BAILII is celebrating 24 years of free online access to the law! Would you
consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it
will have a significant impact on BAILII's ability to continue providing free
access to the law.
Thank you very much for your support!
[New search]
[Contents list]
[Printable RTF version]
[Help]
SECOND
SECTION
CASE OF VLAHOVIĆ v. SERBIA
(Application
no. 42619/04)
JUDGMENT
STRASBOURG
16
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 Vlahović v.
Serbia,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Françoise Tulkens,
President,
Ireneu Cabral Barreto,
Vladimiro
Zagrebelsky,
Danutė Jočienė,
Dragoljub
Popović,
András Sajó,
Nona
Tsotsoria, judges,
and Sally
Dollé, Section
Registrar,
Having
deliberated in private on 25 November 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 42619/04) against the State
Union of Serbia and Montenegro, lodged with the Court, under Article
34 of the Convention for the Protection of Human Rights and
Fundamental Freedoms (“the Convention”), by, at that
time, a citizen of the State Union of Serbia and Montenegro, Mr
Dragan Vlahović (“the
applicant”), on 10 November 2004.
- As
of 3 June 2006, following the Montenegrin declaration of
independence, Serbia remained the sole respondent in the proceedings
before the Court.
- The
applicant was represented by B. Panić, a lawyer practicing in
Niš. The Government of the State Union of Serbia and
Montenegro and, subsequently, the Government of Serbia (“the
Government”) were represented by their Agent, Mr S. Carić.
- The
applicant complained about the respondent
State's failure to enforce a final judgment rendered in his favour.
- On
16 April 2007 the Court decided to give notice of the application to
the Government. Under Article 29 § 3 of the Convention, it
further decided to examine the admissibility and the merits of the
application at the same time.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1955 and lives in Niš, Serbia.
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
- On
11 May 2001 the Municipal Court in Niš (“Municipal
Court”) ruled in favour of the applicant and ordered the
respondent “socially-owned” company (see paragraph 46
below), “Vagonka” (“the debtor”), to pay him:
i.
salary arrears in the amount of 98,001 Dinars (“RSD”,
approximately 1,661 euros, “EUR”) plus statutory interest
as of 27 January 2001;
ii.
267,620 RSD (approximately 4,537 EUR) in already accrued statutory
interest, and
iii.
800 RSD (approximately 14 EUR) for his legal costs.
- By
15 June 2001 this judgment became final.
- On
22 June 2001 the applicant filed a request for the enforcement of the
judgment, proposing that it be carried out through the auctioning of
the debtor's movable assets.
- On
4 October 2001 the Municipal Court accepted the applicant's request
and issued an enforcement order (I.br. 1706/01).
- This
order subsequently became final.
- The
Municipal Court thereafter attempted several auctions but to no
avail.
- On
2 July 2002 the Municipal Court reduced the sum awarded to the
applicant in the above judgment by 95,730 RSD (approximately 1,578
EUR), which amount the applicant owed the debtor based on a prior
transaction within a separate set of enforcement proceedings.
- On
28 November 2002 the applicant filed another request for the
enforcement of the above judgment, this time proposing that it be
carried out by means of a bank transfer and that the total sum
awarded therein be reduced by 95,730 RSD.
- On
13 December 2002 the Municipal Court accepted the applicant's request
and issued an enforcement order (I.br. 3974/02).
- By
4 February 2003 this order became final.
- On
25 February 2003 the Municipal Court provided the Central Bank
(Narodna banka Srbije) with the enforcement order, as well as
the debtor's bank account details.
- On
20 March 2003 the Municipal Court provided the Central Bank with
additional specifications concerning the enforcement ordered.
- On
6 October 2004 the applicant urged the Central Bank and the Ministry
of Finance to ensure effective implementation of the Municipal
Court's enforcement order dated 13 December 2002 (I.br. 3974/02).
- On
29 November 2005 the applicant requested the Municipal Court to
provide him with a complete list of the debtor's assets.
- On
19 January 2006 the Privatisation Agency (Agencija za
privatizaciju) published a public announcement inviting all of
the debtor's creditors to report their claims, noting, however, that
the private creditors were not legally obliged to do so.
