FIRST SECTION
CASE OF VIKENTIJEVIK v. THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA
(Application no. 50179/07)
JUDGMENT
STRASBOURG
6 February 2014
FINAL
02/06/2014
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.
In the case of Vikentijevik v. the former Yugoslav Republic of Macedonia,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
Isabelle Berro-Lefèvre, President,
Elisabeth Steiner,
Khanlar Hajiyev,
Mirjana Lazarova Trajkovska,
Julia Laffranque,
Erik Møse,
Linos-Alexandre Sicilianos, judges,
and Søren Nielsen, Section Registrar,
Having deliberated in private on 12 November 2013 and 14 January 2014,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 50179/07) against the former Yugoslav Republic of Macedonia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Macedonian national, Mr Aleksandar Vikentijevik (“the applicant”), on 8 November 2007.
2. The applicant was represented by Ms F. Mihajlovska, a lawyer practising in Skopje. The Macedonian Government (“the Government”) were represented by their Agent, Mr K. Bogdanov.
3. The applicant alleged that the extraordinary quashing of a final restitution order rendered in his favour had violated his proprietary rights.
4. On 5 May 2011 the application was communicated to the Government. It was also decided to rule on the admissibility and merits of the application at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
5. The applicant was born in 1941 and lives in Skopje.
A. Background of the case
6. On 27 September 1945 V.D.M., the applicant’s late grandfather, together with other individuals, A.J., T.K. and L.L., members of the Executive Board of company T. (“the company”), were convicted of offences against the people and the State since they had put the company T. at the disposal of the enemy forces (during the Second World War). They were all sentenced to a suspended prison term with forced labour. The court also ordered full confiscation of the company’s property.
7. On 9 January 1946 the then Skopje People’s District Court confiscated the company’s immovable property (including residential apartments for workers (работнички станови)) and various items of movable property, which were specified in detail in the decision (“the confiscation order”). The total surface area of the confiscated buildings was 3,496 square metres. Some 60,549 sq. m of land was also subject to confiscation. The confiscated property was to be transferred to the State. The confiscation order referred to V.D.M., A.J., T.K. and L.L., as “convicted shareholders” who had actual possession (фактичка сопственост) of the company.
B. Relevant actions pre-dating the restitution proceedings
8. On 29 December 1995 the company decided to restructure itself in accordance with the Law for Reorganisation of Companies with Business Losses (“the Company Restructuring (Business Losses) Act”).
9. On the basis of that decision and at the request of the applicant, who was seeking that the property be retained for restitution, on 18 October 1996 the company entered into a contract (“the 1996 contract”) with the State, represented by the Privatisation Agency, transferring to it the title to specific named buildings (which did not include the residential apartments), the total surface area of which was 1,240 sq. m. It further transferred into the State’s possession preference shares (приоритетни акции), the value of which was 2,158,831 German marks (DEM) (“the shares”).
10. Thereafter, on 28 December 1999 the Skopje Court of First Instance (“the first-instance court”), on the applicant’s request, overturned the 1945 judgment in respect of his late grandfather concerning the confiscation of the company’s property. This judgment became final on 31 January 2000.
11. In a judgment of 6 July 2000, which became final on 10 July 2000, the first-instance court declared the applicant heir to the right to claim restitution (наследник на правото на денационализација) in respect of the property of his late grandfather (V.D.M.). Referring to the 1945 judgment, the confiscation order and the judgment of December 1999 (see paragraphs 6, 7 and 10 above), the inheritance order also concerned the applicant’s right to claim “restoration of possession and payment of compensation” in respect of the company’s immovable and movable property.
C. Restitution proceedings
12. On 14 August 2000 the applicant instituted restitution proceedings. The parties did not submit a copy of the restitution claim.
13. On 13 September 2000 the Ministry of Finance, represented by two officials, drew up a report concerning an on-site inspection carried out on 12 September 2000. According to the report, which was typed on a computer, V.D.M., A.J., T.K. and L.L. had been the company’s shareholders. The land was in the company’s possession. In 1959 the land in question was divided into two plots, which included buildings with a total surface area of 3,377 sq. m. The entry in the new Land Register indicated that the total surface area of the buildings constructed on the land was 34,617 sq. m. The report further stated that only some of the buildings specified in the confiscation order, including the residential apartments, were still on the land.
