FIRST SECTION
CASE OF
FOMIN AND OTHERS v. RUSSIA
(Application no.
34703/04)
JUDGMENT
STRASBOURG
26 February 2013
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 Fomin and Others v. Russia,
The European Court of Human
Rights (First Section), sitting as a Chamber composed of:
Isabelle Berro-Lefèvre, President,
Elisabeth Steiner,
Khanlar Hajiyev,
Mirjana Lazarova Trajkovska,
Julia Laffranque,
Ksenija Turković,
Dmitry Dedov, judges,
and Søren Nielsen, Section Registrar,
Having deliberated in private on 5 February 2013,
Delivers the following judgment, which was adopted on that
date:
PROCEDURE
The case originated in an application (no.
34703/04) against the Russian Federation lodged on 10 August 2004 with
the Court under Article 34 of the Convention for the Protection of Human
Rights and Fundamental Freedoms (“the Convention”) by four Russian nationals,
Mr Aleksandr Ivanovich Fomin, Ms Tamara Ivanovna Fomina, Ms Tatyana
Aleksandrovna Fomina, Ms Yulia Aleksandrovna Fomina (“the first”, “the second”,
“the third” and “the fourth” applicant), who were born in 1938, 1946, 1970, and
1976 respectively, and live in Magnitogorsk, Chelyabinsk Region. On 30 March
2011 the Court received a power of attorney issued in the first applicant’s name
by Ms Olga Aleksandrovna Fomina, born in 1976 (“the fifth applicant”), whose
name was also mentioned in subsequent submissions. In the course of the
proceedings before the Court, the third, fourth and fifth applicants got
married and changed their names to Ms Tatyana Aleksandrovna Gnatyuk, Ms Yulia
Aleksandrovna Minkina and Ms Olga Aleksandrovna Ilyina respectively.
The Russian Government (“the Government”) were
represented by Mr G. Matyusknin, the Representative of
the Russian Federation at the European Court of Human Rights.
In particular the applicants alleged that their property
rights had been violated on account of the failure of the State to redeem
governmental bonds.
On 8 December 2010 the application was
communicated to the Government. It was also decided to rule on the
admissibility and merits of the application at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
A. Proceedings for redemption of State bonds
On an unspecified date the first applicant bought
1982 State premium bonds (облигации Государственного внутреннего выигрышного займа
1982 года), which were
issued by the USSR Government in 1982 in order to finance certain State
programmes. It was stipulated at the time of issue that the bonds would be
redeemed by 2004 at the latest.
In 1992, the Government of the Russian Federation acknowledged their succession in respect of the USSR’s obligations under the 1982
loan and suspended payments under the 1982 State premium bonds.
Subsequently, the first applicant converted all
but forty-four 1982 State premium bonds into 235 1992 Russian bonds.
Between 1995 and 2000, a series of legislative
and regulatory acts was enacted providing for the conversion of Soviet
securities, including 1982 State premium bonds, into special Russian promissory
notes. The Government were mandated to devise a procedure for the conversion
and to fix the value of the promissory notes. Although regulations on the
conversion were adopted in 2000, the actual conversion did not start and
application of the regulations remained suspended.
The first applicant brought proceedings before
the Ordzhonikidzevskiy District Court of Magnitogorsk, seeking redemption of
his 1992 Russian bonds and affirmation that the forty-four 1982 State
premium bonds had retained their purchase power.
On 28 March 2005 the court granted the claim in
part, declaring that the 1982 bonds had retained their value and purchase power
proportionate to the USSR currency exchange rate in 1990. The judgment entered
into force.
The first applicant immediately brought
proceedings before the Pravoberezhniy District Court of Magnitogorsk to recover
the value of nine of his 1982 State bonds.
By a judgment of 17 May 2005 the court dismissed
the claim, finding that the Government had not yet developed a conversion
mechanism for the bonds. On 21 July 2005 the judgment was upheld on appeal by
the Chelyabinsk Regional Court.
At the present time the first applicant holds
nine 1982 State premium bonds with a nominal value of 450 roubles.
