CASE OF A. AND B. v. MONTENEGRO

SECOND SECTION

CASE OF A. AND B. v. MONTENEGRO

(Application no. 37571/05)

JUDGMENT

STRASBOURG 

5 March 2013

FINAL

05/06/2013

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of A. and B. v. Montenegro,

The European Court of Human Rights (Second Section), sitting as a Chamber composed of:

Guido Raimondi, President,
Peer Lorenzen,
Dragoljub Popović,
András Sajó,
Nebojša Vučinić,
Paulo Pinto de Albuquerque,
Helen Keller, judges,
and Stanley Naismith, Section Registrar,

Having deliberated in private on 5 February 2013,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 37571/05) against Montenegro lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by the applicants’ mother, a Montenegrin national, on 19 October 2005. In July 2006 she passed away and her two sons, Mr A and Mr B, elected to pursue the application before the Court. For reasons of convenience, the present judgment will refer to Mr A and Mr B as the applicants. The President of the Fourth Section, to which the case had been assigned at the time, acceded to the applicants’ request not to have their names disclosed (Rule 47 § 3 of the Rules of Court).

2. The applicants, who had been granted legal aid, were represented by Mr P. Radulović, a lawyer practising in Banja Luka, Bosnia and Herzegovina. The Montenegrin Government (“the Government”) were represented by their Agent, Mr Z. Pažin.

3. The applicants complained, primarily, about the continued non-enforcement of the final civil judgments concerning the re-payment of the old foreign-currency savings deposited by their late mother and inherited by them. In the alternative, they complained about the failure of the Podgorička banka and/or the Central Bank of Montenegro to register the savings at issue and thus have them converted into the respondent State’s public debt, in accordance with the relevant domestic legislation.

4. On 6 July 2011 the application was communicated to the Government. It was also decided to rule on the admissibility and merits of the application at the same time (Article 29 § 1).

THE FACTS

I. BACKGROUND INFORMATION

5. Following the financial crisis in the former Socialist Federal Republic of Yugoslavia, as well as the subsequent collapse of the banking system in the 1990s, in 1998, 2002, and 2003 the Federal Republic of Yugoslavia, as well as the respondent State itself adopted specific legislation accepting the conversion of foreign currency deposits in certain banks, including the Podgorička banka, into a public debt. The legislation set the time-frame (2017) and the amounts, including interest, to be paid back to the banks’ former clients (see paragraphs 27-41 below).

II. THE CIRCUMSTANCES OF THE CASE

6. The applicants were born in 1949 and 1950, respectively, and both live in Montenegro.

A. The civil proceedings

7. On 20 September 1993 the Court of First Instance (Osnovni sud) in Podgorica rendered the first judgment in favour of the applicants’ mother ordering the Podgorička banka to pay to her: (i) 179,650.84 US dollars (USD), 59,539.97 German marks (DEM), 254,906.52 Italian liras (LIT) and 4,364.70 Swiss francs (CHF) on account of her foreign-currency savings; (ii) the applicable domicile sight deposit interest for the period between 1 January 1993 and 3 July 1993, plus 6% annual interest as of 3 July 1993; and (iii) 193,768,312 Yugoslav dinars (YUD) for legal costs.

8. On 23 May 1994 the Court of First Instance in Podgorica rendered a second judgment in favour of the applicants’ mother ordering the Podgorička banka to pay to her: (i) USD 9,770 and DEM 25,700 on account of her foreign-currency savings; (ii) the accrued sight deposit interest, and (iii) YUD 1,584 for legal costs.

9. On 27 June 1996 the same court rendered a third judgment in favour of the applicants’ mother, ordering the Podgorička banka to pay to her: (i) USD 147,620.64, DEM 126,661.39 and LIT 1,602.16 on account of an erroneous calculation of the applicable interest; (ii) the stipulated interest of 12.5%; and (iii) YUD 900 for legal costs.

10. On various dates thereafter these judgments became final and enforceable.

B. The enforcement proceedings

11. By 5 November 1998 enforcement orders in respect of the first and third judgments were issued. By 19 November 1999 the Court of First Instance terminated the enforcement of these two judgments relying on the Act on the Settlement of Obligations Arising from the Citizens’ Foreign Currency Savings (see paragraph 29 below). The applicants’ mother did not seek an enforcement order in respect of the second judgment at the time.

