FIFTH SECTION
CASE OF DUMAGAS TRANSPORT S.A. v. BULGARIA
(Application no. 59271/11)
JUDGMENT
STRASBOURG
21 November 2019
This judgment is final but it may be subject to editorial revision.
In the case of Dumagas Transport S.A. v. Bulgaria,
The European Court of Human Rights (Fifth Section), sitting as a Committee composed of:
Gabriele Kucsko-Stadlmayer, President,
Yonko Grozev,
Lado Chanturia, judges,
and Claudia Westerdiek, Section Registrar,
Having deliberated in private on 22 October 2019,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 59271/11) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Romanian joint-stock company, Dumagas Transport S.A. (“the applicant company”), on 1 September 2011.
2. The applicant company was represented by Mr A. Fleancu, a lawyer practising in Craiova. The Bulgarian Government (“the Government”) were represented by their Agent, Ms A. Panova, of the Ministry of Justice.
3. On 10 October 2018 the Government were given notice of the application.
4. On 22 October 2018 the Romanian Government were informed of their right to intervene in the proceedings in accordance with Article 36 § 1 of the Convention and Rule 44 § 1 of the Rules of Court. On 4 January 2019 they informed the Court that they would not avail themselves of this possibility.
THE FACTSTHE CIRCUMSTANCES OF THE CASE
5. The applicant company has its registered seat in Branişte. It runs transport and logistics services.
6. On 9 February 2011 three of its lorries, travelling from Turkey to Romania, were stopped for inspection at the Bulgarian-Turkish border. The Bulgarian customs officials discovered large quantities of undeclared perfumes and cigarettes. It was established for the purposes of the ensuing criminal proceedings (see below) that the value of the smuggled goods totalled 56,210 Bulgarian levs (BGN), the equivalent of about 28,750 euros (EUR). Those goods were seized, and the lorries were seized as well as physical evidence. The remaining merchandise, which had not been the object of any offence, was returned to the applicant company.
7. The applicant company was the owner of one of the seized lorries and the lessee of the two others, on the strength of financial lease contracts concluded in 2008 and 2009. These contracts stipulated that after the expiry of the respective lease periods the applicant company could acquire ownership. The applicant company continued to pay the monthly instalments due under those contracts until 2016. Expert valuations commissioned by the Bulgarian authorities showed that the value of the three lorries totalled BGN 205,100 (EUR 105,000).
8. Criminal proceedings for smuggling – an offence under Article 242 of the Criminal Code (see paragraph 14 below) – were opened against the three drivers.
9. After the applicant company submitted requests under Article 111 of the Code of Criminal Procedure (see paragraph 15 below) for the release of the lorries, in three decisions dated 21 February 2011 a prosecutor from the Yambol Regional Public Prosecutor’s Office refused such release. He pointed out that, since the offences committed by the three drivers had been “proven in an undisputable manner”, the lorries were to be forfeited, in accordance with Article 242 § 8 of the Criminal Code (see paragraph 14 below).
10. The applicant company lodged appeals, which were dismissed in three decisions of the Yambol Regional Court of 28 February 2011. In one of the cases the domestic court pointed out that physical evidence could be released before the end of the relevant criminal proceedings only where this would not hinder those proceedings, which was not the case. In the two other cases the applicant company’s appeals were found to be inadmissible since it had not been shown that the person having lodged them had been authorised to act on its behalf.
11. In the meantime, the three drivers entered into plea agreements with the prosecution authorities, confessing to having committed offences under Article 242 § 1(d) of the Criminal Code and accepting suspended prison sentences. The terms of the agreements included the forfeiture of the lorries, under Article 242 § 8 of the Criminal Code (see paragraph 14 below).
12. The plea agreements were approved by the Yambol Regional Court in three decisions given on 2 and 17 March and 8 April 2011. Those decisions were not subject to appeal and became immediately enforceable.