B. Non-enforcement of a judgment against a private
party
On 20 June 1997 the Pravoberezhniy District
Court of Magnitogorsk ordered the debtor, M., to repay the applicants 1,100,000
Russian roubles (RUB).
On 20 June 2003 the same court awarded the
applicants interest on the unpaid debt in the amount of RUB 1,100,000.
Following the bailiff’s failure to recover the
debt, in 2003 the applicants brought a civil claim against M., seeking
determination of his share in a flat that he owned jointly with his spouse and
child, and its seizure to enforce the court decisions.
On 21 October 2003 the Ordzhonikidzevskiy
District Court of Magnitogorsk disallowed the claim on the ground that the flat
was M.’s only housing and hence could not be seized for recovery of the debt.
By a decision of 19 February 2004 the Chelyabinsk Regional Court upheld the judgment on appeal.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A summary of the relevant domestic law and
practice is provided in the judgment in the Yuriy Lobanov v. Russia case
(no. 15578/03, §§ 13-23, 2 December
2010).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No.
1
The applicants complained that their property
rights had been violated by the Russian authorities’ failure to fulfil their
obligations under the 1982 State premium bonds. The complaint falls to be
examined under Article 1 of Protocol No. 1, which 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.”
A. Admissibility
The Court considers that the second, third, and
fourth applicant had neither taken part themselves in any of the relevant
proceedings at the national level, nor submitted any complaints on the matter in
their own name before the Court. Further, the Court notes that the fifth
applicant was neither mentioned in the application forms submitted by the other
applicants, nor submitted an application form of her own. Therefore, in respect
of the second, third, fourth, and fifth applicants the application must be
rejected in accordance is with Article 35 § 3 and 4 of the Convention.
The Court notes that the first applicant’s complaint
is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the
Convention. It further notes that it is not inadmissible on any other grounds.
It must therefore be declared admissible.
B. Merits
1. Arguments of the parties
The applicant alleged that the prolonged failure
of the State to redeem the nine 1982 State premium bonds had violated his
property rights. He considered that the nine bonds effectively constituted his
possessions and that their status was recognised by the domestic courts. Failure
to redeem the bonds had resulted in interference with his property rights which
was unlawful, had no legitimate aim, and did not ensure a fair balance between
public and private interests.
The Government acknowledged that the nine 1982
State premium bonds may be considered as a possession within the meaning of
Article 1 of Protocol No. 1. At the same time they contended that the
interference with the applicant’s property rights had been lawful since the
necessary domestic legal framework had been put in place. They further stressed
that, as the Court had acknowledged in the case Malysh and Others v. Russia (no. 30280/03, § 80, 11 February 2010), the harsh economic
situation in Russia in the 1990s necessitated some restrictions on private
property, and thus the interference had pursued a legitimate aim. Lastly, the
Government argued that a fair balance between public and private interests had
been ensured in the applicant’s case, because he had been afforded the
opportunity - and indeed had chosen - to convert the majority of his 1982 State
premium bonds into 1992 Russian bonds. In respect of the remaining bonds, he had
not used that option and thus could not be considered to be a victim within the
meaning of Article 34 of the Convention.
2. The Court’s
assessment
The Court is mindful that on several previous occasions it has been called
upon to rule whether governmental bonds issued in the USSR, but later recognised as Russian state debt, constitute possessions within the meaning of
Article 1 of Protocol No. 1. The Court has consistently concluded that, given
that Soviet securities were recognised under Russian legislation as Russian
Federation Government debt and that such recognition entails compensation or
redemption, those securities are considered as possessions under the Convention
(see, among other authorities, Malysh and Others, cited above; Tronin
v. Russia, no. 24461/02, 18 March
2010; Yuriy Lobanov, cited above; and Andreyeva v. Russia,
no. 73659/10, 10 April 2012)
The Court notes that in the present case, both
the applicant and the Government agreed that the 1982 State premium bonds constituted
the applicant’s possessions within the meaning of Article 1 of Protocol
No. 1. Equally, both parties agreed that there had been an interference
with the applicant’s property rights. Having regard to the circumstances of the
case and the case-law cited above, the Court finds no reason to reach a
diverging conclusion.