12. Between December 2003 and February 2004 the applicants’ mother requested the enforcement of all three judgments against the Podgorička banka. On 30 March 2005 the Court of First Instance rejected these requests, on the basis that the Podgorička banka was no longer the debtor (nije pasivno legitimisana). The decision further explained that by virtue of the Act on the Citizens’ Foreign-Currency Savings 2003 the respondent State had taken over the debt from this bank, and that the Central Bank of Montenegro (Centralna banka Crne Gore) was responsible for the accuracy of the data taken from the records of the authorised banks (see paragraph 34 below).

13. On 18 April 2005 and 19 April 2005 the Court of First Instance upheld the impugned decisions, endorsing the reasons contained therein.

C. Other relevant facts

14. On 26 May 2004 the applicants requested the Real Estate Office (Direkcija za nekretnine) in Podgorica to register the enforcement orders against the Podgorička banka property (tražili zabilježbu u evidenciji rješenja o izvršenju na nepokretnostima). On 1 June 2004 the Real Estate Office rejected their request. On 23 November 2004 the Real Estate Administration (Uprava za nekretnine) upheld the previous decision and directed them to enforce their rights through the Central Bank and the Ministry of Finance. On 3 April 2007 the applicants’ request was rejected by the Administrative Court (Upravni sud).

15. On 21 December 2004 the applicants’ mother requested the Central Bank to ensure the payment of the outstanding debt. On 7 April 2005 the Central Bank informed her that it lacked competence to deal with her case (nema ingerencije u [ovom] slučaju). In particular, it could not be held responsible for the accuracy of the relevant data as that was the responsibility of the authorised banks. In this regard the Central Bank referred to Article 7 § 5 of the Act on the Citizens’ Foreign-Currency Savings 2003 (see paragraph 36 below). In February and March 2006 the applicants, on behalf of their mother, requested again that the Central Bank pay the savings in question. On an unspecified date thereafter the Central Bank replied by referring to its previous letter of 7 April 2005, notably that it could not comply with their request. On 18 December 2007, upon yet another request from the applicants, this bank confirmed that there were no foreign-currency savings registered in respect of their mother.

16. On 4 October 2005 the applicants’ mother was informed, upon her enquiry, by the Ministry of Finance that the authorised banks were responsible for the accuracy of the transferred data.

17. After the applicants’ mother passed away in July 2006, the Court of First Instance rendered a decision on 5 May 2007 declaring the applicants her sole legal heirs and specifying that the inheritance consisted of the deposits (novčana sredstva) as established by the final courts’ judgments referred to above (see paragraphs 7-9 above).

18. On 21 December 2007 the Podgorička banka informed the applicants that there was no evidence that the debt established by the domestic judgments had been paid. At the same time, they were informed that the Central Bank was responsible for the accuracy of the transferred data and that the applicants could obtain the official data concerning the transfer from the Central Bank.

19. On several occasions the applicants’ mother and/or the applicants contacted the Ombudsman (Zaštitnik ljudskih prava i sloboda), and the Ministry of Justice (Ministarstvo pravde), but to no avail.

20. It would appear that the debt established by the domestic courts’ judgments has never been registered by the Podgorička banka and transferred to the Central Bank.

D. The additional foreign currency account

21. The applicants’ mother had another foreign-currency account with EUR 17,697.79, which amount was registered as public debt with the Central Bank and later converted into bonds. On an unspecified date in 2006 the applicants would appear to have sold the bonds for half of their value.

II. RELEVANT DOMESTIC LAW

A. The Constitution of Montenegro 2007 (Ustav Crne Gore; published in the Official Gazette of Montenegro - OGM - no. 1/07)

22. Article 149 of the Constitution provides that the Constitutional Court shall rule on a constitutional appeal lodged in respect of an alleged violation of a human right or freedom guaranteed by the Constitution, after all other effective legal remedies have been exhausted.

23. The Constitution entered into force on 22 October 2007.

B. The Constitutional Court Act (Zakon o Ustavnom sudu Crne Gore; published in OGM no. 64/08)

24. Section 48 provides that a constitutional appeal may be lodged against an individual decision of a state body, an administrative body, a local self-government body or a legal person exercising public authority, for violations of human rights and freedoms guaranteed by the Constitution, after all other effective domestic remedies have been exhausted.

