CASE OF STEFANOVA AND OTHERS v. BULGARIA

THIRD SECTION

CASE OF STEFANOVA AND OTHERS v. BULGARIA

(Application no. 9313/21)

JUDGMENT
 

STRASBOURG

25 February 2025

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

In the case of Stefanova and Others v. Bulgaria,

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

 Peeter Roosma, President,
 Diana Kovatcheva,
 Mateja Đurović, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 9313/21) 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”) on 27 January 2021 by three Bulgarian nationals, listed in the appended table (“the applicants”), who were represented by Mr M. Ekimdzhiev, Ms K. Boncheva and Ms M. Dokova-Kostadinova, lawyers practising in Plovdiv;

the decision to give notice of the application to the Bulgarian Government (“the Government”), represented by their Agent, Ms M. Tsocheva from the Ministry of Justice;

the parties’ observations;

Having deliberated in private on 28 January 2025,

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

SUBJECT MATTER OF THE CASE

1.  The application concerns a complaint similar to the one examined in the judgment Kostov and Others v. Bulgaria (nos. 66581/12 and 25054/15, 14 May 2020), namely that the compensation awarded to the applicants for their expropriated land was not adequate.

2.  The applicants’ plot of land measuring 390 square metres in Sofia was expropriated by a mayor’s decision of 7 October 2019 with a view to implement an infrastructure project. The compensation allotted to the applicants was 18,731 Bulgarian levs (BGN), or 9,576 euros (EUR), equivalent to BGN 48 (EUR 24.5) per square metre, and was based on the land’s valuation for the purposes of taxation. Under the Municipal Property Act appliable to the case, which contains provisions very similar to the ones in the State Property Act as summarised in Kostov and Others (cited above, §§ 24-29), the amount of compensation was to be based on the tax valuation where no relevant comparable properties could be found for the calculation of the market value.

3.  The applicants applied for judicial review, but the expropriation order was upheld in a final judgment of the Sofia City Administrative Court of 27 April 2020. The domestic court confirmed that no plots of land subject to transactions in the relevant period preceding the expropriation met the relevant statutory requirements to qualify as comparable, considering that one such plot selected by a court-appointed expert (see paragraph 13 below) did not meet the relevant requirements.

4.  The applicants complained under Article 1 of Protocol No. 1, relying in addition on Articles 6 § 1, 8 and 13 of the Convention, of the level of compensation received. They argued that the restrictive rules of the Municipal Property Act, introducing various requirements as to the transactions which can be used to calculate a market price, had led in their case to an unfair result.

THE COURT’S ASSESSMENT

ALLEGED VIOLATION OF ARTICLE 1 of protocol no. 1

5.  The complaint falls to be examined under Article 1 of Protocol No. 1 to the Convention (see Kostov and Others, cited above, §§ 94-96, and Hristova and Others v. Bulgaria [Committee], no. 56681/15, § 6, 5 September 2023).

6.  The 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.

7.  The relevant domestic law and practice and the criteria concerning the adequacy of compensation for expropriation under the State Property Act, to which the Municipal Property Act is very similar, have been described in Kostov and Others (cited above). The Court further reiterated that the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference, and that the amount of compensation had to be calculated on the basis of the value of the property at the date on which ownership of it was lost (ibid., §§ 62-63).

8.  In the individual cases examined in Kostov and Others (cited above, §§ 81-87 and 91), as well as in some of the follow-up cases (see, for example, Bozhilov and Others v. Bulgaria [Committee], no. 56383/15, §§ 11-13, 5 September 2023, and Nevada Tours 2004 AD and Bulgarian Tourist Company Global Tours AD v. Bulgaria [Committee], nos. 4173/20 and 6186/20, §§ 11-16, 10 September 2024), the Court found a violation of Article 1 of Protocol No. 1. It noted the amount of compensation awarded to the applicants in accordance with the rules of the State Property Act but saw serious indications that the market value of the applicants’ land could have been much higher. It concluded that the respondent State had not shown that the compensation awarded at the domestic level had met the requirement of being reasonably related to the actual value of the applicants’ land.

9.  The Court therefore has to assess in the present case, on the basis of the facts submitted by the parties, whether there are sufficient indicators that the actual value of the applicants’ land could have been significantly higher than the compensation awarded at the domestic level.

10.  As noted, that compensation was equivalent to BGN 48 (EUR 24.5) per square metre (see paragraph 2 above).

11.  In order to justify such level of compensation, the Government pointed out that it had been reached pursuant to the rules of the Municipal Property Act and had been upheld in fair judicial proceedings. Moreover, a valuation for the purposes of taxation was calculated on the basis of objective criteria and took into account the characteristics of the land.

12.  The applicants, for their part, relied on the circumstances below to substantiate their position that the level of compensation was too low.

