FIRST SECTION

CASE OF KUZNETSOVA v. RUSSIA

(Application no. 67579/01)

JUDGMENT

STRASBOURG

7 June 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 Kuznetsova v. Russia,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
	Mr	 President,
	Mr	
	Mrs	
	Mr	
	Mr	
	Mr	
	Mr	 judges,
and Mr  , Section Registrar,
Having deliberated in private on 15 May 2007,
Delivers the following judgment, which was adopted on the last‑mentioned date:
PROCEDURE
1.  The case originated in an application (no. 67579/01) 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 a Russian national, Ms Lidiya Vladimirovna Kuznetsova (“the applicant”), on 14 February 2001.
2.  The applicant, who had been granted legal aid, was represented by Mr I. Ogorodnikov, a lawyer practising in the Moscow Region. The Russian Government (“the Government”) were represented by Mr P. Laptev, Representative of the Russian Federation at the European Court of Human Rights.
3.  The applicant complained, in particular, of the quashing of a final judgment in her favour on account of newly discovered circumstances.
4.  By a decision of 19 January 2006, the Court declared the application partly admissible.
5.  The applicant and the Government each filed further written observations (Rule 59 § 1). The Chamber having decided, after consulting the parties, that no hearing on the merits was required (Rule 59 § 3 in fine), the parties replied in writing to each other's observations. The Chamber also decided, after examining the request of the Government, that there is no need to relinquish jurisdiction in favour of the Grand Chamber under Rule 72 of the Rules of Court.
THE FACTS
I.  THE CIRCUMSTANCES OF THE CASE
6.  The applicant was born in 1939 and lives in Serpukhov in the Moscow Region.
A.  Background to the case
7.  The applicant is in receipt of an old-age pension.
8.  On 23 June 1997 the Federal Law on Calculating and Upgrading State Pensions (the “Pensions Law”) was enacted. It introduced a new scheme for calculating retirement benefits – the “Individual Pensioner Coefficient” (“IPC”).
9.  On 1 December 1997 the Ministry of Labour brought in the Regulations on the Implementation of the Pensions Law (“the Regulations”) clarifying the application of the Pensions Law.
10.  On 1 February 1998 the Pension Fund Agency of Serpukhov (“the Agency”) re-assessed the amount of the applicant's pension according to the Pensions Law interpreted in the light of the Regulations, and decided that the IPC to be applied in her case should be 0.525.
11.  On 18 June 1998 the Supreme Court of Russia ruled that the Regulations were unlawful.
12.  On 29 December 1999 the Ministry of Labour issued the Directive on the Application of Limitations established by the Pensions Law (“the Directive”). The Directive again specified how the Pensions Law should apply.
13.  By decisions of 24 April, 25 May and 3 August 2000 the Supreme Court of Russia, sitting at three different levels of jurisdiction, confirmed the lawfulness of the Directive.
B.  First set of court proceedings
14.  In January 2000 the applicant instituted court proceedings against the Agency, claiming that under the Pensions Law she was eligible to an IPC of 0.7.
15.  On 13 April 2000 the Serpukhov Town Court of the Moscow Region found in the applicant's favour, having established that the defendant had misinterpreted the Pensions Law. In respect of the Agency's argument that it had applied the law in accordance with the Directive, the court noted that the Directive was essentially similar to the Regulations of 1 December 1997, which the Supreme Court had ruled were unlawful. Accordingly, the court ordered the Agency to apply an IPC of 0.7 when calculating the applicant's pension thereby increasing it by RUR 822.5 and awarded her arrears of RUR 4,593.89.
16.  On 22 May 2000 the Moscow Regional Court dismissed the defendant's appeal, and the judgment of 13 April 2000 became final.
17.  On 16 June 2000 enforcement proceedings commenced.
C.  Re-opening of the applicant's case and ensuing proceedings
18.  In June 2000 the Agency applied for a review of the judgment of 13 April 2000 owing to the discovery of new circumstances. It claimed that on 24 April 2000 the Supreme Court of Russia had confirmed the lawfulness of the Directive and contended that since it had been unaware of the decision of the Supreme Court when the judgment in the applicant's favour was delivered, that judgment should be reviewed.
19.  On 16 August 2000 the Serpukhov Town Court granted the Agency's application and re-opened the proceedings.
20.  On 12 September 2000 following a fresh examination of the case the Serpukhov Town Court dismissed the applicant's claims in full having applied the Directive.
