[New search]
[Contents list]
[Printable RTF version]
[Help]
FOURTH
SECTION
CASE OF
NISTAS GMBH v. MOLDOVA
(Application
no. 30303/03)
JUDGMENT
STRASBOURG
12
December 2006
FINAL
12/03/2007
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 Nistas Gmbh v. Moldova,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Sir Nicolas Bratza, President,
Mr J.
Casadevall,
Mr G. Bonello,
Mr M. Pellonpää,
Mr K.
Traja,
Mr S. Pavlovschi,
Mr J. Šikuta, judges,
and
Mr T.L. Early, Section Registrar,
Having
deliberated in private on 21 November 2006,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 30303/03) against the Republic
of Moldova lodged with the Court on 4 August 2003 under Article 34
of the Convention for the Protection of Human Rights and Fundamental
Freedoms (“the Convention”) by Nistas Gmbh, a company
registered in Germany and having its head office in Frankfurt am
Main.
- The
applicant was represented by Engelmann, Kargl &
Gorev-Drozd, a law firm based in Frankfurt. The Moldovan
Government (“the Government”) were represented by their
Agent, Mr V. Pârlog.
- The
applicant alleged, in particular, that its right to a fair hearing
and its right to the peaceful enjoyment of its possessions were
breached as a result of the quashing of final judgments in its
favour.
- The
application was allocated to the Fourth Section of the Court (Rule 52
§ 1 of the Rules of Court).
- On
19 May 2004 a Chamber of that Section decided to communicate 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
facts of the case, as submitted by the parties, may be summarised as
follows.
- On
31 December 1997 the applicant (hereinafter “NISTAS”)
concluded a contract with the State-owned Moldovan Railways Company
(Calea Ferată din Moldova, hereinafter CFM). The initial
contract provided for the lending of 128 container-wagons by NISTAS
to CFM for a five-year period. The contract was later modified by the
parties into a leasing agreement. CFM was to pay in instalments for
the use of the wagons. The total price of the contract was 4,675,560
United States Dollars (USD).
- Until
March 2001 CFM paid regularly. However, it did not pay between March
and November 2001. The debt accumulated over this period amounted to
USD 705,760 and the applicant claimed that the associated contractual
penalties were USD 57,166. This constitutes “the first debt”.
- On
13 October 2001 CFM registered with the National Bank of Moldova the
lease contract, as was required by law.
- From
November to December 2001 no payments were made. The debt for this
period amounted to USD 386,560 and penalties to USD 29,185 (“the
second debt”).
- From
May to September 2002 CFM again failed to make payments. The debt
accumulated over that period amounted to USD 416,943 and penalties to
USD 25,263 (“the third debt”).
- NISTAS
initiated three sets of court proceedings against CFM, claiming the
above debts.
1. Proceedings A (regarding the first debt)
- On
17 January 2002 the Chişinău Economic Court found in favour
of NISTAS. It awarded USD 704,000 in respect of the debt, USD 57,024
in penalties and USD 22,830 in court fees.
- This
judgment was upheld by the Appellate
Chamber of the Economic Court of the Republic of Moldova on 28
February 2002, by the Cassation Chamber of the Economic Court of the
Republic of Moldova on 8 April 2002 and by the Supreme Court of
Justice on 26 June 2002.
- The
latter judgment was final and enforceable and was enforced at an
unspecified time before February 2003.
- The
Prosecutor General subsequently filed a request for annulment of all
the above judgments and asked for the amounts awarded to be reduced.
- On
24 February 2003 the Plenary Supreme
Court of Justice upheld the Prosecutor General’s request for
annulment and quashed all the judgments. It adopted a new judgment
whereby it confirmed the award as regards the outstanding debt and
reduced to USD 15,000 the award for
penalties (a difference of USD 42,024).
The court accordingly also reduced the court fees awarded to USD
21,569.
2. Proceedings B (regarding the second debt)
- On
19 June 2002 the Chişinău Economic Court found in favour of
the applicant. It awarded USD 386,560 in respect of the debt,
USD 29,185.28 in penalties and USD 12,472 in court fees.
