12 March 2010
FOURTH SECTION
Application no. 60642/08
by Emina ALIŠIĆ and Others
against Bosnia and Herzegovina, Croatia, “the former Yugoslav Republic of Macedonia”, Serbia and Slovenia
lodged on 30 July 2005
STATEMENT OF FACTS
THE FACTS
1. The applicants, Ms Emina Ališić, Mr Aziz Sadžak and Mr Sakib Šahdanović, citizens of Bosnia and Herzegovina, were born in 1976, 1949 and 1952, respectively, and live in Germany. They are represented before the Court by Mr B. Mujčin, a lawyer practising in Germany.
A. The circumstances of the case
1. Relevant background to the present case
2. The present case relates to the issue of “old” foreign-currency savings (foreign currency deposited before the dissolution of the Socialist Federal Republic of Yugoslavia – “the SFRY”).
(a) Relevant information on the banking system of the SFRY
3. Until the 1989/90 economic reforms (the so-called Marković reforms, named after the then Prime Minister Ante Marković), the commercial banking system of the SFRY consisted of self-managed basic and associated banks. Basic banks, founded and nominally controlled by socially owned enterprises, carried on day-to-day commercial banking activities. Two or more basic banks could form an associated bank through a self-management agreement, while preserving their separate legal personality. In the SFRY, there were more than 150 basic banks and nine associated banks (namely Jugobanka Beograd, Beogradska udružena banka Beograd, Vojvođanska banka Novi Sad, Kosovska banka Priština, Udružena banka Hrvatske Zagreb, Ljubljanska banka Ljubljana, Privredna banka Sarajevo, Stopanska banka Skopje and Investiciona banka Titograd).
4. Hard-pressed for hard currency as it was, the SFRY made it attractive for its expatriate workers and other citizens to deposit their foreign currency with commercial banks based in the SFRY: such deposits earned high interest (the annual interest rate often exceeded 10%) and were guaranteed by the State (see, for example, section 14(3) of the Foreign-Currency Transactions Act 1985[1] and section 76(1) of the Banks and Other Financial Institutions Act 1989[2]).
5. The Foreign-Currency Transactions Act 1977[3] introduced a system for redepositing of foreign currency by commercial banks with the National Bank of Yugoslavia. Although the system was optional, it allowed commercial banks to shift the currency risk to the State and practically all foreign currency was thus redeposited. In addition, the National Bank of Yugoslavia was required to grant national-currency loans (initially, interest-free) to commercial banks to the value of the redeposited foreign currency. It should be emphasised, however, that such redepositing was as a rule only a paper transaction, because commercial banks had insufficient liquid funds: it would appear that commercial banks redeposited in total 12.2 billion United States dollars (USD), out of which only USD 1.7 billion was actually transferred to the National Bank of Yugoslavia (see Kovačić and Others v. Slovenia [GC], nos. 44574/98, 45133/98 and 48316/99, §§ 36 and 39, ECHR 2008-...; see also decision AP 164/04 of the Constitutional Court of Bosnia and Herzegovina of 1 April 2006, § 53). In 1988 the system of redeposits was brought to an end (see section 103 of the Foreign-Currency Transactions Act 1985, as amended on 15 October 1988).
6. The global economic crisis of the 1970s hit the SFRY particularly hard. The SFRY turned to international capital markets and soon became one of the most indebted countries in the world. When the international community backed away from the loose lending practices of the 1970s, the SFRY resorted to foreign-currency savings in local commercial banks to pay foreign debts and finance imports. At the end of the 1980s, statutory restrictions on the repayment of foreign-currency deposits were therefore imposed (see section 71 of the Foreign-Currency Transactions Act 1985).
7. Within the framework of the Marković reforms, the SFRY abolished the system of basic and associated banks described above. This shift in the banking regulations allowed some basic banks to opt for an independent status, while other basic banks became branches (without separate legal personality) of the associated banks to which they had beforehand belonged.
8. Some important features of the banking system remained, however, unaffected by the reforms. First of all, commercial banks remained under the regime of “social ownership” – a concept which, while it does exist in other countries, was particularly highly developed in the SFRY. Secondly, both commercial banks and the State had financial obligations arising from foreign-currency savings: depositors were entitled to collect their deposits at any time, together with accumulated interest, from a commercial bank (see sections 1035 and 1045 of the Civil Obligations Act 1978[4]) or, in the event of the commercial bank’s “manifest insolvency” or bankruptcy, from the State (see sections 1004(2) and 1007(2) of the Civil Obligations Act 1978; section 18 of the Banks and Other Financial Institutions Insolvency Act 1989[5]; and the relevant secondary legislation[6]).
