European Court of Human Rights

 

 

 

SECOND SECTION

 

 

 

 

CASE OF ELECTRONSERVICE-NORD S.A. v. THE REPUBLIC OF MOLDOVA

(Application no. 12918/12)

 

 

 

 

JUDGMENT
(Just satisfaction)

 

 

STRASBOURG

23 June 2020

 

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

In the case of Electronservice-Nord S.A. v. the Republic of Moldova,

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

          Arnfinn Bårdsen, President,
          Valeriu Griţco,
          Peeter Roosma, judges,
and Hasan Bakırcı, Deputy Section Registrar,

Having deliberated in private on 26 May 2020,

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

PROCEDURE

1.  The case originated in an application (no. 12918/12) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 23 December 2011 by a company incorporated in Moldova, Electronservice-Nord S.A. (“the applicant company”).

2.  In a judgment delivered on 2 July 2019 (“the principal judgment”), the Court held there had been a violation of Article 6 § 1 of the Convention and of Article 1 of Protocol No. 1 to the Convention (Electronservice-Nord S.A. v. the Republic of Moldova, no. 12918/12, 2 July 2019).

3.  Since the question of the application of Article 41 of the Convention was not ready for decision as regards pecuniary damage, the Court reserved it and invited the Government and the applicant company to submit, within three months, their written observations on that issue and, in particular, to notify the Court of any agreement they might reach (ibid., § 35 and point 5 of the operative provisions).

4.  The applicant company and the Government each filed observations.

BACKGROUND OF THE CASE

5.  Following judicial proceedings which ended with a final judgment of the Bălţi Court of Appeal on 8 December 2009, the applicant company obtained a final ruling obliging the Cadastral Authority to register immovable property privatised by it in 1999 and in 2004 in its name. In particular, the Cadastral Authority was obliged to register, inter alia, the following property:

(a)   Building with a garage totalling 265.8 sq. m and 28.7 sq. m respectively;

(b)  Building measuring 138.4 sq. m;

(c)   Shed measuring 61.2 sq. m;

(d)  Workshop measuring 58.4 sq. m;

(e)   Garage-archive measuring 59.5 sq. m;

(f)   Garage measuring 185.1 sq. m.

6.  On 16 November 2011 the Chisinau Court of Appeal quashed the above judgment after accepting a review request by the Cadastral Authority and ordered the re-opening of the proceedings.

7.  The Court ruled in the principal judgment that that quashing had been contrary to the principle of legal certainty and had breached the applicant company’s rights guaranteed by Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention (see paragraphs 26 and 30 of the principal judgment).

8.  During the re-opened proceedings, in April 2012, the Cadastral Authority registered voluntarily the property listed at letters (a), (b) and (c). The re-opened proceedings ended with a final judgment of the Supreme Court of Justice of 23 October 2013, by which the applicant company’s action against the Cadastral Authority was rejected.

9.  The property listed at letters (d), (e) and (f) was never registered by the Cadastral Authority in the applicant company’s name. Moreover, the property mentioned at letter (f) was demolished by the State in 2018.

RELEVANT DOMESTIC LAW AND PRACTICE

10.  The relevant provision of the Civil Code as applicable at the material time reads as follows:

Article 619. Default interest

“1)  Default interest is payable for the delayed execution of pecuniary obligations. Default interest shall be 5% above the interest rate provided for in Article 585 [the National Bank of Moldova’s refinancing interest rate] unless the law or contract provides otherwise. Proof that less damage has been incurred shall be admissible.

2)  In non-consumer-related situations default interest shall be 9% above the interest rate provided for in Article 585 unless the law or contract provides otherwise. Proof that less damage has been incurred shall be inadmissible.

...”

APPLICATION OF aRTICLE 41 OF THE CONVENTION

11.  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.     Pecuniary damage

12.  The applicant company presented a report by an independent expert containing a detailed calculation of the losses allegedly incurred by it due to inability to use the property. According to the report, the property listed at letters (a), (b) and (c) would have generated profits of 53,686.61 Moldovan lei (MDL) between November 2011 and April 2012, had it been rented out. The property listed at letters (d) and (e) would have generated profits of MDL 293,373.43 between November 2011 and October 2019 (that is, the date of the expert report), had it been rented out. As to the property indicated at letter (f), the report presented an assessment of the alleged lost profits between November 2011 and the date of its demolition in 2018 in an amount of MDL 293,902.57. The total amount of lost profits claimed by the applicant company is 32,944.35 euros (EUR).