14. On 15 September 2000 the Restitution Commission of the Ministry of Finance accepted the applicant’s restitution claim and decided 1) to restore to his possession the buildings specified in the 1996 contract (see paragraph 9 above) and the residential apartments and adjacent buildings (694 sq. m), together with the land underneath, as well as the land described as a courtyard (двор), a total surface area of 60,549 sq. m; 2) to transfer into his possession the preference shares specified in the 1996 contract as compensation for the movable property of the company; and 3) to transfer into his possession State-owned shares in company P. as compensation (the equivalent to approximately 51,400 euros (EUR) for land underneath) for other objects (1,561 sq. m). As stated in the order, the Restitution Commission, assisted by an expert, had carried out an on-site inspection and established that the total surface area of all confiscated buildings at the time of confiscation, was 3,496 sq. m.
15. The restitution order indicates that the applicant’s restitution claim, together with the complete case file, was communicated to the Solicitor General (Јавен Правобранител) (see paragraph 48 below) , who submitted in reply that “there was no statutory provision requiring him or her to comment on the matter” (не бил законски обврзан да се изјасни по барањето). As is evident from a letter of 21 March 2003 from the Ministry of Finance included in the case file, the restitution order was served on the Solicitor General. No appeal having been submitted, the restitution order became final on 13 October 2000.
16. On 13 February 2001 the Restitution Commission rectified the restitution order under sub-heading 3), stating that the applicant would receive State-owned shares in company Z.L. (“the rectifying decision”).
17. Between 21 February and 27 March 2001, the State authorities 1) transferred to the applicant title to the company’s preference shares (which represented 7.84% of the company’s share capital (основна главнина)), and buildings specified in the 1996 contract (on the basis of two separate contracts concluded between the Privatisation Agency and the applicant), and 2) registered him as the owner of the buildings and the land. According to an extract from the land registry dated 25 October 2006, the applicant had title to 62,755 sq. m. The applicant was recorded in the company’s shareholder book (акционерска книга), as well as in the Central Securities Depositary (Централен Депозитар за хартии од вредност), as a shareholder in company T. and company I.G. (apparently instead of company Z.L.) The Privatisation Agency requested that company T. allow the applicant to obtain actual possession (владение) of the immovable property.
18. On 29 November 2003 an expert commission of the Ministry of Finance carried out an on-site inspection and established that the land in question could not be returned to the applicant, since it served the existing buildings (company property and the residential apartments).
19. On 8 December 2003 the applicant requested that the Ministry of Finance enforce the restitution order and asked that the company transfer the “land and buildings” into his actual possession. On 15 January 2004 he repeated his request for enforcement. On 22 April 2004 the Ombudsman also recommended that the Ministry of Finance enforce the restitution order and transfer the land into the applicant’s actual possession.
20. On 21 January 2004 a Coordinating Commission in the Ministry of Finance, having been approached by a group of citizens residing in the apartments located on the land in question, noted that there had been “certain irregularities” in the restitution proceedings, and requested that the Government Appeal Commission (“the Commission”) review the restitution order under the Administrative Proceedings Act. On 22 October 2004 the Commission found no grounds to rescind the restitution order within its powers of supervisory review (укинување по право на надзор). It also stated that the Coordinating Commission should submit the case file to the Restitution Commission, which had the authority to quash the restitution order of its own motion provided the statutory requirements had been met.
D. Extraordinary proceedings in which the restitution order of 15 September 2000 was quashed
21. On 1 December 2004 the Solicitor General requested, under section 267 § 1 (3) and (5) of the Administrative Proceedings Act (see paragraph 44 below), that the Commission declare the restitution order and the rectifying decision null and void (барање за огласување ништовно). He submitted that the applicant had been awarded full restitution of the entire property of the company, despite the fact that, as specified in the confiscation order of 1946, the company had been jointly owned by several persons. Furthermore, the buildings restored to the applicant were not the same in terms of surface area and description as the buildings confiscated in 1946. The current value of the land now by far exceeded its value at the time of confiscation. Furthermore, the land had been developed in the meantime, and buildings with a total surface area of 34.064 sq. m had been constructed. Lastly, he maintained that the preference shares transferred into the applicant’s possession on the basis of the 1996 contract represented over half the value of the entire movable property of the company.
