Communicated on 26 January 2017
FOURTH SECTION
Application no. 47523/10
GLAS-METALL TRUST REG.
against Slovenia
lodged on 16 July 2010
STATEMENT OF FACTS
1. Glas-Metall Trust Reg. (“the applicant company”) is a private company registered in Liechtenstein. It is represented before the Court by Mr D. Puh, a lawyer from Portorož, Slovenia.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant company, may be summarised as follows.
3. It would appear that the applicant company was party to several sets of civil proceedings against the Socialist Federal Republic of Yugoslavia (hereinafter “the SFRY”) concerning damages arising from an allegedly unlawful seizure of goods by the Federal Customs Inspectorate (zvezni devizni inšpektorat). While the applicant company complains only about the proceedings which are described in detail below, it makes reference to other sets of proceedings in support of its argument concerning the transfer of liability for debts incurred due to actions of the Federal Customs Inspectorate (see paragraphs 23 and 31 below).
4. In 1974 the applicant company had goods delivered to the state-owned port of Koper, located in the then Socialist Republic of Slovenia, which formed part of the SFRY. Upon their arrival at the port, the goods were seized by the Federal Customs Inspectorate. In 1977 the goods were released; however, they had in the meantime been sold by the port of Koper. Subsequently, the applicant company claimed, before the Koper Basic Court, compensation for damage incurred as a result of the aforementioned seizure of its goods.
5. On 9 April 1991 the Koper Basic Court allowed the applicant company’s claim for compensation in part and ordered the defendant, the SFRY, to pay 1,426,910 Swiss francs (CHF) and 795,000 Italian lire (ITL), together with a considerable amount of interest, as compensation for the pecuniary damage and loss of profit incurred by the applicant company. The remainder of the claim was dismissed.
6. Both parties appealed against the judgment.
7. On 25 June 1991 Slovenia declared its independence and became the Republic of Slovenia.
8. On 27 February 1992 the Koper Higher Court upheld the Koper Basic Court’s judgment in part. It allowed the applicant company’s claim in the amount of CHF 776,661. The remainder of the claim was remitted to the first-instance court in order for it to further clarify the underlying facts of the case. This part of the claim was subsequently dismissed. As regards the locus standi of the SFRY, the higher court took the view that the damage resulted from an act de iure gestionis and that the SFRY thus could not be relieved of its liability for actions which had taken place in 1974.
9. The SFRY appealed on points of law with regard to the CHF 776,661 that it had been ordered to pay to the applicant company. It argued that, having declared its independence, the Republic of Slovenia had become responsible for the discharge of all liabilities originating on its territory.
10. On 27 January 1993 the Supreme Court dismissed the SFRY’s appeal on points of law. It pointed out that the first-instance judgment had been rendered before the Republic of Slovenia had declared its independence, and that the Koper Basic Court had rightly assumed territorial jurisdiction over the case. The Supreme Court furthermore pointed out that under the rules in force at the time that the applicant company had sustained damage resulting from the actions of the Federal Customs Inspectorate, the SFRY had been liable for damage resulting from the actions of its officials and employees.
11. On 3 October 2001 the applicant company lodged a request for the enforcement of its claim in the amount of CHF 776,661 with the Ljubljana Local Court against the then Federal Republic of Yugoslavia (a federation then established between Serbia and Montenegro – hereinafter “the FRY”) and the Republic of Slovenia, as legal successors to the former SFRY. The applicant company pointed out that the Republic of Slovenia, on declaring its independence, had undertaken (in the Constitutional Act Implementing the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia – hereinafter “the Constitutional Act Implementing the Basic Charter”, see paragraph 32 below) that it would assume the share of the SFRY’s national debts that pertained to the Republic of Slovenia.
12. On 22 November 2002 the Ljubljana Local Court refused the applicant company’s request for enforcement as inadmissible on the ground that it had failed to provide a valid document permitting enforcement. The applicant company appealed.
