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FOURTH
SECTION
CASE OF
PEJAKOVIĆ AND OTHERS v. BOSNIA AND HERZEGOVINA
(Applications
nos. 337/04, 36022/04 and 45219/04)
JUDGMENT
STRASBOURG
18
December 2007
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 Pejaković and Others v. Bosnia and
Herzegovina,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Sir Nicolas Bratza, President,
Mr J.
Casadevall,
Mr S. Pavlovschi,
Mr L. Garlicki,
Ms L.
Mijović,
Mr J. Šikuta,
Mrs P. Hirvelä,
judges,,
and Mr T.L. Early, Section Registrar,
Having
deliberated in private on 27 November 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in three applications (nos. 337/04, 36022/04 and
45219/04) against Bosnia and Herzegovina lodged with the Court under
Article 34 of the Convention for the Protection of Human Rights and
Fundamental Freedoms (“the Convention”) by three citizens
of Bosnia and Herzegovina, Mr Čedomir Pejaković, Mr
Dragomir Kusić and Ms RuZica Pejić (“the
applicants”), between 8 December 2003 and 16 November 2004.
- The
applicants, two of whom had been granted legal aid, were represented
by Mr P. Radulović, Ms D. Glušac and Mr M. Pjević
respectively (all three lawyers practise in Banja Luka). The
Government of Bosnia and Herzegovina (“the Government”)
were represented by their Agent, Ms M. Mijić.
- The
applicants complain about non-enforcement of final and enforceable
judgments in their favour.
- On 14 December 2006 the President of the Fourth Section
of the Court decided to give notice of the applications to the
Government. Under the provisions of Article 29 § 3 of the
Convention, it was decided to examine the merits of the applications
at the same time as their admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicants were born in 1932, 1944 and 1942 respectively.
Mr Pejaković and Mr Kusić live in Bosnia and
Herzegovina, whereas Ms Pejić lives in Belgium.
- Prior
to the dissolution of the former Socialist Federal Republic of
Yugoslavia (“SFRY”) the applicants deposited foreign
currency in their bank accounts at the then Privredna banka Sarajevo
Filijala Banja Luka (Mr Pejaković), Jugobanka Sarajevo
Ekspozitura Gradiška (Mr Kusić) and Jugobanka Sarajevo
Ekspozitura Brčko (Ms Pejić). In Bosnia and Herzegovina, as
well as in other successor States of the former SFRY, such savings
are commonly referred to as “old” foreign-currency
savings (for the relevant background information see Jeličić
v. Bosnia and Herzegovina (dec.), no. 41183/02, ECHR 2005-...).
- Following
several unsuccessful attempts to withdraw their funds, the applicants
instituted proceedings, seeking the recovery of their entire “old”
foreign-currency savings and accrued interest.
- By
a decision of the Banja Luka Court of First Instance of 4 November
1999, the Banjalučka banka (the legal successor of the Privredna
banka Sarajevo Filijala Banja Luka) was ordered to pay Mr Pejaković
18,952.59 German marks (DEM),
default interest on the above amount at the rate applicable in
Germany to overnight deposits from 1 January 1998, legal costs
in the amount of 250 convertible marks (BAM)
and default interest on the last-mentioned amount at the statutory
rate from the date of the judgment. The judgment entered into force
on 7 March 2001. On 6 June 2001 the Banja Luka Court of
First Instance issued a writ of execution (rješenje o
izvršenju). On 18 January 2002 the judgment debt became a
public debt pursuant to section 20 of the Opening Balance Sheets Act
1998.
- By
a decision of the Gradiška Court of First Instance of 5 July
2000, the Kristal banka (the legal successor of the Jugobanka
Sarajevo Ekspozitura Gradiška) was ordered to pay Mr Kusić
38,779.48 pounds sterling (GBP),
5,758.18 US dollars (USD)
and 193,609.28 Australian dollars (AUD),
default interest on the above amounts at the annual rate of 9% from
29 January 1993 and legal costs in the amount of BAM 6,500.
The judgment entered into force on 8 September 2000. On 28 March 2001
the Gradiška Court of First Instance issued a writ of
execution. On 17 April 2002 the judgment debt became a
public debt pursuant to section 20 of the Opening Balance Sheets Act
1998.
