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FIRST
SECTION
CASE OF
ZAGORODNIKOV v. RUSSIA
(Application
no. 66941/01)
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 Zagorodnikov v. Russia,
The European Court of Human Rights (First Section), sitting as a
Chamber composed of:
Mr C.L. Rozakis, 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 15 May 2007,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
- The case originated in an application (no. 66941/01)
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, Mr
Sergey Borisovich Zagorodnikov (“the applicant”), on 31
January 2001.
- The applicant was represented by Mr A. Glushenkov,
a lawyer practising in Moscow. The Russian Government (“the
Government”) were represented by Mr P. Laptev,
Representative of the Russian Federation at the European Court of
Human Rights.
- The applicant alleged that his right to a public
hearing had been violated in the proceedings before the Commercial
Court of Moscow. He also alleged that his right to be present at a
hearing had been violated in those proceedings.
- By a decision of 30 June 2005 the Court declared the
application partly admissible.
- The Government, but not the applicant, filed further
written observations (Rule 59 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The applicant was born in 1967 and lives in Moscow. He
was an investor in Russian Credit, a private bank which is now
insolvent.
- In 1998 and 1999 the applicant won two legal actions
against the bank. Unable to recover his investment despite the
judgments in his favour, the applicant instituted numerous sets of
proceedings against the bank and various authorities involved in its
insolvency.
- In April 2000 188,900 of the bank's creditors joined
together to form a union, obtained a settlement with the bank and
asked the Commercial Court of Moscow to ratify it. 221 creditors
disagreed with the settlement. Some of them, including the applicant,
lodged their written objections with the court.
- The Commercial Court of Moscow heard the case in four
hearings which took place on 10, 11, 14, and 15 August 2000. The
court gave notice of the hearings to the 221 creditors who had
objected to the settlement, representatives of the creditors' union
and representatives of the bank. Since the applicant received the
notice only on 14 August 2000, he was able to participate in the last
hearing only. According to the applicant, on 15 August 2000 the
judge refused to hear his pleadings on the ground that they were
essentially the same as those of the other creditors.
- Access to the court building was restricted throughout
the proceedings. On 10 August 2000 a policeman standing at the
entrance turned away twenty to twenty-five people who wished to enter
the courtroom but who did not have a notice to appear or an identity
card. On each of the following days about three to five people
wishing to attend the hearings were refused access to the court
building. At each hearing a number of seats in the courtroom remained
free.
- On 15 August 2000 the Commercial Court of Moscow
ratified the settlement. The applicant appealed.
- On
9 October 2000 the Appeals Division of the Commercial Court of Moscow
upheld the settlement. The applicant participated in the hearing,
pleaded his case and submitted written arguments. Disagreeing with
the judgment, the applicant appealed on points of law.
- On
1 December 2000 the Federal Commercial Court of the Moscow Circuit
dismissed the appeal on points of law. The applicant participated in
the hearing, pleaded his case and submitted written arguments.
- Public
access to the appeal hearings was also restricted. Both appeal courts
ignored the applicant's complaint that the first-instance hearings
had not been public.
II. RELEVANT DOMESTIC LAW
- The commercial courts ratified the settlement in
accordance with the Code of Commercial Procedure of the Russian
Federation (Law no. 70-FZ of 5 May 1995, in force at the
material time). Article 9 of the Code required proceedings to be
public:
Article 9 Public character of proceedings
“Proceedings in commercial courts shall be public.
A hearing in camera shall be possible if [the case concerns]
State, commercial, and other secrets...”
- Article 115 of the Code required the commercial court
to verify at the beginning of the proceedings whether the notice to
appear had been properly dispatched to the absentee parties:
Article 115 The hearing before the commercial
court
“The presiding judge ... shall verify the presence
of the parties and other participants at the hearing ... [and shall
find out] whether persons who do not appear have been properly
notified and if there is information available concerning the reasons
for their failure to appear.”
THE LAW
I. ALLEGED VIOLATIONS OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the proceedings in his case had not been
public and that he had been unable to participate in the hearings
before the first-instance court. He relied on Article 6 § 1 of
the Convention which, in so far as relevant, reads:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair and public hearing
... by [a] ... tribunal.... Judgment shall be pronounced publicly but
the press and public may be excluded from all or part of the trial in
the interests of morals, public order or national security in a
democratic society, where the interests of juveniles or the
protection of the private life of the parties so require, or to the
extent strictly necessary in the opinion of the court in special
circumstances where publicity would prejudice the interests of
justice.”
A. The applicant's right to a public hearing
- The
applicant complained that public access to the courtroom during the
first, second and third-instance proceedings had been unnecessarily
restricted. Only those creditors who had submitted their written
observations objecting to the settlement with the bank were allowed
into the courtroom. Access for members of the public and for those
creditors who had either failed to submit their written observations
beforehand or had not received notice in good time was not permitted.