- On
16 June 2006 the same agency accepted a privatisation programme for
the debtor.
- On
29 August 2006 the applicant wrote to the Central Bank. He stated
that the debtor's bank account had apparently not been blocked
despite the fact that there was a binding court decision so ordering.
- On
the same date the applicant complained to the Privatisation Agency,
referring to his application filed with the Court.
- On
31 August 2006 the applicant received a letter form the Central Bank,
informing him that on 10 August 2006 the above enforcement had been
stayed at the initiative of the Privatisation Agency.
- On
4 September 2006 the Privatisation Agency itself sent a letter to the
applicant, explaining that the decision to privatise the debtor, by
means of a public auction, had been adopted on 11 January 2006. It
then, inter alia, referred to Article 31 of the Amendments and
Additions to the Privatisation Act (see paragraph 45 below) and
concluded that the enforcement proceedings at issue had to be stayed,
ex lege, for a period of two years beginning on 11 January
2006.
- On
12 February 2007 an unrelated final judgment, rendered in favour of a
third party, was enforced against the debtor by means of a bank
transfer.
- On
21 February 2007 86.92% of the debtor's socially-owned capital was
privatised.
- On
26 February 2007 the Privatisation Agency withdrew the instruction
issued to the Central Bank.
- On
2 March 2007 the Central Bank resumed the enforcement ordered by the
Municipal Court.
- On
29 May 2007 the President of the Supreme Court (Vrhovni sud
Srbije) confirmed that judicial enforcement proceedings could not
be stayed in respect of a company undergoing privatisation without
restructuring. She also noted that, in any event, it was within the
sole competence of the enforcement court to rule in this regard.
- On
4 June 2007 the Deputy President of the High Commercial Court (Viši
trgovinski sud) confirmed that, in the absence of restructuring,
no stay of enforcement was possible.
- On
4 July 2007 the Privatisation Agency confirmed that the debtor had
not been restructured as part of its privatisation process.
- On
4 October 2007 the Central Bank carried out the enforcement ordered
by the Municipal Court.
- On
12 December 2007 the applicant filed a new claim with the Municipal
Court, seeking that the debtor be ordered to pay additional statutory
interest in respect of the RSD 267,620 already awarded in his favour
(see paragraph 8 above). These proceedings are still pending.
II. RELEVANT DOMESTIC LAW
A. Enforcement Procedure Act 2000 (Zakon o izvršnom
postupku; published in the Official Gazette of the Federal Republic
of Yugoslavia - OG FRY - nos. 28/00, 73/00 and 71/01)
- Article
4 § 1 provided that all enforcement proceedings were to be
conducted urgently.
- Under
Article 59 only the court in charge of these proceedings had the
right to stay them.
- Articles
63-84 and 180-188 regulated enforcement by means of a bank transfer,
as well as enforcement through the auctioning of the debtor's movable
assets.
B. Enforcement Procedure Act 2004 (Zakon o izvršnom
postupku; published in the Official Gazette of the Republic of Serbia
- OG RS - no. 125/04)
- The
Enforcement Procedure Act 2004 (“the 2004 Act”) entered
into force on 23 February 2005, thereby repealing the Enforcement
Procedure Act 2000 (“the 2000 Act”).
- Article
304 of the 2004 Act, however, provides that all enforcement
proceedings instituted prior to 23 February 2005 are to be concluded
in accordance with the 2000 Act.
C. Administrative Disputes Act (Zakon o upravnim
sporovima; published in OG FRY no. 46/96)
- Articles
5 and 6 provide, inter alia, that judicial review proceedings
may only be brought against an administrative decision issued by a
competent State body.
D. Financial Transactions Act (Zakon o platnom prometu,
published in OG FRY nos. 3/02 and 5/03, as well as OG RS nos. 43/04
and 62/06)
- Under
Articles 47, 48 and 57, inter alia, the Serbian Central Bank
shall comply with a final judicial execution order providing for
enforcement by means of a bank transfer and shall, in so doing,
instruct the “debtor's bank” to transfer the amount in
question.
