CASE OF MAHMUDOVA v. AZERBAIJAN

FIRST SECTION

CASE OF MAHMUDOVA v. AZERBAIJAN

(Application no. 69201/11)

JUDGMENT
 

STRASBOURG

18 January 2024

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

In the case of Mahmudova v. Azerbaijan,

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

 Krzysztof Wojtyczek, President,
 Lətif Hüseynov,
 Erik Wennerström, judges,
and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the application (no. 69201/11) 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 October 2011 by an Azerbaijani national, Ms Aygun Aydin gizi Mahmudova (Aygün Aydın qızı Mahmudova - “the applicant”), who was born in 1966 and lives in Baku, and who was represented by Mr A. Mutallimov and Mr J. Suleymanov, lawyers based in Azerbaijan;

the decision to give notice of the complaints under Article 6 § 1 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 12 December 2023,

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

SUBJECT MATTER OF THE CASE

1.  The case concerns the applicant’s complaint of an alleged failure by the State to protect her property interests in relation to a property transfer between third parties concerning a plot of land and a non-residential building belonging to her (“the properties”) on the basis of a falsified power of attorney.

2.  In 1998 the applicant had certificates of ownership issued to her by the State Property Committee confirming her rights to the properties. According to the applicant, in 2007, through her spouse, she negotiated with company G. in relation to the sale of her properties and agreed to a purchase price of 1,500,000 Azerbaijani manats (AZN; approximately 1,200,000 euros (EUR) at the relevant time). It appears that the applicant received 500,000 United States dollars (USD) as an advance payment. According to her, the ownership documents were subsequently handed over to company G. for the preparation of the sale and purchase contract, and the parties agreed that the remainder of the above-mentioned sum would be paid at the time of signing the contract.

3.  On 8 January 2008 the applicant’s spouse gave his written consent for the sale of the non-residential building in question in its entirety. On the same date the State Registry Service for Immovable Property (“the SRSIP”) issued a reference to the applicant to present to a notary. The reference indicated information about the properties and the relevant certificates concerning them.

4.  On 26 January 2008 company G. signed a sale and purchase contract in respect of the properties with A.B., who acted on the basis of a power of attorney allegedly issued by the applicant. On an unspecified date the non‑residential building was demolished, and company G. started to construct a new building on a site which included the plot of land in question.

5.  According to the applicant, when she and her spouse visited the properties at the beginning of 2009, they discovered that the non‑residential building had been demolished. On 7 October 2009, before the Nasimi District Court, she brought a civil claim against company G., A.B., the relevant notary and the SRSIP, arguing that A.B. had acted on the basis of a forged power of attorney. She asked the court to declare the sale contract null and void, annul company G.’s titles to the properties, return the plot of land to her and order company G. to pay her the market value of the demolished building.

6.  On 30 October 2009 the SRSIP sent a letter to the first-instance court where it asked that the case be examined without its participation and stated that the non-residential property had been registered in the applicant’s name and had later been sold to company G. The letter did not contain any information about the plot of land.

7.  On 9 November 2009 the applicant lodged a written request with the first-instance court, asking it to oblige the SRSIP to provide the originals or certified copies of her certificates of ownership. During the preliminary hearing held on the same date, the court decided to leave the request unexamined, referring to the fact that the SRSIP was involved in the proceedings as a third party and that it would be possible to require the SRSIP to produce those documents if it failed to do so voluntarily.

8.  On 14 October 2010 the first-instance court found that the power of attorney allegedly issued to A.B. by the applicant had been falsified. It annulled the purchase contract and company G.’s titles to the properties. However, it dismissed the applicant’s claim for compensation for the demolished building, holding that no evidence had been provided to the court proving that company G. had demolished that building or indicating the estimated value of the building. It also dismissed the claim regarding the return of the land to the applicant, on the grounds that the relevant documents confirming her title had not been provided to the court. The court added that while the applicant had sufficient means to provide the relevant evidence or lodge requests for such evidence, she had failed to make use of them.

9.  Company G. and A.B. lodged an appeal with the Baku Court of Appeal, asking it to quash the part of the first-instance court’s judgment concerning the annulment of the sale and purchase contract and company G.’s titles. The applicant did not lodge an appeal, but submitted a written objection in reply to the defendants’ appeal asking for the lower court’s judgment to be upheld.

10.  On 29 March 2011 the appellate court quashed the first‑instance court’s judgment in part. It referred to the certificates of ownership issued to the applicant in 1998 (see paragraph 2 above; as it appears from the case file, the appellate court had requested copies of those documents from the SRSIP) and upheld the lower court’s finding that the applicant had been divested of her properties without her consent. The court held that while the sale and purchase contract was null and void, and whereas normally the parties would have to return to each other all items which they had received, that was impossible in the present case. It found that company G. had received the relevant authorisations and had started to construct a building on a site which included the plot of land in question before the applicant had brought proceedings against it. It concluded that there was no need for the annulment of company G.’s titles and noted that the applicant could only claim damages in such case, but that she had not lodged an appeal against the first‑instance court’s judgment dismissing her claims.

11.  The applicant lodged a cassation appeal, arguing that the appellate court’s judgment had resulted in her being deprived of her properties. She argued that maintaining company G.’s titles made the annulment of the sale and purchase contract, a contract which had been entered into on the basis of a forged power of attorney, meaningless. She further argued that the fact that she had not lodged an appeal against the first-instance court could not be held against her, since the annulment of the sale and purchase contract meant that the parties had to return to each other everything which they had received.