- This
judgment was upheld by the Appellate
Chamber of the Economic Court of the Republic of Moldova on 15
October 2002 and by the Supreme Court of Justice on 27 November 2002.
- The
latter judgment was final and enforceable and was enforced at an
unspecified time before February 2003.
- The
Prosecutor General subsequently filed a request for annulment of all
the above judgments and asked for the amounts awarded to be reduced.
- On
24 February 2003 the Plenary Supreme
Court of Justice (entirely separately from its judgment on the same
day in proceedings A) upheld the Prosecutor General’s request
for annulment and quashed all the above judgments. It adopted a new
judgment whereby it confirmed the award as regards the outstanding
debt and reduced to USD 10,000 the award
for penalties (a difference of USD 19,185).
The court also reduced the court fee to USD 11,896.
3. Proceedings C (regarding the third debt)
- On
20 December 2002 the Chişinău Economic Court found in
favour of the applicant. It awarded USD 391,680 in respect of the
debt, USD 25,263 in penalties and 171,698 Moldovan lei (MDL)
(the equivalent of 11,947.53 euros (EUR) at the time) in court fees.
- This
judgment was partially set aside by the
Appellate Chamber of the Economic Court of the Republic of Moldova on
23 April 2003. That court confirmed the award in respect of the debt,
but awarded USD 6254 in penalties and USD 10,046 in court fees, based
on Article 217 of the Civil Code (see paragraph 30 below).
- However,
noting that two final judgments in proceedings A and B had already
been executed before the Plenary Supreme Court of Justice quashed
them on 24 February 2003, the court reduced the sum to be awarded as
regards the debt and the court fees by a total of USD 63,045.
- As
a result, the award in respect of the debt made in proceedings C, set
by the Court at USD 391,680, was reduced to USD 328,635, taking into
account the judgments of 24 February 2003.
- The
court also ordered that the applicant pay court fees of MDL 5,915
(the equivalent of EUR 411.59 at the time) in respect of those of its
claims which had been rejected by court.
- On
12 June 2003 the Supreme Court of Justice partially modified the
judgment of the Appellate Chamber of the Chişinău Economic
Court, increasing the amount of court fees awarded to the applicant
to USD 11,938.
II. RELEVANT DOMESTIC LAW
- The
relevant domestic law is summarised in Roşca v. Moldova
(no. 6267/02, §§ 16 and 17, 22 March 2005).
- In
addition, the relevant provisions of the Civil Code, in force before
12 June 2003, read as follows:
“Article 217.
If the [penalties] that must be paid largely exceed the
damage caused to the creditor, the court has the power to reduce the
[penalties]. In such a case the court shall take into consideration:
1) the degree of fulfilment of the obligation by the
debtor;
2) the financial state of the arties to the obligation;
...”
THE LAW
I. ADMISSIBILITY OF THE COMPLAINTS
- The
applicant complained that the quashing of the final judgments in its
favour violated its rights under Article 6 § 1 of the Convention
and Article 1 of Protocol No. 1 to the Convention.
- The
Court considers that the applicant’s complaints under both
these Articles raise questions of law which are sufficiently serious
that their determination should depend on an examination of the
merits. No other 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 5 above), the Court will
immediately consider the merits of these complaints.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the two judgments of the Supreme Court of
Justice of 24 February 2003, which set aside two final judgments in
its favour, had violated Article 6 § 1 of the Convention.
The
relevant part of Article 6 § 1 reads as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair and public hearing
... by an independent and impartial tribunal established by law...”
- The
Government rejected the applicant’s claims and argued that in
the proceedings before the Supreme Court of Justice the parties had
enjoyed equal procedural rights and that the re-opening was
justified.
- The
Court has found violations of Article 6 § 1 of the Convention in
numerous cases raising issues similar to those in the present case
(see, among other authorities, Brumărescu v. Romania
[GC], no. 28342/95, § 61, ECHR 1999 VII and Roşca
v. Moldova, no. 6267/02, 22 March 2005, § 29).