E. Privatisation Act (Zakon o privatizaciji, published
in OG RS nos. 38/01, 18/03 and 45/05)
- Articles
19-20đ set out the details as regards the restructuring of
companies about to be privatised. This restructuring, however, is
optional and a company may be sold without having been restructured
if the Privatisation Agency so decides.
F. Amendments and Additions to the Privatisation Act
(Izmene i dopune Zakona o privatizaciji, published in OG RS no.
45/05)
- Article
31 provides that a company whose restructuring commenced prior to 7
June 2005, as part of an ongoing privatisation, cannot be “subjected
to an enforcement procedure” within one year of that date. If
the decision to restructure a company, however, was not adopted prior
to 7 June 2005, the relevant time limit shall be two years as of the
subsequent adoption of a decision to this effect. Any ongoing
enforcement proceedings shall be stayed while new enforcement
proceedings shall not be instituted until the expiry of the above
time-limits.
G. The status of socially-owned companies (pravni
poloZaj društvenih preduzeća)
- The
relevant provisions of this legislation are set out in the R. Kačapor
and Others v. Serbia judgment (nos. 2269/06, 3041/06, 3042/06,
3043/06, 3045/06 and 3046/06, §§ 68-76, 15 January
2008).
H. Other relevant provisions
- Other
relevant provisions are set out in the Cvetković
v. Serbia judgment (no. 17271/04, §§ 28-34,
10 June 2008, not yet final).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- Under
Article 6 § 1 the applicant complained about the respondent
State's failure to enforce the final judgment rendered in his favour.
- Article
6 § 1 of the Convention, in the relevant part, reads as follows:
“In the determination of his [or her] civil rights
and obligations .., everyone is entitled to a fair ... hearing ... by
[a] ... tribunal ...”
A. Admissibility
1. Exhaustion of domestic remedies
- The
Government submitted that the applicant had not exhausted all
effective domestic remedies.
- In
particular, he had omitted to complain about the delay in question to
the President of the Municipal Court, the President of the District
Court, the Minister of Justice and the Supreme Court's Supervisory
Board, respectively.
- Further,
the applicant had not filed a criminal complaint nor lodged an appeal
with the Constitutional Court.
- Lastly,
the Government maintained that the applicant had failed to bring a
separate civil lawsuit on the bases of the Obligations Act and/or the
Convention itself.
- The
applicant contested the effectiveness of these remedies.
- The
Court has already held that the remedies referred to by the
Government could not be deemed effective within the meaning of its
established case-law under Article 35 § 1 of the Convention (see
Tomić v. Serbia, no. 25959/06, §§ 81
and 82, 26 June 2007; V.A.M. v. Serbia, no. 39177/05,
§§ 85 and 86, 13 March 2007; Cvetković v.
Serbia, cited above, §§ 39-43). It finds no reason
to depart from this ruling in the present case.
- It
follows that the Government's objection must be dismissed in its
entirety.
2. Compatibility ratione personae (the applicant's
“victim” status)
- The
Government noted that the final judgment at issue had been fully
enforced by 4 October 2007; thus the applicant was no longer a victim
within the meaning of Article 34 of the Convention.
- The
applicant contested this argument.
- The
Court recalls that a decision or a measure favourable to the
applicant is not in principle sufficient to deprive that individual
of the status of a victim unless the national authorities have also
acknowledged, either expressly or in substance, and then afforded
redress for, the breach of the Convention complained of (see, for
example, Bulović v. Serbia, no.
14145/04, § 39, 1 April 2008).
- Since
the Government in the present case have failed to provide the
applicant with an acknowledgment of the violations alleged or,
indeed, compensation for any non-pecuniary damage suffered, the Court
finds that the applicant has retained his victim status,
notwithstanding the conclusion of the enforcement proceedings on 4
October 2007. It therefore dismisses the Government's objection in
this regard.
3. Compatibility ratione personae (responsibility of
the State)
- The
Government maintained that the State could not be held responsible
for a socially-owned company. In addition, they pointed out that most
of the debtor's socially-owned capital was subsequently privatised.
