Communicated on 9 February 2016
FIRST SECTION
Application no. 45934/11
Thodori DUNI
against Albania
lodged on 23 July 2011
STATEMENT OF FACTS
The applicant, Mr Thodori Duni, is an Albanian national who was born in 1942 and lives in Tirana.
A. Background to the case
In the mid-1990s private companies entered into loan agreements (kontratë huaje) with individuals (under which they borrowed money from such individuals) in order to finance their investments plans. It was subsequently alleged that those companies were engaged in fraudulent pyramid schemes.
In 1997 Albania was hit by civil unrest owing to the collapse of the companies which had allegedly been “pyramid schemes” and which had been established during the preceding years. Subsequently, the State intervened and passed legislation aimed at placing those companies in compulsory administration.
Vefa Holding sh.p.k. (hereinafter “the company”), which was one of the alleged pyramid-scheme companies (hereinafter “borrowing companies”), was made subject to the new legislation, and administrators were appointed by the Government.
Under the new legislation, the administration process would be conducted in two phases. During the first phase the administrators would assume full control of the companies. An inventory of the company’s assets would be compiled and a plan of action would be prepared for the recovery of the assets. During the second phase the administrators would proceed with the sale of the companies’ assets and assist in the distribution of the proceeds to their creditors. Domestic legislation set out a method for the calculation of a repayment coefficient which would be used in the distribution process.
B. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 4 April 1996 the applicant concluded loan agreement no. 3447 with the company. He deposited different amounts of money with the company until 4 January 1997. The principal amount cannot be identified.
On 11 and 15 April 1997 the applicant withdrew 9,184,590 Albanian leks (ALL) by way of “partial liquidation” (likujdim i pjesshëm). On 5 June and 17 July 1997 he withdrew ALL 714,000 by way of “deposit withdrawal” (“tërheqje depozite”).
On 31 August 1999 the company’s administrators, pursuant to section 2(3) of the Outstanding Debts Act, decided that the applicant was a debtor and that he owed to the company ALL 9,184,590.
On an unspecified date the applicant signed a loan statement (deklarata e huadhënies), as required by a Government decision of 28 October 1997. It transpires that a serial number was allocated to the loan statement.
On 26 July 2005 a daily newspaper published a list of the company’s creditors. The applicant’s name was on the list. The list – entitled “List of Vefa Holding sh.p.k.’s creditors – stated that the company’s debt towards the applicant in respect of loan agreement no. 3447 amounted to ALL 11,389,324.5. The amount to which the applicant was entitled as a result of the application of the repayment coefficient was ALL 1,252,825.
On 27 July 2005 the applicant unsuccessfully attempted to withdraw ALL 1,252,825, which had been frozen by the company’s administrators.
Judicial proceedings
On 7 March 2006 the applicant instituted legal proceedings to have the administrators’ decision of 31 August 1999 annulled. He submitted, as part of the proceedings, that under section 2(3) of the Outstanding Debts Act he could not be deemed to be a debtor, since he possessed the original copy of the loan agreement. This showed that the contract had not ended (kontrata nuk është mbyllur). He further argued that he had acted on behalf of himself and members of his family in making deposits with the company. He had acted on behalf of family members as regards the withdrawals made on 11 and 15 April 1997. At the same time, he had been declared a creditor by the authorities. Relying on a decision of the Court of Appeal of 24 November 2004, he contended that he had been deemed mistakenly to be a debtor.
The case was heard by the Tirana Court of Appeal, acting as a first‑instance court. On 25 October 2006 the Court of Appeal dismissed the claim, stating that the administrators’ decision had been in accordance with section 2(3) of the Outstanding Debts Act. It found that the applicant had not substantiated his submission that the contractual relationship with the company had continued after 23 January 1997.
On an unspecified date the applicant appealed to the Supreme Court, complaining about the Court of Appeal’s failure to examine whether the loan agreement had ended. He argued that since he still possessed the original contract, it had not in fact ended. Moreover, he had made withdrawals on 5 June and 17 July 1997. Those withdrawals had related to the principal amount and not to the interest thereon. He had also been recognised as a creditor. He argued that since he had been deemed to be both debtor and creditor on the basis of the same loan agreement, the authorities should have reconciled those amounts.
On 2 December 2008 the Supreme Court upheld the Court of Appeal’s decision. It stated that the applicant had made withdrawals after 23 January 1997. This amounted to a termination of the contract.
In November 2010 the applicant lodged a constitutional complaint. He submitted, inter alia, that the Supreme Court had decided differently in decisions nos. 341 of 17 April 2001, 92 of 8 February 2002, 323 of 2 April 2002, 453 of 23 April 2002, 50 of 14 January 2003, 320 of 12 February 2003, 492 of 6 March 2003, 515 of 11 March 2003, 535 of 13 March 2003, 452 of 26 February 2004, 730 of 28 April 2005, 272 of 24 September 2009 and 302 of 6 October 2009. The lower courts had not examined whether he should have been deemed to be a creditor.