9. In 1991/92 the SFRY dissolved. It was replaced by five successor States: Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia (succeeded in 2006 by Serbia), “the former Yugoslav Republic of Macedonia” and Slovenia.
(b) Relevant information on the Ljubljanska banka, the Investbanka and their branches in Bosnia and Herzegovina
(i) Ljubljanska banka
10. Until the Marković reforms, the Ljubljanska banka Sarajevo (a basic bank) had its own legal personality, although it belonged to the Ljubljanska banka group (an associated bank). However, on 1 January 1990 the Ljubljanska banka Sarajevo became a branch (without legal personality) of the Ljubljanska banka Ljubljana. As a result, the latter took over the former’s rights, assets and liabilities.
11. Following the dissolution of the SFRY, the Slovenian authorities first nationalised and then, in 1994, restructured the Ljubljanska banka by creating a new and separate legal entity, the Nova Ljubljanska banka, which took over all of the old Ljubljanska banka’s assets and liabilities on Slovenian territory. The old Ljubljanska banka, among other things, maintained its links with its branches in other successor States and retained full liability for “old” foreign-currency savings in those branches (see Kovačić and Others, cited above, § 171). At the same time, any proceedings concerning such savings were stayed by virtue of law pending the outcome of the succession negotiations (ibid., §§ 67-73). It would appear that the old Ljubljanska banka is still State-owned and administered by the Bank Rehabilitation Agency (ibid., §§ 65 and 171).
12. A homonymous bank was created in Bosnia and Herzegovina on 2 July 1993. That bank is apparently not a legal successor of the Ljubljanska banka Sarajevo mentioned above (see decision AP 164/04 of the Constitutional Court of Bosnia and Herzegovina of 1 April 2006, § 56).
(ii) Investbanka
13. Until the Marković reforms, the Investbanka (a basic bank) had its own legal personality, although it belonged to the Beogradska udružena banka group (an associated bank). On 1 January 1990 the Investbanka became an independent bank with corporate headquarters in Serbia and a number of branches (without legal personality) in Bosnia and Herzegovina.
14. On 3 January 2002 the Serbian authorities made a bankruptcy order against the Investbanka and then sold its branches abroad. As a result, all enforcement proceedings against the bank were stayed by virtue of law and the statutory guarantee of the State was activated (see section 99 of the Insolvency Act 1989[7] and section 18 of the Banks and Other Financial Institutions Insolvency Act 1989). The bankruptcy proceedings are still pending.
2. The present case
15. The facts of the case, as submitted by the applicants, may be summarised as follows.
16. Ms Ališić and Mr Sadžak deposited foreign currency in the Ljubljanska banka Sarajevo and Mr Šahdanović in the Tuzla branch of the Investbanka. On 31 December 1991 the balance in Ms Ališić’s account was 4,715.56 German marks (DEM) and in Mr Sadžak’s accounts DEM 129,874.30. On 17 April 1992 the balance in Mr Šahdanović’s account was DEM 51,280.48.
B. General international law concerning State succession
17. The matter of State succession is regulated by customary rules, to some extent codified in the following treaties: the 1978 Vienna Convention on Succession of States in respect of Treaties and the 1983 Vienna Convention on Succession of States in respect of State Property, Archives and Debts (“the 1983 Vienna Convention”). The latter is not yet in force.
The fundamental rule is that States must together settle all aspects of succession by agreement (see Opinion No. 9 of the Arbitration Commission of the International Conference on the Former Yugoslavia[8]). If one of the States concerned refused to cooperate, it would be in breach of that fundamental obligation and would be liable internationally, with all the legal consequences this entails, notably the possibility for States sustaining loss to take non-forcible counter-measures, in accordance with international law (see Opinion No. 12 of the Arbitration Commission). While it is not required that each category of property and debts of a predecessor State be divided in equitable proportions, an overall outcome must be an equitable division (see Article 41 of the 1983 Vienna Convention and Opinion No. 13 of the Arbitration Commission).
As regards private rights (such as claims of private persons against other private persons or States), they do not cease on a change of sovereignty (see the Advisory Opinion of the Permanent Court of International Justice in the German Settlers in Poland case, Series B, No. 6, 10 September 1923, p.36, and Article 6 of the 198