- Having
examined the material submitted to it, the Court notes that the
Government have not put forward any fact or argument capable of
persuading it to reach a different conclusion in the present case.
- Having
regard to its case-law on the subject, the Court finds that the
quashing of the final judgments in favour of the applicant breached
the applicant’s right to a fair hearing under Article 6 §
1 of the Convention.
- Moreover,
the reliance by the courts in proceedings C on the outcome of the two
annulment proceedings (the judgments of 24 February 2003) as the only
reason for reducing the award for the main debt in the applicant’s
favour tainted the fairness of proceedings C.
- There
has accordingly been a violation of Article 6 § 1 of the
Convention.
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO.1 TO
THE CONVENTION
- The
applicant complained that the Supreme Court of Justice’s
judgments of 24 February 2003 had had
the effect of infringing its right to the peaceful enjoyment of its
possessions as secured by Article 1 of Protocol No. 1, which
provides:
“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.”
- The
Government submitted that the judgments of 24 February 2003 did not
affect the applicant’s property right since the two judgments
which were quashed by those judgments had already been fully enforced
and since the quashing only affected the amount of penalties and
court fees and not the principal of the debts. The judgments of 24
February 2003 should be distinguished from cases such as Roşca
v. Moldova, cited above, since in the present case the annulments
did not result in any deprivation of the applicant’s property.
- The
applicant submitted that although the judgments of 24 February
2003 did not directly deprive it of any property, they were relied on
expressly in the subsequent judgments to diminish by a specific
amount the award given by the judgments of 23 April 2003 and 12 June
2003. There was thus a clear violation of the applicant’s
property right.
- The
Court recalls its finding in paragraph 38 of a violation of Article 6
§ 1 of the Convention also in respect of proceedings C as a
result of the courts’ reliance on the outcome of the annulment
proceedings. It therefore considers that the deduction from the
applicant’s award made in proceedings C, even assuming that it
was carried out with the public interest in mind, could not be
justified since a fair balance was not preserved and the applicant
was required to bear an individual and excessive burden
(cf. Brumărescu, cited above, §§ 75-80).
- There
has accordingly been a violation of Article 1 of Protocol No. 1
to the Convention.
IV. 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. Pecuniary damage
- The
applicant claimed USD 82,044, which it considered to be the
equivalent of EUR 113,300 as a result of currency fluctuations, for
pecuniary damage suffered as a result of the quashing of the final
judgments in its favour. This amount included the deductions of USD
63,045 as ordered by the courts in proceedings C on the basis of the
quashing of 24 February 2003 and the consequent deductions from
the penalties by USD 19,009 and of the amounts of court fees
(USD 2,506 and 23,098 Moldovan lei, equivalent to EUR 1,393 in June
2003) not returned to the applicant because it was considered “not
to have won” the proceedings in respect of the USD 63,045
mentioned above.
- The
applicant also claimed lost profits, which amounted, according to it,
to at least 7% a year from the above amounts.
- The
Government contested the exchange rate used to convert USD 82,044
into euros. In addition, the applicant did not present evidence of
its intentions to obtain the losses claimed. According to their
calculations, the amount of penalties deducted from the three awards
in favour of the applicant as a result of the quashing was USD
42,024. The reduction of the court fees by USD 1,260.72 was in favour
of the applicant since it had to pay smaller fees as a result.
- The
Government also contested the claim of 7% a year in lost profits as
unsubstantiated: the applicant had not submitted any calculations or
evidence to support its claims in this respect, contrary to Article
60 of the Rules of Court.
- The
Court recalls its finding of a violation of Article 6 § 1 of the
Convention in proceedings C (see paragraph 38 above). It notes the
divergent calculations of the parties regarding the amount of
deductions from the award made in those proceedings as a result of
the quashing. It also notes that in proceedings C the courts
expressly stated that they had deducted from the award to which the
applicant was entitled (in respect of the main debt, penalties and
court fees) the total amount of USD 63,045 based on the judgments of
24 February 2003. This sum included the deductions from both the
penalties and the court fees awarded in proceedings A and B. It
follows that, for the purposes of restitutio in integrum, this
amount has to be returned to the applicant, at the rate of exchange
on the date of making the claims, which equals EUR 53,346.