The applicant contended that the failure to hold a public hearing
undermined the transparency of the proceedings.
- The
Government responded that the restrictions in issue had been imposed
in the interests of public order and examination of the case within a
reasonable time. The case affected as many as 188,900 persons
and it was technically impossible to invite them all to the hearings.
Therefore, the Commercial Court of Moscow had chosen to invite the
221 creditors who had objected to the settlement, representatives of
the creditors' union and representatives of the bank. Furthermore,
the hearings in the instant case should be deemed to have been public
as visitors wishing to attend could have obtained authorisation from
the court's registry.
- The Court reiterates that Article 6 § 1 of the
Convention provides that, in the determination of civil rights and
obligations, “everyone is entitled to a fair and public
hearing”. The public character of proceedings protects
litigants against the administration of justice in secret with no
public scrutiny; it is also one of the means whereby confidence in
the courts can be maintained. By rendering the administration of
justice visible, publicity contributes to the achievement of the aim
of Article 6 § 1, a fair hearing, the guarantee of which is one
of the foundations of a democratic society (see Osinger v.
Austria, no. 54645/00, § 44, 24 March 2005, with
further references).
- However, the requirement to hold a public hearing is
subject to exceptions. This is apparent from the text of Article 6 §
1 itself, which contains the provision that “the press and
public may be excluded from all or part of the trial ... where the
interests of juveniles or the private life of the parties so require,
or to the extent strictly necessary in the opinion of the court in
special circumstances where publicity would prejudice the interests
of justice”. Moreover, it is established in the Court's
case-law that, even in a criminal-law context where there is a high
expectation of publicity, it may on occasion be necessary under
Article 6 to limit the open and public nature of proceedings in
order, for example, to protect the safety or privacy of witnesses or
to promote the free exchange of information and opinion in the
pursuit of justice (see Osinger, cited above, § 45).
- Furthermore,
neither the letter nor the spirit of Article 6 § 1 prevents a
person from waiving of his own free will, either expressly or
tacitly, the entitlement to have his case heard in public (see
Yakovlev v. Russia, no. 72701/01, § 19, 15
March 2005, with further references).
- Turning
to the instant case, the Court observes that access to the courtroom
during the first-instance hearings between 10 and 15 August 2000, as
well as during the appeal hearings, was restricted. It is not
disputed that only those creditors who had submitted their written
observations objecting to the settlement were allowed in the
courtroom. The public and those creditors who had not submitted their
written observations or had not received notice in good time were
prevented from entering the court building. The Court notes that the
Government failed to show that the registry of the Commercial Court
of Moscow had actually authorised any visitor to attend the hearings
on the days in question.
- The
Court cannot therefore accept the Government's argument that the
hearings before the Commercial Court of Moscow in the applicant's
case were public.
- The Court further observes that the applicant made no
express waiver of his right to a public hearing. As regards a tacit
waiver, the Court notes that the applicant was entitled to a public
hearing under Russian law (see paragraph 15 above). It was
therefore unnecessary for him to request a public hearing (compare
Sträg Datatjänster AB v. Sweden (dec.),
no. 50664/99, 21 June 2005). The applicant therefore did
not waive his right to a public hearing, either expressly or tacitly.
- The
Government also referred to the legitimate aim pursued by the
restrictions on public access to the courtroom. The Court observes
that, although the case potentially touched upon the rights of
thousands of people, there is nothing to suggest that the building
was besieged by crowds on the days in question (see paragraph 10
above). The Court considers that the Government did not put forward
any argument capable of persuading it to agree that admitting the
public to the hearings would have jeopardised public order or
affected the length of the proceedings.
- There
is no other reason that could justify the failure to hold a public
hearing. Accordingly, there has been a violation of Article 6 §
1 of the Convention.
B. The applicant's right to be present at a hearing
- The
applicant complained that on 10, 11 and 14 August 2000 he had been
unable to participate in the hearings before the Commercial Court of
Moscow because he had received notice from the court only on
14 August 2000.
- The
Government responded that a notice had been duly dispatched to the
applicant on 3 August 2000, and that its belated delivery by the
postal service could not be attributed to the national authorities.
Furthermore, any alleged shortcoming on the part of the national
authorities in the course of the first-instance proceedings had been
remedied in the appeal hearings, in which the applicant had
participated actively.
