CASE OF AGAYEV & ZULFUGARZADEH COMPANY v. AZERBAIJAN

FIRST SECTION

CASE OF AGAYEV & ZULFUGARZADEH COMPANY v. AZERBAIJAN

(Application no. 31222/14)

JUDGMENT
(Merits)

STRASBOURG

24 October 2024

This judgment is final but it may be subject to editorial revision.

In the case of Agayev & Zulfugarzadeh Company v. Azerbaijan,

The European Court of Human Rights (First Section), sitting as a Committee composed of:

 Raffaele Sabato, President,
 Lətif Hüseynov,
 Alain Chablais, judges,
and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the application (no. 31222/14) against the Republic of Azerbaijan lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 17 April 2014 by Agayev & Zulfugarzadeh Company (“the applicant company”), based in Baku, which was represented by Mr F. Agayev, a lawyer based in Azerbaijan;

the decision to give notice of the complaints under Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention to the Azerbaijani Government (“the Government”), represented by their Agent, Mr Ç. Əsgərov, and to declare the remainder of the application inadmissible;

the parties’ observations;

Having deliberated in private on 3 October 2024,

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

SUBJECT MATTER OF THE CASE

1.  The case concerns an allegedly unlawful expropriation by the Baku City Executive Authority (“the BCEA”) of a house in the shared ownership of the applicant company and two individuals, for the purpose of constructing a new garden-park complex (“the Winter Park”).

2.  According to the ownership certificate issued by the Technical Inventory and Ownership Rights Registration Department of the BCEA, the applicant company owned two rooms (34.83 sq. m in total), while the other two individuals owned one room and the remaining part of the house respectively.

3.  The facts of the present case are similar in several respects to those in the case of Khalikova v. Azerbaijan (no. 42883/11, 22 October 2015). As in that case, the applicant company’s property in the present case was demolished by the BCEA on the basis of order no. 76 issued by the Head of the BCEA on 16 February 2011, which stated that the buildings and houses located on certain streets were to be demolished for the purpose of constructing the Winter Park and the residents were to be relocated.

4.  According to the applicant company, on 23 September 2012 the BCEA started demolishing the house.

5.  On the following day the applicant company applied to the State Land and Cartography Committee (“the SLCC”) asking it to issue a plan and measurements of the plot of land underlying and attached to the house.

6.  On the same date the applicant company brought proceedings against the BCEA and several other State authorities, seeking, inter alia, the invalidation of the BCEA’s order (see paragraph 3 above) and an award of compensation for pecuniary and non-pecuniary damage (“the first claim”). It argued that the size of its share in the house was 55.73 sq. m (rather than 34.83 sq. m as stated in paragraph 2 above) and that 69.48 sq. m of the land underlying and attached to the house belonged to the company by virtue of the provisions of domestic law.

7.  Following the SLCC’s refusal to grant the applicant company’s request, on 22 November 2012 it lodged a separate claim against the SLCC, asking the courts to order it to issue the relevant plan and measurements (“the second claim”).

8.  It appears that in November 2012 the house in question was completely demolished.

9.  By a final judgment of 17 October 2013, the Supreme Court dismissed the second claim. It found, in particular, that the plot of land underlying and attached to the house did not constitute the applicant company’s possessions owing to the lack of legal grounds. The Supreme Court held that Article 9 of the Law on Land Reform, under which the plots of land underneath private residential houses lawfully used by citizens were transferred from State ownership into the occupants’ private ownership under the relevant procedure, did not apply to the applicant company as it was a legal person. The court additionally held that the applicant company had failed to provide evidence of any agreement made with the co-owners of the house concerning the use of the land and their consent to the company’s privatisation of 69.48 sq. m of the land.

10.  By a final judgment of 29 January 2014, the Supreme Court upheld the lower court’s judgment, partly granting the first claim and awarding the applicant company 62,694 Azerbaijani manats (AZN) in compensation (AZN 1,500 per square metre for its share in the house and an additional 20% under Presidential Decree no. 689 of 26 December 2007). The court dismissed the applicant company’s claim in respect of the additional surface area and the plot of land in question (see paragraph 6 above), holding that it did not have any rights over them.

11.  At the time of the latest communication with the parties in 2022, the Supreme Court’s judgment of 29 January 2014 remained unenforced.

12.  The applicant company complained under Article 1 of Protocol No. 1 to the Convention that the interference with its property rights had been unlawful and unjustified. It further complained under Article 6 of the Convention that the Supreme Court’s final judgment of 29 January 2014 had not been enforced. It also claimed that there had been a violation of its Convention right to a reasoned decision under Article 6 and Article 13.

THE COURT’S ASSESSMENT

13.  The Government argued that the applicant company had not had title to either the additional parts of the house that had not been indicated in the certificate of ownership or to the plot of land underlying and attached to the house. The applicant company disagreed, arguing that the domestic courts had arbitrarily not taken into account the additional parts of the house when awarding it compensation and that it had had a legitimate expectation under the domestic law of acquiring ownership of the plot of land in question.

14.  In the present case, the domestic courts found that the applicant company had not had any rights to the additional surface area that had not been mentioned on the certificate of ownership (see paragraphs 2 and 9 above). In the absence of any relevant documentary evidence, there are no elements that could lead the Court to reach a different conclusion (compare Rahimov v. Azerbaijan [Committee] (dec.), no. 40026/09, § 14, 7 July 2022, and Bagvanov and Others v. Azerbaijan [Committee], nos. 77919/11 and 13 others, § 11, 10 November 2022).

