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FIRST
SECTION
CASE OF EFENDIYEVA v. AZERBAIJAN
(Application
no. 31556/03)
JUDGMENT
STRASBOURG
11
December 2008
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 Efendiyeva v. Azerbaijan,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Christos Rozakis, President,
Nina
Vajić,
Anatoly Kovler,
Dean
Spielmann,
Sverre Erik Jebens,
Giorgio
Malinverni, judges,
Latif Huseynov, ad hoc
judge,
and Søren
Nielsen, Section
Registrar,
Having
deliberated in private on 20 November 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 31556/03) against the Republic
of Azerbaijan lodged with the Court under Article 34 of the
Convention for the Protection of Human Rights and Fundamental
Freedoms (“the Convention”) by an Azerbaijani national,
Mrs Latifa Talat qizi Efendiyeva (Lətifə Tələt
qızı Əfəndiyeva – “the
applicant”), on 11 September 2003.
- In
a judgment delivered on 25 October 2007 (“the principal
judgment”), the Court held that there had been violations of
Article 6 § 1 of the Convention and Article 1 of Protocol No. 1
to the Convention due to non-enforcement of a final judgment ordering
the applicant’s reinstatement in her job (the principal
judgment, §§ 53-63).
- Under
Article 41 of the Convention the applicant sought just satisfaction
of several hundred thousand euros for damage sustained and costs and
expenses.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it and invited the
Government and the applicant to submit their written observations on
that issue and, in particular, to notify the Court of any agreement
they might reach (ibid., § 69, and point 5 of the operative
provisions).
- The
applicant and the Government each submitted observations and replied
to each other’s observations.
THE LAW
- 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
1. Pecuniary damage
(a) The parties’ submissions
- In
respect of pecuniary damage, the applicant claimed 893,114.74 New
Azerbaijani manats (AZN) for lost earnings. In particular, she
claimed (a) the principal amount of AZN 35,316 for
outstanding salary for the period of 162 months (from January 1994 to
June 2007); and (b) interest accrued on the above in the amount
of AZN 863,476, calculated at the rate of 1% for each calendar day of
delay in payment of each month’s salary. The amount of AZN
5,677.26, paid to the applicant pursuant to the Supreme Court’s
decision of 18 January 2008, was deducted from the sum of the
previous two amounts, bringing the total to AZN 893,114.74.
- As
for the principal amount of the outstanding salary, the applicant
originally claimed the actual rate of each month’s unpaid
salary, applicable at the relevant time. The salary rate had been
increased numerous times during the approximately thirteen-year
period while the judgment of 9 September 1994 remained
unenforced, and was significantly lower in 1994 than at the time of
the execution of the judgment on 11 July 2007, when the applicant was
finally reinstated in her job. However, following the delivery of the
principal judgment, the applicant submitted an amended claim and
maintained that all the unpaid monthly salary corresponding to the
period of delay in execution should be calculated at the rate of the
current salary (AZN 218, which was higher than all previous rates).
- The
Government argued that the application of the current salary rate to
the unpaid salary during the entire period of delay in execution was
unsubstantiated. The Government further submitted that such a
“baseless” amendment of the original claim appeared to be
an effort to “exceed reasonable limits of just satisfaction”
and to obtain unjust enrichment.
- As
for the accrued interest, the applicant claimed interest at the rate
of 1% for each day of delay in payment of each month’s salary
during the period of delay in execution of the judgment of 9
September 1994, calculated up to June 2007. She relied on Article
172.5 of the Labour Code, which provided:
“If the payment of salary is delayed due to the
fault of the employer, and if this has not resulted in an individual
labour dispute, the employee shall be paid interest in the amount of
at least one per cent of the salary for each day of delay in
payment.”
- Relying
on the reasoning in the Supreme Court’s decision of 18 January
2008, the Government contested this claim, arguing that Article 172.5
of the Labour Code did not apply in the present case, as the delay in
payment of salary to the applicant has “resulted in an
individual labour dispute”. In such an event, Article 300 of
the Labour Code applied, which provided that the compensation awarded
to an employee for unlawful dismissal should include, inter alia,
only “the average salary of the employee during the period of
his or her absence from work” without any fixed-rate interest
accrued. The Government maintained that the applicant had been fully
compensated for her lost earnings by the Supreme Court’s
decision of 18 January 2008.
- The
applicant disagreed, arguing that the only “labour dispute”
between her and her employer had already been resolved by the
judgment of 9 September 1994, which had not been enforced for almost
thirteen years. According to the applicant, the subject matter of the
current case is not a labour dispute between her and her employer,
but a compensation for late execution of the final and binding
judgment of 9 September 1994 as a result of which she had not been
paid, in a timely manner, the salary to which she had been entitled.