Thus the issue to be resolved by the Court is whether
such interference complied with the requirements prescribed within the
Convention system. The Court reiterates that, for the interference to be
compatible with Article 1 of Protocol No. 1, it must be lawful, pursue a
legitimate aim, and ensure a fair balance between public and private interests
(see Broniowski v. Poland [GC], no. 31443/96, §§ 147-51,
ECHR 2004-V).
In the Yuriy Lobanov case (cited above),
the Court has already dealt with a fundamentally identical issue concerning an
individual’s inability to redeem 1982 State premium bonds. The Court found
that, while the interference had been lawful and had pursued a legitimate aim, a
fair balance had not been struck between the interests of the applicant and those
of the State. The Government had not given any satisfactory justification, in
terms of Article 1 of Protocol No. 1, for their continuous failure over many
years to implement an entitlement conferred on the applicant by Russian
legislation (ibid., §§ 49-52, and 54).
Nor have the Government advanced such a
justification in the present case. The fact that the applicant had an
opportunity to convert - and indeed converted - the majority of his 1982 State
premium bonds into 1992 Russian bonds did not relieve the State of its
obligation to ensure a fair balance between public and private interests in
respect of the nine bonds retained by the applicant. Russian legislation
allowed the conversion of certain Soviet securities into Russian securities as an
alternative to redemption, and the applicant was under no obligation to opt for
it.
The foregoing considerations are sufficient to
enable the Court to conclude that there has accordingly been a violation of
Article 1 of Protocol No. 1 on account of the prolonged and
unjustified failure of the State to put in practice the procedure for
redemption of 1982 State premium bonds.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
Lastly, the applicants complained under Article
6 of the Convention and Article 1 of Protocol No. 1 of various violations in
the course of the first and second sets of proceedings. However, in the light
of all the material in its possession, and in so far as the matters complained
of are within its competence, the Court finds that these complaint do not
disclose any violation of the provisions invoked. They are inadmissible and
must be rejected in accordance with Article 35 § 1 and 3 (a) 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 first applicant claimed 27,954,725 Russian
roubles (RUB) (698,868 euros (EUR)) in respect of pecuniary damage for the nine
bonds he currently owns. The nominal value of the bonds is 450 roubles.
The Government disagreed. They contended that
the first applicant’s method of calculation had no legal basis and that he had failed
to take into account the redenomination of the rouble in 1998.
The Court notes that indeed the applicant’s
calculation is not based on any method in the domestic law and ignores the redenomination
of the Russian currency. Having regard in particular to the just satisfaction awarded
to the applicants in cases raising identical
issues under the Convention (see, for example, Yuriy Lobanov,
cited above, (just satisfaction)),
the Court awards EUR 1,200 to the first applicant as compensation in respect of
pecuniary damage.
The applicant did not submit a claim for non-pecuniary
damage. Having regard to the case-law and the well-established practice, the
Court finds that there are no grounds for awarding any sum on that account.
B. Costs and expenses
The applicant did not claim any costs and
expenses. Accordingly, the Court considers that there is no call to award any
sum on that account.
C. Default interest
The Court considers it appropriate that the
default interest rate 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. Declares the first applicant’s complaint about
violation of his property rights by failure of the State to redeem 1982 State
premium bonds admissible and the remainder of the application inadmissible;
2. Holds that there has been a violation of
Article 1 of Protocol No. 1;
3. Holds
(a) that the respondent State is to pay the first applicant
Mr Aleksandr Ivanovich Fomin, within three months from the date on
which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 1,200 (one thousand two
hundred euros) in respect of pecuniary damage, plus any tax that may be
chargeable, to be converted into the currency of the
respondent State at the rate applicable at the date of settlement:
(b) that from the expiry of the above-mentioned
three months until settlement, simple interest shall be payable on the above
amount at a rate equal to the marginal lending rate of the European Central
Bank during the default period plus three percentage points.
4. Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 26 February
2013, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Isabelle Berro-Lefèvre
Registrar President