22. On 26 April 2006 the Commission granted the request, quashed the restitution order and the rectifying decision, and remitted the case for re-examination. It ordered the Land Registry and the Central Securities Depositary to amend their records accordingly. It held that the Solicitor General, in what was a manifest omission (очигледен пропуст), had not appealed against the impugned decisions in the ordinary proceedings “despite their apparent unlawfulness”. Referring to the confiscation order of 1946, the Commission stated:
“... V.D.M., A.J., T.K. and L.L. were the former owners of the confiscated property of [the company].
... it is not in doubt that [the applicant] is the heir only of V.D.M., thus of only a notional one-quarter of the confiscated property ...
This is sufficient (for the conclusion) that the first-instance commission violated the Restitution Act at the expense of the State, and that it follows that the [restitution order] is invalid.
As is evident from the expert report of 13 September 2000 (see paragraph 13 above), which was drawn up only two days before the restitution order, the confiscated property was not at all identical to the existing property, specifically the buildings confiscated in 1946, the total surface area of which was 3,496 sq. m, were supporting objects, while the current buildings, with a surface area of 34,617 sq. m, are modern and solid constructions. Furthermore, the confiscated buildings no longer exist, but completely different buildings, which are ten times bigger, were constructed instead. That was confirmed in the report of 29 November 2003 (see paragraph 18 above).
Furthermore, the land (60,549 sq. m) could not be the subject of restitution and it could not be returned under section 28 of the Restitution Act, since buildings (34,617 sq. m) belonging to the company T. had been constructed on that land. It is developed construction land with complete infrastructure, which serves the existing property ...
Lastly, the first-instance body wrongly applied sections 33, 34, 35 and 36 of the Restitution Act when it transferred into [the applicant’s] sole possession the entire package of reserved preference shares of all four former owners, actually their heirs, instead of only a notional one-quarter. As a result, the State sustained damages. Accordingly, [the restitution order] cannot be enforced, as specified under section 267 § 1 (3) of the Administrative Proceedings Act ...”
23. On 22 June 2006 the applicant lodged an administrative-dispute claim (тужба за управен спор) with the Supreme Court, in which he argued that the restitution order and the rectifying decision had already been enforced. They had been rendered in proceedings in which the Solicitor General had failed to lodge an ordinary appeal, although entitled to do so. The quashing of the order had been based on alleged errors in the facts, which could not serve as a ground for the extraordinary remedy used in his case. Furthermore, the Solicitor General had not been entitled to intervene in the proceedings in order to protect the interests of third parties. The applicant argued that the Commission, by quashing the relevant decisions over five years after they had been adopted, had violated the principle of legal certainty and irrevocability of final decisions. Lastly, he complained that the expert report of 13 September 2000, to which the Commission referred in the impugned decision, carried no stamp; it had not been drawn up on the form in use at the time; and the Restitution Commission had not quoted it in the restitution order of 15 September 2000. That raised doubts about the reliability of that document.
24. On 16 March 2007 the Supreme Court dismissed the applicant’s appeal. It stated that section 267 § 1 (3) of the Administrative Proceedings Act concerned both the factual (фактичка) and legal (правна) impossibility of enforcement. The restitution order and the rectifying decision were contrary to sections 13, 21 § 1 (1), 28 § 2, 33 and 36 of the Restitution Act (see paragraphs 31-38 below), and were accordingly legally unenforceable. The court further stated:
“... According to [the 1945 judgment], the confiscation concerned the convicted shareholders T.K., A.J. and L.L., who were (in addition to V.D.M.) the owners of [company T.]. Having regard to section 13 of the Restitution Act, [the applicant] applied as heir to the property of his legal predecessor, V.D.M. Consequently, he could inherit only V.D.M.’s share and not the entire property of [the company].
Having regard to the transcript of the hearing of 13 September 2000 ... the court finds that there has been a violation of section 21 of the Restitution Act, since it has not been established whether the value of the confiscated property has increased.
... there has been a violation of section 28 § 1 (2) of the Restitution Act, since land which has been developed and built upon (60,549 sq. m), as established on 29 November 2003 by a commission, has been restored [on the basis of the restitution order] to the possession of the applicant.
On the basis of the material in the case file it has been established beyond any doubt that the property subject to restitution had previously been owned by four persons, who were the shareholders. Consequently, there has been a violation of sections 33 and 36 of the Restitution Act, since the entire package of reserved preference shares for all four former shareholders was transferred to [the applicant’s] sole possession ...
... In the present case, the court underlines once more that there has been a violation of the imperative provisions of the Restitution Act, which made the enforcement of the final restitution order legally impossible, as specified under section 267 § 1 (3) of the Administrative Proceedings Act.
