CASE OF UMID-T LLC v. AZERBAIJAN

THIRD SECTION

CASE OF UMID-T LLC v. AZERBAIJAN

(Application no. 7949/13)

JUDGMENT
 

STRASBOURG

29 April 2025

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

In the case of UMID-T LLC v. Azerbaijan,

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

 Darian Pavli, President,
 Lətif Hüseynov,
 Úna Ní Raifeartaigh, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 7949/13) 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 4 February 2013 by Umid-T LLC (“the applicant company”), a company registered in Baku, which was represented by Mr M. Mustafayev, a lawyer based in Azerbaijan;

the decision to give notice of the complaints under Articles 6 and 13 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 25 March 2025,

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

SUBJECT MATTER OF THE CASE

1.  The case concerns the allegedly unlawful expropriation of commercial property belonging to the applicant company, namely an LPG (liquefied petroleum gas) filling station, for the purpose of reconstructing a motorway connecting the country’s international airport to the outskirts of Baku.

2.  A certificate of ownership issued in 2005 showed the applicant company as the owner of an LPG filling station located adjacent to the Heydar Aliyev Airport–Mardakan–Bilgah motorway. It was situated on an 800 sq. m plot of land which had been allocated to the company specifically for that purpose. The land itself remained in State ownership.

3.  On 28 August 2009 the Cabinet of Ministers issued a decision on the expropriation of land, together with any immovable property located on it, for State needs in connection with the reconstruction of the motorway. Under this decision the AzerYolServis Open Joint Stock Company (“OJSC”), which was owned by the State and operated by the Ministry of Transport, was designated as the authorised State body responsible for expropriation. On 25 September 2009 the AzerYolServis OJSC sent the applicant company written notification informing it of the impending expropriation of its commercial property because of the motorway reconstruction project. On the same day the applicant company’s property was demolished.

4.  On 19 March 2010 the applicant company was paid 400,000 Azerbaijani manats (AZN) (approximately 365,600 euros at the material time) comprising AZN 333,333 for the market value of the property and an additional 20% compensation under Presidential Decree no. 689 of 26 December 2007 by way of compensation for the expropriation. This amount was shown on the valuation report commissioned by the AzerYolServis OJSC from a private company (a copy of the report was not provided to the Court).

5.  On an unspecified date the applicant company lodged a complaint with Baku Administrative-Economic Court No. 1 against the AzerYolServis OJSC and the Baku City Executive Authority (“the BCEA”). The applicant company asked the court to order the BCEA to either allocate it an 800 sq. m plot of land and to order the AzerYolServis OJSC to restore the demolished property to its original condition or to award AZN 667,088 for the value of its commercial property, as well as an additional AZN 100,000 for pecuniary damage, AZN 100,000 for damage to its business reputation, and AZN 31,123 for delayed payment. In support of its claim, the applicant company produced a valuation report prepared by a private company, which estimated the market value of the property in question at AZN 889,240. It contended that it had only been partly compensated (see paragraph 4 above) and that the payment had been made six months after the demolition of its property. It further complained that the expropriation was carried out in violation of the procedure prescribed by domestic law.

6.  On 20 December 2011 the first-instance court dismissed the claim. The court found that the expropriation of the applicant company’s property had been carried out in accordance with the law and that the amount of compensation had been sufficient. It rejected the valuation report submitted by the applicant company, observing that the market value of the expropriated property under the expropriation procedure had to be established by a competent State authority.

7.  By judgments of 16 May 2012 and 24 October 2012, the Baku Court of Appeal and the Supreme Court respectively dismissed the applicant company’s appeals.

8.  The applicant company complained under Article 1 of Protocol No. 1 to the Convention that it had been unlawfully deprived of its commercial property and that the compensation awarded had been inadequate. It further complained under Articles 6 and 13 of the Convention that the domestic courts had failed to give reasons for their judgments and that it had not had an effective domestic remedy at its disposal for protecting its Convention rights.

THE COURT’S ASSESSMENT

9.  The Government submitted that the expropriation of the applicant company’s property had been lawful and had pursued an aim in the general interests of the public. They further submitted that the compensation awarded to the applicant company had been adequate and had constituted sufficient redress. The applicant company disagreed.

10.  It is not disputed by the parties that the property in question was owned by the applicant company and constituted its “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention.