- By
a decision of the Banja Luka Court of First Instance of 28 May 2001,
the Kristal banka (the legal successor of the Jugobanka Sarajevo
Ekspozitura Brčko) was ordered to pay Ms Pejić
DEM 227,445.47,
USD 3,964.17,
1,765.11 Dutch guilders
and 13,735.84 French francs,
default interest on the above amounts at the rate applicable to
overnight deposits from 1 January 1998 until 5 August 1999 and
at the statutory rate thereafter, legal costs in the amount of BAM
4,360
and default interest on the last-mentioned amount at the statutory
rate from the date of the judgment. The judgment entered into force
on 28 July 2001. On 19 October 2001 the Banja Luka Court of First
Instance issued a writ of execution. On 17 April 2002 the judgment
debt became a public debt pursuant to section 20 of the Opening
Balance Sheets Act 1998.
- On 14 December 2001, 29 May 2002 and 17 February 2004
Mr Kusić converted a part of his savings (AUD 26,436.35,
AUD 5,903.99
and GBP 1,536.40
respectively) into privatisation coupons pursuant to section 19 of
the old Privatisation of Companies Act 1998. He subsequently sold
those coupons on the secondary market. The price which he thereby
obtained has not been indicated.
- On 24 January 2002 and 7 August 2002 Mr Pejaković
converted a part of his savings (in total 810 euros) into
privatisation coupons pursuant to section 19 of the old Privatisation
of Companies Act 1998. When purchasing a State-owned apartment at a
later date, the applicant paid a price reduced by the nominal value
of those coupons pursuant to section 33 of the Privatisation of
Apartments Act 2000.
- On
15 April 2006 the Old Foreign-Currency Savings Act 2006 entered into
force (“2006 Act”). Former section 27 of the 2006 Act,
which was in force until 27 September 2007, effectively amended the
awards made by the domestic courts: for example, interest accrued
from 1 January 1992 was to be calculated afresh at an annual
rate of 0.5% instead of the significantly higher interest rates
awarded by the domestic courts.
- On
5 July 2006 the Human Rights Commission within the Constitutional
Court of Bosnia and Herzegovina (“Human Rights Commission”)
dismissed the application brought by Mr Kusić (together with
those brought by a number of other “old” foreign-currency
savers) on the ground that, following the entry into force of the
2006 Act, the matter had been resolved.
- It
would appear that the judgments at issue have not yet been enforced.
II. RELEVANT LAW AND PRACTICE
- The
relevant law and practice were outlined in the admissibility decision
in Jeličić (cited above), Suljagić v. Bosnia
and Herzegovina ((dec.), no. 27912/02, 20 June 2006) and the
judgment in Jeličić v. Bosnia and Herzegovina
(no. 41183/02, ECHR 2006 ...).
- Following the judgment in Jeličić
(cited above), section 27 of the 2006 Act has been amended. It now
reads as follows:
“The courts shall send all their enforceable
judgments ordering the release of “old” foreign-currency
savings either to the Ministry of Finance of the Federation of Bosnia
and Herzegovina, or the Ministry of Finance of the Republika Srpska
or the Directorate for Finance of the Brčko District of Bosnia
and Herzegovina.”
THE LAW
- The
applicants complained about non-enforcement of final and enforceable
judgments in their favour. Their complaints were examined by the
Court under Article 6 of the Convention and Article 1 of Protocol No.
1 to the Convention.
Article
6, in so far as relevant, provides:
“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 to the Convention 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.”
I. ADMISSIBILITY
- The
Government submitted that the complaints of Mr Pejaković and Ms
Pejić were inadmissible on non-exhaustion grounds, by reason of
their failure to complain to the Constitutional Court of Bosnia and
Herzegovina (“Constitutional Court”). They referred to
the finding of the Court that an appeal to the Constitutional Court
constituted, in principle, an effective remedy for raising a
complaint about non-enforcement of judgments (see Mirazović
v. Bosnia and Herzegovina (dec.), no. 13628/03, 16 May 2006 and
Lukić v. Bosnia and Herzegovina
(dec.), no. 34379/03, 9 January 2007).
- The
applicants contested the applicability of that principle to the
judgments ordering the release of “old” foreign-currency
savings on the ground of their being subject to a special legal
regime.
- The
general principles concerning the rule of exhaustion of domestic
remedies were outlined in Mirazović (cited above).