The court has examined [the applicant’s] allegations that there was a violation of the fundamental principle of finality of decisions in administrative proceedings, as well as that the impugned decision contained no reasons that could fall within the ambit of section 267 (of the Administrative Proceedings Act), but it considers them ill-founded. The Administrative Proceedings Act provides for the extraordinary remedy of declaring a decision null and void (section 267). [The Commission] is the competent body to decide, and the (impugned) decision clearly states that the decision was given under section 267 § 1 (3) of the Administrative Proceedings Act. Furthermore, the decision contains adequate reasoning.”
25. This judgment was served on the applicant on 11 May 2007.
26. On 3 July 2007 the public prosecutor found that there were no grounds to institute legality review proceedings (постапка по барање за заштита на законитоста) against the Supreme Court’s judgment.
E. Resumed restitution proceedings
27. On the basis of a request by the Restitution Commission, on 26 May 2008 an expert commission of the Ministry of Finance carried out an on-site inspection and found that construction of collective residential buildings had been planned under the town plan of May 2008 on the land in question. It further established that the part of the land on which roads, car parks and green space were planned could not be returned (не може да биде предмет на реално враќање). Over 42,600 sq. m of the land, the part on which construction of collective residential buildings was planned, could be restored.
28. On 7 December 2010 the Restitution Commission suspended the proceedings (прекинува) and instructed the applicant to institute, within fifteen days of service of that decision, separate civil proceedings in order to establish, as a preliminary question (претходно прашање), the amount of the share of V.D.M., his legal predecessor, in the company’s property. In the reasoning, it noted that on 9 May 2008 the applicant had submitted written evidence that T.K., A.J. and L.L. were not shareholders in the company. It also observed that five other requests for restitution of the company’s property had been submitted for consideration between 7 May 2003 and 15 May 2008. The claimants in those cases had provided documents indicating that their predecessors had been shareholders, dividing between them the entire property of the company.
29. The Government stated that most of the restitution claims concerning the property at issue which had been submitted by third parties had been dismissed.
30. On 22 December 2010 the applicant brought a civil action against T.K., A.J. and L.L., whose whereabouts were unknown, in which he sought to have the first-instance court declare V.D.M., his legal predecessor, the sole shareholder of the company. Those proceedings are still pending before the first-instance court.
II. RELEVANT DOMESTIC LAW
A. Restitution Act, consolidated version of 2000 (Закон за денационализација, пречистен текст, „Службен весник на Република Македонија„ бр.43/2000)
31. Section 13 of the Restitution Act entitled former owners and their heirs who had been recognised under inheritance rules to claim restitution.
32. In restitution proceedings it is for the Solicitor General to safeguard the proprietary rights and interests of the State (section 17).
33. Under section 20 § 1, the property in question could be restored into the possession of the claimant.
34. Under section 21 § 1 (1) of the Act, a property whose value increases after confiscation may be restored if the claimant pays the difference between the original and the increased value of the property.
35. Section 28 § 2 of the Act provided that building land was to be restored where the purpose of confiscation had not been achieved, as well as when that purpose had been achieved and the land, at the time of submission of the restitution claim, remained undeveloped.
36. Under section 29, the ownership of residential buildings and apartments could be restored in restitution proceedings.
37. The Privatisation Agency would transfer to the claimant the title to shares in the confiscated property of a restructured company, which were reserved and transferred to it on the basis of a contract (section 33).
38. Section 36 provided that the value of property specified under section 33 did not include property that the company had acquired after confiscation, nor did it include construction land on which business premises had been built.
39. Section 37 provided that compensation was to be paid for property that could not be returned.
40. A restitution order could be subject to an appeal to the Government (section 59). The Government’s decision on that appeal could be challenged by means of an administrative dispute (управен спор) before the Supreme Court (section 60).
41. Under section 63 § 2, third parties could assert their rights in respect of successful claimants to whom property had been restored or compensation paid on the basis of the Restitution Act, by means of a civil action before courts of general competence within five years of the date the restitution order became final.
42. Section 70 provided that lawful tenants who had lost their tenancy under section 29 of the Act were entitled to apply for the State to provide them with alternative accommodation (to rent or buy) according to the Law on Sale of Socially-Owned Apartments (“the Social Housing (Sales) Act”). Until they obtained occupancy of the alternative accommodation they were entitled to continue using the apartment in respect of which they had a lawful tenancy for up to one year after ownership of it had been returned to the claimant in restitution proceedings.