15.  The Court notes that in Akhverdiyev v. Azerbaijan (no. 76254/11, §§ 73-78, 29 January 2015), it held that a “lawful user” of immovable property located on State-owned land had a right to have the land transferred into his or her ownership free of charge and that that right gave rise to a “legitimate expectation” of acquiring ownership of the land. Plots of land underlying and attached to a private residential house constituted the “possessions” of the house owner by virtue of provisions of domestic law. However, in the present case the domestic courts held that the relevant provision did not apply to legal persons. The Court reiterates that no legitimate expectation can be said to arise where there is a dispute as to the correct interpretation and application of domestic law and the applicant’s submissions are subsequently rejected by the national courts (see Kopecký v. Slovakia [GC], no. 44912/98, § 52, ECHR 2004-IX).

16.  Moreover, the courts found that the applicant company had failed to provide evidence of any agreement made with the co-owners of the property concerning the use of the land in question and their consent to the company’s privatisation of 69.48 sq. m of the land (see paragraph 9 above). Bearing in mind that the house was in shared ownership, the Court notes that the applicant company has not indicated whether it could have automatically had any individual share in the plot of land underlying and attached to the house transferred into its ownership or whether the land would first have had to be privatised by all those who had shared ownership of the house, following which each owner could have transferred any corresponding share in the land into his or her, or its, ownership (see Bagirova and Others v. Azerbaijan, nos. 37706/17 and 5 others, § 37, 31 August 2023).

17.  It cannot therefore be established that the applicant company’s claims in respect of the additional surface area and the relevant part of the plot of land underlying and attached to the house amounted to its “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention. It follows that the parts of the complaint relating to those claims are incompatible ratione materiae with the provisions of the Convention and the Protocols thereto within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.

18.  The Court notes that the complaint, except the parts declared inadmissible in paragraph 17 above, is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

19.  The general principles concerning Article 1 of Protocol No. 1 to the Convention have been summarised in Akhverdiyev (cited above, §§ 79-82), Khalikova (cited above, §§ 134-36) and Maharramov v. Azerbaijan (no. 5046/07, §§ 56-60, 30 March 2017).

20.  In Khalikova (cited above) the Court found that the expropriation of the applicant’s property had not been carried out in compliance with the “conditions provided for by law”. It concluded, in particular, that (i) the BCEA did not have the authority to expropriate private property; (ii) no lawful expropriation order had been issued by a competent State authority; and (iii) the interference with the applicant’s possessions thus constituted a de facto deprivation of possessions. Having examined all the material submitted to it, the Court has not found any fact or argument capable of persuading it to reach a different conclusion in the present case. It thus considers that the expropriation of the applicant company’s property was not carried out in compliance with the “conditions provided for by law”.

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

22.  According to the applicant company the Supreme Court’s final judgment of 29 January 2014 had not been enforced (see paragraph 11 above).

23.  The Government argued that the applicant company had failed to exhaust domestic remedies, alleging that it could have challenged the domestic authorities’ failure to enforce the above-mentioned judgment.

24.  The Court notes that a similar objection has been raised by the Government in similar cases and has been dismissed by the Court (see, for example, Mirzayev v. Azerbaijan, no. 50187/06, §§ 24-28, 3 December 2009). The Court refers to its reasoning in the above-mentioned case and sees no grounds to depart from it. Therefore, the Government’s objection should be dismissed.

25.  The Court further notes that this complaint is not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention, nor is it inadmissible on any other grounds. Accordingly, it must be declared admissible.

26.  Having examined all the material before it, the Court concludes that the complaint discloses a violation of Article 6 § 1 of the Convention in the light of its findings in Akhundov v. Azerbaijan (no. 39941/07, §§ 31-36, 3 February 2011), Jafarli and Others v. Azerbaijan (no. 36079/06, §§ 52-54, 29 July 2010) and Faber Firm and Jafarov v. Azerbaijan (no. 3365/08, §§ 20-23, 25 November 2010).

27.  As concerns the applicant company’s complaints under Article 6 (right to a reasoned judgment) and Article 13, having regard to the facts of the case, the submissions of the parties and its findings above, the Court considers that it has dealt with the main legal questions raised by the case and that there is no need to examine the remaining complaints (see Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014, and compare also Bagvanov and Others, cited above, § 23).

APPLICATION OF ARTICLE 41 OF THE CONVENTION

28.  The applicant company claimed 700,000 euros (EUR) in respect of pecuniary damage and EUR 100,000 in respect of non-pecuniary damage.

29.  The Government submitted that the amounts claimed were excessive and unsubstantiated.

30.  The Court considers that the question of the application of Article 41 in its entirety is not ready for decision. It is therefore necessary to reserve the matter, due regard being had to the possibility of an agreement between the respondent State and the applicant company (Rule 75 §§ 1 and 4 of the Rules of Court).

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a)  reserves the said question in whole;

(b)  invites the Government and the applicant company to submit, within three months, their written observations on the matter and, in particular, to notify the Court of any agreement that they may reach;

(c)  reserves the further procedure and delegates to the President of the Committee the power to fix the same if need be.

Done in English, and notified in writing on 24 October 2024, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Liv Tigerstedt Raffaele Sabato
 Deputy Registrar President