12.  On 23 August 2011 the Supreme Court dismissed the cassation appeal, reiterating the appellate court’s reasoning.

13.  The applicant complained under Article 6 § 1 of the Convention that the domestic proceedings in question had been unfair. She also complained under Article 1 of Protocol No. 1 to the Convention of a violation of her right to property.

THE COURT’S ASSESSMENT

14.  The Government submitted that as the applicant had not lodged an appeal against the first-instance court’s judgment, she had failed to exhaust domestic remedies. The applicant disagreed.

15.  The Court considers that the Government’s preliminary objection of non-exhaustion of domestic remedies is closely linked to the merits of the applicant’s complaint and that it should therefore be joined to the merits of the case.

16.  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.

17.  The relevant general principles under Article 6 § 1 of the Convention have been summarised in the case of Mazahir Jafarov v. Azerbaijan (no. 39331/09, §§ 33-36, 2 April 2020).

18.  In the present case, the domestic courts established that the power of attorney on the basis of which A.B. had sold the applicant’s properties to company G. had been forged. The first-instance court accordingly declared the sale and purchase contract null and void, annulling company G.’s titles to the properties. The Court notes that declaring a transaction invalid requires that each party return the items received as a result of that transaction (see Yusifli and Others v. Azerbaijan (dec.), nos. 21274/08 and 6 others, § 50, 6 December 2022). However, the court rejected the applicant’s claims and refused to order the return of the plot of land to her. In doing so, it noted that the applicant had failed to provide a document proving her right of ownership to the plot of land and to lodge requests in order to secure that evidence. The Court observes that this statement clearly contradicts the information available in the case file, as the applicant had lodged a written request to that effect during the preliminary hearing, which the court had left unexamined (see paragraph 7 above). It is unclear why the court did not ask the relevant authority to provide the information about the applicant’s registered right of ownership to the land.

19.  While upholding the conclusion that the sale and purchase contract was null and void, the appellate court quashed the part of the lower court’s judgment annulling company G.’s titles to the properties, providing its reasons therefore (see paragraph 10 above). The Supreme Court reiterated that same reasoning (see paragraph 12 above).

20.  The Court notes that the domestic courts’ judgments in the present case resulted in a situation where the sale and purchase contract was declared invalid, but company G. kept the titles to both properties. At the same time, the domestic courts failed to duly address the applicant’s claims for compensation in respect of their value, as provided for under the domestic law provisions concerning invalid transactions, and to respond to the applicant’s arguments. As a result, the applicant was divested of her properties and did not receive any compensation. In other words, while flagrant unlawfulness in the conduct of the third parties was established, the applicant’s claims based on adverse effects of such conduct were not duly addressed and the applicant was made to bear all the associated burdens. In such a case, the Court cannot but conclude that the civil proceedings in the present case fell short of the requirement of a fair hearing.

21.  In the specific circumstances of the present case, the fact that the applicant did not lodge an appeal against the first-instance court’s judgment cannot change this conclusion. In particular, whereas the first-instance court declared the sale null and void and annulled company G.’s titles to the properties, dismissing at the same time the applicant’s claims based on grounds, which appear to be questionable, it was the appellate court which decided that the return of the properties was impossible and that company G.’s titles had to be maintained. The applicant lodged a cassation appeal contesting that judgment, which was dismissed by the Supreme Court.

22.  The Court therefore dismisses the Government’s preliminary objection and concludes that there has been a violation of Article 6 § 1 of the Convention.

23.  Having regard to the facts of the case, the submissions of the parties, and its findings above, the Court considers that there is no need to give a separate ruling on the admissibility and merits of this complaint (see, for a similar approach, Aykhan Akhundov v. Azerbaijan, no. 43467/06, §§ 110-13, 1 June 2023, and Ahmadov v. Azerbaijan [Committee], no. 53957/12, § 24, 1 June 2023; see also Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).

APPLICATION OF ARTICLE 41 OF THE CONVENTION

24.  In respect of pecuniary damage, the applicant claimed 676,773 euros (EUR) in relation to the unpaid part of the allegedly agreed purchase price (see paragraph 2 above) and EUR 541,416 in relation to lost profit. She also claimed EUR 250,000 in respect of non-pecuniary damage and EUR 3,470 in respect of costs and expenses incurred before the domestic courts and the Court. She submitted numerous receipts in respect of the latter amount.

25.  The Government submitted that the applicant had failed to submit any evidence relating to the amounts claimed in respect of pecuniary damage, and argued that those amounts were excessive. Lastly, they contested the amount claimed in respect of costs and expenses, arguing that some parts of the claim lacked documentary evidence, while certain receipts were not relevant to the present application.

26.  In the present case, the applicant failed to submit any evidence or calculations in support of her claim in respect of pecuniary damage; the Court therefore rejects this claim. It notes at the same time that Article 431-1.2.2 of the Code of Civil Procedure provides for the possibility of reopening domestic proceedings following a finding by the Court of a violation of the Convention (see Azadliq and Zayidov v. Azerbaijan, no. 20755/08, § 56, 30 June 2022; Aykhan Akhundov, § 127; and Ahmadov, § 30, both cited above).

27.  The Court considers that the applicant must have sustained non‑pecuniary damage which is not sufficiently compensated for by the finding of a violation. Ruling on an equitable basis, it awards the applicant EUR 4,000 in respect of non-pecuniary damage, plus any tax that may be chargeable.

28.  Having regard to the documents in its possession, the Court considers it reasonable to award the applicant EUR 230 for costs and expenses in the domestic proceedings and before the Court, plus any tax that may be chargeable to her.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a)  that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i)  EUR 4,000 (four thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 230 (two hundred and thirty 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 18 January 2024, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Liv Tigerstedt Krzysztof Wojtyczek
 Deputy Registrar President