B. Administrative Proceedings Act 1986 (Закон за општата управна постапка)
43. Under section 12 of the Administrative Proceedings Act 1986, which was valid at the relevant time, a decision conferring rights or obligations to a party, which could no longer be challenged by means of an appeal or an administrative-dispute claim (a final decision) could be quashed, rescinded or amended in cases specified by law.
44. Section 267 § 1 of the Act provided that a decision could be declared null and void in the following cases: 1) if it had been rendered in administrative proceedings despite the fact that its subject matter was within the competence of a court; 2) if enforcement of the decision would give rise to a crime punishable under the Criminal Code or other laws; 3) if the decision was impossible to enforce; 4) if the decision had been issued in the absence of a claim; and 5) if it contained an error (неправилност) which was specified in an explicit statutory provision as a ground for nullity.
45. Under section 268 §§ 1 and 2, a decision could be declared null and void at any time at the request of a party to the proceedings or the public prosecutor. Both partial and full nullity could be ordered.
C. Solicitor General Act (Закон за Јавното Правобранителство, Official Gazette no. 47/1997)
46. Section 2 of the Solicitor General Act, as in force at the relevant time, provided that the Solicitor General protected the proprietary rights and interests of the State.
47. Under section 5, the Solicitor General represented the State and its bodies before national and foreign courts and bodies in property-related disputes.
48. According to section 10, the State bodies were obliged to notify the Solicitor General about any property-related dispute with domestic or foreign physical and legal persons.
49. Under section 16, the Government appointed the Solicitor General and his or her deputies.
THE LAW
ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 OF THE CONVENTION
50. The applicant complained under Article 1 of Protocol No. 1 of the Convention that the State, by quashing the restitution order and the rectifying decision six years after they had been adopted, had deprived him of his possessions in respect of the immovable property and shares specified in those decisions. The quashing of the final order and the rectifying decision had been contrary to the principles of the rule of law and legal certainty. Article 1 of Protocol No. 1 of 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.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A. Admissibility
51. The Government did not raise any objection as regards the admissibility of the application.
52. The Court notes that the application 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
1. The parties’ submissions
(a) The applicant
53. The applicant contested the validity of the on-site inspection report of 13 September 2000 (see paragraph 13 above) arguing that it had been drawn up and attached to the case file subsequent to the restitution order. In this connection he submitted a written statement of 25 May 2004 in which an official of the Ministry of Finance, who had been responsible at the relevant time, had described how such reports were drawn up, namely that a blank form was filled in by hand by an expert. Further, he submitted documents attesting that in February 2005 insolvency proceedings had been requested by the State and opened against the company.
54. The Solicitor General, as the State representative, had participated in the restitution proceedings, but he had failed to comment on his restitution claim; neither had he appealed against the restitution order or instituted administrative-dispute proceedings before the Supreme Court. However, five years later he had requested the revocation of the restitution order notwithstanding that the facts of the case had remained the same.
55. The applicant denied that the buildings returned to him were not the same as those confiscated in 1946. The constructions specified in the confiscation order had been the same as those identified in the 1996 contract (see paragraph 9 above) and had been returned to him with the restitution order. He also contested that the land in question had been developed (изградено градежно земјиште). The 2008 report (see paragraph 27 above) demonstrated that the majority of the land could be returned. According to the relevant town planning documents, construction of collective residential buildings was planned for the area concerned. On the basis of the restitution order, he obtained title to the residential apartments that had been confiscated in 1946 and reserved for restoration under the 1996 contract. There were currently seventeen families living in those apartments, which were of extremely poor quality. Since those apartments were not socially owned, the State was not obliged to provide alternative accommodation for those affected by the restitution. In any event, lawful tenants were entitled to seek, under section 70 of the Restitution Act, to be provided with alternative accommodation by the State. The applicant also contested the findings of the domestic authorities that he should have been awarded only one-quarter of the company’s shares. In this connection he submitted that his predecessor was the sole proprietor of the company and that the remaining three individuals named in the confiscation order were not owners or shareholders of the company. In any event, those persons or their heirs had the opportunity to assert their rights, if any, regarding the property, under section 63 of the Restitution Act (see paragraph 41 above). No such persons had claimed any rights, either in restitution proceedings or in civil proceedings against him.
