CASE OF ILIRIA S.R.L. v. ALBANIA

THIRD SECTION

CASE OF ILIRIA S.R.L. v. ALBANIA

(Application no. 31011/09)

JUDGMENT
 

STRASBOURG

5 March 2024

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

In the case of Iliria S.R.L. v. Albania,

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

 Georgios A. Serghides, President,
 Darian Pavli,
 Oddný Mjöll Arnardóttir, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 31011/09) against the Republic of Albania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 6 April 2009 by an Italian company, Iliria S.r.l. (in liquidation) (“the applicant company”), registered in Naples and represented initially by Mr A. Hakani and subsequently by Mr A. Saccucci, a lawyer practising in Rome;

the decision to give notice of the complaint under Article 6 § 1 of the Convention concerning the length of proceedings to the Albanian Government (“the Government”), represented by their then Agent Ms A. Hicka and subsequently by Mr O. Moçka, General State Advocate;

the fact that the Italian Government did not seek to exercise their right to intervene (Article 36 § 1 of the Convention and Rule 44 § 1 of the Rules of Court);

the parties’ observations;

Having deliberated in private on 6 February 2024,

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

SUBJECT MATTER OF THE CASE

1.  The case concerns a complaint under Article 6 § 1 of the Convention that the length of proceedings related to the recognition (exequatur) of an international arbitral award was unreasonable.

2.  On 3 September 1993, following the institution of arbitration proceedings by the applicant company, an international arbitral tribunal set up on the basis of an arbitration agreement ordered the Albanian Government to pay the applicant company 48,239,000,000 Italian Lira (“ITL”) and annual interest at a rate of 13% (“the Arbitral Award”).

3.  On 25 May 1995 the Ministry of Finance informed the applicant company that it would pay its debt after obtaining a loan from foreign banks.

4.  On 11 March 1998 the applicant company lodged a non-contentious request (i.e., without citing an opposing party) that the Tirana Court of Appeal recognise (exequatur) the Arbitral Award in the Albanian legal order.

5.  On 2 April 1998 the Tirana Court of Appeal approved the request and recognised the Arbitral Award thereby making it executable. As this decision referred only to the principal amount, on 5 May 2000 the same court supplemented its first decision by recognising the obligation of the debtor to pay interests too (the “Initial Exequatur Decisions”).

6.  On 3 August 1998 the Council of Ministers instructed the Ministry of Finance to act pursuant to the applicable laws in respect of the debt towards the applicant company.

7.  On 11 November 1998 and 20 May 2002 a bailiff forwarded to the Council of Ministers the information about the debt towards the applicant company and recommended that the parties enter into negotiations about the terms of the payment.

8.  On an unspecified date the Council of Ministers lodged with the Tirana Court of Appeal a request to appeal out of time (rivendosje në afat) against the Initial Exequatur Decisions. On 26 December 2003 the Tirana Court of Appeal accepted the request on the grounds that the impugned decisions had not been served on the Council of Ministers.

9.  On 5 January 2004 the Council of Ministers lodged an appeal on points of law against the Initial Exequatur Decisions.

10.  On 10 February 2005 the Supreme Court quashed those decisions and remitted the case for re-examination. It found that the Council of Ministers should have been afforded a possibility to oppose the recognition of the Arbitral Award.

11.  On 14 February 2006 the Tirana Court of Appeal decided to discontinue the examination of the case. It found that the representative of the applicant company had not obtained a valid authorisation from its director to start recognition proceedings in Albania. The applicant company lodged an appeal on points of law.

12.  On 9 May 2007 the Supreme Court held a hearing on the case and on 26 September 2007 it quashed the lower court’s decision remitting the case for re-examination. It found that court of appeal had failed to hear the applicant company on the matter of the authorisation and to award to it a possibility to correct the alleged defects in that connection.

13.  On 31 March 2009 the Court of Appeal dismissed the applicant company’s request for the recognition and enforcement of the Arbitral Award. It held that the award was contrary to the basic principles of the Albanian law.