- The
Court notes that the reduction of penalties from USD 25,263 to USD
6,254 during proceedings C was not ordered with any reference to the
judgments of 24 February 2003 but rather on the basis of general
legal provisions (Article 217 of the Civil Code in force at the time,
see paragraphs 24 and 30 above). The Court does not discern a
causal link between the quashing of the final judgments in favour of
the applicant and this deduction, which accordingly does not have to
be returned. The same applies to the court fees not returned in
respect of the part of the applicant’s claims which were so
rejected.
- The
Court notes that the applicant has claimed lost profits in the amount
of 7% a year from the amounts it was not able to use since June 2003.
However, it does not accept the applicant’s method of
calculation. Taking into consideration the average interest rate as
indicated by the National Bank of Moldova for the period in question
(see Roşca v. Moldova, cited above, § 37) and
the circumstances of the case under consideration, the Court awards
the applicant the sum of EUR 7,251.
- It
follows that the total amount of pecuniary damage to be paid to the
applicant equals EUR 60,597.
B. Non-pecuniary damage
- The
applicant claimed EUR 3,000 for the non-pecuniary damage suffered as
a result of the quashing of the final judgment favourable to it. It
argued that the quashing caused it anxiety and humiliation.
- The
Government disagreed with the amount claimed by the applicant,
arguing that it was unsubstantiated and that the mere fact of finding
a violation could be considered to be sufficient just satisfaction.
56. The Court considers that, as a
result of the quashing of final judgments in its favour, the
applicant was placed in a state of uncertainty regarding the level of
compensation, if any, still to be received from its counterpart, and
regarding the future of its property – 128 wagons. It could
thus not fully plan its activity as a result. The Court awards the
applicant EUR 2,000 for non-pecuniary damage (cf. Roşca
v. Moldova, cited above, § 41; Sovtransavto Holding
v. Ukraine (just satisfaction), no. 48553/99, §§ 78-82,
2 October 2003).
C. Costs and expenses
- The
applicant also claimed EUR 24,700 for the costs
and expenses incurred before the Court, which constituted payment of
the legal fees of the law firm at its normal rate of EUR 300 per hour
for 72 hours worked on the case.
- In
support of its claims regarding representation fees the applicant
sent the Court copies of several requests by the applicant’s
representative to make the transfer of representation fees.
- The
Government did not agree with the amounts claimed. They noted that
the applicant had failed to annex invoices confirming payments to the
representative and that the documents submitted did not prove that
the representative had in fact been paid. The documents were,
moreover, not submitted in one of the official languages of the
Court.
- The
Government contested the amount of time spent in preparing the case
and submitted that it had not been proven that the expenses claimed
had been necessary and reasonable as to quantum. They asked the Court
to reject the applicant’s claim for legal expenses in their
entirety.
- The
Court recalls that in order for costs and expenses to be included in
an award under Article 41, it must be established that they were
actually and necessarily incurred and were reasonable as to quantum
(Roşca v. Moldova, cited above, § 45).
- In
the present case, regard being had to the legal representation
provided by the applicant’s lawyer, the above criteria and the
complexity of the case, as well as the failure to submit evidence
regarding the extent of the applicant’s obligation to pay its
lawyer or an itemized list of hours worked on the case, the Court
awards the applicant EUR 2,400 for costs and expenses.
D. 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 application admissible;
- Holds that there has been a violation of Article
6 § 1 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 the applicant,
within three months from the date on which the judgment becomes final
in accordance with Article 44 § 2 of the
Convention, the following amounts:
(i) EUR
60,597 (sixty thousand five hundred and ninety seven euros) in
respect of pecuniary damage;
(ii) EUR
2,000 (two thousand euros) in respect of
non-pecuniary damage;
(iii) EUR
2,400 (two thousand four hundred euros) in
respect of costs and expenses;
(iv) 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 applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 12 December 2006,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
T.L. Early Nicolas Bratza
Registrar President