On 14 January 2011 the Constitutional Court, sitting as a panel of three judges, rejected the complaint as manifestly ill-founded. It did not give reasons in respect of the difference between the applicant’s case and the domestic decisions cited in his complaint. It simply stated that a case was to be examined on the basis of its facts and complaints. It further stated that the applicant had been recognised as a creditor in a list published by a daily newspaper, whereas the company’s administrators had decided that he was a debtor. The issue of whether or not the applicant was a debtor was a matter for examination by the lower courts.
C. Relevant domestic law and practice
1. Identification of debtors
The Outstanding Debts Act (Law no 8471 of 8 April 1999) provided an exhaustive list of persons who qualified as debtors. Section 2(3) stated that a debtor was any natural or legal person who had ended a loan agreement after 23 January 1997 and had withdrawn more than ALL 1,000,000 (the equivalent of 10,000 United States dollars (USD)). Section 4 stated that the administrators, as designated by law, (see “background to the case” above) would identify all natural persons and legal entities which had outstanding debts and obligations in respect of the borrowing companies. The administrators would adopt a decision on the names of persons who would be deemed to be debtors (section 5). That decision would constitute an execution title and would be enforceable. Debtors had forty-five days from the date of the notification of the administrators’ decision in which to comply; failure to comply would result in mandatory enforcement by the bailiff (section 7). Debtors had the right to appeal against before the Court of Appeal the administrators’ decision and the bailiff’s actions within ten and five days respectively (section 8).
2. Identification of creditors
On 28 October 1997 the Government adopted decision no. 453 of 28 October 1997 on the registration of creditors, which was further supplemented by an instruction of 7 November 1997 from the Social Affairs and Finance Ministers. Registration was to be carried out by the employment offices of the Ministry of Social Affairs. A claimant was to complete and sign a loan statement. The back of the statement was to be filled out by an official of the employment office and a serial number was to be allocated to the statement. If a claimant properly completed and signed the statement and submitted a copy of the loan agreement, he or she would be registered as a creditor. All information and documents were to be sent to the Centre of Financial Computing (Qendra e Informatizimit Financiar ‑“CFC”).
3. Distribution of payment to creditors
Section 3 of the Redistribution of Non-banking Entities’ Property Act (law no. 8360 of 10 June 1998, as amended) stipulated that the distribution of financial assets was to be carried out on the basis of a repayment coefficient, which was different for each company. The repayment amount would be distributed in the event that the creditor’s deposit had yielded a sum amounting to the difference between (i) the principal he had deposited and (ii) the interest he had withdrawn or any other amount that had accrued to him. No amount would be distributed in the event that the creditor had withdrawn interest that was equal to or higher than the principal. In such a case, the loan agreement would be considered to have ended (section 5). A loan agreement concluded before 23 January 1997 between a creditor and the borrowing company in question was the sole evidence required for the distribution of payment. The original copy of the loan agreement was to be verified by the administrator and a financial expert (section 7). A list of creditors of a company, together with the amount of its capital, was to be published at such company’s premises no later than 15 July 1998. Any creditor who could not find his name on such a list and who could substantiate his status as a creditor on the basis of documentary evidence could appeal to the Group of Administrators and Financial Experts (Grupi i Administratorëve dhe Ekspertëve të Pavarur) no later than 15 August 1998. Such a creditor could subsequently appeal to the Court of Appeal (section 9).
Under Government decision no. 579 of 8 September 1998, as amended, a person who had been declared both debtor and creditor could ask the companies’ administrators to reconcile the respective amounts (section 4). Payment to be distributed was to be sent to a designated bank. The public was to be informed by way of public information tools (such as newspaper announcements) of the place, date, and time for the withdrawal of such payments (section 9).
4. Domestic courts’ case-law
(a) Supreme Court’s case-law
After the collapse of the alleged borrowing companies, the Supreme Court examined claims brought by individuals whose status as debtors had been recognised pursuant to section 2(3) of the Outstanding Debts Act.
In decision no. 453 of 23 April 2002 the appellant appealed against the administrators’ decision that had recognised him as a debtor on account of his withdrawal of ALL 2,800,000 after 23 January 1997. The appellant submitted that he had not signed a withdrawal slip (mandat pagesën) in respect of that amount. The Supreme Court decided to remit the case to the Court of Appeal for re-examination on the following grounds:
“In order to conclude whether the appellant is a debtor, it is important for the respondent company to clarify the procedures followed in respect of withdrawals of the principal amount deposited with the company. In accordance with recognised practice, the withdrawal of the principal amount [would not have been] possible if the loan agreement had not been handed in/surrendered.
If the company’s administrators possess the original agreement, then in accordance with the [principle of] burden of proof, each of the parties should prove whether the withdrawal took place.
In accordance with the Government’s decision of 28 October 1997, the appellant was obliged to register, complete and hand in a loan statement, the [relevant] loan agreement and an identification document.
