European Court of Human Rights

SECOND SECTION

CASE OF KEŠELJ AND OTHERS v. MONTENEGRO

(Application no. 33264/11)

JUDGMENT

STRASBOURG

13 February 2018

This judgment is final but it may be subject to editorial revision.

In the case of Kešelj and Others v. Montenegro,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

Ledi Bianku, President,
Nebojša Vučinić,
Jon Fridrik Kjølbro, judges,

and Hasan Bakırcı, Deputy Section Registrar,

Having deliberated in private on 23 January 2018,

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

PROCEDURE

1. The case originated in an application (no. 33264/11) against Montenegro lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (-�the Convention-�) by ten nationals of Bosnia and Herzegovina, on 24 May 2011. Further personal details of the applicants are set out in the appendix.

2. The applicants were represented by Mr I. Darmanović, a lawyer practising in Podgorica. The Montenegrin Government (-�the Government-�) were represented by their Agent, Ms V. Pavličić.

3. On 12 January 2017 the complaints concerning the non-enforcement of a final court settlement concluded in favour of the applicants were 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

A. The proceedings concerning the applicants-� claims

4. On 28 February 1996 the applicants and the debtor (JSP -�Tara-� Cetinje) reached a court approved settlement before the Cetinje Municipal Court, whereby the debtor undertook to pay the applicants specified amounts in respect of pecuniary and non-pecuniary damage.

5. The settlement became final on the same date.

6. The debtor ultimately paid part of the amounts determined in the settlement.

7. On 26 May 1997 the Podgorica Commercial Court opened insolvency proceedings against the debtor.

8. On 19 August 1997 the applicants submitted their respective claims based on the settlement.

9. In the course of the insolvency proceedings the Podgorica Commercial Court acknowledged the applicants-� claims.

10. On 23 December 2009 the Podgorica Commercial Court terminated (zaključio) the insolvency proceedings against the debtor, but continued the proceedings against the debtor-�s estate. This decision was upheld by the Appellate Court on 9 April 2010.

11. The proceedings are still pending.

12. On 14 October 2010 the Constitutional Court dismissed the applicants-� constitutional appeal on procedural grounds.

13. The court settlement in question remains partly unenforced to the present day.

B. The debtor-�s legal status

14. It transpires from the case file that at the time the court settlement was concluded and became final (see paragraphs 4 and 5 above) the debtor was a company predominantly comprised of State-�controlled capital. The Government neither contested this nor provided any evidence to the contrary.

THE LAW

I. ALLEGED VIOLATIONS OF ARTICLE 6 § 1 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL NO. 1

15. Without relying on any of the Articles of the Convention or the Protocols thereto, the applicants complained about the failure of the national authorities to enforce the final court settlement concluded in their favour.

16. Being the master of the characterisation to be given in law to the facts of any case before it (see Tarakhel v. Switzerland [GC], no. 29217/12, § 55, ECHR 2014 (extracts)), the Court considers that the applicants-� complaints fall to be examined under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1, the relevant parts of which read as follows:

Article 6 § 1

-�In the determination of his civil rights and obligations ..., everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.-�

Article 1 of Protocol No. 1

-�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

17. The Government submitted that the applicants-� complaints should be rejected for failure to observe the six-month-�s rule. They maintained that the time-limit had started to run from the date on which the commercial court-�s decision on the termination of the insolvency proceedings against the debtor had become final given that a constitutional appeal had not been an effective domestic remedy at the relevant time.

18. The applicants reaffirmed their complaints.

19. The Court reiterates its conclusion in its decision in the case of Sokolov and Others v. Serbia ((dec), nos. 30859/10 and 6 others, § 34, 14 January 2014) that, in the context of non-�enforcement of domestic court decisions against insolvent socially/State-owned companies, the applicants should lodge their applications, at the latest, within six months of a decision on the termination of insolvency proceedings becoming final. In particular, in its aforementioned Sokolov and Others (cited above, § 33), it found that the insolvency proceedings had been terminated and that the debtor company had been liquidated without any remaining debtor-�s estate, which was why the applicants ought to have been aware that enforcement of the judgments in their favour was no longer possible.

20. In the present case, the proceedings in respect of the debtor-�s estate are still continuing. Therefore, the six-month time-�limit could not have started to run (see, mutatis mutandis, Stanka Mirković and Others v. Montenegro, nos. 33781/15 and 3 others, § 44, 7 March 2017, and the authorities cited therein) and the Government-�s objection in this regard must be dismissed.