- The
applicant submitted that the debtor was a socially-owned entity which
was fully controlled by the State until its privatisation on 21
February 2007. He further maintained that, even beyond this date, the
State's Privatisation Agency had remained responsible for making sure
that the obligations undertaken by the buyer were fulfilled.
- The
Court notes that the debtor was indeed solely comprised of
social capital until 21 February 2007 (see paragraph 29 above) and
that, as such, during this time, at a minimum, it was closely
controlled by the Privatisation Agency, itself a State body, and/or
the Government (see paragraph 46 above).
- The
Court therefore considers that the debtor, despite the fact that it
was a separate legal entity, did not enjoy sufficient institutional
and operational independence from the State, between 3 March 2004, as
the date of entry into force of the Convention in respect of Serbia,
and its privatisation on 21 February 2007, which would absolve the
latter from its responsibility under the Convention (see, mutatis
mutandis, R. Kačapor and Others v. Serbia, cited
above, §§ 92-99).
- Accordingly,
the Court finds that the applicant's complaint is compatible ratione
personae with the provisions of the Convention, and dismisses the
Government's objection in respect of the said period.
4. Conclusion
- The
Court considers that the applicant's complaint is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention and finds no other ground to declare it inadmissible. The
application must therefore be declared admissible.
B. Merits
1. Arguments of the parties
- The
Government maintained that there had been no violation of Article 6 §
1.
- In
the first place, the Government contended that they could not be held
liable for the debtor's lack of funds.
- Secondly,
by forwarding its enforcement order to the Central Bank, the
Municipal Court did everything in its power to secure the execution
of the final judgment rendered in favour of the applicant (see
paragraphs 18 and 19 above).
- Thirdly,
since the applicant had failed to inform the Municipal Court of the
Central Bank's subsequent decision to stay the enforcement in
question, the former could not have intervened on his behalf.
- Fourthly,
the applicant himself should have sought judicial review of the
instruction issued by the Privatisation Agency (see paragraphs 26 and
27 above).
- Lastly,
the Government observed that the Central Bank's stay of enforcement
had only lasted between 10 August 2006 and 2 March 2007 (see
paragraphs 26 and 31 above).
- The
applicant reaffirmed his complaints. He further noted that other
creditors had been paid by the debtor whilst the enforcement in
question had apparently been stayed (see paragraph 28 above), and
pointed out that the instruction issued by the Privatisation Agency
was not actionable.
2. The Court's assessment
- The
Court recalls that the execution of a judgment given by a court must
be regarded as an integral part of the “trial” for the
purposes of Article 6 (see Hornsby v. Greece, judgment of
19 March 1997, Reports of Judgments and Decisions 1997-II, p.
510, § 40).
- Further,
a delay in the execution of a judgment may be justified in particular
circumstances. It may not, however, be such as to impair the essence
of the right protected under Article 6 § 1 of the Convention
(see Immobiliare Saffi v. Italy [GC], no. 22774/93, § 74,
ECHR 1999-V).
- Finally,
irrespective of whether a debtor is a private or a State-controlled
actor, it is up to the State to take all necessary steps to enforce a
final court judgment, as well as to, in so doing, ensure the
effective participation of its entire apparatus (see, mutatis
mutandis, Pini and Others v. Romania, nos. 78028/01 and
78030/01, §§ 174-189, ECHR 2004-V (extracts); see also
mutatis mutandis, Hornsby, cited above, p. 511, §
41).
- Turning
to the present case, the Court notes that:
(i)
the Convention entered into force in respect of Serbia on 3 March
2004, that the debtor was privatised on 21 February 2007 and that,
ultimately, the final judgment was enforced by 4 October 2007 (see
paragraphs 29 and 35 above);
(ii)
the Privatisation Agency had acted clearly outside of its competence
ratione materiae when it had ordered that the enforcement be
stayed, which is why it would appear that no judicial review was
possible (the Government have certainly offered no evidence to the
contrary; see also paragraphs 32, 33, 34, 44, 45, 38 and 42 above, in
that order);
(iii)
the relationship between the Municipal Court and the Central Bank was
an internal one, between two Government bodies, and, as such, beyond
the scope of the applicant's influence; in any event, he did
everything in his power to expedite the impugned proceedings (see,
mutatis mutandis, R. Kačapor and Others v.
