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FIRST
SECTION
CASE OF GRIGORYEV AND KAKAUROVA v. RUSSIA
(Application
no. 13820/04)
JUDGMENT
STRASBOURG
12 April
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 Grigoryev and Kakaurova v. Russia,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Mr L. Loucaides, President,
Mr A.
Kovler,
Mrs E. Steiner,
Mr K. Hajiyev,
Mr D.
Spielmann,
Mr S.E. Jebens,
Mr G. Malinverni, judges,
and
Mr S. Nielsen, Section Registrar,
Having
deliberated in private on 22 March 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 13820/04) 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 two Russian nationals, Mr Guriy Aleksandrovich
Grigoryev and Mrs Alevtina Aleksandrovna Kakaurova (“the
applicants”), on 24 March 2004.
- The
Russian Government (“the Government”) were represented by
Mr P. Laptev, Representative of the Russian Federation at the
European Court of Human Rights.
- On
22 February 2005 the Court decided to give notice of the application
to the Government. Under the provisions of Article 29 § 3 of the
Convention, it decided to examine the merits of the application at
the same time as its admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicants were born in 1930 and 1934 respectively and live in
Irkutsk.
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
- On
22 December 1986 the Irkutsk regional administration ordered
expropriation of the applicants' plot of land, house and certain
constructions in the public interest and transferred them to the
State enterprise “Vostok”. The actual transfer took place
in 1992.
- On
27 January 1993 the first applicant reached an agreement with
“Vostok” by which the enterprise undertook to move the
applicant's garage and cellar to his new place of residence. By a
decision of the same date, the Sverdlovskiy District Court of the
Irkutsk Region approved the agreement. It was later invalidated by
domestic courts.
- On
22 September 1995 the Sverdlovskiy District Court allowed the
applicants' civil claims against “Vostok” and awarded
them compensation for the expropriated property. The applicants did
not specify the amount awarded. It appears that the judgment became
binding and enforceable on 2 October 1995.
- On
1 November 1996 and 13 March 2001 the District Court adjusted the
award under the judgment of 22 September 1995 in line with the
inflation.
- According
to the judgments of 22 September 1995, 1 November 1996 and 13 March
2001, the federal State unitary enterprise “Vostok”
(федеральное
государственное
унитарное
предприятие
“Восток”)
was to pay 72,502.20 Russian roubles (“RUR”) to the first
applicant and RUR 4,856.30 to the second applicant.
- On an unspecified date the bailiffs' service opened
enforcement proceedings and placed the applicants on the waiting
list, along with many others creditors of “Vostok”.
- On
28 January 2002 the Commercial Court of the Irkutsk Region started
insolvency proceedings against “Vostok”.
- On
24 February 2004 the bailiff passed the enforcement documents to the
company receiver.
- On
an unspecified date the applicants brought civil proceedings against
the Irkutsk City Administration, claiming that the Administration
should be liable for the debts of the State enterprise.
- On
3 December 2003 the Kirovskiy District Court of Irkutsk dismissed
their claim as having no basis in the domestic law. On
30 January 2004 the Irkutsk Regional Court upheld the
judgment on appeal.
- It
appears that the judgments of 22 September 1995, 1 November 1996
and 13 March 2001 have not been enforced to date, and that the
insolvency proceedings against “Vostok” are still
pending.
II. RELEVANT DOMESTIC LAW
A. General provisions of Russian law on State
enterprises
- The Civil Code defines State and municipal unitary
enterprises as a special form of legal entities that do not exercise
the right of ownership in respect of the property allocated to them
by the property owner (Article 113 § 1). The State or municipal
authority retains ownership of the property but the enterprise may
exercise in respect of that property the right of economic control
(право
хозяйственного
ведения)
or operative management (право
оперативного
управления)
(Article 113 § 2). The name of the unitary enterprise must
indicate the owner of its property (Article 113 § 3).
- The manager of a unitary enterprise is appointed by,
and reports to, the property owner (Article 113 § 4). The owner
has the right to re-organise or liquidate the unitary enterprise. A
consent by the owner is required for any transaction that may lead to
encumbrance or alienation of the property.
B. Unitary enterprises having the right of economic
control
- The
State or municipal owner of the property is not liable for debts of
unitary enterprises having the right of economic control over the
property unless the owner has caused insolvency of the enterprise or
violated the procedure for its liquidation (Article 114 of the
Civil Code and section 184 of the Bankruptcy Act, federal law no.
8-FZ of 8 January 1998, effective at the material time).
- Unitary
enterprises having the right of economic control over the property
may be declared insolvent in accordance with the insolvency procedure
applicable to private companies. The State or municipal owner of the
property may, but is not obliged to, pay debts of a State enterprise
in the framework of insolvency proceedings (sections 1 and 89 of the
Bankruptcy Act).
C. Unitary enterprises having the right of operative
management
- The
State or municipal owner of the property is liable for debts of
unitary enterprises having the right of operative management of the
property in case of insufficiency of their funds (Article 115 of
the Civil Code).
