the Court (see paragraph 25). It further notes that the mining licence and the quarrying operation were not expropriated. The applicant company could have also pursued its mining business at another site (see paragraph 8).

41.  The Court notes that it was not contested that the construction of the motorway interfered with the mining licence and the quarrying operation. The applicant company was still the holder of the licence, but could not exercise it. It was also still the owner of the quarrying operation, but could not use the plant, machinery, roads and buildings because it was necessary that the plant to process the limestone was next to the quarry. Accordingly, the interference must be considered as control of the use of property, which falls under the second paragraph of Article 1 of Protocol No. 1 (see Fredin, cited above, §§ 43-47; Tre Traktörer AB, cited above, § 55; and Ouzounoglou v. Greece, no. 32730/03, § 28, 24 November 2005).

3.  Compliance with the conditions laid down in the second paragraph of Article 1 of Protocol No. 1

(a)  Lawfulness and purpose of the interference

42.  The Court notes that the interference was based on section 124(3) and (4) of the Federal Mining Act (see paragraph 22). It was not contested that the construction of the motorway in that region of the former German Democratic Republic was important to improve transport infrastructure after German reunification. Thus, the control of the use of property was lawful and pursued an aim in the general interest.

(b)  Proportionality of the interference

43.  The applicant company complained that the domestic authorities had failed to strike a fair balance between the general interest and the applicant company’s interest. When it had purchased the land, it had not known that the motorway would be routed across the quarry. The chosen route across the quarry, by not bypassing it, had saved costs for the general public but imposed an excessive burden on the applicant company.

44.  The Government contested that the applicant company had had to bear an excessive individual burden. The applicant company had been aware of the limitation inherent in the mining licence, it could have continued its quarrying operation during a transitional period at the initial site and subsequently at a nearby mining site with a new licence and it had had many opportunities to challenge the interference.

They referred to Matczyński (Matczyński v. Poland, no. 32794/07, § 106, 15 December 2015) and submitted that, at the time when the applicant company had acquired the property and the mining licence, it had known or should have reasonably known about the restrictions resulting from section 124 of the Federal Mining Act (see paragraphs 21-22). Furthermore, in the wake of German reunification it had been known that transport infrastructure in southern Thuringia would have to be improved and that a motorway had been planned which could possibly have affected the quarrying operation, albeit the exact route of which had not been determined. Lastly, they argued that the Contracting States enjoy a wide margin of discretion in the area of public infrastructure projects.

45.  The Court must therefore determine whether a fair balance was struck between the interests at stake. The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1 of Protocol No. 1 (see, among other authorities, Sporrong and Lönnroth v. Sweden, 23 September 1982, § 69, Series A no. 52). Compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance and, notably, whether it does not impose a disproportionate burden on the applicant. In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation can be considered justifiable under Article 1 of Protocol No. 1 only in exceptional circumstances (see Lithgow and Others v. the United Kingdom, 8 July 1986, § 120, Series A no. 10, and Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, § 94, ECHR 2005-VI).

(i)  Adverse effects on the remaining possessions

46.  The Court observes that in the present case compensation was only paid for the expropriation of the land (see paragraphs 13-17). The effective loss of the applicant company’s mining licence and the interference with its remaining quarrying operation were assessed by the domestic courts separately from the land expropriation and were not compensated at all.

47.  The Court has already examined similar cases of partial expropriation where the applicant did not receive any compensation for the adverse effects on the remaining property, especially for the loss of value. In some cases, the Court observed that the domestic courts, when fixing the compensation, had not had regard to the nature of the road construction and whether or not it had provided any advantage to the owners, but had only fixed compensation with regard to the plots actually expropriated. The Court considered, however, that, having regard to the margin of appreciation left under Article 1 of Protocol No. 1 to the national authorities, there appeared no indication warranting the conclusion that the refusal to grant special indemnities might amount to a violation of Article 1 of Protocol No. 1 (see, for example, Azas v. Greece, no. 50824/99, §§ 51-53, 19 September 2002; and Athanasiou and Others v. Greece, no. 2531/02, § 24, 9 February 2006).

48.  The Court has found in other cases of partial expropriation, where a motorway was built in the near vicinity of an applicant’s house, that such interference might warrant the granting of additional compensation for the limiting of the use of the house. The nature of the construction had evidently contributed more directly to the substantial depreciation of the value of the remaining property (see Bistrović, cited above, §§ 40-42, and Ouzounoglo, cited above, § 30).

49.  The Court takes the view that the present case falls in the latter category of cases. Despite being the holder of the mining licence and the owner of the remaining property with roads, buildings, machinery and the plant, the applicant company could not make use of it because the motorway had been built across the remaining limestone deposits. Thus, the interference at issue might warrant the granting of additional compensation.