25. Sections 49-59 provide additional details as regards the processing of constitutional appeals. In particular, section 56 provides that when the Constitutional Court finds a violation of a human right or freedom, it shall quash the impugned decision, entirely or partially, and order that the case be re-examined by the same body which rendered the quashed decision.

26. The Act entered into force in November 2008.

C. The Act on the Settlement of Obligations Arising from the Citizens’ Foreign Currency Savings (Zakon o izmirenju obaveza po osnovu devizne štednje građana; published in the Official Gazette of the Federal Republic of Yugoslavia - OG FRY - nos. 59/98, 44/99 and 53/01)

27. Sections 1, 2, 3 and 4 provided that all foreign currency savings deposited with the “authorised banks”, including the Podgorička banka, before 18 March 1995 were to become public debts.

28. Under section 10 the State’s responsibility in that respect was to be fully honoured by 2012 through the payment of specified amounts, plus interest, and according to a certain time-frame.

29. Section 22 provided that, as of the date of this Act’s entry into force (12 December 1998), “all pending lawsuits, including judicial enforcement proceedings, aimed at the collection of the foreign currency covered by this Act shall be discontinued”.

D. The Act on the Settlement of the Public Debt of the Federal Republic of Yugoslavia Arising from the Citizens’ Foreign Currency Savings (Zakon o regulisanju javnog duga Savezne Republike Jugoslavije po osnovu devizne štednje građana; published in OG FRY no. 36/02)

30. This Act repealed the Act described above. In doing so, however, it explicitly acknowledged as part of public debt all deposits previously recognised as such. It modified the time-frame for honouring the debt in question (from 2012 to 2016) and specified amended amounts, plus interest, to be paid annually.

31. Section 36 reaffirmed that “all lawsuits aimed at the collection of the foreign currency savings covered by this Act, including judicial enforcement proceedings, shall be discontinued”.

32. This Act entered into force on 4 July 2002. It was subsequently amended on two occasions, but these amendments concerned peripheral issues unrelated to the savers’ above-described status.

E. The Citizens’ Foreign-Currency Savings Act 2003 (Zakon o regulisanju obaveza i potraživanja po osnovu ino duga i devizne štednje građana; published in the Official Gazette of the Republic of Montenegro - OG RM - nos. 55/03 and 11/04)

33. Section 3, inter alia, defines “foreign currency savings” as all foreign currency deposited by natural persons with one of the “authorised banks based in the territory of the Republic of Montenegro” as recognised as a public debt of the Federal Republic of Yugoslavia (see paragraphs 27 and 30 above). The same section further provides that the foreign-currency savings shall be increased for an annual interest rate of 2% as of 1 January 2003. The same interest rate shall be applied on annual basis to all the remaining unpaid sums at the end of each payment period until the foreign-currency savings are entirely paid off.

34. Section 4 provides that the Central Bank of Montenegro shall provide all the records (evidenciju) and necessary documentation in respect of the foreign-currency savings, and that the same bank shall be responsible for the accuracy of the data taken from the records of the banks in question.

35. Pursuant to section 5 § 1 as of the date of this Act’s entry into force Montenegro shall assume the obligations of the authorised banks towards natural persons in respect of their foreign-currency savings.

36. Section 7 § 1 provides that after the transfer of debts to the Central Bank (nakon isknjižavanja potraživanja i obaveza), the authorised banks are obliged to provide the Central Bank with detailed analytical records of debts (detaljnu analitiku obaveza) on the basis of foreign currency savings. Article 7 § 5 provides that the authorised banks are responsible for the accuracy of these data.

37. Sections 14 and 15 provide that Montenegro shall honour this debt by 2017 and specify the amounts, and interest, to be paid annually in Euros.

38. Pursuant to section 18, the banks’ clients may, in advance of the said time-frame and under certain conditions, make use of their deposits converted into Government bonds in order to pay taxes, buy State property or take part in the privatisation of State-owned businesses.

39. Under sections 16 and 17 former clients of the banks in question can also sell the said bonds to other natural or legal persons. Such trading is exempt from taxation.

40. Sections 16 § 5 and 18 § 2 provide that the Government of Montenegro shall adopt additional technical regulations concerning the bonds in question.