21.  On 26 September 2000 the applicant lodged an appeal against that judgment.
22.  On 6 October 2000 the Serpukhov Town Court stayed the applicant's appeal and invited her to provide a valid explanation for her failure to observe the statutory time-limit of 10 days for appealing against a first-instance judgment, and to pay a court fee in the amount of RUR 87.83. As the applicant failed to fulfil these requirements, on 18 October 2000 the court returned her appeal papers to her.
23.  On 15 November 2000 the Serpukhov Town Court stayed the applicant's appeal against the decision of 6 October 2000 with reference to the same statutory time-limit and invited her to show good cause for her failure to comply with it. On 4 December 2000 it returned the applicant's appeal papers since she had again failed to comply with the requirements. The applicant did not appeal against any of these decisions.
II.  RELEVANT DOMESTIC LAW AND PRACTICE
24.  At the material time the Code of Civil Procedure 1964 provided:
Article 333 ‑ Grounds for re-consideration
“[Judgments] which have come into force may be re-considered on the basis of newly-discovered circumstances. The grounds for re-consideration ... shall be:
1.  significant circumstances which were not and could not have been known to the party who applies for re-consideration;...
4.  cancellation of a court [judgment] or of another authority's decision which served as a legal basis for the [judgment] in question.”
Article 334 ‑ Making of application
“... [An application for re-consideration of a [judgment] due to newly-discovered circumstances] must be made within three months after the discovery of the circumstances.”
Article 337 ‑ Ruling on the re-reconsideration of the case
“... No appeal shall lie against the ruling ordering the re-consideration of the judgment ... due to newly-discovered circumstances”.
THE LAW
I.  ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
25.  The applicant complained that the final judgment in her favour had been quashed on account of newly discovered circumstances, which had resulted in a decrease in her pension. The Court will examine this complaint under Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention. 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.  Submissions by the parties
1.  The applicant
26.  The applicant contended that the decision of the Supreme Court of 24 April 2000 was a new – as opposed to a newly discovered – circumstance, since it was adopted between the first-instance and appellate decisions in the applicant's case. The defendant Agency should therefore have been aware of that decision before the appeal proceedings. Moreover the decision of 24 April 2000 had been issued in the context of another court dispute, and therefore, in the applicant's view, should not have been used as a ground for re-opening her case. The applicant next noted that the decision of the Constitutional Court dated 14 January 1999 referred to by the Government was irrelevant to her case, as it only concerned changes caused by a law's unconstitutionality, whereas the constitutionality of the legislation and regulations applied in her case had never been disputed. Finally, the applicant alleged that the judgment of 13 April 2000 in her favour had become final and legally binding once it had been upheld on appeal, and therefore constituted a “possession”, within the meaning of Article 1 of Protocol No. 1, until it was quashed on 13 August 2000.
2.  The Government
27.  The Government argued that the application was incompatible ratione materiae with the provisions of the Convention. As regards the applicability of Article 6 of the Convention, they referred to the cases of Schouten and Meldrum v. the Netherlands (dec. nos. 19005/91 and 19006/91, 9 December 1994); Pančenko v. Latvia, (dec. no. 40772/98, 28 October 1999) and Kiryanov v. Russia (dec. no. 42212/02, 9 December 2004) and argued that the applicant's pension dispute involved the interpretation of pension legislation rather than the determination of her right to pension benefits and that the method of the calculation of an old-age pension belonged to the public-law domain.
28.  The Government further contested that the pension awarded to the applicant by the judgment of 13 April 2000 was a “possession” within the meaning of Article 1 of Protocol No. 1. They pointed out that in the case of Pravednaya v. Russia (no. 69529/01, 18 November 2004) the Court had regarded a judicial award of that type as being the applicant's “possession” and made an order for the initial judgment in the applicant's favour to be restored and the pension paid to the applicant in the amount originally determined. However, in the Government's view, such an approach created confusion. If the sum awarded by the court was a “possession” of the pensioner, it should not be affected by future rises in the pension rates. Therefore, in the Pravednaya case the applicant would have to return the money she had already received from the Pension Fund by virtue of the recent changes in the legislation on State pensions. They concluded that in order to avoid such a situation the Court should not regard the amounts of pension awarded by the domestic courts as the claimants' “possession” within the meaning of Article 1 of Protocol No. 1, and that therefore this provision was inapplicable in the present case.
29.  As regards the merits of the application, the Government alleged that the decision to re-open the applicant's civil case had not been arbitrary, since it had been based on the Supreme Court's decision of 24 April 2000 confirming the lawfulness of the Directive of 29 December 1999 clarifying how the Pensions Law should be interpreted and applied. In the Government's view, it had been necessary to re-open the case in order to correct a judicial error in the application of the substantive law.
