CASE OF HEROSS LTD v. THE REPUBLIC OF MOLDOVA

SECOND SECTION

CASE OF HEROSS LTD v. THE REPUBLIC OF MOLDOVA

(Application no. 58982/12)

JUDGMENT
 

STRASBOURG

19 May 2020

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

In the case of Heross LTD v. the Republic of Moldova,

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

Arnfinn Bårdsen, President,
Valeriu Griţco,
Peeter Roosma, judges,
and Hasan Bakırcı, Deputy Section Registrar,

Having regard to:

the application against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Heross LTD, a company incorporated in Bulgaria (“the applicant”), on 31 August 2012;

the decision to give notice to the Moldovan Government (“the Government”) of the complaints concerning Article 6 § 1 and Article 1 of Protocol No. 1;

the parties’ observations;

Having deliberated in private on 19 May 2020,

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

PROCEDURE

1.  The case originated in an application (no. 58982/12) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Heross LTD, a company incorporated in Bulgaria (“the applicant company”), on 31 August 2012.

2.  The applicant company was represented by Mr A. Bivol, a lawyer practising in Chişinău. The Moldovan Government (“the Government”) were represented by their Agent, Mr O. Rotari.

3.  The applicant company alleged, in particular, that a final judgment in its favour had been quashed after being wrongfully reviewed.

4.  On 13 April 2018 notice of the application was given to the Government.

5.  The Government objected to the examination of the application by a committee. Having considered the objection, the Court rejects it.

INTRODUCTION

6.  The case concerns the misuse of the review procedure resulting in the wrongful quashing of a final judgment in favour of the applicant company. It raises problems under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 to the Convention.

THE FACTS

7.  By a final judgment of 27 December 2000, the Chişinău Economic Court ordered V., a company, to pay the applicant company 118,527.58 United States dollars and 43,914.38 Moldovan lei.

8.  On 8 September 2010 a State-owned company, A. – which was also a creditor of V. by virtue of another unrelated judicial decision and which had not been involved in the proceedings between V. and the applicant company – lodged a request for review of the judgment of 27 December 2000. It asserted that new information had become available to it which justified the revision of that final judgment. According to A., the applicant company’s claim had been upheld despite there being no evidence that it had paid court fees. Moreover, the case file did not contain evidence that the applicant company had provided the originals of the documents submitted in support of its claim. No translator had been involved in the proceedings and a criminal investigation had been initiated against the owner of the applicant company in connection with allegations that the contract between it and another company had been forged.

9.  On 22 March 2011 the Economic Court granted the above-mentioned request for review, quashed the judgment of 27 December 2000 and ordered the reopening of the proceedings. The court endorsed the reasons relied upon by company A. in its request for review. It also ruled that its decision was final and could not be challenged.

10.  On 2 March 2012 the Economic Court decided to terminate the reopened proceedings between the applicant company and company V. as the latter had ceased to exist on 25 March 2009 as a result of insolvency proceedings.

11.  The applicant company challenged the decisions of 22 March 2011 and 2 March 2012. It argued, inter alia, that the review of the judgment of 27 December 2000 had been an abuse of process and had in fact been an appeal in disguise.

12.  On 7 June 2012 the Chişinău Court of Appeal dismissed the applicant company’s appeal and upheld both decisions. The Court of Appeal held, inter alia, that the review of the judgment of 27 December 2000 had been in accordance with the law and had not been an abuse of process.

RELEVANT Legal framework

13.  The relevant provisions of the Code of Civil Procedure concerning the review of final judgments read as follows.

Article 449

“A request for review shall be granted when:

...

(c)  after a judgment has been adopted, new documents have been discovered which were withheld by one of the parties to the proceedings or which could not have been submitted to the court during the proceedings because of circumstances beyond the control of the interested party;

...”

Article 450

A request for review may be lodged:

...

(d)  within three months from the date on which the document was discovered – in cases [falling under] Article 449 (c);

...”

14.  Under Article 453 § 2 of the Code of Civil Procedure, as in force at the material time, a decision to examine a request for review could be challenged together with the decision on the merits of the case.

THE LAWALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

15.  The applicant company complained that the quashing of the final judgment of the Chişinău Economic Court of 27 December 2000 had been wrongful and had violated Article 6 § 1 of the Convention, the relevant part of which reads as follows:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. ...”Admissibility

16.  The Government submitted that in Frunze v. the Republic of Moldova ((dec.), no. 42308/02, 14 September 2004) the Court had held that the quashing of a judgment was an instantaneous act and that, therefore, the six‑month time-limit started running from the date of quashing and not from the moment when the reopened proceedings ended. They observed that in the present case the quashing had taken place on 22 March 2011, whereas the application had been lodged some seventeen months later. They also pointed out that in the decision of 22 March 2011 it had been clearly indicated that it was final and could not be challenged.

17.  The applicant company disagreed with the Government and submitted that the application had been submitted within the six-month time-limit.