13. On 12 February 2003 the Ljubljana Higher Court allowed the applicant company’s appeal, stating that the first-instance judgment was final and enforceable in the amount of the claim that the applicant company was seeking to enforce. It further noted that the claim was being enforced against the FRY and the Republic of Slovenia, entities which had not been indicated as debtors in the judgment. The applicant company was therefore required to prove that the debt had been transferred to these new entities. The court observed that in Article 11 of the Constitutional Act Implementing the Basic Charter (see paragraph 32 below) the Republic of Slovenia undertook to assume the share of the former SFRY’s national debts pertaining to the Republic of Slovenia. However, the court also pointed out that under the Act on the Succession Fund of the Republic of Slovenia (hereinafter “the Act on the Succession Fund” – see paragraph 33 below), enforcement proceedings regarding any debts incurred by the SFRY were to be stayed in the event that claim in question was subject to succession negotiations. Therefore, the court was of the view that an opinion was first to be obtained from the Succession Fund as to whether the applicant company’s claim should be resolved within the framework of the succession process.
14. On 3 April 2003 the Ljubljana Local Court stayed the enforcement proceedings, finding that the applicant company’s claim was to be resolved within the framework of the succession of the former SFRY.
15. The applicant company appealed against the decision.
16. On 15 April 2004 the Ljubljana Higher Court upheld its appeal in part. Firstly, it took the view that the proceedings could only be stayed with respect to the Republic of Slovenia, but not with respect to the FRY, the other debtor indicated by the applicant company. Secondly, the Higher Court observed that all successor states of the SFRY had meanwhile ratified the Agreement on Succession Issues signed in 2001 (see paragraph 34 below) and accordingly ordered the first-instance court to also decide on the enforcement action against the Republic of Slovenia.
17. The applicant company states that it was served this decision of the Higher Court on 18 April 2006.
18. On 12 February 2007 the applicant company withdrew the request for enforcement in so far as it was lodged against the FRY.
19. On 17 October 2007 the applicant company wrote to the Ljubljana Local Court, urging it to continue the enforcement proceedings.
20. As the Ljubljana Local Court failed to respond, on 12 March 2008 the applicant company lodged a supervisory appeal with the president of the Ljubljana Local Court.
21. On 21 March 2008 the president of the Ljubljana Local Court informed the applicant company that its request for enforcement would be decided within fourteen days.
22. On 9 April 2008 the Ljubljana Local Court invited the applicant company to submit, within fifteen days, a document certified by a public authority proving that liability for payment of its claim had been transferred to the Republic of Slovenia.
23. On 14 April 2008 the applicant company replied to the request, stating that it considered the transfer of liability to have been confirmed in the Basic Constitutional Charter on the Sovereignty and Independence of the Republic of Slovenia and the Constitutional Act Implementing the Basic Charter (see paragraph 32 below). The applicant company, moreover, enclosed a judgment of 12 March 1998 given in relation to its other claim against the SFRY, in which the Koper Higher Court had taken the view that the Republic of Slovenia ought to be considered liable for damage incurred in its territory that had been caused by the authorities of the former SFRY.
24. On 6 May 2008 the Ljubljana Local Court terminated the proceedings with regard to the FRY and refused the request for enforcement against the Republic of Slovenia. The Local Court was of the view that the applicant company had not proved that liability for payment of its claim had been transferred to the Republic of Slovenia. As regards the judgment of 12 March 1998 relied on by the applicant company, the Local Court explained that it was not bound by its reasoning and that the relevant passage, in any event, constituted merely orbiter dicta. Moreover, the Local Court considered that, under the Agreement on Succession Issues, the applicant company’s claim was to be considered as relating to the external debt of the SFRY to “other” creditors – that is to say not official or commercial creditors; this had not yet been divided among successor States (see paragraph 34 below). The Local Court explained that the Succession Fund had been transformed into the Public Agency of the Republic of Slovenia for Succession (hereinafter “the Public Agency for Succession”), which had authority to deal with all issues of succession. The Local Court therefore instructed the applicant company to obtain from the Public Agency for Succession an official document confirming that liability for payment of its claim had in fact been transferred to the Republic of Slovenia.