56. Lastly, the applicant reiterated that the restitution order had been set aside on the basis of an extraordinary remedy, which could be used without any time-limit. That fact alone was contrary to the principle of legal certainty. That remedy could be used in very exceptional circumstances of serious violations of law, which was not the case here. Errors made in the facts and law could not serve as a ground for declaring a final decision null and void. Furthermore, the financial interests of the State, if at stake, were not a matter of public interest and could not justify this interference with his possessions.
(b) The Government
57. The Government admitted that the final restitution order given in the applicant’s favour constituted a “possession” within the meaning of Article 1 of Protocol No. 1, and that the quashing of the order amounted to a deprivation of his possessions. However, they submitted that the interference had been lawful; it had pursued a legitimate aim in the public interest; and it had been proportionate. In this connection they stated that it had been carried out in accordance with sections 267 and 268 of the Administrative Proceedings Act (see paragraphs 44 and 45 above). The Solicitor General, as a party to the proceedings, had sought revocation of the restitution order, which had been impossible to enforce, given the errors noted by the Commission and the Supreme Court. The restitution order of 2000, which had been adopted at a particular political moment and in an extremely short procedure in which State interests were not represented, had disregarded or failed to establish certain relevant facts, namely: the share in the property of the former owners indicated in the 1945 judgment; the property that could have been the subject of restitution, given the fact that the 1999 judgment had concerned only one former shareholder; that the property in question had meanwhile been developed with public funds; and that there were socially owned apartments on the site (referring to the “workers’” apartments), which accommodated thirty-three families. In this connection they submitted letters that the Restitution Commission had sent on 10 July 2008 to twenty-three individuals, seeking information regarding their tenancies. Those issues had made the enforcement of the restitution order burdensome.
58. The quashing of the order was aimed at protecting the proprietary rights and financial interests of the State. Furthermore, the interests of third parties, as well as those of the company which had operated and developed the site for many years previously, had also been disrespected. The Supreme Court had noted the “problems” in the restitution order and had instructed the Restitution Commission to take into consideration, in the resumed proceedings, the interests of third parties, whose guarantor was the State. Because of the many unclear issues concerning the property in question, the Restitution Commission had suspended the renewed proceedings and advised the applicant to establish, by means of a separate civil action, the share that his predecessor had had in the company’s capital. Lastly, the Government argued that there had been no other available means of protecting the public interest, which had been endangered by the restitution order.
2. The Court’s assessment
(a) General principles
59. The Court reiterates that the existence of a claim confirmed by a binding and enforceable judgment or an administrative decision furnishes the beneficiary with a “legitimate expectation” that the claim would be enforced, and constitutes the beneficiary’s “possessions” within the meaning of Article 1 of Protocol No. 1. Quashing such a judgment or decision amounts to an interference with his or her right to peaceful enjoyment of possessions. An interference with the peaceful enjoyment of possessions must be lawful (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999-II) and must strike a fair balance between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights. In particular, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions (see Lenskaya v. Russia, no. 28730/03, § 45, 29 January 2009). The requisite “fair balance” will not be struck where the person concerned bears an individual and excessive burden (see Moskal v. Poland, no. 10373/05, §§ 49-52, 15 September 2009).
(b) Application to the present case
60. In the present case, the Court notes that the restitution order issued by the Restitution Commission on 15 September 2000 conferred on the applicant the title to the immovable property specified therein, as well as to the preference shares in the company that had been transferred earlier, on the basis of the 1996 contract, to the State. He also obtained possession of formerly State-owned shares in company I.G. as compensation for land which apparently it was impossible to return to him. On the basis of the restitution order, the applicant was recorded in the Land Registry as the owner of the land and buildings. He was also registered by the Securities Depositary as the shareholder in company T. and company I.G. (see paragraph 17 above). The Government admitted that the restitution order constituted a “possession” within the meaning of Article 1 of Protocol No. 1. The Court sees no reasons to find otherwise. The mere fact that his property rights were later revoked does not prevent them from being a “possession” within the meaning of Article 1 of Protocol No. 1 (see Beyeler v. Italy [GC], no. 33202/96, § 105, ECHR 2000‑I).
61. The Court further considers, as the Government admitted, that the quashing of the restitution order, which became final, amounted to an interference with his possessions.
62. It must therefore ascertain whether the interference complained of was lawful and whether it was proportionate to the legitimate aim pursued.