30.  They stressed that since the defendant Agency had learnt about this new circumstance, which was of crucial relevance to the applicant's case, only after the judgment of 13 April 2000 became final, it had been entitled to request the re-opening of the applicant's case and the domestic court had had good grounds for granting its request. In this respect the Government also stressed that the Agency had lodged the application for a review of the judgment of 13 April 2000 within the statutory time-limit of three months after the delivery of the decision of the Supreme Court of 24 April 2000 which constituted the newly discovered circumstance in the applicant's case. The Government also pointed out that the Constitutional Court of Russia had recognised in a decision of 14 January 1999 that changes in the law could constitute newly discovered circumstances and had gone on to confirm in decisions of 2 February 1996 and 3 February 1998 that the Supreme Court's rulings could be regarded as newly discovered circumstances. They argued that the decision to re-open the case fully complied with the Code of Civil Procedure, so that there had been no violation of the applicant's right to a fair trial.
31.  As to whether the applicant's property right had been violated, the Government contended that the applicant had not acquired property since the judgment which had conferred a right on her had been annulled owing to the discovery of new circumstances and the applicant's claims for a higher pension had ultimately been dismissed.
32.  The Government concluded that neither Article 6 § 1 of the Convention nor Article 1 of Protocol No. 1 to the Convention had been violated as a result of the annulment of the judgment in the applicant's favour.
B.  The Court's assessment
1.  The Government's objection on applicability
33.  The Court notes at the outset that the Government's objection concerning the applicability of Article 6 § 1 of the Convention was adequately dealt with in the decision on the admissibility of the present application. It does not consider it necessary to re-examine the matter and therefore rejects the Government's objection in this respect.
34.  In so far as the Government disputed the applicability of Article 1 of Protocol no. 1, the Court reiterates that the Convention does not guarantee, as such, the right to an old-age pension or any social benefit in a particular amount (see, for example, Aunola v. Finland (dec.), no. 30517/96, 15 March 2001). However a “claim” – even concerning a pension – can constitute a “possession” within the meaning of Article 1 of Protocol No. 1 where it has a sufficient basis in national law, for example where it is confirmed by a final court judgment (see Pravednaya, cited above, § 38; and Kopecký v. Slovakia judgment, [GC], no. 44912/98, § 35, ECHR 2004-IX).
35.  The judgment of the Serpukhov Town Court of 13 April 2000 as upheld by the Moscow Regional Court on 22 May 2000 provided the applicant with an enforceable claim to receive an increased pension with an IPC of 0.7 together with arrears of RUR 4,593.89. It became final and binding after being upheld on appeal and enforcement proceedings were instituted. In the Court's view, the applicant therefore had a “possession” for the purposes of Article 1 of Protocol No. 1. The Court also finds that the quashing on 16 August 2000 of that final and binding judgment deprived the applicant of her entitlement to the increased pension, and therefore constituted interference with her right to the peaceful enjoyment of her possessions guaranteed by Article 1 of Protocol No. 1 (see Brumărescu v. Romania [GC], no. 28342/95, § 74, ECHR 1999-VII; and Pravednaya, cited above, § 39).
36.  The Court concludes that the reversal of the final and binding decision in the applicant's favour constituted interference with her rights under both Article 6 and Article 1 of Protocol No. 1 to the Convention. It remains to be established whether this interference was justified.
2.  Alleged violation of Article 6 § 1 of the Convention
37.  The Court reiterates that the right to a fair hearing before a tribunal as guaranteed by Article 6 § 1 of the Convention must be interpreted in the light of the Preamble to the Convention, which declares, in its relevant part, the rule of law to be part of the common heritage of the Contracting States. One of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, among other things, that where the courts have finally determined an issue, their ruling should not be called into question (see , cited above, § 61).
38.  This principle insists that no party is entitled to seek a review of a final and binding judgment merely for the purpose of a rehearing and a fresh decision of the case. The power of review should be exercised for correction of gross judicial mistakes and miscarriages of justice, and not to substitute a review. The review cannot be treated as “an appeal in disguise”, and the mere possibility of two views on the subject is not a ground for re-examination. Departures from that principle are justified only when made necessary by circumstances of a substantial and compelling character (see Ryabykh v. Russia, no. 52854/99, § 52, ECHR 2003–X).
39.  The Court should be especially mindful of the dangers inherent in the use of retrospective legislation which has the effect of influencing the judicial determination of a dispute to which the State is a party. Respect for the rule of law and the notion of a fair trial require that any reasons adduced to justify such measures be treated with the greatest possible degree of circumspection (see The National & Provincial Building Society, the Leeds Permanent Building Society and the Yorkshire Building Society v. the United Kingdom, judgment of 23 October 1997, Reports 1997-VII, § 112; and Zielinski and Pradal & Gonzalez and Others v. France [GC], nos. 24846/94 and 34165/96 to 34173/96, § 57, ECHR 1999‑VII).