25. On 19 May 2008 the applicant company appealed against this decision, arguing that the transfer of liability had already been confirmed by the Constitutional Act Implementing the Basic Charter (see paragraph 32 below) and should have thus not been considered as a matter of succession. It also stated that the court had had no legal basis for referring the claimants to yet another body and argued that the courts had no reason to continue to postpone the enforcement of its claim.
26. On 17 December 2008 the Ljubljana Higher Court dismissed the applicant company’s appeal, concurring with the first-instance court that the question of the transfer of the applicant company’s claim to the successor states of the SFRY was not yet resolved. The Higher Court was of the view that the applicant company’s claim was to be considered as a debt due from the SFRY and accordingly ought to be deemed as falling under Article 1 of Annex F to the Agreement (see paragraph 34 below). In this regard it observed that the liabilities falling under Annex F were to be divided under the direction of the Joint Standing Committee of the representatives of the successor states.
27. The applicant company lodged a constitutional complaint against the higher court’s decision, pointing out that the refusal of the lower courts to allow the enforcement of its claim against the Republic of Slovenia would prevent the claim from ever being enforced, as enforcement would soon to be time-barred. Moreover, the applicant company emphasised that section 11 of the Constitutional Act Implementing the Basic Charter (see paragraph 32 below) provided that the Republic of Slovenia would assume the share of the SFRY’s debts pertaining to the Republic of Slovenia; therefore, in the applicant company’s opinion there could be no doubt that its claim had been transferred to the Republic of Slovenia. Further, the applicant company was convinced that in the absence of an international agreement specifically covering its claim, it could not obtain a document proving the Republic of Slovenia’s liability for the payment of its claim. Finally, the applicant company pointed out that the legal system should not deny its right to enforcement by declining to accept the Republic of Slovenia’s liability for claims evidently pertaining to its territory on the ground that twenty years after the dissolution of the SFRY, the successor states had still not been able to conclude a binding international instrument settling this question.
28. The applicant company also requested the Office of the State Prosecutor General to lodge a request for the protection of legality (an extraordinary remedy) with the Supreme Court.
29. On 5 May 2009 the State Prosecutor General refused the applicant company’s request. Consequently, the applicant company lodged another constitutional complaint against the refusal of its request.
30. On 15 January 2010 the Constitutional Court dismissed the applicant company’s constitutional complaint against the letter of the State Prosecutor General refusing its request. Moreover, it also dismissed the constitutional complaint against the judicial decisions rendered in the enforcement proceedings in so far as they pertained to the breach of the applicant company’s right to have its case decided within a reasonable period of time. As regards the merits of the judicial decisions, the Constitutional Court declined to consider the applicant company’s complaint, stating that the alleged violations of its constitutionally guaranteed rights had not occurred.
31. In another set of enforcement proceedings arising from the same event (namely the seizure of the applicant company’s goods by the Federal Customs Inspectorate in the port of Koper) the applicant company succeeded in enforcing its claim against the former SFRY in the amount of ITL 1,431,000 (approximately 740 euros (EUR)). On 12 November 2007 the Koper Local Court rejected the objection raised by the Republic of Slovenia to the effect that the debt had not been transferred to it. Having declared itself a successor of the former SFRY and having ratified the Agreement on Succession Issues (see paragraph 34 below), in the Local Court’s opinion, the Republic of Slovenia could not relieve itself of its liability.