(i) Lawfulness of the interference
63. As regards the lawfulness of the measure complained of, the Court observes that the extraordinary proceedings that led to the quashing of the restitution order were initiated, under section 268 of the Administrative Proceedings Act (see paragraph 45 above), by the Solicitor General, who had been a party to the restitution proceedings (see paragraphs 21 and 23 above). The intervention of the Solicitor General can be considered to have been taken in light of his or her right and duty to protect the proprietary rights and interests of the State (see paragraphs 32 and 46 above). The quashing of the order was based on section 267 § 1 (3) of the Administrative Proceedings Act (see paragraph 44 above), which provided that a final administrative decision could be set aside if it was impossible to enforce. Both the Commission and the Supreme Court referred to this provision in their decisions (see paragraphs 22 and 24 above). As interpreted by the Supreme Court, enforcement of an order could be impossible both factually and legally. It is therefore not in doubt that, as the Supreme Court established in its decision of 16 March 2007 (see paragraph 24 above), the measure complained of was based on valid statutory provisions.
64. It is true that, as the applicant argued (see paragraph 56 above), the domestic law did not explicitly provide that errors in facts and law could serve as a legal basis for the extraordinary quashing of a final restitution order. In this connection the Court reiterates that the existence of a legal basis in domestic law does not suffice in itself to satisfy the principle of lawfulness. In addition, the legal basis must have a certain quality, namely it must be compatible with the rule of law and must provide guarantees against arbitrariness (see N.K.M. v. Hungary, no. 66529/11, § 47, 14 May 2013).
65. The Court observes that the errors cited by the Commission and the Supreme Court concerned the following: 1) the applicant had obtained possession of the entire immovable property and preference shares in the company despite the fact that the company had been in the joint ownership of four individuals, one of whom had been the applicant’s late predecessor; 2) the buildings that had been restored to the applicant had been larger than those confiscated, in terms both of their size and of their value; and 3) there had been development on the land which had been returned to him on the basis of the restitution order. The Commission and the Supreme Court established that the Restitution Commission’s decision suffered from fundamental defects, as a result of which the restitution order was legally unenforceable. The Supreme Court further stated that those errors had violated imperative provisions of the Restitution Act (see paragraph 24 above). Having regard to the information before it and considering that it has only limited power to deal with alleged errors of fact or law committed by the national courts (see García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999‑I and Kopp v. Switzerland, 25 March 1998, § 59, Reports of Judgments and Decisions 1998‑II), the Court considers that it cannot substitute its view for that of the national courts, which in the absence of any argument to the contrary, does not appear unreasonable or manifestly arbitrary.
66. In such circumstances, the Court considers that the decisions of the Commission and the Supreme Court dating 26 April 2006 and 16 March 2007 respectively can be accepted as providing a proper legal basis for the measure in question, taking into account the degree of autonomy and latitude afforded to the domestic authorities regarding the interpretation and application of domestic law.
67. The Court therefore concludes that the interference with the applicant’s property rights was provided for by law, as required by Article 1 of Protocol No. 1 to the Convention.
(ii) Legitimate aim
68. The Court reiterates that the national authorities, because of their direct knowledge of society and its needs, are in principle better placed than an international court to appreciate what is “in the public interest”. Under the system of protection established by the Convention, it is thus for the national authorities to make the initial assessment as to the existence of a problem of public concern warranting measures of deprivation of property. Here, as in other fields to which the safeguards of the Convention extend, the national authorities accordingly enjoy a certain margin of appreciation. The Court will respect the judgment of the national authorities as to what is “in the public interest” unless that judgment is manifestly without reasonable foundation (see Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, § 98, 25 October 2012).
69. The Court accepts that the aim of the interference in question was to correct errors on the part of the Restitution Commission, which had led to the applicant’s being divested of proprietary rights, which he had acquired allegedly unjustly. Those errors, as argued by the Government, affected the proprietary rights and financial interests of the State, as well as the interests of third parties namely the company and those living in the residential apartments, which had been returned to the applicant (see paragraphs 20 and 57 above). As noted by the Commission and the Supreme Court, those errors also adversely affected the proprietary interests of A.J., T.K. and L.L. or their heirs (see paragraphs 22 and 24 above).
70. The Court therefore considers that the interference in question pursued a legitimate aim, namely to ensure that the public purse was not called upon to subsidise undeserving claimants. Holding otherwise would be contrary to the doctrine of unjust enrichment (see, mutatis mutandis, Moskal, cited above, §§ 63 and 73). In any event, the Court has already found that the protection of the rights and interests of third persons is a legitimate consideration which may justify the quashing of a final and binding judgment (see Protsenko v. Russia, no. 13151/04, § 33, 31 July 2008).
