CASE OF KENZIE GLOBAL LIMITED LTD v. THE REPUBLIC OF MOLDOVA

THIRD SECTION

CASE OF KENZIE GLOBAL LIMITED LTD
v. THE REPUBLIC OF MOLDOVA

(Application no. 287/07)

JUDGMENT

STRASBOURG

8 April 2014

FINAL

08/07/2014

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

In the case of Kenzie Global Limited Ltd v. the Republic of Moldova,

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

Josep Casadevall, President,
Alvina Gyulumyan,
Ján Šikuta,
Dragoljub Popović,
Luis López Guerra,
Johannes Silvis,
Valeriu Griţco, judges,
and Santiago Quesada, Section Registrar,

Having deliberated in private on 18 March 2014,

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

PROCEDURE

1. The case originated in an application (no. 287/07) 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 a company incorporated in the United Kingdom, Kenzie Global Limited Ltd (“the applicant company”), on 27 December 2006.

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

3. The applicant company alleged, in particular, that it had not been summoned to the hearing of the Supreme Court of Justice and that, as a result, it had suffered damage after losing the case.

4. On 24 May 2012 the application was communicated to the Government. On the same date the United Kingdom Government were informed of their right to intervene in the proceedings, in accordance with Article 36 § 1 of the Convention and Rule 44 § 1(b) of the Rules of Court, but they did not wish to avail themselves of that right.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicant is a company incorporated in the United Kingdom.

6. At the time of the events the applicant company was the creditor of company C. which, in its turn, was the creditor of company P. On 1 October 2005 the applicant company and company C. concluded an agreement by which the debt owed by company P. to company C. was assigned to the applicant company in lieu of the debt owed by company C. to the applicant company.

7. Later company P. became bankrupt and the insolvency procedure was commenced in its respect. On 10 May 2006 the applicant company requested that the Chişinău Economic Court allow it to replace company C. in the list of creditors of company P. In so doing, the applicant company relied on an agreement that it had concluded on 1 October 2005 with company C.

8. On 5 June 2006 the Chişinău Economic Court held a public hearing in the case and accepted the applicant company’s request. As a result the applicant company replaced company C. in the list of creditors of company P. with a debt of some 14,015,000 Moldovan lei (MDL) (the equivalent of some 901,000 euros (EUR)).

9. On 16 October 2006 company C. lodged an appeal against the above decision on the ground, inter alia, that the agreement of 1 October 2005 was faulty and that the persons who had signed it from both sides had acted ultra vires.

10. On 9 November 2006 the Supreme Court of Justice examined the appeal lodged by company C. in a hearing to which the applicant company had not been summoned to appear. The other parties participated in the hearing. The Supreme Court upheld the appeal and reversed the judgment of the lower court. In particular, the Supreme Court held that the person who had signed the agreement of 1 October 2005 on behalf of company C. had acted ultra vires, because at the relevant time she had been on maternity leave. The decision of the Supreme Court of Justice was final and the applicant company was excluded from the list of creditors of company P.

II. RELEVANT DOMESTIC LAW AND PRACTICE

11. The relevant provisions of the Code of Civil Procedure read as follows:

“Article 105. Service of the summons...

(1) The summons ... shall be sent by registered mail with confirmation of delivery or through a person authorised by the court. The date of service of the summons ... shall be written on the summons, as well as on the receipt, which shall be returned to the court.

...

(5) The summons ... addressed to a natural person shall be served on him or her personally and shall be countersigned on the receipt. The summons ... addressed to a legal person shall be served on the authorised employee and shall be countersigned on the receipt; if such a person is absent, the summons shall be served on another employee in the same conditions...”

“Article 441

... (2) The President of the Chamber [of the Supreme Court of Justice] shall set, within one month, the date for hearing the appeal in cassation and inform the parties accordingly. A copy of the appeal in cassation shall be sent to the other parties together with a summons to attend the hearing, indicating that a written reply should be submitted to the court not later than five days before the hearing.

Article 444

... (2) The appeal in cassation shall be examined after the parties have been summoned. However, their failure to appear shall not prevent the examination of the appeal.”