40.  The Court also notes, more specifically, that the procedure of re-opening a civil case on account of newly discovered circumstances does not by itself contradict the principle of legal certainty in so far as it is used to correct miscarriages of justice. The Court's task is to determine whether this procedure was applied in a manner which is compatible with Article 6 § 1 (see Pravednaya, cited above, § 28).
41.  Turning to the present case, the Court observes that on 13 April 2000 the Serpukhov Town Court delivered a judgment that was favourable to the applicant. The domestic court construed the applicable law in the applicant's favour and rejected the defendant Agency's reference to the Directive supporting the Agency's interpretation of that law. However, several months after the judgment of 13 April 2000 had become final, it was set aside on the ground that it had not taken into account the decision of the Supreme Court dated 24 April 2000 confirming the lawfulness of the Directive.
42.  The Court does not consider it necessary to decide whether the decision of the Supreme Court delivered on 24 April 2000, that is to say. after the judgment of the Serpukhov Town Court, could be regarded as “newly discovered evidence”, as stated by the Government, or “new evidence”, as alleged by the applicant, as these terms pertain to the domain of the domestic law. The Court reiterates in this respect that it is not called upon to decide issues of interpretation of domestic law but rather has to verify whether on the facts of the case the authorities complied with the requirements of Article 6 of the Convention. Having examined the parties' observations and the materials in its possession, the Court is not satisfied that the aforementioned requirements of Article 6 § 1 were complied with.
43.  It finds it difficult to accept the Government's argument that the applicant's case was re-opened with a view to correcting a judicial error in the application of the substantive law. It notes in this respect that the only reason for the review of the settled dispute was the adoption, in an unrelated set of proceedings, of the decision of the Supreme Court, which confirmed the defendant Agency's interpretation of the law applied in the applicant's case. In the Court's view, being dissatisfied with the outcome of the civil dispute with the applicant, the Agency attempted in essence to re-argue the case with the result that the “wrong” judicial interpretation of the law applied in the applicant's case was replaced with the “correct” interpretation, favourable to the Agency. Moreover, the application of the Agency's interpretation of the law, as supported by the decision of the Supreme Court, led to a retrospective recalculation of the amounts due to the applicant under the judgment of 13 April 2000.
44.  Against this background, the Court considers that the decision to re-open the applicant's case was not aimed at correcting a judicial error or a miscarriage of justice but rather was an abuse of procedure used merely for the purpose of obtaining a rehearing and fresh determination of the case. This, in the Court's view, infringed the principle of legal certainty and the applicant's “right to a court”.
45.  Accordingly, there has been a violation of Article 6 § 1 of the Convention.
3.  Alleged violation of Article 1 of Protocol No. 1
46.  The Court reiterates that the existence of a debt confirmed by a binding and enforceable judgment furnishes the judgment creditor with a “legitimate expectation” that the debt will be paid and constitutes the judgment creditor's “possessions” within the meaning of Article 1 of Protocol No. 1. The quashing of such a judgment amounts to an interference with his or her right to the peaceful enjoyment of possessions (see, among other authorities, Brumărescu, cited above, § 74).
47.  The Court observes that in the instant case the applicant failed to pursue the proceedings once the judgment in her favour had been quashed. In particular, she did not properly appeal against the new judgment which rejected her claims for a higher pension. It reiterates in this respect that the quashing of a final and binding judgment is an instantaneous act (see Sitokhova v. Russia (dec.), no. 55609/00, 2 September 2004). Thus, the eventual outcome of the subsequent proceedings is not directly relevant to the Court's analysis of the complaint about the annulment of the judgment in the applicant's favour (see Ivanova v. Ukraine, no. 74104/01, §§ 35-38, 13 September 2005), save in cases where the subsequent proceedings result in an increased award for the applicant.
48.  The Court further observes that the judgment of the Serpukhov Town Court of 13 April 2000, as upheld by the Moscow Regional Court on 22 May 2000, provided the applicant with an enforceable claim to an increased pension with an IPC of 0.7 plus arrears of RUR 4,593.89. It became final and binding after it had been upheld on appeal, and enforcement proceedings were instituted. In the Court's view, the applicant therefore had a “possession” for the purposes of Article 1 of Protocol No. 1.
49.  The Court finds that the decision of 16 August 2000 to quash the judgment of 13 April 2000 deprived the applicant of her entitlement to an increased pension, and therefore constituted an interference with her right to the peaceful enjoyment of possessions guaranteed by Article 1 of Protocol No. 1 (see Brumărescu, cited above, § 74; and Pravednaya, cited above, § 39).