13.  The applicant company further claimed the market value of the building indicated at letter (f), which was demolished in 2018. According to the valuation in the expert report, its market value at the time of the demolition was EUR 37,823.

14.  The applicant company also claimed compensation for default interest calculated according to the provisions of the Civil Code (see paragraph 10 above) in an amount of EUR 21,906.60.

15.  Finally the applicant company claimed compensation for inflation in an amount of EUR 20,910.39.

16.  In total the applicant company claimed EUR 113,584.34 for pecuniary damage suffered as a result of the breaches found by the Court in the principal judgment.

17.  The Government expressed doubt as to the applicant company’s submission that it would have rented out the property, had the final judgment of 8 December 2009 not been quashed. They argued that the applicant company had not presented any evidence to substantiate its intention of renting out the property in question and submitted that the applicant company had plans to open a car-wash on the premises.

18.  The Government also expressed the view that there was no causal link between the violations found in the principal judgment and the amounts claimed by the applicant company and submitted that the applicant company’s claims were speculative.

19.  The Court reiterates that a judgment in which it finds a breach imposes on the respondent State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Former King of Greece and Others v. Greece [GC] (just satisfaction), no. 25701/94, § 72). In the present case the reparation should aim at putting the applicant company in the position in which it would have found itself, had the violation not occurred.

20.  The Court considers it clear that the applicant company must have suffered pecuniary damage as a result of its lack of control over its possessions and the denial to it of the possibility to use and enjoy them (see Immobiliare Saffi v. Italy [GC], no. 22774/93, ECHR 1999‑V). These losses were incurred as a result of the quashing of the final judgment of 8 December 2009. As a result of the quashing, the applicant company could not use its possessions for periods varying between five months for the property listed at letters (a), (b), (c) and over eight years for the property listed at letters (d), (e) and (f). Moreover, the property mentioned at letter (f) had been demolished in the meantime.

21.  The Court considers reasonable the general approach taken by the applicant company to assessing the loss suffered as a result of a breach of its Convention rights. Nevertheless, the Court cannot but observe that there is a certain degree of speculation in the calculation presented by the applicant company. Assuming that the applicant company had rented out the property in question, it would inevitably have experienced delays in finding suitable tenants and would have incurred maintenance expenses in connection with the property. Moreover, it would inevitably have had to pay taxes from the profits made.

22.  Taking into account the circumstances of the case under consideration and making its own assessment, the Court awards the applicant company a total amount of EUR 50,000 in respect of pecuniary damage.

B.     Costs and expenses

23.  The applicant company also claimed EUR 1,846 for the costs and expenses incurred before the Court. In particular, it submitted that it had effectively paid its representative EUR 1,682 for representation during the friendly-settlement negotiations and the presentation of the observations concerning the reserved Article 41 part of the case. The rest of the money was paid to the expert who prepared the report on the losses it had suffered.

24.  The Government did not comment on the applicant company’s claims.

25.  The Court reiterates that in order for costs and expenses to be included in an award under Article 41 of the Convention, it must be established that they were actually and necessarily incurred and were reasonable as to quantum (see, for example, Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 240, 23 February 2016. Having regard to all the relevant factors and to Rule 60 § 2 of the Rules of Court, the Court awards the applicant EUR 1,500 for costs and expenses.

C.     Default interest

26.  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.      Holds

(a)   that the respondent State is to pay the applicant company, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i)         EUR 50,000 (fifty thousand euros) , plus any tax that may be chargeable, in respect of pecuniary damage;

(ii)       EUR 1,500 (one thousand five hundred euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(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;

2.      Dismisses the remainder of the applicant company’s claim for just satisfaction.

Done in English, and notified in writing on 23 June 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

   Hasan Bakırcı                                                                    Arnfinn Bårdsen
Deputy Registrar                                                                       President