- Unitary
enterprises having the right of operative management of the property
may not be declared insolvent (Article 65 of the Civil Code).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 AND ARTICLE 1
OF PROTOCOL NO. 1
- The
applicants complained about the continued non-enforcement of the
judgments of 22 September 1995, 1 November 1996 and 13 March 2001 in
their favour. This complaint falls to be examined under Article 6 §
1 of the Convention and Article 1 of Protocol No. 1. The
relevant parts of these provisions read as follows:
Article 6 § 1
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair ... hearing ... by
[a] ... tribunal...”
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
- The
Court reiterates that its jurisdiction ratione temporis covers
only the period after the ratification of the Convention or its
Protocols by the respondent State. From the ratification date
onwards, all of the State's alleged acts and omissions must conform
to the Convention or its Protocols and subsequent facts fall within
the Court's jurisdiction even where they are merely extensions of an
already existing situation (see, for example, Yağcı and
Sargın v. Turkey, judgment of 8 June 1995,
Series A no. 319-A, p. 16, § 40, and Almeida Garrett,
Mascarenhas Falcão and Others v. Portugal,
nos. 29813/96 and 30229/96, § 43, ECHR 2000-I).
- The
Court is competent to examine the facts of the present case for their
compatibility with the Convention only in so far as they occurred
after 5 May 1998, the date of ratification of the Convention by the
Russian Federation. It may, however, have regard to the facts prior
to ratification inasmuch as they could be considered to have created
a situation extending beyond that date or may be relevant for the
understanding of facts occurring after that date (see Broniowski
v. Poland (dec.) [GC], no. 31443/96, §§ 74-77,
ECHR 2002-X).
- Turning
to the facts of the present case, the Court notes the judgment of
1995, as modified in 1996, remains unenforced to date. The period
after 5 May 1998, that is almost nine years, therefore falls
within the scope of the Court's jurisdiction ratione temporis.
- The Government submitted that the applicants had
failed to exhaust domestic remedies because it had been open to them
to bring a civil action against the bailiffs' service. The
Government also submitted that the insolvency proceedings in respect
of the “Vostok” enterprise were ongoing, and that the
complaints about non-enforcement of the judgments in the applicants'
favour were therefore premature.
- The
Court reiterates that Article 35 § 1 of the Convention, which
sets out the rule on exhaustion of domestic remedies, provides for a
distribution of the burden of proof. It is incumbent on the
Government claiming non exhaustion to satisfy the Court that the
remedy was an effective one, available in theory and in practice at
the relevant time, that is to say, that it was accessible, was one
which was capable of providing redress in respect of the applicant's
complaints and offered reasonable prospects of success (see Selmouni
v. France [GC], no. 25803/94, § 76, ECHR 1999-V, and Mifsud
v. France (dec.), no. 57220/00, § 15, ECHR 2002 VIII).
The Court further observes that the domestic remedies must be
“effective” in the sense either of preventing the alleged
violation or its continuation, or of providing adequate redress for
any violation that had already occurred (see Kudła v.
Poland [GC], no. 30210/96, § 158, ECHR 2000 XI).
- The Court notes that insolvency
proceedings in respect of the “Vostok” enterprise started
in 2002. It also notes that by that moment the applicants had already
been on a waiting list of creditors of the “Vostok”
enterprise (see paragraph 11 above). It follows that by the moment
the insolvency proceedings commenced the “Vostok”
enterprise had already for some time been unable to meet the
creditors' claims. The Court concludes that in these circumstances
any civil action brought by the applicants against the bailiffs would
have been ineffective.
- The
Court further notes that the Government's objection concerning the
ongoing insolvency proceedings is closely linked to the merits of the
complaint and should be joined to the merits.
- The
Court considers, in the light of the parties' submissions,
that the application raises serious issues of fact and law under the
Convention, the determination of which requires an examination of the
merits. It considers that the application is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. No other ground for declaring it inadmissible has been
established.
B. Merits
- The
Government contested their responsibility for the continued
non-enforcement of the judgments. They submitted that the domestic
authorities had shown due diligence in the enforcement of the
judgments and could not be blamed for the delay.
- The
applicants insisted that the State was responsible for the failure
for years to enforce the judgments in their favour.
- The
Court observes that on 22 September 1995, 1 November 1996 and 13
March 2001 the applicants obtained enforceable judgments by
which the federal State unitary enterprise “Vostok” was
to pay them a substantial amount. The judgments have not been
enforced to date.