41. This Act entered into force on 9 October 2003, and its amendments on 28 February 2004.

F. The Obligations Act 1978 (Zakon o obligacionim odnosima; published in the Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/78, 39/85, 57/89 and 31/93)

42. Section 172 paragraph 1 provides, inter alia, that a legal person is responsible for the damage caused by its body to another person in the course of performing its functions or related thereto.

G. The Obligations Act 2008 (Zakon o obligacionim odnosima; published in the OGM nos. 47/08 and 04/11)

43. Section 148 provides that one who causes damage to another person is obliged to compensate for it, unless he/she proves that the damage was not his/her fault.

44. Section 166 provides, inter alia, that a legal person is responsible for the damage caused by its body to another person in the course of performing its functions or related thereto.

45. Section 192 provides that the responsible person will provide restitutio in integrum as before the damage occurred. If the damage cannot be removed entirely in this way, the remainder of the damage will be compensated in money.

H. The Civil Procedure Act (Zakon o parnicnom postupku; published in the OG RM nos. 22/04, 28/05, and 76/06, and OGM no. 73/10)

46. Section 188 provides that, by a civil claim, a plaintiff can seek the courts only to establish the existence or non-existence of a certain right or legal relation, or the accuracy of a document (neistinitost neke isprave).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

47. Under Article 1 of Protocol No. 1 to the Convention the applicants complained about the failure of the Podgorička banka and/or the Central Bank to register the foreign-currency savings deposited by their late mother and thus have them converted into the respondent State’s public debt, in accordance with the relevant domestic legislation.

48. The relevant provision reads as follows:

Article 1 of Protocol No. 1.

“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

1. The parties’ submissions

49. The Government submitted that the applicants had not exhausted all effective domestic remedies available to them.

50. In particular, they had failed to institute civil proceedings against the Podgorička banka, on the basis of which database the transfer had been done, and which omitted to submit the relevant data concerning the savings in question to the Central Bank. They also could have filed a civil claim against the State, had they considered the State responsible. In the proceedings against the Podgorička banka and/or the State the applicants could have sought both compensation as well as the establishment of their right and/or the accuracy (istinitost) of the debt-related records (see paragraphs 42-46 above).

51. The Government further maintained that the applicants had also failed to initiate administrative proceedings against the Central Bank or any other body they considered responsible for the said legal matter, which decision could have been further challenged before the courts.

52. Lastly, after having exhausted these remedies the applicants could have made use of a constitutional appeal (see paragraphs 22-26 above). In any event, the letters addressed to various institutions could not be considered adequate legal proceedings.

53. The applicants contested these submissions and referred, in particular, to the civil court decisions rendered against the Podgorička banka in 1993, 1994 and 1996 (see paragraphs 7-10 above). While addressing various institutions was not an appropriate legal procedure itself, this was done only after the civil proceedings had been concluded and as an additional attempt to have the said judgments enforced.

54. They also maintained that a constitutional appeal had been introduced in the Montenegrin legal system much after the relevant civil proceedings had been concluded and it was thus not available to them at the relevant time.

2. The relevant principles

55. The Court reiterates that, according to its established case-law, the purpose of the domestic remedies rule contained in Article 35 § 1 of the Convention is to afford the Contracting States the opportunity of preventing or putting right the violations alleged before they are submitted to the Court. However, the only remedies to be exhausted are those which are effective.

56. It is incumbent on the Government claiming non-exhaustion to satisfy the Court that the remedy was an effective one, available in theory and in practice at the relevant time, that is to say, that it was accessible, was one which was capable of providing redress in respect of the applicant’s complaints and which offered reasonable prospects of success. However, once this burden of proof has been satisfied, it falls to the applicant to establish that the remedy advanced by the Government was in fact used or was for some reason inadequate and ineffective in the particular circumstances of the case, or that there existed special circumstances absolving him or her from the requirement (see Akdivar and Others v. Turkey, 16 September 1996, § 65, Reports of Judgments and Decisions 1996‑IV).