B. Relevant domestic law
1. The Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia and the Constitutional Act Implementing the Basic Charter
32. On 25 June 1991, the day of the proclamation of Slovenian independence, the National Assembly of the Republic of Slovenia approved a number of documents enabling Slovenia to assume authority over its territory, including the Basic Constitutional Charter on the Sovereignty and Independence of the Republic of Slovenia, in which it proclaimed its independence and assumed “all rights and duties which, under the Constitution of the Republic of Slovenia and the Constitution of the SFRY, [had been] transferred to the authorities of the SFRY”. The basic principles governing the transfer of the former federal rights and obligations to the newly established State were set out in the Constitutional Act Implementing the Basic Charter. As regards the legal assumption of federal debts, section 11 of the Act read:
“On the basis of the agreement on the legal succession to the SFRY, the Republic of Slovenia will assume that share of the SFRY’s national debts which pertains to the Republic of Slovenia, as well as the share of the debts guaranteed by the SFRY whose beneficiaries are legal entities based in the territory of the Republic of Slovenia.
The Republic of Slovenia will assume the appropriate share of those of the SFRY’s national debts [in respect of which] direct [creditors] cannot be established.
The Executive Council of the Assembly of the Republic of Slovenia is authorised to negotiate the assumption of the shares of the SFRY national debts referred to in the first and second paragraphs of this article.”
2. Act on the Succession Fund of the Republic of Slovenia
33. In 1993 Slovenia established the Succession Fund with the aim of enforcing claims and settling debts of the Republic of Slovenia, as well as of natural and legal persons originating within its territory, that pertained to the distribution of the former SFRY’s assets, rights and obligations in the process of succession. The relevant provisions read of the Act read as follows:
Section 15
“Natural and legal persons who on the day when this Act enters into force have unpaid claims against or liabilities in respect of subjects of the former SFRY may enter into an agreement with the Fund [by which they transfer] their unpaid claims and liabilities to the Fund, or alternatively give the Fund authority to recover claims and to discharge liabilities in their name and on their behalf.”
Section 15(c)
“The obligations of the Fund to persons subject to this Act shall be regulated by a special act adopted pursuant to the regulation of claims and liabilities arising from Slovenia’s succession to the SFRY.”
Section 15(d)
“The court shall also make an order on the stay of proceedings ... of its own motion in cases in which natural persons or legal entities have not acted, or were not entitled to act, in accordance with section 15, and the claim pertains, directly or indirectly, to legal relations with entities of the former Federation or to the liability of entities of the former SFRY.”
Section 15(e)
“Proceedings that have been stayed under section 15(č) of this Act shall be reinstated by the court of its own motion once the Act referred to in Section 15(c) has come into force.”
Section 15 (g)
“For the purpose of establishing whether the circumstances referred to in sections 15(č), 15(d) ... apply, the court shall obtain of its own motion the opinion of the Fund beforehand and base its decision on that opinion. ...”
C. Relevant international law
34. The Agreement on Succession Issues was signed on 29 June 2001 and entered into force between Bosnia and Herzegovina, Croatia, Serbia and Montenegro (later succeeded by Serbia), Slovenia and the former Yugoslav Republic of Macedonia on 2 June 2004. The relevant provisions of the Agreement read as follows:
Article 4
“(1) A Standing Joint Committee of senior representatives of each successor State, who may be assisted by experts, is hereby established.
(2) This Committee shall have as its principal tasks the monitoring of the effective implementation of this Agreement and serving as a forum in which issues arising in the course of its implementation may be discussed. The Committee may as necessary make appropriate recommendations to the Governments of the successor States.
(3) The first formal meeting of the Standing Joint Committee shall be convened, at the initiative of the Government of the Republic of Macedonia, within two months of the entry into force of this Agreement. The Committee may meet informally, and on a provisional basis, at any times convenient to the successor States after the signature of this Agreement.
(4) The Committee shall establish its own rules of procedure.”