13. Subsequently, the applicant company wrote to the Yambol Regional Public Prosecutor’s Office with a request to apply for the re-opening of the criminal proceedings. In a decision of 31 May 2011 and two further decisions of 15 June 2011 prosecutors from that office found that there were no grounds to seek re-opening. One of the reasons put forward was that the forfeiture of the lorries had been in compliance with Article 242 § 8 of the Criminal Code, and in particular the proviso that such forfeiture was not to be carried out where the value of the vehicle used for smuggling clearly did not correspond to the seriousness of the offence. It was noted that the seriousness of the offence was determined with reference not merely to the value of the smuggled goods, but also to all other relevant circumstances. Similar statements were made in three decisions of prosecutors from the Chief Public Prosecutor’s Office dated 1 and 29 September and 17 October 2011, pursuant to further requests by the applicant company for the re‑opening of the proceedings.RELEVANT DOMESTIC LAW AND PRACTICE
14. Article 242 of the Criminal Code criminalises smuggling. Its paragraph 1(d) provides that transporting across the border large quantities of undeclared goods for trade or production purposes, which the person is unauthorised to carry, is punishable by up to ten years’ imprisonment and a fine of between BGN 20,000 and BGN 100,000. Article 242 § 8 allows in addition the forfeiture to the State of a vehicle which has served for the transportation of smuggled goods across the border, even if it is not the property of the offender, except where the vehicle’s value clearly does not correspond to the seriousness of the offence.
15. Article 111 of the Code of Criminal Procedure stipulates that physical evidence must be retained until the end of the criminal proceedings. It can be released to those entitled earlier if that does not hinder the establishment of the facts. The prosecutor’s refusal to release the evidence can be appealed against before the first-instance court, whose decision is final.
16. Plea bargaining is regulated by Articles 381 et seq. of the Code of Criminal Procedure. A plea agreement between the prosecution and the accused is to be confirmed by a court, at a hearing in which the prosecutor, the defence lawyer and the accused are to be present. The court is in particular required to satisfy itself that the agreement does not breach the law.
17. The remaining relevant domestic law and practice have been summarised in Ünsped Paket Servisi SaN. Ve TiC. A.Ş. v. Bulgaria (no. 3503/08, §§ 13-26, 13 October 2015).
THE LAWALLEGED VIOLATIONS OF ARTICLE 1 OF PROTOCOL NO. 1 and article 6 § 1 of the convention
18. The applicant company complained under Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention of the forfeiture of its lorries. It pointed out that it had been unable to participate in the proceedings resulting in that forfeiture and to defend its rights.
19. Article 1 of Protocol No. 1 reads as follows:
“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.”
Article 6 § 1 of the Convention, in so far as relevant, reads:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”Article 1 of Protocol No. 1Admissibility
20. The Government pleaded non-exhaustion of domestic remedies on two grounds. First, they pointed out that the applicant company had failed to duly appeal against the prosecution’s refusals to release two of the lorries in the procedures under Article 111 of the Code of Criminal Procedure (see paragraphs 9-10 above). Second, they argued that the applicant company should have brought proceedings against the lorry drivers and seek compensation for the losses it had incurred due to their criminal behaviour.
21. The applicant company did not comment.
22. In the earlier similar case of Ünsped Paket Servisi SaN. Ve TiC. A.Ş (cited above, §§ 30-32) the Court examined and dismissed an argument comparable to the first objection raised by the Government. It noted that by using the procedure under Article 111 of the Code of Criminal Procedure the applicant company could only have obtained the temporary release of its seized lorry, but could not have prevented its forfeiture, which was what it had complained about. Accordingly, the procedure at issue could not be considered an effective remedy for its grievances. Such considerations are equally valid in the case at hand. This means that the Government’s first objection of non-exhaustion of domestic remedies must be dismissed.
23. As to the whether an action for compensation against the lorry drivers may be considered as capable of offering an effective remedy within the meaning of Article 35 § 1 of the Convention – the second objection raised by the Government – the question is closely linked to the substance of the applicant company’s complaints (see B.K.M. Lojistik Tasimacilik Ticaret Limited Sirketi v. Slovenia, no. 42079/12, § 26, 17 January 2017). Accordingly, that objection should be joined to the merits.