57. The application of this rule must make due allowance for the context. Accordingly, the Court has recognised that Article 35 § 1 must be applied with some degree of flexibility and without excessive formalism (see Akdivar and Others, cited above, § 69). It has further recognised that the rule of exhaustion is neither absolute nor capable of being applied automatically; in reviewing whether it has been observed it is essential to have regard to the particular circumstances of each individual case (see Van Oosterwijck v. Belgium, 6 November 1980, Series A no. 40, § 35). This means, amongst other things, that the Court must take realistic account not only of the existence of formal remedies in the legal system of the Contracting Party concerned, but also of the general context in which they operate, as well as the personal circumstances of the applicant (see Akdivar and Others v. Turkey, cited above, § 69). It must examine whether, in all the circumstances of the case, the applicant did everything that could reasonably be expected in order to exhaust domestic remedies (see EVT Company v. Serbia, no. 3102/05, § 37 in fine, 21 June 2007).

3. The Court’s assessment

58. The Court observes the contradiction in the domestic legislation as to who exactly was responsible for providing the records on the old foreign-currency savings and the accuracy of the relevant data (see paragraphs 34 and 36 above). This contradiction was further affirmed by various domestic bodies when dealing with the requests of the applicants and their late mother (see paragraphs 12 in fine, 13, 14 in fine, 15-16, and 18 above). The Government, for their part, did not provide a clarification in this respect (see paragraphs 50-51 above).

59. The Court notes that the applicants’ late mother had obtained the civil court judgments against the Podgorička banka, which had already established the existence of the debt and its exact amount (see paragraphs 7-10 above), but which could not be enforced by virtue of the domestic legislation (see paragraphs 29, 31 and 11 above, in that order). In addition, the domestic courts themselves specified that, after the adoption of the relevant legislation, the said bank was no longer the debtor (see paragraph 12 in limine above). As there is nothing in the case file to suggest that the domestic courts would have ruled any differently at a later stage, the Court considers that requiring the applicants to initiate yet another set of civil proceedings against the bank at issue, after they had already obtained a final judgment in their favour, would place an excessive burden on them and that therefore they did not have to exhaust this particular avenue of redress (see, mutatis mutandis, Metaxas v. Greece, no. 8415/02, § 19, 27 May 2004; and Đukić v. Bosnia and Herzegovina, no. 4543/09, § 33, 19 June 2012).

60. The Court further observes that the applicants’ late mother as well as the applicants themselves requested the Central Bank on several occasions to ensure the payment of the outstanding debt. However, the Central Bank merely informed them by letters that it lacked competence to deal with their case (see paragraph 15 above).

61. While administrative proceedings before the Central Bank as well as a civil claim against the respondent State were theoretically possible, the Court notes that the savings in question had never actually been registered, as confirmed by the Central Bank (see paragraph 15 in fine above), and thus converted into the State’s public debt. The Court considers that, in such circumstances, and in view of the said Central Bank’s rejection of its competence in the applicants’ case neither administrative proceedings before the Central Bank nor civil proceedings against the State could offer the applicants reasonable prospects of success, thus absolving them from the obligation to make use of these remedies.

62. Lastly, it should be reiterated that, although there may be exceptions justified by particular circumstances of a case, the assessment of whether domestic remedies have been exhausted is normally carried out with reference to the date on which the application was lodged with the Court (see Baumann v. France, no. 33592/96, § 47, ECHR 2001‑V (extracts)). The Court observes in this regard that the application in the present case had been lodged on 19 October 2005, while the constitutional appeal was introduced as of 22 October 2007, which is two years later, and was thus unavailable to the applicants at the relevant time (see paragraphs 1 and 22-23 above).

63. In view of the above, in particular given the contradiction in the relevant legislation, varying interpretations thereof, numerous futile attempts by both the applicants as well as their late mother to re-obtain the savings at issue at the domestic level after having had obtained judgments against the debtor bank, the Court considers that the applicants did not have to exhaust in addition the avenues of redress suggested by the Government. The Government’s objection in this regard must therefore be dismissed.

64. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B. Merits

1. The parties’ submissions

65. The applicants reaffirmed their complaints. In particular, they submitted that the State was obliged to pay for their old-foreign currency savings, pursuant to the relevant legislation, and that the Government had never denied it.