11.  In so far as the Government’s submissions may be understood as an objection regarding the applicant company’s victim status, the Court reiterates that an applicant is deprived of victim status if the national authorities have acknowledged, either expressly or in substance, a breach of the Convention and then afforded appropriate and sufficient redress for it (see Bagirova and Others v. Azerbaijan, nos. 37706/17 and 5 others, § 40, 31 August 2023, with further references). In the present case, the domestic courts held that the demolition of the applicant company’s property had been lawful (see paragraphs 6-7 above). There was therefore no acknowledgement of a breach of Article 1 of Protocol No. 1 in the present case. In the absence of any such acknowledgement, the Court considers that the applicant company can still claim to be a victim of the alleged violation and 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.

12.  In the present case, there was an interference with the applicant company’s possessions, as its property was expropriated by the State authorities. That interference amounted to a “deprivation of possessions” within the meaning of the second sentence of Article 1 of Protocol No. 1.

13.  The applicable principles concerning Article 1 of Protocol No. 1 have been summarised, in particular, in Akhverdiyev v. Azerbaijan (no. 76254/11, §§ 79‑82, 29 January 2015); Khalikova v. Azerbaijan (no. 42883/11, §§ 134‑36, 22 October 2015); and Maharramov v. Azerbaijan (no. 5046/07, §§ 56-60, 30 March 2017).

14.  The Court observes that under domestic law as in force at the material time, private property could be compulsorily taken for State or public needs only in the cases permitted by law, namely for the purposes of building roads or other communication lines or demarcating the State border or constructing defence facilities, by a decision of the relevant State authority (the Cabinet of Ministers), and subject to prior payment of compensation in an amount corresponding to its market value (see Akhverdiyev, cited above, § 52). Furthermore, Article 246 of the Civil Code, as in force at the material time, provided that land acquired for State needs and any buildings located on it had to be vacated no earlier than 90 calendar days and no later than 180 calendar days from the date of receipt of notification of the expropriation.

15.  In the present case, the property in question was demolished by the State authorities on the same day that the notification of the expropriation was served on the applicant company (see paragraph 3 above). Furthermore, the applicant company was only paid compensation almost six months after the property had been demolished (see paragraph 4 above). The relevant domestic procedure for expropriation was therefore not followed.

16.  The foregoing considerations are sufficient for the Court to conclude that the interference in the present case was not carried out in compliance with “conditions provided for by law” (compare Akhverdiyev, cited above, § 99). That conclusion makes it unnecessary to ascertain whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.

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

18.  Turning to the applicant company’s complaints under Articles 6 and 13 of the Convention (see paragraph 8 above), having regard to the facts of the case, the submissions of the parties, and its findings above, the Court considers that it has dealt with the main legal question raised by the case and that there is no need to examine the remaining complaints (see 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

19.  The applicant company claimed AZN 1,045,750 in respect of pecuniary damage and 50,000 United States dollars in respect of non‑pecuniary damage. It relied on the valuation report presented before the domestic courts in respect of the value of its property (see paragraph 5 above).

20.  The Government submitted that the amount claimed by the applicant company did not reflect the actual market value of the property and asked the Court to reject its claims.

21.  As already mentioned above, the applicant company received AZN 400,000 as compensation for its expropriated property (see paragraph 4 above). As to the report presented by the applicant company, the Court observes that, in addition to the value of the property, the total estimate provided therein included the market value of the land, which was in the State’s ownership (see paragraph 2 above), and the cost of additional works carried out by the company, which were not substantiated with supporting documents. Moreover, the surface area of the property indicated in the report is larger than the size mentioned in other relevant documents in the case file. In such circumstances, and in the absence of substantiated arguments to the contrary, the Court dismisses the applicant company’s claim in respect of pecuniary damage. However, ruling on an equitable basis, as required by Article 41 of the Convention, the Court awards it 3,000 euros (EUR)  in respect of non-pecuniary damage, plus any tax that may be chargeable on that amount.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a)  that the respondent State is to pay the applicant company, within three months, EUR 3,000 (three thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage, to be converted into the currency of the respondent State at the rate applicable at the date of settlement;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount 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 29 April 2025, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Olga Chernishova Darian Pavli
 Deputy Registrar President