(b) The Court’s assessment
- The
Court points out 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 Papamichalopoulos and Others v. Greece (Article 50),
judgment of 31 October 1995, Series A no. 330 B, pp. 58-59,
§ 34).
- If
the internal law allows only partial reparation to be made,
Article 41 of the Convention gives the Court the power to award
compensation to the party injured by the act or omission that has led
to the finding of a violation of the Convention. The Court enjoys a
certain discretion in the exercise of that power, as the adjective
“just” and the phrase “if necessary” attest
(see Comingersoll S.A. v. Portugal [GC], no. 35382/97, §
29, ECHR 2000 IV).
- At
the outset, the Court notes that on 11 July 2007 the applicant was
reinstated in her position of head physician of the Republican
Maternity Hospital in accordance with the judgment of 9 September
1994 (see the principal judgment, § 22). On 18 January 2008 the
Supreme Court awarded the applicant AZN 5,677.26 in compensation for
pecuniary damage sustained as a result of the delayed enforcement of
the judgment. The applicant has been paid this amount.
- The
Court notes that, as a result of the lengthy non-enforcement of the
judgment of 9 September 1994 ordering her reinstatement, the
applicant was unable to return to her job and receive the wages to
which she was entitled. Therefore, the Court considers that there is
a causal link between the violations found and the applicant’s
claims in respect of lost earnings.
- The
applicant’s claim goes back to January 1994, when she was
dismissed from her job. However, the Court reiterates its finding in
the principal judgment that the period prior to 15 April 2002, the
date of the Convention’s entry into force with respect to
Azerbaijan, fell outside the Court’s competence ratione
temporis (ibid., § 34). Therefore, no award can be made in
respect of any damage suffered prior to 15 April 2002 and the Court
will take into consideration only claims relating to the period after
that date.
- The
Court does not accept the applicant’s argument that the total
principal amount of all salary arrears should be calculated at the
current rate of the applicant’s salary. Such a method of
calculation would not reflect the actual pecuniary loss sustained.
The Court considers that, as to the principal amount of lost
earnings, the applicant can claim only the sum of the salary she
would have been entitled to receive had she been reinstated in her
job in a timely manner, at actual rates applicable at various times
throughout the relevant period.
- The
Court notes that, in her original just satisfaction claim submitted
prior to the delivery of the principal judgment, the applicant
specified the exact salary rates applicable for each month during the
period from January 1994 to March 2005. However, she has not
submitted any information on exact salary rates applicable during the
period between April 2005 and July 2007, as in her amended claim her
calculations for each month’s salary throughout the entire
period of non-execution were based on the current salary rate.
Neither the Government’s observations nor the Supreme Court’s
decision of 18 January 2008 contained any breakdown of the salary to
which the applicant was entitled each month. Nevertheless, as far as
it is possible to deduce from other materials available in the case
file even in the absence of this specific information, the total
amount of salary due to the applicant in the period from 15 April
2002 to 11 July 2007 constituted approximately AZN 4,250.
- As
to the interest claimed by the applicant, the Court accepts her
argument that, as there has been a decrease in value of the delayed
salary due to inflation, deferred consumption, opportunity cost or
other factors, she is entitled to additional compensation for that
decrease in value and that the compensation can be calculated on the
basis of an interest rate applied on the principal amount of each of
her delayed salary payments.
- In this regard, the Court notes that the applicant,
relying on Article 172.5 of the Labour Code, claimed 1% interest
for each calendar day of delay in payment of each monthly salary,
while the Government argued that Article 172.5 did not apply in the
present case. The Court reiterates that it is in the first place
for the national authorities, and notably the courts, to interpret
domestic law and that the Court will not substitute its own
interpretation for theirs in the absence of arbitrariness (see Salov
v. Ukraine, no. 65518/01, § 95, ECHR 2005 VIII
(extracts)). As to the substance of the parties’ disagreement
as to the applicability of Article 172.5 of the Labour Code, the
Court will limit itself to reiterating that, in determining the
amount of damages to be awarded under Article 41 of the Convention,
it is not bound by any provisions of the domestic law such as the
labour law provisions concerning interest on delayed salary payments.
However, in doing so, it may take into account any relevant domestic
interest rates, in so far as they are reasonable, as a useful guide
in determining the amount of the pecuniary loss suffered.
- The
1% daily interest rate proposed by the applicant, in essence,
corresponds to an annual interest rate of 365%. For a rough
comparison, it suffices to note that, according to the publicly
available information, the annual average inflation for consumer
prices in Azerbaijan was around 17% in 2007 and significantly lower
than that in the preceding years going back to 2002. It therefore
appears that application of the interest rate proposed by the
applicant would result in an amount grossly exceeding the actual
damage sustained by her. In the Court’s opinion, such a high
rate is unreasonable and clearly excessive for the purposes of
determining the compensation that is “just” within the
meaning of Article 41.