66. The Government made no comments in this regard.

2. The Court’s assessment

67. The Court recalls that foreign currency savings constitute a possession within the meaning of Article 1 of Protocol No. 1 to the Convention (see Kovačić and Others v. Slovenia (dec.), no. 44574-98 et al., 9 October 2003, as well as Trajkovski v. the former Yugoslav Republic of Macedonia (dec.), no. 53320/99, ECHR 2002 IV). It is also reiterated that any interference by a public authority with the peaceful enjoyment of possessions should be lawful (see The Former King of Greece and Others v. Greece [GC], no. 25701/94, § 79, ECHR 2000-XII) and that it should pursue a legitimate aim “in the public interest”. According to the Court’s established case-law, the expression “in accordance with the law” requires that the impugned measure should have some basis in domestic law, and it also refers to the quality of the law in question, requiring that it should be accessible to the person concerned and foreseeable as to its effects (see Kurić and Others v. Slovenia [GC], no. 26828/06, § 341, ECHR 2012 (extracts); see also Amann v. Switzerland [GC], no. 27798/95, § 50, ECHR 2000-II; Slivenko v. Latvia [GC], no. 48321/99, § 100, ECHR 2003‑X).

68. Turning to the present case, the Court notes that the foreign-currency savings deposited by the applicants’ late mother constituted a possession, which possession was inherited by the applicants by virtue of the decision of the Court of First Instance of 5 May 2007 (see paragraph 17 above). As the relevant domestic legislation clearly provided that the State would take these savings over as a public debt and pay them back gradually by 2017 (see paragraphs 33, 35 and 37 above), the Court considers that the applicants’ mother and later the applicants themselves had a legitimate expectation that they would re-obtain the savings in question.

69. However, due to, apparently, an administrative error, and contrary to the said legislation, the savings at issue have never been registered and converted into the public debt and the applicants have never received a single instalment. This has been confirmed by the Central Bank and the Podgorička banka, as well as, indirectly, even by the Government themselves (see paragraphs 15 in fine, 18 in limine, and 50 in limine above).

70. The Court notes a lack of precision and foreseeability of the domestic legislation as to who is responsible for the transfer, the Central Bank or the debtor bank, given the contradiction of the relevant provisions (see paragraphs 34 and 36 above). It is clear, however, that it could not be imputed to the applicants.

71. In view of the above, the Court considers that there has been an evident interference by the respondent State with the applicants’ possessions and their legitimate expectation to gradually re-obtain the savings at issue, which interference was clearly contrary to the law. This conclusion makes it unnecessary for the Court to ascertain whether a fair balance has been struck between the demands of the general interest of the community on the one hand, and the requirements of the protection of the individual’s fundamental rights on the other (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999‑II).

72. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.

II. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION

73. Relying on Article 6 of the Convention the applicants made the same complaint as the one already examined under Article 1 of Protocol No. 1.

74. The relevant provision reads as follows:

Article 6

“In the determination of his civil rights and obligations ... everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”.

75. Having regard to its findings in relation to Article 1 Protocol No. 1, the Court considers that it is not necessary to examine separately the admissibility or the merits of the applicant’s identical complaint made under Article 6 of the Convention (see, mutatis mutandis, Milanović v. Serbia, no. 44614/07, § 103, 14 December 2010; Mladenović v. Serbia, no. 1099/08, § 59, 22 May 2012; as well as Jovanović v. Serbia, no. 32299/08, § 53, 2 October 2012).

III. OTHER COMPLAINTS

76. Under Article 6 of the Convention and Article 1 of Protocol No. 1 thereto the applicants also complained about: (a) their inability to enforce the final civil judgments rendered in the 1990s and be paid back the savings in question instantaneously, as well as (b) having had to sell the bonds issued in respect of another foreign-currency savings account for half of their nominal value (see paragraph 21 above).

77. The Court has already held in similar cases that the applicants did not have a continuing right to the enforcement, as it had been barred by the relevant legislation before the respondent State’s ratification of the Convention and Protocol No. 1 on 3 March 2004 (see Ajdarpašić and Kadić v. Montenegro (dec.), nos. 40759/06 and 56888/09, §§30-33, 23 November 2010; Molnar Gabor v. Serbia, no. 22762/05, §§ 48-51, 8 December 2009; see also paragraphs 29, 31 and 11 above, in that order). It follows that the applicants’ complaint in this respect is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

78. The Court notes that the relevant domestic legislation envisaged a possibility for the bonds to be sold (see paragraph 39 above), but it did not limit the value of these bonds in the market in any way whatsoever. In such circumstances, the Court considers that the State cannot be held responsible for the applicants’ own choice to sell the bonds for half of their nominal value. It follows that this complaint is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

79. 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

80. The applicants claimed the old foreign-currency savings and interest, as awarded by the domestic courts (see paragraphs 7-9 above), in respect of pecuniary damage, as well as 10,000 euros (EUR) each in respect of non-pecuniary damage.