The above considerations are crucial ... for the court to decide ... whether the appellant was a debtor or not.”
In decision no. 50 of 14 January 2003 the appellant appealed against the administrators’ decision recognising him as a debtor on account of the withdrawal of ALL 2,995,200 after 23 January 1997. The appellant submitted that he had not signed the relevant withdrawal slip. The Supreme Court decided to remit the case to the Court of Appeal for re-examination on the following grounds:
“In the first place, the appellant should submit the original copy of the loan agreement in order to prove that he is a creditor and that he did not withdraw any money. The case-file does not contain the original copy of the agreement; neither was it examined whether the appellant possessed the original copy of the agreement; [n]or [was] the domestic practice of providing creditors with agreements or the practice of withdrawing deposits [examined].
Secondly, it has been acknowledged that after the fraudulent pyramid-scheme companies were placed under administration, creditors were requested to complete a set of documents [in order to withdraw] the [respective] repayment amount. The Court of Appeal failed to examine whether the appellant had completed such documents and whether he had asked to [be permitted to] withdraw the repayment amount from the designated bank.”
In decisions nos. 92 of 8 February 2002, 323 of 2 April 2002, 320 of 12 February 2003, and 515 of 11 March 2003, the Supreme Court, citing the same reasons as above, decided to remit the case to the Court of Appeal for further re-examination.
In decision no. 535 of 13 March 2003 the appellant appealed against the administrators’ decision recognising her as a debtor on account of her having withdrawn ALL 1,700,000 on 14 August 1997. The appellant submitted that she had not signed the withdrawal slip. The Supreme Court quashed the administrators’ decision on the ground that the applicant was in possession of the original agreement. It reasoned that:
“... irrespective of [whether or not] the creditor’s signature [was affixed] when the company’s administrators were in possession of the original copy of the agreement, it has been acknowledged that the agreement was handed in by the interested party...and that ... [it] was considered to have ended after the time-limit prescribed by law and, consequently, [that] the person was considered a debtor in respect of the amount that had been withdrawn.
The loan agreement was drawn up in one single copy and was kept by the creditor. If the original copy had been handed in, it would have meant that this action was carried out by the creditor himself. Regardless of his claims regarding the signature, he was not absolved from being a debtor.
In the present case, the original copy of the agreement was in the appellant’s possession. It was submitted as evidence to the Court of Appeal. This goes to show that the appellant, by way of third parties, did not take any action to withdraw money and end the agreement.”
In decision no. 452 of 26 February 2004 the appellant appealed against the administrators’ decision recognising him to be a debtor on account of [his] withdrawal of ALL 7,480,000 after 23 January 1997. The Supreme Court upheld the administrators’ decision finding that the loan agreement had ended, since the original copy of the agreement was in the administrators’ possession. It stated as follows:
“It is an acknowledged fact that the termination of the [loan] agreement took place by the handing in of the original copy after the withdrawal of money. After such action, the contract became invalid.”
By decisions nos. 492 of 6 March 2003 and 730 of 28 April 2005, the Supreme Court, citing the same reasons as above, upheld or quashed the administrators’ decisions which had recognised the appellants as debtors under section 2(3) of the Outstanding Debt Act.
(b) Court of Appeal’s case-law
In decision no. 110 of 24 November 2004 the Court of Appeal quashed the administrators’ decision recognising the appellant as a debtor pursuant to section 2(3) of the Outstanding Debts Act in the amount of ALL 11,000,000. The appellant claimed that in March 1997 he had withdrawn half of the principal amount and that he was still a creditor in respect of the remaining half. The administrators accepted that the appellant was a creditor on the basis of the computer results (see “identification of creditors” above) and could not be deemed to be a debtor. He had been mistakenly recognised as a debtor owing to the lack of documents testifying to the contrary. The Court of Appeal, taking into account the parties’ submissions, held that the loan agreement had not ended since the appellant continued to be a creditor in respect of USD 10,000.
COMPLAINTS
The applicant complains under Article 6 § 1 of the Convention that the domestic courts failed to give adequate reasons for rejecting the arguments he had raised before them. He also complains that, in other similar cases, the domestic courts had reached different conclusions.
QUESTION TO THE PARTIES
1. Did the applicant have a fair hearing in the determination of his civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular:
(a) Did the domestic courts examine whether the original loan agreement was in the applicant’s possession, whether he had completed and handed in a loan statement and whether he had asked to be able to withdraw the repayment amount from the designated bank?
(b) Did the domestic courts depart from previous rulings of the Supreme Court (see decisions nos. 92 of 8 February 2002, 323 of 2 April 2002, 453 of 23 April 2002, 50 of 14 January 2003, 320 of 12 February 2003, 492 of 6 March 2003, 515 of 11 March 2003, 535 of 13 March 2003, 452 of 26 February 2004, and 730 of 28 April 2005)? If so, were adequate reasons given for departing from the previous case-law (Atanasovski v. the former Yugoslav Republic of Macedonia, no. 36815/03, 14 January 2010)?
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