- Given
the Government's failure to provide a single example
of a case in which an individual in a similar situation obtained
redress from the Constitutional Court as well as the recent,
unsuccessful attempt of Mr Kusić to obtain redress from the
Human Rights Commission, which is institutionally close to the
Constitutional Court, the Court agrees with the applicants that the
remedy at issue offered no reasonable prospects of success in the
special circumstances of the present case.
- Therefore,
Mr Pejaković and Ms Pejić were
not required to make use of that remedy and the Government's
objection is thus dismissed.
- The
Court considers that the applicants' complaints raise questions of
law which are sufficiently serious that their determination should
depend on an examination of the merits. No grounds for declaring them
inadmissible have been established. The Court therefore declares
these complaints admissible. In accordance with its decision to apply
Article 29 § 3 of the Convention (see paragraph 4
above), the Court will immediately consider the merits of these
complaints.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION AND OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
- The
applicants argued that the principle of the rule of law, which Bosnia
and Herzegovina undertook to respect when it ratified the Convention,
required that every single judgment be enforced. They further
submitted that Bosnia and Herzegovina, together with other successor
States, had inherited valuable assets from the former SFRY pursuant
to the 2001 Agreement on Succession Issues: for example, Bosnia and
Herzegovina received only from the Bank for International Settlements
the equivalent of BAM 156,011,373.15 in 2002 (see the Earmarking of
Certain Assets Act 2002; Zakon o namjeni i
korištenju dijela imovine koju je Bosna i Hercegovina dobila
po Sporazumu o pitanjima sukcesije;
published in the Official Gazette of Bosnia and Herzegovina no. 11/02
of 30 May 2002). They concluded that the financial
difficulties of Bosnia and Herzegovina were not as serious as the
Government suggested. Indeed, they accused the Government of weak
public-sector management and of being influenced by narrow private
interests.
- The
Government accepted that former section 27 of the 2006 Act restricted
the applicants' access to court, maintaining, at the same time, that
the restrictions pursued legitimate aims (namely, the macroeconomic
stability and fiscal sustainability of Bosnia and Herzegovina) and
that they were balanced. The Government then addressed the general
situation of “old” foreign-currency savings. Lastly, they
submitted that, following the Court's judgment in Jeličić
(cited above), it had been realised that the number of judgments
ordering the release of “old” foreign-currency savings
could amount to 200 and not, as earlier believed, 10 to 20 judgments.
The public debt arising from those judgments exceeded BAM
100,000,000, the Government claimed.
- The
Court notes that the present case is nearly identical to Jeličić
(cited above) in which the Court found a violation of Article 6 of
the Convention as well as a violation of Article 1 of Protocol No. 1
to the Convention. It is true that section 27 of the 2006 Act has
recently been amended and that this could eventually lead to the full
enforcement of the judgments at issue. Nevertheless, it would appear
that this has not yet happened. Furthermore, while there is no doubt
that the public debt to which the Government referred constitutes an
important burden for the State, the Government failed to substantiate
their claim that the enforcement of the judgments ordering the
release of “old” foreign-currency savings (such as those
in the present case) would indeed endanger the macroeconomic
stability and fiscal sustainability of Bosnia and Herzegovina. That
being so, the Court does not see any reason to depart from its
well-established case-law pursuant to which it is not open to a State
authority to cite lack of funds as an excuse for not honouring a
judgment debt (see Jeličić, cited above, § 39).
The remaining arguments of the Government were either already
rejected in Jeličić (cited above, §§ 41
and 44) or became moot following the amendment of section 27 of the
2006 Act.
There
has accordingly been a breach of Article 6 of the Convention and
Article 1 of Protocol No. 1 to the Convention.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- 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
- In
respect of pecuniary damage, the applicants sought the payment of the
judgment debt. In addition, they claimed 4,000 euros (EUR),
EUR 10,000 and EUR 10,000 by way of compensation for
non-pecuniary damage.
- The
Government submitted that the amounts converted into privatisation
coupons should be deducted as in Jeličić (cited
above, § 53). They further considered the amounts claimed for
non-pecuniary damage to be excessive.
- The
Court reiterates that the most appropriate form of redress in respect
of a violation of Article 6 is to ensure that the applicants as
far as possible are put in the position in which they would have been
had the requirements of Article 6 not been disregarded (see
Jeličić, cited above, § 53). The
Court finds that in the present case this principle applies as well,
having regard to the violation found. It therefore considers that the
Government should pay the awards made by the domestic courts.