14.  On 12 April 2012 the Supreme Court rejected the applicant company’s appeal on points of law by way of a de plano decision noting that it did not include any admissible cassation arguments.

15.  The applicant company lodged a constitutional appeal on an unspecified date (the “First Constitutional Appeal”).

16.  On 2 May 2013 the Constitutional Court held a hearing on the case and on10 July 2013 it quashed the Supreme Court’s decision. It noted that the Supreme Court should have provided more ample reasons in response to the applicant company’s arguments.

17.  On 4 October 2013 the Supreme Court ruled once again against the applicant company.

18.  On 2 December 2014 the applicant company lodged another constitutional appeal complaining, among others, of the length of proceedings.

19.  On 14 April 2015 the Constitutional Court held a hearing on the case and on 22 December 2015 it dismissed the appeal. In respect of the length of proceedings, the court distinguished between two different periods.

20.  Pursuant to the Constitutional Court, the first relevant period started on 31 March 2009 when the Tirana Court of Appeal gave its judgment on the merits of the case and ended when the Supreme Court gave its decision of 12 April 2012 (see paragraphs 13 and 14 above). In connection to this period, the court held that the applicant had raised no complaints about the length of proceedings in its First Constitutional Appeal thereby failing to complain within the 2 year statutory time-limit.

21.  The second relevant period started on 10 July 2013 when the Constitutional Court gave its first judgment (see paragraph 16 above) and ended on 4 October 2013 when the Supreme Court handed its second decision (see paragraph 17 above). This period in the court’s view did not disclose any delays.

THE COURT’S ASSESSMENT

ALLEGED VIOLATION OF ARTICLE 6 §1 OF THE CONVENTION on account of the length of proceedings

22.  The applicant complained under Article 6 § 1 of the Convention that the length of the proceedings concerning the recognition of the Arbitral Award was unreasonable.

23.  The Government contended that since the applicant company was under liquidation, it is unclear who has the power to represent it before the Court.

24.  However, the initial application was lodged on the strength of a notarized power of attorney from the applicant company’s Chairman of the Board of Directors (Presidente del consiglio d’amministrazione). Following the placement of the applicant company in liquidation, on 22 December 2015 the liquidator gave an authority to Mr A. Saccucci. The Court considers that no issues arise under this aspect.

25.  The Government submitted that the applicant company’s domestic claim was ultimately rejected on the merits, therefore it suffered no damage from the alleged delays and accordingly had no victim status before the Court. However, the Court notes that the applicant company was entitled under domestic law to a decision on whether the Arbitral Award was enforceable in Albania or not. Therefore, independently from the result of the domestic proceedings, the applicant company may claim to be a victim of the unreasonable length of the proceedings in question.

26.  The Government’s contention that the application is abusive, without any further explanation of the grounds supporting this argument, is dismissed.

27.  The Government further argued that the applicant company had started exequatur proceedings in Italy, therefore the complaint before the Court is premature. However, the Court notes that proceedings in Albania have ended on 22 December 2015 when the Constitutional Court gave its final decision on the matter (see paragraph 19 above), therefore the Government’s objection is dismissed.

28.  The Court notes that this complaint 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.

29.  The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicants and the relevant authorities and what was at stake for the applicants in the dispute (see, among many other authorities, Pélissier and Sassi v. France [GC], no. 25444/94, § 67, ECHR 1999‑II, and Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000‑VII).

30.  The Court is unable to follow the Constitutional Court’s finding that the proceedings started on 31 March 2009 when the Tirana Court of Appeal gave its last judgment on the merits of the case (see paragraph 20 above). It finds, in line with its established case-law, that the proceedings in question started on 11 March 1998 when the applicant company lodged its request for recognition of the Arbitral Award in Albania (see paragraph 4 above).

31.  The relevant period ended on 22 December 2015 when the Constitutional Court gave its final decision on the matter thereby marking the end of the proceedings (see paragraph 19 above). The proceedings therefore lasted 17 years and 9 months before nine levels of jurisdiction.