(iii) Proportionality
71. It remains to be ascertained whether the interference found by the Court satisfied the requirement of proportionality under Article 1 of Protocol No. 1. In particular, the Court has to assess whether the power to launch and conduct an extraordinary review was exercised by the authorities so as to strike, to the maximum extent possible, a fair balance between the interests of the applicant and the need to ensure the proper administration of justice, given the fact that the quashing of the restitution order was based on the findings that there had been fundamental defects in the proceedings before the Restitution Commission (ibid., § 29 and mutatis mutandis, Radchikov v. Russia, no. 65582/01, § 43, 24 May 2007).
72. Having examined the case file and the parties’ submissions, the Court is of the opinion that the authorities respected this requirement in the present case. In this connection the Court accepts that the extraordinary review procedure was conducted in compliance with the requirements of the domestic law and procedure (see paragraphs 63 and 66 above) and that the applicant had the opportunity effectively to challenge the measure complained of (see paragraph 23 above). Furthermore, it considers that the circumstances referred to by the Commission and the Supreme Court (see paragraphs 22 and 24 above) were in their nature and significance such as to justify the quashing of the final restitution order. The domestic authorities, including the Supreme Court, as the highest judicial authority in the State, exercised their power of review in order to correct certain fundamental defects committed by the Restitution Commission, which had been the first and only instance in the ordinary restitution proceedings that had examined the merits of the applicant’s claim. These errors led the review bodies to conclude that the restitution order had been legally unenforceable and in violation of the imperative provisions of the Restitution Act. In so doing they advanced reasons of substantial and compelling character that justify the extraordinary quashing of the final restitution order.
73. The Court observes that the deficiencies noted by the review bodies could have been rectified had the Solicitor General intervened before the Restitution Commission and availed himself of the available remedies in the ordinary restitution proceedings. The reasons for his or her inactivity remain unclear. However, the Court is of the opinion that the “manifest omission” of the Solicitor General in the ordinary restitution proceedings (see paragraph 22 above) cannot be interpreted, in the present case, as a bar to the impugned intervention, the aim of which was to correct fundamental errors. To consider otherwise would be contrary to the principle of the proper administration of justice. Given the particular circumstances of the case, the Court is not convinced that the errors of the Restitution Commission could be neutralised or corrected by any other means than those applied therein.
74. The Court further considers that the implications of the quashing of the restitution order are not without relevance in the present case. In this connection it notes that on the basis of the errors specified above, the case was remitted to the Restitution Commission for a fresh examination and since 2007 the restitution proceedings have been pending before the Restitution Commission. They were suspended in December 2010 when the applicant was instructed to initiate separate civil proceedings in order to establish the share of his late predecessor in the company’s property (see paragraph 28 above). The applicant may therefore recover possession of parts of the property after the restitution proceedings would resume.
75. Nevertheless, whereas the Court does not underestimate the complexity of the circumstances of the present case, the issue of proportionality further requires that the applicant should not be left in a situation of uncertainty for an unreasonable period of time. In this respect the Court notes with concern that the new restitution proceedings have been pending since 2007 and that, at present, it is unclear when they will come to an end. In this connection it recalls that there is an effective remedy before the Supreme Court that the applicant can avail himself of regarding the length of the resumed restitution proceedings (see Adži-Spirkoska and Others v. the former Yugoslav Republic of Macedonia (dec.), nos. 38914/05 and 17879/05, 3 November 2011). Whereas inactivity on behalf of the national authorities may in future lead the Court to hold otherwise, it does not find that the present situation is such that due to the still pending proceedings a disproportionate burden has been placed on the applicant.
76. The foregoing considerations thus lead the Court to conclude that the extraordinary quashing of the order did not amount in the present case to an unjustified interference with the applicant’s property rights as guaranteed by Article 1 of Protocol No. 1.
77. There has accordingly been no violation of that Convention provision.
FOR THESE REASONS, THE COURT,UNANIMOUSLY,
1. Declares the application admissible;
2. Holds that there has been no violation of Article 1 of Protocol No. 1 of the Convention.
Done in English, and notified in writing on 6 February 2014, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren NielsenIsabelle Berro-Lefèvre
RegistrarPresident
Full & Egal Universal Law Academy