Communicated on 23 October 2014
THIRD SECTION
Application no. 8968/14
BRD - GROUPE SOCIĖTĖ GĖNĖRALE S.A.
against Romania
lodged on 17 January 2014
STATEMENT OF FACTS
The applicant company, BRD - Groupe Société Générale S.A., is a Romanian legal person, which was established on 2 November 1990. Its main office is located in Bucharest. It is represented before the Court by the Law Practice of Stoica & Associates, located in Bucharest.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
The applicant company is one of the largest banks in Romania.
On 19 October 2006 the applicant company awarded a bank loan to a third party. The loan was guaranteed by a cash collateral bank account covered by a security mortgage. The guarantee deposited in the cash collateral bank account was more than four and a half million euros.
On 23 July 2012, after a criminal investigation for fraud and money laundering had been opened against the third party, the Department for Investigation of Terrorism and Organised Crime Offences (DIICOT) ordered the seizure (sechestru asigurator) of the third party’s assets and of the cash collateral bank account guaranteeing the loan, pending the outcome of the criminal investigation.
On the same date the applicant company confirmed that the seizing measure had been enforced and informed DIICOT about the bank loan awarded to the third party and the guarantee set up in the cash collateral bank account.
On 28 September 2012, after the third party had defaulted on the payments owed to the applicant company, the latter had taken the money from the cash collateral bank account to compensate for its loss.
On 7 November 2012 DIICOT had informed the applicant company that it had taken the money from the cash collateral bank account without its consent and in spite of the seizing measure which had not been lifted or suspended. Consequently, it notified the applicant company to either return the money to the account or face criminal charges.
On an unspecified date the applicant company notified DIICOT that it had returned the money taken from the cash collateral bank account.
By an order of 7 January 2013, on the basis of Article 10 of Law no. 241/2005 on preventing financial fraud, DIICOT decided to lift the measure to seize the cash collateral bank account and ordered that the funds available in the bank account be transferred in a bank account belonging to the Romanian Ministry of Finance. In addition, it notified the applicant company that failure to transfer the money as ordered would result in criminal charges being brought against it.
On an unspecified date the applicant company transferred the money to the bank account belonging to the Romanian Ministry of Finance. Subsequently, it challenged DIICOT’s order of 7 January 2013 before the domestic courts. It argued that according to the relevant criminal procedure rules DIICOT could not have seized the money in the cash collateral bank account but could have only instituted a precautionary garnishee attachment (poprire asiguratorie) because the owner of the bank account owed the money to the bank. In addition, according to the relevant civil code rules the money in the cash collateral bank account was the bank’s property. Consequently, their transfer to the Romanian Ministry of Finance’s bank account had been unlawful. Furthermore, the measures ordered by DIICOT prior to the money transfer were designed to preserve the third party’s assets and therefore the transfer could not have been done in the absence of a final court judgment convicting the third party. Also, while the person charged with money laundering offences is entitled to cover the damage caused, he could not do that with money owned by a third-party and which did not belong to him. Lastly, the legal provisions relied on by DIICOT were not applicable to the present case.
By a judgment of 24 July 2013 the Bucharest County Court dismissed the applicant company’s challenge. It held that the measure to seize the cash collateral bank account had not been lifted and the money had been used to cover the damage caused by the third party. The court failed to provide any other grounds for dismissing the applicant company’s challenge. The applicant company appealed on points of law (recurs) against the judgment. It reiterated the arguments raised before the first-instance court and contended that the first-instance court had failed to examine its arguments.
By a final judgment of 13 October 2013 the Bucharest Court of Appeal dismissed the applicant company’s appeal on points of law. It held that the money had been used to cover the damage caused by the third party’s offence. The court failed to provide any other grounds for dismissing the applicant company’s appeal on points of law and did not address the applicant company’s claim that the first-instance court had failed to examine its arguments.
According to the applicant the criminal proceedings opened against the third party are still pending before the domestic courts.
B. Relevant domestic law
Article 2191(1) of the Civil Code provided that any crediting organisation becomes the owner of any deposit of funds opened with it.
Article 10 of Law no. 241/2005 on preventing financial fraud provided that if a person charged with financial fraud covered partly or entirely the damage caused prior to the first hearing of the case by a court the limits of his sentence could be reduced.
COMPLAINTS
Relying on Article 6 of the Convention the applicant company complains of the unfairness of the proceedings in so far as the domestic courts failed to examine any of the arguments raised by it in order to challenge the order of 7 January 2013 and to provide grounds for dismissing them.
Invoking Article 1 of Protocol No. 1 to the Convention the applicant company complains of a breach of its property rights in so far as it had been forced to unlawfully forfeit the money owned by it following the order of 7 January 2013 without any possibility to recover them in the future.
QUESTIONS TO THE PARTIES
1. Did the applicant company have a fair hearing in the determination of its civil rights and obligations, in accordance with Article 6 § 1 of the Convention?
In particular, were the arguments presented by the applicant company in support of its action seeking to challenge the DIICOT order of 7 January 2013 considered by the domestic courts, and did they provide sufficient grounds for dismissing the applicant company’s arguments?
2. Has there been an interference with the applicant company’s right to peaceful enjoyment of its possessions within the meaning of Article 1 of Protocol No. 1 to the Convention on account of the fact that the domestic authorities have ordered the transfer of the money owned by it from the cash collateral bank account to the Romanian Ministry of Finance’s account?
If so, was that interference in compliance with the conditions set out in Article 1 of Protocol No. 1 to the Convention, as interpreted in the Court’s jurisprudence?
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