32.  The Court notes that an initial delay of 5 years and 8 months occurred between the first 1998 decision recognising the enforceability of Arbitral Award and up until the 2003 Tirana Court of Appeal decision allowing the Council of Ministers’ request to appeal out of time (see paragraphs 5 and 8 above). There is no indication that the failure to serve the initial decisions on the Council of Ministers was attributable to the applicant company.

33.  Subsequent delays occurred as a result of the fact that the Initial Exequatur Decisions did not stand on appeal before the Supreme Court (see paragraph 10 above) and neither did the Tirana Court of Appeal decision of 14 February 2006 (see paragraph 11 above). Although it is not for the Court in this context to analyse the quality of the decision-making of the domestic courts, the remittal of cases for re-examination is usually ordered as a result of errors committed by the lower courts, and serial remittals within the same set of proceedings may disclose a serious deficiency in the judicial system, considerably extending the overall length of proceedings. Moreover, such a state of affairs is imputable to the authorities and not the applicants (see Vlad and Others v. Romania, nos. 40756/06 and 2 others, § 133, 26 November 2013, with further references).

34.  A delay of one year and six months occurred between 26 September 2007, when the Supreme Court quashed the lower decision, and 31 March 2009, when the Tirana Court of Appeal ruled again on the matter (see paragraphs 12 and 13 above). A further delay of almost three years occurred between the Tirana Court of Appeal decision of 31 March 2009 and the Supreme Court decision of 12 April 2012 (see paragraphs 13 - 14 above and Luli and Others v. Albania, nos. 64480/09 and 5 others, § 95, 1 April 2014). It appears, in particular, that during this period the Supreme Court held no hearings or took any other procedural steps in the examination of the case.

35.  Lastly, a delay also occurred as a result of the fact that the Supreme Court’s decision of 12 April 2012 was quashed and remitted for re‑examination by the Constitutional Court (see paragraph 16 above and Vlad, cited above, §133).

36.  These delays cannot be attributed to the applicant company’s conduct. If the latter’s submissions before the domestic courts were incomplete, as the Government submitted, it was open to the domestic courts to adopt that conclusion within a reasonable time.

37.  The Court finds therefore that the Government’s claim that the delay had been caused by the applicant company’ own conduct has not been substantiated.

38.  Neither can the Court accept the Government’s contention that the delays were caused by the complexity of the case which involved the determination of the question of the enforceability of the Arbitral Award in Albania. Even if the case was of some complexity, that alone could not justify legal proceedings lasting for 17 years and 9 months.

39.  There has accordingly been a violation of Article 6 § 1 of the of the Convention on account of the length of proceedings.

APPLICATION OF ARTICLE 41 OF THE CONVENTION

40.  The applicant company did not submit a claim for just satisfaction in respect of pecuniary damage, therefore the Court makes no award under this head.

41.  The applicant company claimed 100,000 euros (EUR) in respect of non-pecuniary damage. The Government contested the claim as unreasonable. Ruling on equitable basis, the Court awards the applicant company EUR 4,800 in respect of non-pecuniary damages.

42.  The applicant company claimed EUR 21,000 in respect of costs and expenses incurred before domestic courts. It submitted the relevant invoices to support the claim. The Government contested the claim as unreasonable. The Court does not consider that the entire expenses incurred by the applicant company before domestic courts is linked to the unreasonable length of the proceedings. Having regard to the documents submitted, the Court considers it reasonable to award the applicant company EUR 6,000 under this head.

43.  The applicant company did not submit a claim for costs and expenses incurred before the Court, therefore the Court makes no award under this head.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a)  that the respondent State is to pay the applicant company, within three months, the following amounts:

(i)  EUR 4,800 (four thousand eight hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 6,000 (six thousand 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;

Done in English, and notified in writing on 5 March 2024, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Olga Chernishova Georgios A. Serghides
 Deputy Registrar President