- In
respect of Mr Pejaković this award consists of a principal debt
(in the amount of EUR 9,691), default interest on the above amount at
the rate and for the period specified by the domestic courts (EUR
1,602), legal costs (EUR 128) and default interest on the
last-mentioned amount at the statutory rate for the period specified
by the domestic courts (EUR 128). The amount of EUR 810 should be
deducted because it has been invested in the privatisation process
(see paragraph 12 above). Mr Pejaković should therefore receive
EUR 10,739 in all under this head plus any tax that may be
chargeable.
- In
respect of Mr Kusić this award consists of a principal debt (in
the amount of EUR 189,748), default interest on the above amount at
the rate and for the period specified by the domestic courts (EUR
246,745) and legal costs (EUR 3,323). As for the amount to be
deducted, the Court notes that the applicant has converted a part of
his savings (in total EUR 21,213) into privatisation coupons which he
has then sold for an unknown price on the secondary market (see
paragraph 11 above). Taking into consideration the going rate for
such coupons at the relevant time (see the Human Rights Chamber's
decision nos. CH/98/420, CH/00/5893, CH/02/9315 and CH/02/9852 of 4
September 2003, § 159), the presumption is that the applicant
has received 60% of the nominal value of his privatisation coupons.
Accordingly, the amount of EUR 12,728 should be deducted (see
Jeličić, cited above, § 54). Mr Kusić
should therefore receive EUR 427,088 in all under this head plus any
tax that may be chargeable.
- In
respect of Ms Pejić this award consists of a principal debt (in
the amount of EUR 123,798), default interest on the above amount at
the rate and for the period specified by the domestic courts (EUR
130,753), legal costs (EUR 2,229) and default interest on the
last-mentioned amount at the statutory rate for the period specified
by the domestic courts (EUR 2,229). It would appear that the
applicant has not converted any of her savings into privatisation
coupons. Ms Pejić should therefore receive EUR 259,009 in all
under this head plus any tax that may be chargeable.
- As
for non-pecuniary damage, the Court accepts that the applicants
suffered distress, anxiety and frustration because of the State's
failure to enforce judgments in their favour. Making its assessment
on an equitable basis, as required by Article 41 of the Convention,
the Court awards EUR 4,000 to each applicant under this head
plus any tax that may be chargeable.
B. Costs and expenses
- Ms
Pejić also claimed the equivalent of EUR 2,550 for the costs and
expenses incurred before the Court.
- The
Government disagreed with the amount claimed by the applicant.
- The
Court notes that Ms Pejić was granted legal aid under the
Court's legal-aid scheme in the amount of EUR 850. She failed to
submit evidence, such as itemised bills and invoices, that any
additional expenses had been actually incurred. Accordingly, the
Court rejects her claim.
C. Default interest
- The
Court considers it appropriate that the default interest 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
- Decides to join the applications;
- Declares the applications admissible;
- Holds that there has been a violation of Article
6 of the Convention;
- Holds that there has been a violation of Article
1 of Protocol No. 1 to the Convention;
- Holds
(a) that
the respondent State is to pay Mr Pejaković, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts, which should be converted into convertible marks at the rate
applicable on the date of settlement:
(i) EUR
10,739 (ten thousand seven hundred and thirty nine euros) in respect
of pecuniary damage;
(ii) EUR
4,000 (four thousand euros) in respect of non-pecuniary damage; and
(iii) any
tax that may be chargeable on the above amounts;
(b) that
the respondent State is to pay Mr Kusić, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts, which should be converted into convertible marks at the rate
applicable on the date of settlement:
(i) EUR
427,088 (four hundred and twenty seven thousand and eighty eight
euros) in respect of pecuniary damage;
(ii) EUR
4,000 (four thousand euros) in respect of non-pecuniary damage; and
(iii) any
tax that may be chargeable on the above amounts;
(c) that
the respondent State is to pay Ms Pejić, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts, which should be converted into convertible marks at the rate
applicable on the date of settlement:
(i) EUR
259,009 (two hundred and fifty nine thousand and nine euros) in
respect of pecuniary damage;
(ii) EUR
4,000 (four thousand euros) in respect of non-pecuniary damage; and
(iii) any
tax that may be chargeable on the above amounts;
(d) 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;
- Dismisses the remainder of the applicants'
claims for just satisfaction.
Done in English, and notified in writing on 18 December 2007,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
T.L. Early Nicolas Bratza
Registrar President