50.  While the Court accepts that this measure was lawful and pursued the public interest (such as, for example, providing an efficient and harmonised State pension scheme), its compliance with the requirement of proportionality is open to question.
51.  It is true that the recalculation of a pension and its subsequent reduction does not, as such, violate Article 1 of Protocol No. 1 (Skorkiewicz v. Poland (dec.), no. 39860/98, 1 June 1998). However, backdating the recalculation with the effect that the sums due were reduced involved an individual and excessive burden for the applicant and was incompatible with Article 1 of the Protocol. In this respect, the Court refers to the aforementioned Pravednaya judgment, in which it noted:
“40.   ... The 'public interest' may admittedly include an efficient and harmonised State pension scheme, for the sake of which the State may adjust its legislation.
41.  However, the State's possible interest in ensuring a uniform application of the Pensions Law should not have brought about the retrospective recalculation of the judicial award already made. The Court considers that by depriving the applicant of the right to benefit from the pension in the amount secured in a final judgment, the State upset a fair balance between the interests at stake (see, mutatis mutandis, Pressos Compania Naviera S.A. and Others v. Belgium, judgment of 20 November 1995, Series A no. 332, § 43).”
52.  The Court does not find it necessary to depart from its conclusions in that judgment and considers that there has been a violation of Article 1 of Protocol No. 1 in the present case.
II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION
53.  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
54.  The applicant claimed 6,813 euros (EUR) in respect of pecuniary damage, which represented the amount of arrears and increased pension under the judgment of 13 April 2000 index-linked to the inflation rate of 833.3% and converted into euros. She also claimed EUR 12,000 in respect of non-pecuniary damage.
55.  The Government contested the applicant's claims. They argued that the applicant's method of calculation of the amount of pecuniary damage was unreliable and that her claims in this respect were unsubstantiated. They also submitted that the applicant's claims in respect of non-pecuniary damage were excessive. In the Government's view, a finding of a violation would suffice to compensate her for any non-pecuniary damage she had sustained.
56.  The Court does not discern any causal link between the violation of Article 6 and the pecuniary damage alleged. However, in respect of the violation of Article 1 of Protocol No. 1 and having regard to the nature of the violation found, the Court considers it appropriate to award the applicant EUR 250 representing the sum she would have received had the judgment of 13 April 2000 not been annulled (see Yuriy Romanov v. Russia, no. 69341/01, § 60, 25 October 2005).
57.  As to non-pecuniary damage, the Court considers that the applicant must have suffered distress and frustration resulting from the decision to re-open a judgment in her favour, which cannot sufficiently be compensated for by the finding of a violation. Making its assessment on an equitable basis, it awards the applicant EUR 500 in respect of non-pecuniary damage.
B.  Costs and expenses
58.  The applicant claimed EUR 5,500 in respect of the costs and expenses she had incurred in the proceeding before the Court, EUR 5,000 of which represented the amount she had paid to her lawyer under a contract of legal representation and EUR 500 the amount of expenses for such items as postage, photocopies and notary's fees.
59.  The Government did not contest the authenticity of the contract of legal representation submitted by the applicant, and agreed that the expenses claimed by the applicant could be regarded as those actually incurred. They argued, however, that the amount indicated in the contract could not be considered as reasonable and necessary. They also contested the amount of EUR 500, stating that those were part of the total sum under the contract of legal representation. In the Government's view, the sum of EUR 1,000 could be regarded as reasonable and necessary in the present case.
60.  The Court reiterates 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 (see, for example, Nilsen and Johnsen v. Norway [GC], no. 23118/93, § 62, ECHR 1999-VIII).
61.  In the present case, having regard to the documents submitted by the applicant, the above criteria and the complexity of the case, the Court accepts the Government's argument and awards the applicant EUR 1,000 for costs and expenses, less EUR 715 received by way of legal aid from the Council of Europe, plus any tax, including value-added tax, that may be chargeable.
C.  Default interest
62.  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
1.  Holds that there has been a violation of Article 6 § 1 of the Convention and of Article 1 of Protocol No. 1 to the Convention;

2.  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, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement:
(i)  RUR 250 (two hundred and fifty euros) in respect of pecuniary damage;
(ii)  EUR 500 (five hundred euros) in respect of non-pecuniary damage;
(iii)  EUR 285 (two hundred and eighty-five 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;

3.  Dismisses the remainder of the applicant's claim for just satisfaction.
Done in English, and notified in writing on 7 June 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
	Søren Christos 
	Registrar	President