ALBA GAMES AND BITI v. ALBANIA

THIRD SECTION

DECISION

Application no. 47108/08
ALBA GAMES and Eduard BITI
against Albania

The European Court of Human Rights (Third Section), sitting on 19 March 2024 as a Committee composed of:

 Georgios A. Serghides, President,
 Darian Pavli,
 Oddný Mjöll Arnardóttir, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 47108/08) against the Republic of Albania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 17 September 2008 by Alba Games, a company incorporated in Albania (“the applicant company”), and its administrator, Mr Eduard Biti, an Albanian national, who was born in 1968 and lives in Tirana (“the second applicant”), and were represented by Mr Muçi, a lawyer practising in Tirana;

the decision to give notice of the application to the Albanian Government (“the Government”), represented initially by their Agent, A. Hiçka, and subsequently by Mr O. Moçka, General State Advocate;

the parties’ observations;

the decision of 31 August 2023 to strike the application out of the list of cases due to loss of interest;

the decision of 1 February 2024 to restore the application to its list of cases (Rule 43 § 5 of the Rules of Court) since the applicant had proven that he had duly maintained the application;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1.  The case concerns legislation on games of chance which allegedly impacted the business activity of the applicants.

2.  On 31 December 2002 the applicant company was granted an operating licence for ten years to operate facilities for games of chance. Between 19 July 2003 and 14 March 2007 the applicant company purchased eighteen electronic roulettes having more than one gaming position, and between 2003 and 2008 the applicant company concluded lease contracts for renting venues in different cities in the country.

3.  On 28 May 2007 Parliament amended the Games of Chance Act to the effect that only slot machines providing for an immediate prize were permitted as electronic games of chance. Licensees were required within six months from the amendments’ entry into force to remove all other electronic gambling machines, including roulettes having more than one gaming position, which did not fall under the new statutory definition.

4.  On 10 September 2007 the Union of Games of Chance Businesses, of which the applicant company was a member, lodged a constitutional complaint against the 2007 Act, complaining principally about a breach of its members’ property rights, a breach of its members’ right of access to court and a breach of the principles of legal certainty and acquired rights.

5.  On 19 March 2008 the Constitutional Court rejected the Union’s constitutional complaint. It accepted that the exclusion of gaming machines having multiple gaming positions from the amended definition of electronic gaming machines amounted to a limitation of licensees’ economic activity. In amending the provision, the legislator pursued several public interests such as: increasing security in games of chance through stricter control over such activity, tightening licencing rules and improving the geographical distribution of licensees, increasing revenues of the State budget by raising taxes, categorisation and separation of games of chance and better protection of juveniles. The addition of a new criterion, without being attended by exclusionary or discriminatory measures against other licensees, could not have been considered unconstitutional in so far as the gist of the economic activity was not impeded or its exercise was not barred. It was open to all licensees to obtain a licence to operate machines having multiple gaming positions if they met the statutory requirements. Given that it was a relatively new activity in the country, the authorities were obliged to control and prevent the increase in addiction to gambling. In view of economic and social factors, the legislator had considered adding a licensing criterion to be an appropriate exercise of the State’s regulatory role.

6.  The Constitutional Court further found that the provision was not aimed, either directly or indirectly, at the expropriation of the concerned licensees’ property. In so far as the statutory criteria had been satisfied, the operation of machines having multiple gaming positions would have been allowed. It was open to licensees to sell, rent or otherwise dispose of such gaming machines. The legislator had also provided for a six-month period during which licensees could still operate such machines, in order to avoid immediate adverse consequences.

7.  It further held that the Association had not substantiated the financial, irreversible damage that would result from the limitation to its members’ economic activity. The provision did not purport to revoke the licence entirely; it limited it in so far as gaming machines having more than one gaming position were concerned. The remainder of the licence, in so far as it concerned other gaming machines, continued to be valid.

Relevant domestic law

8.  The relevant part of the Constitution reads as follows:

Article 41

“1. The right of private property is guaranteed.