ANNEX C
Financial Assets and Liabilities
Article 2
“(1) (a) The SFRY’s financial liabilities comprised (subject to paragraphs (2) and (3) of this Article) the debts of the SFRY, debts guaranteed by the SFRY and financial claims against the SFRY, and consisted principally of –
(i) the external debt of the SFRY to official creditors and the International Financial Institutions;
(ii) the external debt of the SFRY to commercial creditors;
(iii) sums payable by the National Bank of Yugoslavia to banks in other countries resulting from uncompleted inter-bank clearing arrangements. Such countries include, but are not limited to, those listed in Appendix 2 to this Annex;
(iv) external debt of the SFRY to creditors other than those listed in (i) – (iii), above.
(b) External debt in (i) – (iv) above is described as allocated debt if the final beneficiary of the debt is located on the territory of a specific successor State or group of successor States. Allocated debt is not subject to succession and shall be accepted by the successor State on the territory of which the final beneficiary is located.
(c) Liabilities of the SFRY, National Bank of Yugoslavia or other federal institutions towards international financial organizations are included under the external debt of the SFRY.
...”
Article 6
“Each successor State shall appoint a representative of the Central Bank or an other authorised representative to form a Committee, which shall meet within 30 days of the signature of this Agreement to arrange the modalities for the initial distributions identified in Article 5 of this Annex. Their objective will be to effect any distributions of assets as quickly as possible. In addition they will arrange jointly to verify, settle and effect distributions under Article 4 of this Annex. They will also make arrangements to distribute to the extent possible assets under Article 1(f) and liabilities under Article 2(1)(a)(iv) of this Annex according to the proportions agreed to in Article 5(2). The Committee will also prepare a definitive list of all SFRY external debt.”
ANNEX F
Other rights, interests and liabilities
Article 1
“All rights and interests which belonged to the SFRY and which are not otherwise covered by this Agreement (including, but not limited to, patents, trade marks, copyrights, royalties, and claims of and debts due to the SFRY) shall be shared among the successor States, taking into account the proportion for division of SFRY financial assets in Annex C of this Agreement. The division of such rights and interests shall proceed under the direction of the Standing Joint Committee established under Article 4 of this Agreement.”
Article 2
“All claims against the SFRY which are not otherwise covered by this Agreement shall be considered by the Standing Joint Committee established under Article 4 of this Agreement. The successor States shall inform one another of all such claims against the SFRY.”
COMPLAINTS
35. The applicant company complains under Article 6 of the Convention that in the present case the domestic courts arbitrarily refused to enforce its claim.
36. Further, the applicant company alleges that the refusal of the domestic authorities to enforce its claim amounted to a violation of its right to peaceful enjoyment of its possessions, contrary to Article 1 of Protocol No. 1 of the Convention.
QUESTIONS TO THE PARTIES
1. Was Article 6 § 1 of the Convention applicable under its civil head to the proceedings in the present case?
2. Was the refusal of the domestic courts to enforce the final judgment relied on by the applicant company on the ground that it had not submitted an official document issued by the Succession Fund or the subsequent Public Agency for Succession and proving that the liability of the respective debt had been transferred to the Republic of Slovenia, in breach of Article 6 § 1 of the Convention (see, for example, Dadiani and Machabeli v. Georgia, no. 8252/08, §§ 44-52, 12 June 2012?
In particular, did the Succession Fund or the subsequent Public Agency for Succession have the authority to issue documents to private individuals or companies stating that liability for a certain debt had been transferred to the Republic of Slovenia? If so, what was the legal basis on which the applicant company could have made a request for such a document? If it had made such a request, would it then be able to execute the judgment at issue?
3. Did the applicant company have a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention (see Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the former Yugoslav Republic of Macedonia [GC], no. 60642/08, §§ 77 and 79-80, ECHR 2014)?
4. If so, has there been a violation of Article 1 of Protocol No. 1 to the Convention arising from the applicant company’s inability to have its judicially recognised claim against the SFRY enforced against the Republic of Slovenia?
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