13.  First, the plot of land considered by the court-appointed expert in the proceedings before the Sofia City Administrative Court to be sufficiently similar to theirs (see paragraph 3 above) had been sold for BGN 486 (EUR 248) per square metre. Second, the Sofia City Administrative Court had awarded the owners of a neighbouring plot expropriated in the same procedure BGN 696 (EUR 356) per square metre, this time basing itself on a number of transactions with comparable land. Third, according to an expert valuation commissioned by the applicants for the purposes of the procedure before the Court and dated August 2020, referring to actual transactions with land in the same area, the market value of the applicants’ land was equivalent to EUR 607 per square metre. And fourth, according to the applicants, valuations for the purposes of taxation were known to be much lower than market values, and initiatives to amend the methods of calculation were under way.

14.  As to the applicants’ arguments, the Government contested only the valuation report prepared in August 2020, considering it too general and unreliable.

15.  The Court is satisfied that the circumstances referred to by the applicants are sufficient for it to conclude that the real market value of the expropriated land could have been substantially higher than the compensation awarded at the national level. As pointed out by the applicants themselves, the Government did not refer to any actual transaction, with comparable or other land in the area, where a price similar to the compensation awarded to the applicants had been paid. As to the Government’s objections against the August 2020 valuation report, it is to be noted that this document is but one of the elements taken into account. Lastly, the Court refers to its finding in Kostov and Others (cited above, § 89) that valuations for the purposes of taxation could not, a priori, be considered indicative of a market value.

16.  In view of the above, the Court concludes that the compensation awarded to the applicants was not reasonably related to their land’s value, which means that the requirements of Article 1 of Protocol No. 1 have not been met, and that the deprivation of the applicants of their property was a disproportionate measure.

17.  There has accordingly been a violation of Article 1 of Protocol No. 1.

APPLICATION OF ARTICLE 41 OF THE CONVENTION

18.  In respect of pecuniary damage, the applicants claimed EUR 276,900, namely what they considered to be the value of their plot of land according to the valuation report of August 2020 (see paragraph 13 above). In respect of non-pecuniary damage, the applicants claimed, jointly, EUR 15,000. Lastly, as to costs and expenses, the applicants claimed EUR 3,000, of which EUR 500 value-added tax, paid to their legal representatives before the Court, and another EUR 142 paid for postage and translation. They presented a contract for legal representation and the relevant invoices and receipts. They requested finally that the sum of EUR 142 be transferred directly to the law firm of their legal representatives.

19.  The Government contested the claims.

20.  In a case such as the present one the Court is to make an award which is, as far as possible, “reasonably related” to the market value of the expropriated land at the time the applicants lost ownership thereof (see Vistiņš and Perepjolkins v. Latvia (just satisfaction) [GC], no. 71243/01, § 36, ECHR 2014, and Kostov and Others, cited above, § 102).

21.  However, the Court is unable in the case at hand to determine precisely such a value. While the applicants submitted a valuation (see paragraph 13 above), the Court is not satisfied that the value indicated therein was a definitely established market value at the time when the applicants lost ownership of their land. It is significant in that regard that the examples used above to cast doubt on the adequacy of the compensation awarded by the domestic authorities (ibid.) referred to different values.

22.  Consequently, as in Kostov and Others (cited above, § 105), the most appropriate means to remedy the violation would be to reopen the proceedings at the domestic level and re-examine the applicants’ claims in compliance with the requirements of Article 1 of Protocol No. 1. Domestic law provides for such a possibility (ibid., § 104).

23.  The Court thus dismisses the claim for pecuniary damage.

24.  As concerns non-pecuniary damage, judging in equity, the Court awards EUR 5,000 jointly to the three applicants.

25.  Lastly, having regard to the documents in its possession, the Court awards in full to the applicants jointly the amounts claimed for costs and expenses, totalling EUR 3,142 (see paragraph 18 above). As requested, EUR 142 out of this sum is to be transferred directly to the law firm of the applicants’ legal representatives.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a)  that the respondent State is to pay jointly to the three applicants, 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 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 3,142 (three thousand one hundred forty-two euros), plus any further tax that may be chargeable to the applicants, in respect of costs and expenses; of these, EUR 142 (one hundred forty-two euros) are to be paid directly to the law firm of the applicants’ legal representatives;

(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 25 February 2025, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Olga Chernishova Peeter Roosma
 Deputy Registrar President

APPENDIX

List of applicants:

No.

Applicant’s Name

Year of birth

Nationality

Place of residence

1.

Nevena Mihaylova STEFANOVA

1952

Bulgarian

Sofia

2.

Elena Kalinova MICHEVA

1976

Bulgarian

Sofia

3.

Mila Kalinova STEFANOVA

1981

Bulgarian

Sofia