(...)

4. Expropriation, or limitations of property equivalent to expropriation, are permitted only against fair compensation.

5. For disputes concerning the scope of the compensation, a complaint may be filed in a court.

9.  Article 122 states that an “international agreement, which has been ratified, is part of the domestic legal order...”. Such international agreement is directly applicable and prevails over domestic legislation with which it conflicts.

10.  The relevant part of the Civil Code 1994 reads as follows:

“Article 190

Property may be expropriated only in the public interest recognized by law and only against a fair compensation.

(...)”

11.  Sections 1 and 3 of that Law (as amended by Law no. 10005 of 23 October 2008) provide that the State is liable for non-contractual pecuniary and non-pecuniary damage caused to natural or legal persons, domestic or foreign. State bodies have an obligation to compensate the damage, inter alia, when, through the exercise of their public functions, their lawful acts or omissions cause damage to the lawful interests of private natural or legal persons.

THE COURT’S ASSESSMENT

12.  The Government considered that the applicants had failed to properly exhaust domestic remedies because they had not sought compensation before domestic courts for any financial or other loss they might have suffered.

13.  The applicants argued that the impugned legislation had not provided for any possibility to appeal against the revocation of the applicant company’s licence. They further argued that compensation was possible only in respect of an unlawful administrative act, and that the interference with their right to peaceful enjoyment of their possessions had been based in law, making it impossible for them to seek compensation.

14.  The general principles on exhaustion of domestic remedies have been summarised in Vučković and Others v. Serbia ([GC], nos. 17153/11 and 29 others, §§ 69-77, 25 March 2014, and Gherghina v. Romania ((dec.) [GC], no. 42219/07, §§ 83‑89, 9 July 2015).

15.  The Court has held, in particular, that, in the event of there being a number of domestic remedies in different fields of law which an individual can pursue, that person is entitled to choose a remedy which addresses his or her essential grievance. In other words, when a remedy has been pursued, use of another remedy which has essentially the same objective is not required (see Nicolae Virgiliu Tănase v. Romania [GC], no. 41720/13, § 177, 25 June 2019). Accordingly, the Court has to determine in the instant case whether a complaint before the Constitutional Court that certain legislation is unconstitutional and an action for compensation of damages caused by the State before ordinary courts had “essentially the same objective” with regard to the applicants’ complaint.

16.  The Court notes that the purpose of the constitutional challenge was to have the impugned legislation declared unconstitutional, with the desired result that it would not have any effect. Such a constitutional complaint could not have produced pecuniary redress for the applicants.

17.  As regards a civil claim against the State for compensation of damages, it is aimed at obtaining monetary compensation for any financial or other loss the applicants might have suffered as the result of the impugned legislation.

18.  It follows that these two remedies do not have the same purpose, and the Court now has to assess whether a claim for damages may be seen an effective remedy for the violation claimed under Article 1 of Protocol No. 1 to the Convention.

19.  In that connection the Court recalls that it has so far dealt with numerous cases concerning revocation of licences to operate a business activity and that a possibility of obtaining compensation is a regular assessment in such cases, including where delicensing is the direct result of legislative intervention (see, for example, Pinnacle Meat Processors Company and 8 Others v. the United Kingdom (dec.), no. 33298/96, 21 October 1998; Ian Edgar (Liverpool) Ltd v. the United Kingdom (dec.), no. 37683/97, ECHR 2000‑I; Findlater v. the United Kingdom (dec.), no. 38881/97, 26 September 2000; Vékony v. Hungary, no. 65681/13, §§ 24 and 35, 13 January 2015; S.C. Antares Transport S.A. and S.C. Transroby S.R.L. v. Romania, no. 27227/08, § 49, 15 December 2015; Werra Naturstein GmbH & Co KG v. Germany, no. 32377/12, §§ 29-33, 19 January 2017; Svit Rozvag, TOV and Others v. Ukraine, nos. 13290/11 and 2 others, §§ 18 and 154, 27 June 2019; and NIT S.R.L. v. the Republic of Moldova [GC], no. 28470/12, § 254, 5 April 2022).