18.  The Court notes that the finding concerning the applicability of the six-month rule in Frunze (cited above) related to the procedure for lodging a request for annulment and not to a request for review. It further notes that, unlike court decisions in annulment proceedings, decisions in review proceedings could be challenged by means of an appeal under Article 453 § 2 of the Code of Civil Procedure (see paragraph 14 above). The Court observes that it was called upon to deal with a similar situation in Sfinx‑Impex S.A. v. the Republic of Moldova (no. 28439/05, § 16, 25 September 2012), where it ruled that the six-month time-limit started to run not from the date on which the request for review request had been granted but from the date on which the courts had finally dismissed any appeal against the decision to grant it. The fact that in the present case the Economic Court indicated in its decision of 22 March 2011 that the decision could not be challenged appears to have been a mistake since the superior court did examine the appeal subsequently lodged by the applicant company and dismissed it on 7 June 2012.

19.  In view of the above considerations, the Court dismisses the Government’s objection.

20.  The Government also submitted that the applicant company had failed to avail itself of the domestic remedy concerning the non-enforcement of final judgments. However, since the applicant company did not complain of the non-enforcement of the judgment of 27 December 2000, the Court does not consider it necessary to examine this argument.

21.  The Court notes that the application 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.Merits

22.  The applicant company submitted that the quashing of the judgment of 27 December 2000 had violated its right to a fair trial as guaranteed by Article 6 of the Convention and that the review procedure had in fact been an appeal in disguise.

23.  The Government argued that the revision had not been an appeal in disguise but a remedy used in order to correct a judicial error.

24.  The Court reiterates that the right to a fair hearing before a tribunal as guaranteed by Article 6 § 1 of the Convention must be interpreted in the light of the Preamble to the Convention, which, in its relevant part, declares the rule of law to be part of the common heritage of the Contracting States. One of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, among other things, that where the courts have finally determined an issue, their ruling should not be called into question (see Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999‑VII, and Roşca v. Moldova, no. 6267/02, § 24, 22 March 2005).

25.  Legal certainty presupposes respect for the principle of res judicata (see Brumărescu, cited above, § 62) – that is, the principle of the finality of judgments. This principle states that no party is entitled to seek a review of a final and binding judgment merely for the purpose of obtaining a rehearing and a fresh determination of the case. Higher courts’ power of review should be exercised to correct judicial errors and miscarriages of justice, but not to carry out a fresh examination. The review should not be treated as an appeal in disguise, and the mere possibility of there being two views on the subject is not a ground for re-examination. A departure from that principle is justified only when made necessary by circumstances of a substantial and compelling character (see Roşca, cited above, § 25).

26.  The above-mentioned conclusion in Roşca was drawn in connection with the procedure for annulment requests, under which the Prosecutor General’s Office could seek a review of final judgments with which it disagreed. The Court held that this procedure, although possible under domestic law, was incompatible with the Convention because it resulted in a litigant “losing” a final judgment in his favour.

27.  As to the reopening of proceedings owing to newly discovered circumstances, the Court observes that it considered this issue in Popov v. Moldova (no. 2) (no. 19960/04, 6 December 2005), where it found a violation of Article 6 § 1 on account of the misuse of review proceedings. The Court held in that case that reopening was not, as such, incompatible with the Convention. However, decisions to review final judgments had to be in accordance with the relevant statutory criteria and the misuse of such a procedure could well be contrary to the Convention, given that its result – the “loss” of the judgment – was the same as that of a request for annulment. The principles of legal certainty and the rule of law required the Court to be vigilant in this area (ibid., § 46).

28.  The Court notes that the review procedure provided for under Article 449 of the Code of Civil Procedure does indeed serve the purpose of correcting judicial errors and miscarriages of justice. The Court’s task, exactly as in Popov (ibid.), is to determine whether this procedure was applied in a manner which was compatible with Article 6 of the Convention, and thus ensured respect for the principle of legal certainty. In doing so, the Court must bear in mind that it is in the first place the responsibility of national courts to interpret provisions of national law (see Waite and Kennedy v. Germany [GC], no. 26083/94, § 54, ECHR 1999-I).

29.  It notes that, under Article 449 (c) of the Code of Civil Procedure, proceedings may be reopened when new and essential facts or circumstances have been discovered that were unknown and could not have been known earlier. Under Article 450 of the same Code, a request for review may be lodged within three months from the date on which the person concerned came to know essential circumstances or facts of the case which were unknown to him or her earlier and which could not have been known to him or her earlier.

30.  The decision of 22 March 2011 of the Economic Court cited several grounds for reopening the proceedings, including the fact that the applicant company’s claim had been upheld despite there being no evidence that it had paid court fees; the case file did not contain evidence that the applicant company had provided the originals of the documents submitted in support of its claim; no translator had been involved in the proceedings; and a criminal investigation had been initiated against the owner of the applicant company in connection with allegations that the contract between the applicant company and another company had been forged (see paragraph 8 above).