24. The Court observes additionally that the complaint under Article 1 of Protocol No. 1 is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention, or inadmissible on any other ground. It must therefore be declared admissible.Merits
25. The Government argued that any interference with the applicant company’s property rights was lawful, justified and proportionate. They pointed out that States enjoyed wide margin of appreciation when it came to control of the use of property under the second paragraph of Article 1 of Protocol No. 1.
26. The applicant company pointed out that its lorries had been forfeited on the strength of plea agreements between the drivers and the Bulgarian State, none of whom had been those lorries’ owner. In addition, the forfeiture had been disproportionate in view of the huge difference between the value of the smuggled goods and that of the lorries.
27. The Court notes that the applicant company was the owner of one of the forfeited lorries and the lessee of the other two, on the strength of financial lease contracts. Under those contracts, it could acquire ownership after the expiry of the respective lease periods. Moreover, it remained liable to pay its monthly instalments until 2016 (see paragraph 7 above). Accordingly, the Court concludes that the applicant company had a sufficiently established proprietary interest in the two lorries it did not formally own, amounting to a “possession” within the meaning of Article 1 of Protocol No. 1.
28. The Court finds, in the next place, that the forfeiture of the lorries represented an interference with the applicant company’s “possessions”.
29. As to whether that interference was justified, the Court refers to its findings in the similar case of Ünsped Paket Servisi SaN. Ve TiC. A.Ş (cited above, §§ 42-47). In that case it noted that the domestic court ordering the forfeiture of the applicant company’s lorry had not, at any point, considered the legality of that forfeiture, in particular whether the value of the lorry corresponded to the seriousness of the offence, as required under Article 242 § 8 of the Criminal Code. Nor had the domestic court examined the conduct of the lorry driver and whether the applicant company, the lorry’s owner, could or should have been aware of the smuggling. Lastly, the Court criticised the domestic procedural rules for not allowing the applicant company a chance to put its case to the national authorities and challenge the forfeiture. All this meant that the fair balance which had had to be struck between the protection of the applicant’s right to property and the requirements of the general interest had been upset, in violation of Article 1 of Protocol No. 1.
30. The same considerations are valid in the case at hand. The Yambol Regional Court, which confirmed the plea agreements between the lorry drivers and the prosecution authorities and ordered the forfeiture of the applicant company’s lorries, did not consider whether the requirements of Article 242 § 8 of the Criminal Code had been met, in particular the one permitting forfeiture only where the value of the vehicle to be forfeited corresponds to the seriousness of the offence (see paragraphs 11-12 and 14 above). While it could appear that the issue was discussed in the subsequent refusals of the prosecution authorities to seek the re-opening of the proceedings (see paragraph 13 above), these were not decisions taken by the body competent to make a binding assessment on the matter and order or not the forfeiture, namely the respective court. In addition, the Yambol Regional Court did not analyse whether the applicant company could or should have been aware of the smuggling committed by its drivers. Lastly, the applicant company was given no chance to challenge the forfeiture of its lorries in the domestic criminal proceedings against the three drivers. It is to be noted in that respect that the present case concerns the application of the same legal scheme as in Ünsped Paket Servisi SaN. Ve TiC. A.Ş., and the conclusions made there are valid in the present case as well.
31. Lastly, in so far as the Government maintained that the applicant company could have brought proceedings against the lorry drivers convicted for smuggling to seek compensation for its pecuniary losses (see paragraph 20 above), the Court observes that in similar situations it has held that a compensation claim of this nature entailed further uncertainty for a bona fide owner of confiscated property because the offender might be found to be insolvent. The compensation claim was not thus held to offer sufficient opportunity for bringing the relevant case before the competent national authorities (see Bowler International Unit v. France, no. 1946/06, §§ 44-45, 23 July 2009, and, mutatis mutandis, B.K.M. Lojistik Tasimacilik Ticaret Limited Sirketi, cited above, § 50). The general nature of the argument adduced by the Government does not allow the Court to depart from its above-mentioned findings. The Court refers additionally to its finding in Ünsped Paket Servisi SaN. Ve TiC. A.Ş. (cited above, § 32) that the State, which had forfeited the applicant company’s lorry, without providing for a procedure whereby it could have defended its property rights, could not relieve itself of its responsibility under the Convention to provide for such a procedure by asking the applicant company to seek compensation from a third party.