81. The Government contested this claim.

82. The Court accepts that the applicants have suffered some non-pecuniary damage which cannot be sufficiently compensated by the sole finding of a violation. Making its assessment on an equitable basis, the Court awards the applicants jointly EUR 3,000 under this head.

83. In addition, the respondent Government must pay the applicants, on account of pecuniary damage, all the instalments, including the relevant interest (see paragraph 33 above), due to them as of the moment when the old foreign-currency savings became public debt by virtue of the relevant domestic legislation until the date when this Court’s judgment becomes final, less any amounts that may have been paid in the meantime on this basis. The respondent Government must also take all appropriate measures to ensure that the competent authorities implement the relevant legislation in respect of the applicants and thus secure the payment of all future instalments under the same conditions and in the same manner as is done in respect of all other beneficiaries of the said legislation.

B. Costs and expenses

84. The applicants also claimed EUR 10,000 for the costs and expenses incurred before the domestic courts and referred to the relevant decisions issued in the course of these proceedings (see paragraphs 7-9 above). They also submitted an expert’s calculation of these costs, including the statutory interest, given that, in the meantime, the official currency in the respondent State changed from Yugoslav dinars to euros. From the submitted analysis it transpired that the costs incurred in the domestic proceedings amounted to EUR 8,016.35 in total (EUR 3,785.22 for the first set of proceedings, EUR 2,243 for the second set of proceedings and EUR 1,988.13 for the third set of proceedings).

85. The Government contested this claim.

86. 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 are reasonable as to quantum (see, for example, Iatridis v. Greece (just satisfaction) [GC], no. 31107/96, § 54, ECHR 2000-XI).

87. In the present case, regard being had to the documents in its possession, in particular the domestic judgments specifying the awarded costs and the expert’s opinion on the matter, and the above criteria, as well as to the EUR 850 already granted to the applicants under the Council of Europe’s legal aid scheme, the Court considers it reasonable to award the sum of EUR 6,500 for the costs and expenses in the domestic proceedings.

C. Default interest

88. The Court considers it appropriate that the default interest rate 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

1. Declares the complaint under Article 1 of Protocol No. 1 concerning the failure to register the savings in question and have them converted into the respondent State’s public debt admissible;

2. Declares the complaints under Article 6 of the Convention and Article 1 of Protocol No. 1 thereto concerning the non-enforcement of the judgments issued in the 1990s and the sale of the bonds for half of their value inadmissible;

3. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention on account of the failure to register the savings in question and have them converted into the respondent State’s public debt;

4. Holds that it is not necessary to examine separately the admissibility or the merits of the complaint concerning the registration and conversion of the savings in question into the public debt under Article 6 § 1 of the Convention;

5. Holds

(a) that the respondent State is to pay the applicants, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts at the rate applicable at the date of settlement:

(i) all the instalments, including the relevant interest, due to them as of the moment when the old foreign-currency savings became public debt by virtue of the relevant domestic legislation until the date when this judgment becomes final, less any amounts that may have been paid in the meantime on this basis, plus any tax that may be chargeable, in respect of pecuniary damage;

(ii) the respondent Government must also take all appropriate measures to ensure that the competent authorities implement the relevant legislation in respect of the applicants and thus secure the payment of all future instalments under the same conditions and in the same manner as it is done in respect of all other beneficiaries of the said legislation;

(iii) EUR 3,000 (three thousand euros) jointly, plus any tax that may be chargeable, in respect of non-pecuniary damage;

(iv) EUR 6,500 (six thousand five hundred euros), plus any tax that may be chargeable to the applicants, in respect of 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;

6. Dismisses the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 5 March 2013, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Stanley NaismithGuido Raimondi
RegistrarPresident

Full & Egal Universal Law Academy