Serbia, cited above, § 111); and
(iv)
given the finding of State liability for the debt owed to the
applicant in the present case (see paragraphs 63-65 above), the State
cannot cite either the lack of its own funds or the indigence of the
debtor as an excuse for this failure (see R. Kačapor and
Others v. Serbia, cited above, § 114).
- In
view of the above, the Court finds that the Serbian authorities have
failed to take all necessary measures in order to enforce the
judgment at issue between 3 March 2004 and 21 February 2007. There
has, accordingly, been a violation of Article 6 § 1 of the
Convention.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
- The
applicant further complained that the State had infringed his right
to the peaceful enjoyment of his possessions, as guaranteed by
Article 1 of Protocol No. 1, which provides 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 notes that this complaint is linked to the one examined above
and must, therefore, likewise be declared admissible.
B. Merits
- The
Court reiterates that the failure of the State to enforce the final
judgment rendered in favour of the applicant for a period of almost
three years within the Court's competence ratione temporis,
Protocol No. 1 having entered into force as regards Serbia on 3 March
2004, constitutes an interference with his right to the peaceful
enjoyment of possessions, as provided in the first sentence of the
first paragraph of Article 1 of Protocol No. 1 (see, mutatis
mutandis, Sîrbu and Others v. Moldova,
nos. 73562/01, 73565/01, 73712/01, 73744/01, 73972/01 and
73973/01, § 28-33, 15 June 2004).
- For
the reasons set out above in respect of Article 6, the Court
considers that the said interference was not justified in the
specific circumstances of the present case (see R. Kačapor
and Others v. Serbia, cited above, §§ 117-120).
There has, accordingly, been a separate violation of Article 1 of
Protocol No. 1.
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
applicant claimed RSD 721,400.29 on account of the pecuniary damage
suffered. In particular, he explained that this amount corresponded
to statutory interest accrued between 27 January 2001 and 2 July 2007
in respect of the RSD 267,620 already awarded in his favour (see
paragraph 8 above).
- The
applicant further sought EUR 14,000 for the mental anguish sustained
as a result of the procedural delay in question.
- The
Government contested these claims.
- The
Court does not discern a causal link between the violations found and
the pecuniary damage claimed since the final judgment of 11 May
2001, ultimately enforced by 4 October 2007, had not ordered the
payment of the interest sought by the applicant (see paragraph 8
above). In any event, the applicant subsequently brought a separate
civil suit in this respect which is still pending domestically (see
paragraph 36 above). The Court cannot, therefore, but dismiss the
applicant's claim. However, the Court sees no reason to doubt that
the applicant has suffered distress as a result of the breach of his
rights secured under Article 6 of the Convention and Article 1 of
Protocol No. 1, which is why a finding of a violation of these
provisions alone would not constitute sufficient just satisfaction.
Having regard to the above and on the basis of equity, as required by
Article 41, the Court awards the applicant EUR 1,000 under this head.
B. Costs and expenses
- The
applicant also claimed EUR 312.40 for the costs and expenses incurred
domestically, as well as EUR 1,134 for those incurred before the
Court.
- The
Government contested these claims.
- According
to the Court's case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
also reasonable as to their quantum. In the present case, regard
being had to the documents in its possession and the above criteria,
the Court rejects the claim for costs and expenses in the domestic
proceedings but considers it reasonable to award the applicant the
sum of EUR 700 for the proceedings before the Court.
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
- Declares the application admissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
- Holds that there has also been a violation of
Article 1 of Protocol No.1;
- 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
sums, to be converted into the national currency of the respondent
State at the rate applicable at the date of settlement:
(i)
EUR 1,000 (one thousand euros), plus any tax that may be chargeable,
for the non-pecuniary damage suffered,
(ii)
EUR 700 (seven hundred euros), plus any tax that may be chargeable to
the applicant, for 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 16 December 2008,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Sally Dollé Françoise
Tulkens
Registrar President