(ii)  Knowledge or possible knowledge of restrictions

50.  The Court observes that the applicant company had been aware of the limitations resulting from section 124(3) and (4) of the Federal Mining Act that a public transport infrastructure project had priority over a mining operation. Moreover, the applicant company was or should have reasonably been aware that the planned motorway might affect its quarrying operation. The Court has therefore to examine whether the knowledge or possible knowledge of restrictions or future restrictions justifies a total lack of compensation.

51.  The Court has already examined cases where an applicant could not reasonably have been unaware of the legal limitations and was therefore prevented, for example, to build another house on his or her property (see, mutatis mutandis, Allan Jacobsson v. Sweden (no. 1), 25 October 1989, §§ 60-61, Series A no. 163). However, the applicant company in the present case was not only prevented from further developing its property. There was an interference in a separate right other than to the land, as the applicant company had also been granted a mining licence for twenty-five years and had been able to extract only one third of the deposit.

52.  Similar to Matczyński (cited above, § 106) the applicant company purchased land that was likely to be subject to restrictions, but unlike the applicant in Matczyński it obtained at the same time from the State a mining licence (see, mutatis mutandis, Pyrantienė v. Lithuania, no. 45092/07, §§ 54-56, 12 November 2013). It is worth noting that the mining authority was or could have reasonably been aware of the planned motorway when granting the licence. It issued the licence despite the uncertainty as to where exactly the motorway would be built and how the quarrying operation would be affected.

In several cases the Court has accepted the total lack of a compensation when the owner knew, or ought to have known, or reasonably would have been aware of the possibility of future restrictions. In Fredin (cited above, §§ 12, 16, 54) the environmental law provided for the revocation of a mining licence without compensation after the expiry of ten years. It had already been in force for several years when that applicant had initiated the investment. Unlike in the present case, the mining licence indicated that it was intended to re-examine the permit with a view to its possible termination (see Fredin, cited above, §§ 18 and 54). In Łącz (see Łącz v. Poland (dec.), no. 22665/02, 23 June 2009) relevant excerpts from the local development plan concerning the road construction were appended to the sale contract.

Accordingly, as the applicant company did possess a recent licence for twenty-five years, given when the planning of the motorway was already under way, the Court takes the view that the applicant company’s knowledge or possible knowledge of potential future restrictions does not, in the circumstances of the present case, justify a total lack of compensation.

(iii)  Exceptional circumstances

53.  The Government emphasised the significance of the motorway for the further development of the region in the wake of German reunification.

54.  The Court has already examined cases where expropriation was a result of broad economic reforms or measures designed to achieve greater social justice. It found, for example, that a decision to enact legislation regarding the nationalisation of a whole industry will commonly involve consideration of various issues on which opinions within a democratic society may reasonably differ widely. Because of their direct knowledge of their society and its needs and resources, the national authorities are in principle better placed than the international judge to appreciate what measures are appropriate in this area and consequently the margin of appreciation in deciding whether to deprive an owner of his or her property and to lay down the terms and conditions of the compensation should be a wide one (see Lithgow, cited above, §§ 121-22). However, in that case the Court was not required to decide about a total lack of compensation, but found no violation of Article 1 of Protocol No. 1 after an examination of the compensation terms.

55.  The Court also observes that, unlike in Jahn (cited above), the applicant company did not acquire property under legislation in force during a transitional period between two regimes which had been passed by a non-democratically elected parliament. The interference with its property rights was also not necessary to correct flaws in earlier legislation for reasons of social justice (contrast Jahn, cited above, § 116). The Court emphasised that it had been the unique nature of the general political and legal context in the case of Jahn that had justified a total lack of compensation (see Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, § 123, 25 October 2012).

56.  Thus, in the Court’s view the public infrastructure project at issue, even if realised shortly after German reunification, cannot be considered as an exceptional circumstance that justifies a total lack of compensation as regards the mining licence and the quarrying operation.

57.  The foregoing considerations are sufficient to enable the Court to conclude that there has been an infringement of the applicant company’s right to the peaceful enjoyment of its possessions.

There has accordingly been a violation of Article 1 of Protocol No. 1.

II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

58.  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.”

59.  The applicant company claimed EUR 3,589,566.42 plus interest in respect of pecuniary damage. It also claimed EUR 464,310.01 for the costs and expenses incurred before the domestic courts and EUR 12,605.04 for those incurred before the Court.

60.  The Government submitted that no causal link had been established between the total amount of the pecuniary damage and the alleged violation and between costs of EUR 97,647.09 and the alleged violation. Generally, they stated that the claimed costs and expenses were excessive.

61.  In the circumstances of the case, the Court considers that the question of the application of Article 41 of the Convention is not ready for decision. Consequently, it must be reserved and the subsequent procedure fixed taking due account of the possibility of an agreement between the respondent State and the applicant company (Rule 75 § 1 of the Rules of Court).

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1.  Declares the application admissible;

 

2.  Holds that there has been a violation of Article 1 of Protocol No. 1;

 

3.  Holds that the question of the application of Article 41 is not ready for decision; 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 19 January 2017, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

    Milan Blaško                                                                          Erik Møse
Deputy Registrar                                                                       President