20.  There is no doubt that the measure the applicants are complaining about was lawful. Furthermore, the Constitutional Court held that it pursued the legitimate aim of protecting important public interests (see paragraph 5 above), and the Court has no reason to question that conclusion. In these circumstances, a compensatory remedy, namely a possibility for the applicants to seek compensation for any damage they might have suffered because of the implementation of the contested legislation, would have sufficed (compare Vangelova and Others v. North Macedonia (dec.) [Committee], no. 17218/17, § 11, 17 May 2022).

21.  However, the applicants have never lodged a claim for compensation of any damages they might have suffered because of the legislation at issue. Such a claim would have been possible, in principle, under either Law no. 8510 or the Civil Code (see paragraphs 10-11 above).

22.  In that connection the Court notes that the applicants did, indeed, submit before it a claim, inter alia, for pecuniary damages. However, it is primarily for the national courts to assess the facts of a case, and the Court should not act as a court of first instance.

23.  The Court notes that under Article 122 of the Albanian Constitution any ratified international agreement constitutes part of the internal legal system (after it is published in the Official Journal), is directly applicable in principle and has priority over the laws of the country that are incompatible with it. Under Article 17 § 2 of the Constitution, restrictions of constitutional rights and freedoms “in no case may exceed the limitations provided for in the European Convention on Human Rights”.

24.  Thus, the Convention forms an integral part of the Albanian legal system, where it takes precedence over contrary statutory provisions and is directly applicable. Therefore, it was open to the applicants in the present case to argue before the national authorities that, in the circumstances of the case at issue, their rights under Article 1 of Protocol No. 1 had been violated (see also Shpata v. Social Insurance Institute, Supreme Court of Albania, judgment of 22 July 2021, where the Supreme Court directly applied Article 6 of the Convention, relying on the case of Dauti v. Albania, no. 19206/05, 3 February 2009). The national authorities would thus have had the opportunity to give a reply to such arguments, and the Constitutional Court’s decision of 19 March 2008 did not render such claims futile for the purposes of the present application.

25.  Had the applicants filed such a domestic action, they would have given the domestic courts the opportunity which the rule of exhaustion of domestic remedies is designed to afford States, namely to determine the issue of compatibility of the impugned national measures with the Convention and, should the applicants nonetheless have pursued their complaints before the Court, it would have had the benefit of the views of the national courts (see Burden v. the United Kingdom [GC], no. 13378/05, § 42, ECHR 2008, and, mutatis mutandis, Saygılı and Karataş v. Turkey, no. 6875/05, § 36, 16 January 2018).

26.  Thus, the applicants failed to take appropriate steps to enable the national courts to fulfil their fundamental role in the Convention protection system, that of the European Court being subsidiary to theirs (see, among other authorities, Vučković, cited above, § 90). Nor does the Court discern any special reasons for dispensing the applicants from the requirement to exhaust domestic remedies in accordance with the applicable rules and procedure of domestic law.

27.  As regards the applicants’ doubts about the prospect of success of the remedy concerned, the Court has pointed out that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust them (see Vučković and Others, cited above, § 74).

28.  Accordingly, this complaint must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

29.  The Court notes at the outset that it was possible to challenge the legislation at issue through the means of a constitutional complaint, and that, indeed, the Constitutional Court provided detailed reasons for assessing the constitutionality of the impugned legislation. Further to this, the domestic legislation allows for a claim for damages against the State (see paragraph 11 above).

30.  Therefore, the applicants had a possibility of addressing the essence of their complaints concerning the effects of the impugned legislation on their business activity before domestic courts.

31.  It follows that the complaint under Article 13 of the Convention is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 11 April 2024.

 Olga Chernishova Georgios A. Serghides
 Deputy Registrar President