- The key principle governing the application of Article
6 is fairness. The principle of equality of arms – one of the
elements of the broader concept of a fair trial – requires that
each party should be afforded a reasonable opportunity to present his
or her case under conditions that do not place him or her at a
substantial disadvantage vis-à-vis his or her opponent
(see A.B. v. Slovakia, no. 41784/98, § 55,
4 March 2003). As the Court has previously found, the principle of
equality of arms would be devoid of substance if a party to the case
were not notified of the hearing in such a way as to have an
opportunity to attend it, should he or she decide to exercise a right
to appear established in domestic law (see, mutatis mutandis,
Yakovlev, cited above, § 19). Furthermore, from the
Convention standpoint, a hearing may be held to have been “unfair”
and in breach of Article 6 even in the absence of proof of actual
prejudice (see P., C. and S. v. the United Kingdom,
no. 56547/00, § 96, ECHR 2002 VI, with further
references). Finally, the Court reiterates that, in determining
issues of fairness of proceedings for the purposes of Article 6 of
the Convention, it must consider the proceedings as a whole,
including the decision of the appellate court (see C.G. v. the
United Kingdom, no. 43373/98, § 35, 19 December
2001).
- In
the instant case the applicant had submitted his written observations
on the settlement proposal to the court and was entitled to appear
before it. The notice informing him of the time and date of the
hearing reached him only on 14 August 2000, that is, three days into
the trial. It is true that the State is not required to provide a
perfectly functioning postal system (see, mutatis mutandis,
Foley v. the United Kingdom (dec.), no. 39197/98,
11 September 2001); however, the domestic law required
commercial courts to verify at the beginning of the proceedings
whether the notice to appear had been duly dispatched to the absentee
parties (see paragraph 16 above). This was not done. The Court is
therefore not persuaded that the Commercial Court of Moscow
discharged its obligation to secure the applicant's presence at the
hearing (compare Mokrushina v. Russia, no. 23377/02,
§ 21, 5 October 2006).
- The
Court further observes that the instant case
was examined by the commercial courts in proceedings governed by
the 1995 Code of
Commercial Procedure (in force at the material time).
According to the Code, proceeding before commercial courts involved
three levels of jurisdiction, with the court of second instance being
called upon to examine a case as to both the facts and the law, and
the court of third instance to examine points of law.
- The
Court observes that the applicant was able to take part in the second
and third-instance proceedings before the Appeals Division of the
Commercial Court of Moscow and the Federal Commercial Court of the
Moscow Circuit. He pleaded his case and submitted written arguments.
- In these circumstances, the Court finds that the
applicant's appeal to the Commercial Court of Moscow and the Federal
Commercial Court of the Moscow Circuit remedied any unfairness that
may have resulted from the belated notice given to the applicant in
the first-instance proceedings.
- Accordingly,
there has been no violation of Article 6 § 1 of the Convention
as regards the applicant's right to be present at a hearing.
II. 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
applicant claimed 66,581.33 United States dollars (USD) and 1,439.90
Russian roubles (RUR) in respect of pecuniary damage and 25,000 euros
(EUR) in respect of non-pecuniary damage.
- The
Government submitted that there was no causal
link between the alleged violations and the alleged pecuniary damage.
The Government also contested the applicant's claims in respect of
non-pecuniary damage as unsubstantiated.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged; it therefore rejects the
applicant's claim for pecuniary damage. However, having regard to the
nature of the breach in this case, it considers that the
applicant must have suffered frustration and a feeling of injustice
as a consequence of the domestic authorities' failure to make the
hearing public. The Court finds that the applicant suffered
non-pecuniary damage which would not be adequately compensated by the
finding of a violation. Accordingly, making its assessment on an
equitable basis, it awards the applicant EUR 1,000 plus any tax that
may be chargeable on that amount.
B. Costs and expenses
- The
applicant claimed USD 10,000 in respect of legal fees, and also RUR
10,855.31 and USD 55.21 for postal and telephone expenses.
- The
Government submitted that these expenses were partly unsubstantiated.
- The
applicant produced to the Court a contract with his lawyer dated
21 July 2005 setting out the amount of USD 10,000 as the
lawyer's fee for representing the applicant before the Court,
together with the corresponding payment order of 23 August 2005. The
applicant also produced postal receipts and receipts for telephone
conversations with the Court in the amounts of RUR 6,350.85 and USD
55.21.
- The Court reiterates that in order for costs and
expenses to be reimbursed under Article 41, it must be established
that they were actually and necessarily incurred and were reasonable
as to quantum (see, for example, Klyakhin v. Russia,
no. 46082/99, § 131, 30 November 2004). Having regard to
the subject matter under the Convention and the fact that the
applicant's representative lodged no observations after the case had
been declared admissible, the Court awards the applicant EUR 500
in respect of costs and expenses, plus any tax that may be chargeable
on that amount.
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 that there has been a violation of
Article 6 § 1 of the Convention as regards the applicant's
right to a public hearing;
- Holds that there has been no violation of
Article 6 § 1 of the Convention as regards the applicant's
right to be present at the hearings before the Commercial Court of
Moscow;
- 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 Russian roubles at the rate applicable
at the date of settlement:
(i) EUR
1,000 (one thousand euros) in respect of non-pecuniary damage;
(ii) EUR
500 (five hundred euros) in respect of costs and expenses;
(iii) 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 7 June 2007,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos Rozakis
Registrar President