21. Since the applicants-� complaints are neither manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention nor inadmissible on any other grounds, they must be declared admissible.

B. Merits

22. The Court notes that the applicants obtained only part of the amounts specified in the final court settlement of 28 February 1996, the remainder of the settlement being still unenforced.

23. The Court observes that it has frequently found violations of Article 6 of the Conventions and/or Article 1 of Protocol No. 1 to the Convention in cases raising issues similar to those in the present case, particularly in cases concerning companies undergoing restructuring, privatisation and/or other forms of transition from a planned to a market economy (see R. Kačapor and Others v. Serbia, nos. 2269/06 and 5 others, §§ 115-116 and § 120, 15 January 2008, Crnišanin and Others v. Serbia, nos. 35835/05 and 3 others, §§ 123-124 and 133-134, 13 January 2009, and Mijanović v. Montenegro, no. 19580/06, §§ 81-82 and 86-91, 17 September 2013).

24. After examining all the material submitted to it, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case. There have accordingly been violations of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1.

II. ALLEGED VIOLATION OF THE CONVENTION IN RESPECT OF MR DRAGO KANDIĆ

25. On 3 July 2017 the applicants-� lawyer provided the Court with a notarised document confirming that Mr Drago Kandić, in respect of whom the same complaint had already been rejected because of an abuse of the right of individual petition, was in fact alive when the application was lodged and still is. The applicants-� lawyer also invited the Court to examine Mr Kandić-�s complaint on the merits.

26. The Government did not express an opinion on the matter.

27. Since this evidence was submitted together with the applicants-� observations, the Court considers that it is not appropriate to take this matter up in the context of this application (see, mutatis mutandis, Mugoša v. Montenegro, no. 76522/12, §§ 70-71, 21 June 2016, and Stanka Mirković and Others v. Montenegro, nos. 33781/15 and 3 others, §§ 64-66, 7 March 2017).

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

28. 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.-�

A. Damage, costs and expenses

29. The applicants requested that the State be ordered to pay the sums awarded by the final court settlement of 28 February 1996, together with statutory interest.

30. The applicants further claimed EUR 5,000 each in respect of the non-pecuniary damage suffered as a consequence of the impugned non-�enforcement.

31. Lastly, they claimed 2,745 Yugoslav dinars and EUR 1,450 jointly for the costs and expenses incurred before the domestic courts, plus EUR 4,100 for the costs and expenses incurred before the Court.

32. The Government contested these claims.

33. Having regard to the violations found in the present case and its own jurisprudence (see Mijanović, cited above, §§ 93-95; R. Kačapor and Others, cited above, §§ 123-126; and Crnišanin and Others, cited above, §§ 137-139), the Court finds that the Government must pay the applicants the sums established in the final court settlement of 28 February 1996, less any amounts which may have already been paid on this basis. As regards the claim for statutory interest, the court notes that no statutory interest was awarded in the said settlement. It therefore rejects the applicants-� claims in this respect.

34. Furthermore, the Court considers that the applicants sustained some non-�pecuniary loss arising from the breaches of the Convention found in this case. The Court awards EUR 2,000 to each applicant, less any amounts which may have already been paid in that regard at the domestic level, to cover the non-pecuniary damage suffered as well as the costs and expenses incurred before the domestic courts and the Court.

B. Default interest

35. 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. Declares the complaints related to the non-enforcement of the final court settlement of 28 February 1996 admissible;

2. Holds that there have been violations of Article 6 § 1 of the Convention and Article 1 of Protocol No.1;

3. Holds

(a) that the respondent State is to pay the applicants, from its own funds and within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the sums awarded in the court settlement of 28 February 1996, which are to be converted into euros at the rate applicable at the date of settlement, less any amounts which may have already been paid on this basis.

(b) that the respondent State is to pay each applicant, within the same period, EUR 2,000 (two thousand euros), less any amounts which may have already been paid in that connection at the domestic level, in respect of non-pecuniary damage, costs and expenses, plus any tax that may be chargeable to the applicants;

(c) 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;

4. Dismisses the remainder of the applicants-� claim for just satisfaction.

Done in English, and notified in writing on 13 February 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan BakırcıLedi Bianku
Deputy RegistrarPresident

APPENDIX