-
The Court notes that under the domestic law the owner of a unitary
enterprise retains ownership of the property of that enterprise,
approves all transactions with that property, controls the management
of the enterprise and decides whether the enterprise should continue
its activity or be liquidated (see paragraphs 17 and 18 above). It
follows that the Government have not demonstrated that the federal
unitary enterprise, such as the Vostok enterprise in the present
case, enjoyed sufficient institutional and operational independence
from the State to absolve the latter from responsibility under the
Convention for its acts and omissions (see, mutatis mutandis,
Mykhaylenky and Others v. Ukraine, nos. 35091/02,
35196/02, 35201/02, 35204/02, 35945/02, 35949/02, 35953/02, 36800/02,
38296/02 and 42814/02, §§ 41-46, ECHR 2004 XII; and
Lisyanskiy v. Ukraine, no. 17899/02, §§ 17-20,
4 April 2006).
- Thus,
the Court considers that the State should be held liable for debts of
the “Vostok” enterprise.
- The
Court reiterates that it is not open to a State authority to cite the
lack of funds or other resources as an excuse for not honouring a
court award (see, mutatis mutandis, Burdov v. Russia,
no. 59498/00, § 35, ECHR 2002 III). Nor can the State,
in such circumstances, justify its failure to enforce the judgment
against a State enterprise with reference to the liquidation of the
company.
- The
Court has frequently found violations of Article 6 § 1 of the
Convention and Article 1 of Protocol No. 1 in cases raising issues
similar to the ones in the present case (see, for example, Burdov,
cited above, §§ 33-42; Gerasimova v. Russia,
no. 24669/02, §§ 14-22,
13 October 2005; Gizzatova v. Russia,
no. 5124/03, 13 January 2005, §§
18-29).
- Having
examined the material submitted to it, the Court notes that the
Government have not put forward any fact or argument capable of
justifying the continued failure to enforce the judgments. It finds
that by failing for years to comply with the enforceable judgments in
the applicants' favour the domestic authorities impaired the essence
of their “right to a court” and prevented them from
receiving the money they had legitimately expected to receive.
- There
has accordingly been a violation of Article 6 of the Convention and
Article 1 of Protocol No. 1.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- The
applicants also invoked Article 8 of the Convention without
specifying the nature of their grievances. Having regard to all the
material in its possession, the Court finds that there is no
indication of a violation of this provision. It follows that this
part of the application must be rejected as being manifestly
ill-founded, pursuant to Article 35 §§ 3 and 4 of 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
- The applicants claimed compensation in respect of
pecuniary damage equal to the awards made in their favour by the
domestic courts adjusted in line with increases of the minimum
monthly wage since 1995. The first applicant finally claimed
compensation for the failure to enforce the agreement concluded with
“Vostok” in 1993. The applicants also claimed
non-pecuniary damage in the amount of approximately 12,000 euros
(“EUR”).
- The Government submitted that the applicants' claims
were unsubstantiated. They considered that a finding of a violation
would provide sufficient just satisfaction.
- The Court notes that the applicants have not received
the original awards of RUR 72,502.20 and RUR 4,856.30. The Court
recalls that the most appropriate form of redress in respect of a
violation of Article 6 is to ensure that the applicant as far as
possible is put in the position he would have been had the
requirements of Article 6 not been disregarded (see Piersack
v. Belgium (Article 50), judgment of 26 October 1984,
Series A no. 85, p. 16, § 12, and, mutatis
mutandis, Gençel v. Turkey, no. 53431/99,
§ 27, 23 October 2003). 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 shall secure, by
appropriate means, the enforcement of the awards made in the
applicants' favour by the domestic courts.
-
As regards the remainder of the applicants' claims for pecuniary
damage, the Court considers that the applicants did not substantiate
these claims. The Court therefore makes no award in this respect.
- Turning
to the applicants' claim for compensation for non-pecuniary damage,
the Court accepts that the applicants suffered distress because of
the State authorities' failure to enforce the judgments in their
favour. However, the amount claimed in respect of non-pecuniary
damage appears excessive. Making its assessment on an equitable
basis, the Court awards EUR 3,000 to the first applicant and EUR 750
to the second applicant in respect of non-pecuniary damage, plus any
tax that may be chargeable on these amounts.
B. Costs and expenses
- The
applicants did not seek reimbursement of costs and expenses relating
to the proceedings before the domestic courts or the Convention
organs and this is not a matter which the Court has to examine of its
own motion (see Motière v. France, no. 39615/98, §
26, 5 December 2000).
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
- Declares the complaints concerning the
non-enforcement of the judicial decisions in the applicants' favour
admissible and the remainder of the application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention and Article 1 of Protocol No. 1;
- Holds
(a) that
the respondent State, within three months from the date on which the
judgment becomes final according to Article 44 § 2
of the Convention, shall secure, by appropriate means, the
enforcement of the awards made by the domestic court and, in
addition, pay the applicants the following amounts:
(i)
EUR 3,000 (three thousand euros) in respect of non-pecuniary damage
to the first applicant and EUR 750 (seven hundred fifty euros) in
respect of non-pecuniary damage to the second applicant, both amounts
to be converted into Russian roubles at the rate applicable on the
date of settlement;
(ii)
any tax that may be chargeable on the above amounts;
(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;
- Dismisses the remainder of the applicants' claim
for just satisfaction.
Done in English, and notified in writing on 12 April 2007, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Loukis Loucaides
Registrar President