31.  The Court notes that there is no indication in the Economic Court’s judgment of 22 March 2011 whether the above grounds qualified as “information” that could not have been obtained earlier by the defendant. Nor is there any indication that the defendant had tried unsuccessfully to obtain such “information” earlier. In such circumstances, the Court considers that it cannot be said that the grounds relied upon to review the judgment of 27 December 2000 almost ten years later qualified as a new fact or circumstance that had been unknown and could not have been known earlier by the parties to the proceedings.

32.  Accordingly, the Court considers that the review proceedings in issue were, in essence, an attempt to relitigate the case on points which could have been but had not been raised earlier. It was in effect an “appeal in disguise” whose purpose had been to obtain a fresh examination of the matter, rather than a genuine review as provided for under Articles 449 to 453 of the Code of Civil Procedure.

33.  By granting the request for review, the Economic Court infringed the principle of legal certainty and the applicant company’s “right to a court” as guaranteed by Article 6 § 1 of the Convention (see, mutatis mutandis, Roşca, cited above, § 28). In the light of the above the Court considers that there has been a violation of Article 6 § 1.ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

34.  The applicant company complained that the Economic Court’s judgment of 22 March 2011 had had the effect of infringing its right to the peaceful enjoyment of its possessions as secured by Article 1 of Protocol No. 1, which, in so far as relevant, provides:

“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.

...”Admissibility

35.  For the reasons outlined in paragraphs 14 to 17 above, the Court considers that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It must therefore be declared admissible.Merits

36.  The Government argued that there had been no breach of Article 1 of Protocol No. 1.

37.  The Court reiterates that a judgment debt may be regarded as a “possession” for the purposes of Article 1 of Protocol No. 1 (see, among other authorities, Burdov v. Russia, no. 59498/00, § 40, ECHR 2002-III, and the cases cited therein). Furthermore, quashing such a judgment after it has become final and unappealable will constitute an interference with the judgment beneficiary’s right to the peaceful enjoyment of that possession (see Brumărescu, cited above, § 74). Even assuming that such an interference may be regarded as serving a public interest, the Court finds in the instant case that it was not justified since a fair balance was not struck and the applicant company was required to bear an individual and excessive burden (ibid., §§ 75-80).

38.  It follows that there has been a violation of Article 1 of Protocol No. 1.APPLICATION OF ARTICLE 41 OF THE CONVENTION

39.  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.”Pecuniary damage

40.  The applicant company claimed 299,286.23 euros (EUR) in respect of pecuniary damage. This represented the amount it had been entitled to receive from company V. by virtue of the judgment of 27 December 2000, plus the interest accrued and compensation for inflation.

41.  The Government submitted that the applicant company’s claim was excessive and asked the Court to dismiss it.

42.  The Court reiterates that a judgment in which it finds a breach imposes on the respondent State a legal obligation to put an end to the breach and to make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Former King of Greece and Others v. Greece (just satisfaction) [GC], no. 25701/94, § 72, 28 November 2002). In the present case the reparation should aim to put the applicant company in the position in which it would have been had the violation not occurred.

43.  The Court notes that, according to the findings of the domestic courts, the company that owed the applicant company money by virtue of the quashed judgment had ceased to exist as a result of insolvency proceedings almost two years before the quashing in question had taken place. In such circumstances, it is not clear to the Court, and the applicant company did not explain, how it would have been possible to recover its money from a non-existent company had the judgment of 27 December 2000 not been quashed. The Court therefore considers the applicant company’s claims to be highly speculative and unsubstantiated and dismisses them.Non-pecuniary damage

44.  The applicant company also claimed EUR 10,000 in respect of non‑pecuniary damage.

45.  The Government contended that the claim was excessive and asked the Court to dismiss it.

46.  Having regard to the violation found, the Court considers that an award in respect of non-pecuniary damage is justified in this case. Making its assessment on an equitable basis, the Court awards the applicant company EUR 2,000 in respect of non-pecuniary damage.Costs and expenses

47.  The applicant company also claimed EUR 3,000 for the costs and expenses incurred before the Court.

48.  The Government disagreed with the amount claimed by the applicant company and asked the Court to dismiss it.

49.  The Court reiterates that in order for costs and expenses to be included in an award under Article 41 of the Convention, it must be established that they were actually and necessarily incurred and were reasonable as to quantum (see, for example, Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 240, 23 February 2016). Having regard to all the relevant facts and to Rule 60 § 2 of the Rules of Court, the Court awards the applicant company EUR 1,500.

FOR THESE REASONS, THE COURT Declares the application admissible;Holds that there has been a violation of Article 6 § 1 of the Convention;Holds that there has been a violation of Article 1 of Protocol No. 1;Holds

(a)  that the respondent State is to pay the applicant company, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 2,000 (two thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage and EUR 1,500 (one thousand five hundred euros), plus any tax that may be chargeable to the applicant, 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;Dismisses the remainder of the applicant company’s claim for just satisfaction.

Done in English, and notified in writing on 19 May 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan Bakırcı Arnfinn Bårdsen
Deputy RegistrarPresident

 

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