12. On 12 December 2005 the Plenary Supreme Court of Justice adopted a decision “Regarding the application of the rules of the Code of Civil Procedure to the examination of cases by the first-instance courts”. In point 5 of that decision the court noted that examining a case in the absence of a party which had not been properly summoned was contrary to the law. It added that under Article 105 § 5 of the Code of Civil Procedure a person should be considered as lawfully summoned only if he or she had been personally served with the summons and had countersigned the receipt.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

13. The applicant company complained of a violation of its right of access to justice, contrary to Article 6 of the Convention.

The relevant part of Article 6 reads as follows:

“1. In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”

A. Admissibility

14. The Court notes that the 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

15. The applicant company alleged that the Supreme Court’s failure to summon it to the court hearing of 9 November 2006 had breached its rights guaranteed under Article 6 § 1 of the Convention.

16. The Government disagreed with the applicant company and submitted that the outcome of the case would have been the same, irrespective of the applicant company’s presence at the hearing of the Supreme Court of 9 November 2006. Therefore, in their view, the failure of the Supreme Court to summon the applicant company to its hearing had not compromised the overall fairness of the proceedings.

17. The Court reiterates that Article 6 § 1 does not guarantee a right to appeal against a decision of first or second instance. Where, however, domestic law provides for a right of appeal, the appeal proceedings will be treated as an extension of the trial process and accordingly will be subject to the guarantees contained in Article 6 (see Delcourt v. Belgium, 17 January 1970, § 25, Series A no. 11, and Gurov v. Moldova, no. 36455/02, § 33, 11 July 2006).

18. The Court also reiterates that in Bucuria v. Moldova (no. 10758/05, § 24, 5 January 2010) and Rassohin v. Moldova (no. 11373/05, § 33, 18 October 2011) it has dealt with similar problems and found a breach of Article 6 § 1 on account of the failure of the Supreme Court to summon the applicants to its hearings. Similarly, in the present case the Supreme Court overturned a judgment adopted by the lower court in favour of the applicant company after a re-examination of the merits of the case and a re-assessment of its factual circumstances at a hearing to which the applicant company had not been summoned. The Court considers that, as a matter of fair trial, such a re-examination should not have been conducted without having given the applicant company a chance to present its position, especially given that the other parties to the proceedings were present at the hearing and presented their respective positions.

19. The Court therefore concludes that that the applicant company was not given an opportunity to present its case to the Supreme Court of Justice.

20. There has, accordingly, been a violation of Article 6 § 1 of the Convention.

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

21. The applicant company also complained that its rights guaranteed by Article 1 of Protocol No. 1 to the Convention had been breached because the Supreme Court had no right to intervene in its relationship with company C. Moreover, the Supreme Court of Justice adopted the judgment of 9 November 2006 in its absence.

22. The relevant part of Article 1 of Protocol No. 1 to the Convention 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. ...”

23. The Government considered that there was no causal link between a possible breach of Article 6 § 1 of the Convention and the alleged breach of Article 1 of Protocol No.1.

24. The Court has found a violation of Article 6 § 1 of the Convention as a result of the failure of the Supreme Court of Justice to hear the applicant company. It cannot, however, speculate as to the outcome of the proceedings, had they been fair under Article 6 § 1 of the Convention. It therefore considers that this complaint is inadmissible as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

25. 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

26. The applicant company claimed 1,909,946 euros (EUR) in respect of pecuniary damage and EUR 50,000 in respect of non-pecuniary damage.

27. The Government disputed the amounts claimed by the applicant company.

28. The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. On the other hand, it awards the applicant company EUR 3,600 in respect of non-pecuniary damage.

B. Costs and expenses

29. The applicant company also claimed EUR 10,000 for the costs and expenses incurred before the Court.

30. The Government objected and argued that the amount claimed was excessive.

31. Regard being had to the circumstances of the case and to the documents submitted by the applicant company, the Court considers it reasonable to award EUR 1,500 for costs and expenses.

C. Default interest

32. 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 admissible the complaint under Article 6 § 1 of the Convention, and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention;

3. 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, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i) EUR 3,600 (three thousand six hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii) 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;

4. Dismisses the remainder of the applicant company’s claim for just satisfaction.

Done in English, and notified in writing on 8 April 2014, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Santiago QuesadaJosep Casadevall
RegistjrarPresident

Full & Egal Universal Law Academy