32. Accordingly, the Court dismisses the Government’s objection of non-exhaustion of domestic remedies related to the possibility for the applicant company to seek compensation from the lorry drivers, which it previously joined to the merits (see paragraph 23 above).
33. The foregoing considerations are sufficient to enable the Court to conclude that the national authorities failed to strike the necessary fair balance between the protection of the applicant company’s “possessions” and the requirements of the general interest.
34. There has accordingly been a breach of Article 1 of Protocol No. 1.Article 6 § 1 of the Convention
35. The applicant company complained in addition of a violation of Article 6 § 1 of the Convention, pointing out that it had been unable to participate in the proceedings resulting in the forfeiture of its property.
36. The Court notes that this complaint is linked to the one examined above and must therefore likewise be declared admissible.
37. Having regard to its findings under Article 1 of Protocol No. 1, the Court considers that it is not necessary to examine whether, in this case, there has in addition been a violation of Article 6 § 1 of the Convention (see Ünsped Paket Servisi SaN. Ve TiC. A.Ş, cited above, § 51, with further references).APPLICATION OF ARTICLE 41 OF THE CONVENTION
38. 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.”Damage
39. In its submissions following the communication of the application, the applicant company stated that the Bulgarian State had to “take responsibility” for the breach of its rights, and that a “solution for fair compensation” had to be found, “considering the undisputed existence of prejudice to the assets of Dumagas Transport S.A.”. However, the applicant company made no specific claims for pecuniary or non-pecuniary damage, nor did it submit any relevant documents.
40. That being so, the Court considers that the applicant company has failed to comply with its obligations under Rule 60 of the Rules of Court. Since no valid claim for damage has been made, the Court considers that there is no reason to award the applicant company any amount under that head (see Mancini v. Italy, no. 44955/98, §§ 28-29, ECHR 2001‑IX, and Abdullayeva v. Azerbaijan, no. 29674/07, §§ 33-34, 14 March 2019). As concerns in particular non-pecuniary damage, it sees no exceptional circumstances leading to a different conclusion, such as defined in Nagmetov v. Russia ([GC], no. 35589/08, §§ 76-82, 30 March 2017).Costs and expenses
41. The applicant company claimed the reimbursement of the fees charged by its legal representative, M. Fleancu. It stated that it had agreed to pay him a monthly fee of 2,000 Romanian lei (RON) – the equivalent of EUR 422 – “until the end of this dispute”. The applicant company submitted invoices, showing that it had paid such a fee on five occasions between January and May 2019.
42. The Government considered the claim excessive. They argued that the applicant company was not required to pay a fee to its lawyer after the submission of its observations to the Court.
43. Regard being had to the documents in its possession and to its case-law, the Court considers it reasonable to award the applicant company EUR 800 for its legal representation in the current proceedings.Default interest
44. 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,Joins to the merits the Government’s objection of non-exhaustion of domestic remedies related to the possibility for the applicant company to claim compensation from the lorry drivers, and rejects it;Declares the application admissible;Holds that there has been a violation of Article 1 of Protocol No. 1;Holds that it is not necessary to examine the complaint under Article 6 § 1 of the Convention;Holds
(a) that the respondent State is to pay the applicant company, within three months, EUR 800 (eight hundred euros) in respect of costs and expenses, plus any tax that may be chargeable to the applicant company;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;Dismisses the remainder of the applicant company’s claim for just satisfaction.
Done in English, and notified in writing on 21 November 2019, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia WesterdiekGabriele Kucsko-Stadlmayer
RegistrarPresident
Full & Egal Universal Law Academy