- Moreover, it appears that the daily interest rate of
1% provided by Article 172.5 of the Labour Code, in its essence,
constitutes a statutorily fixed financial penalty designed not only
to compensate employees for actual losses, but also to deter
employers from delaying the payment of salaries. A claim against the
State based on such an interest rate can be compared to a claim for
punitive damages. The Court notes, however, that it has repeatedly
rejected requests by applicants for punitive, exemplary or aggravated
damages (see, among other authorities, Selçuk and Asker
v. Turkey, judgment of 24 April 1998, Reports of
Judgments and Decisions 1998 II, § 119; Cable
and Others v. the United Kingdom [GC], nos. 24436/94 et
seq., 18 February 1999, § 30; and Orhan v. Turkey,
no. 25656/94, § 448, 18 June 2002).
- The
parties have not proposed any other means of calculating compensation
for the decrease in value of the delayed payment of salary, although
the inflation rate or average lending rate applicable at the relevant
time periods, or a combination thereof, could serve as reasonable
alternatives (see, mutatis mutandis, Beyeler v. Italy
(just satisfaction) [GC], no. 33202/96, § 23, 28 May 2002).
- In
any event, even if a particular interest rate were to be applied, it
would not be possible to calculate the interest in the present case
for the following reasons. For the purposes of such a calculation,
the interest rate would need to be applied separately to the
principal amount of each month’s salary not paid to the
applicant during the period from 15 April 2002 to 11 July 2007
(a total of almost sixty-two months), due to the fact that the salary
rate for the applicant’s position changed several times
throughout this period and that there was a different length of delay
in payment for each month’s salary. However, as noted above, no
information was made available to the Court concerning the actual
salary rates applicable during the period from April 2005 to July
2007. Therefore, in the absence of this information, the claim does
not lend itself to precise calculation.
- In
conclusion, the Court points out that, in assessing the pecuniary
damage sustained by the applicant, the Court has, as far as
appropriate, considered the estimates provided by the parties. It has
also noted that the total amount of salary due to the applicant
during the period from 15 April 2002 until her reinstatement was
approximately AZN 4,250. Lastly, it has found that the applicant is
entitled to certain compensation for the decrease in value of the
principal amounts of delayed salary payments, although such
compensation cannot be precisely calculated on the basis of the
information submitted.
- Having
regard to the above considerations, the Court, making its assessment
on an equitable basis, finds that the amount of AZN 5,677.26 awarded
to the applicant at the domestic level can be considered as
compensation fully covering the pecuniary damage sustained by the
applicant during the period after 15 April 2002, including both the
principal amount of the delayed salary during this period and
compensation for the decrease in value of the delayed salary.
Accordingly, the Court rejects any claim by the applicant in excess
of that amount and makes no additional award in respect of pecuniary
damage.
2. Non-pecuniary damage
- The
applicant claimed 150,000 euros (EUR) in respect of non pecuniary
damage.
- The
Government indicated their willingness to accept the applicant’s
claim for non-pecuniary damage up to a maximum of AZN 4,000.
- The
Court considers that the applicant must have sustained some
non-pecuniary damage as a result of the lengthy non-enforcement of
the final judgment in her favour. However, the amount claimed is
excessive. Making its assessment on an equitable basis, as required
by Article 41 of the Convention, the Court awards the applicant the
sum of EUR 3,100 under this head, plus any tax that may be chargeable
on this amount.
B. Costs and expenses
- The
applicant claimed EUR 6,623 for the costs and expenses incurred both
in the domestic proceedings and before the Court, including legal
fees and translation and postal expenses.
- The
Government contested this claim, noting that it was not properly
itemised and submitted without all required supporting documents.
However, the Government indicated their willingness to accept the
applicant’s claim up to a maximum of AZN 2,000.
- The Court reiterates that it will award costs and
expenses only if satisfied that these were actually and necessarily
incurred and reasonable as to quantum. It notes that the applicant
has not fully itemised her claim for costs and expenses and has
submitted evidence which supported her claim only partially. Regard
being had to the information in its possession and the above
criteria, the Court considers it reasonable to award the sum of
EUR 1,550 covering costs under all heads, less the sum of EUR
850 received in legal aid from the Council of Europe, plus any tax
that may be chargeable.
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
- 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 New Azerbaijani manats at the rate applicable at the
date of settlement:
(i) EUR
3,100 (three thousand one hundred euros), plus any tax that may be
chargeable, in respect of non-pecuniary damage; and
(ii) EUR
1,550 (one thousand five hundred and fifty euros), less EUR 850
(eight hundred and fifty euros) granted by way of legal aid, 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;
- Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 11 December 2008,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos Rozakis
Registrar President
