FIFTH SECTION
DECISION
Application no. 61324/09
KLIMAT INKOM V & CO OOD and Others
against Bulgaria
The European Court of Human Rights (Fifth Section), sitting on 12 December 2017 as a Chamber composed of:
Angelika Nußberger, President,
Nona Tsotsoria,
André Potocki,
Yonko Grozev,
Mārtiņš Mits,
Gabriele Kucsko-Stadlmayer,
Lәtif Hüseynov, judges,
and Milan Blaško, Deputy Section Registrar,
Having regard to the above application lodged on 27 October 2009,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
THE FACTS
1. The applicant company, Klimat Inkom V & Co OOD, was a Bulgarian limited liability company which had its registered office in Sofia. It was wholly owned by the two individual applicants, Mr Danail Kirilov Vidolov and Ms Vera Gancheva Vidolova, Bulgarian nationals who were born in 1941 and 1946 respectively. Mr Danail Kirilov Vidolov lives in Sofia.
2. Ms Vera Gancheva Vidolova died on 23 May 2014. In a letter dated 14 December 2016, her heirs ‒ Mr Danail Kirilov Vidolov, Mr Kiril Danailov Vidolov and Mr Daniel Danailov Kirilov ‒ expressed their wish to pursue the application in her stead.
3. The applicant company was wound up in 2015.
4. The applicants and Ms Vidolova’s heirs were represented before the Court by Mr M. Ekimdzhiev and Ms K. Boncheva, lawyers practising in Plovdiv.
5. The Bulgarian Government (“the Government”) were represented by their Agent, Ms M. Dimitrova, of the Ministry of Justice.
A. The circumstances of the case
6. The facts of the case, as submitted by the parties, may be summarised as follows.
1. Background
7. The State-owned company Incoms was created in 1989 as the successor of a previously existing State-owned enterprise. In 1991 it was registered as a joint-stock company with its registered place of business in Sofia. At that time it was wholly owned by the State.
8. In 1992 Parliament passed the Transformation and Privatisation of State and Municipally‑Owned Enterprises Act (hereinafter “the Transformation and Privatisation Act”). Pursuant to section 17a thereof (see paragraph 20 below), the company became the owner of the properties it had until then used and managed. In 1994 the company was renamed Incoms-Telecom Holding EAD.
9. On an unspecified date a decision was taken to privatise Incoms‑Telecom Holding EAD.
2. The 1997 contract
10. In early 1996 the company management took a decision to put up for sale some of the company’s properties, namely two industrial buildings in Sofia covering areas of 530 and 1,590 square metres respectively, as well as the plot of land on which they stood, which measured 5,152 square metres (hereinafter “the properties”). Since privatisation of the company was planned, the sale had to be authorised by the Council of Ministers (a requirement under section 21(2) of the Transformation and Privatisation Act – see paragraph 23 below). On 14 June 1996 the Council of Ministers authorised the sale, in a decision which stated in addition that the sale would be carried out in accordance with section 18(2) of the 1994 Regulations on the Exercise of the State’s Property Rights in Enterprises (hereinafter “the 1994 Regulations”, see paragraph 24 below).
11. On 23 August 1996 Incoms-Telecom Holding EAD and the applicant company concluded a preliminary contract for the sale of the properties. The final contract was signed on 5 February 1997 (hereinafter “the 1997 contract”). In July 1997 the applicant company paid in full the agreed price, which at the time was the equivalent of approximately 22,000 euros (EUR).
12. In August 1997 the applicant company took possession of the properties and started using them. The buildings appear to have been in a bad state of repair and it made substantial improvements to them. According to an expert assessment submitted by Mr Vidolov and Ms Vidolova’s heirs, in December 2016 the value of the properties was EUR 2,610,900. However, as the parties have provided to the Court no assessment of the value of the improvements made after 1997, it is unclear to what extent the increased value in 2016 was the result of price changes in the real estate market and to what extent – to the improvements made by the applicant company.
3. Rei vindicatio proceedings
13. Incoms-Telecom Holding EAD was privatised in 2002, after which its name was changed to Incoms-Telecom Holding AD.
14. In 2003 that company brought against the applicant company a rei vindicatio action, reclaiming the properties. It argued that the 1997 sale contract had been null and void because, in particular, it had not been concluded before a notary as required by law; consequently, the applicant company had never validly acquired the properties.
15. The action was allowed on 4 June 2004 by the Sofia District Court. It noted at the outset that the sale would only have been valid if it had been duly authorised by the Council of Ministers, as required by law. However, the authorisation given on 14 June 1996 (see paragraph 10 above) had been too general and had not specified the properties concerned.
16. In addition, the Sofia District Court noted that the 1997 contract was null and void because it had not been concluded before a notary. There was no reason to conclude that the general requirement of section 18 of the Obligations and Contracts Act (see paragraph 26 below) did not apply to it, as it did not fall within any of the exceptions provided for by law. In particular, the contract at issue was not a privatisation contract because it did not fall within the scope of the Transformation and Privatisation Act, as defined under its section 1(3) (see paragraph 21 below), and because its subject matter did not concern State-owned properties, the properties at issue having already come into the private ownership of the company Incoms on the strength of section 17a of the Transformation and Privatisation Act (see paragraph 8 above). Nor could section 18(2) of the 1994 Regulations (see paragraph 24 below), which the applicant company had relied on, provide a legal basis for concluding that the requirement laid down in section 18 of the Obligations and Contracts Act was inapplicable. Thus, the 1997 contract, which had not been concluded before a notary, was null and void ab initio.
17. The contract’s nullity meant that the applicant company had been a possessor in bad faith of the properties after August 1997 and could only acquire those properties through adverse possession after the expiry of a period of ten years. Since the claimant had brought an action in 2003, that period had not expired. Accordingly, the applicant company was not the owner of the properties and had to surrender possession to the claimant.
18. On 26 February 2007 and 27 April 2009 respectively the above conclusions were endorsed by the Sofia City Court and the Supreme Court of Cassation. The applicant company surrendered possession of the properties in 2007.
4. Insolvency proceedings and winding up of the applicant company
19. In separate proceedings, in 2007 Incoms-Telecom Holding AD requested that the applicant company be declared insolvent. Even though the request was not granted until 2011, a trustee for the applicant company was appointed in April 2008. After the liquidation proceedings were completed, the applicant company was wound up by a court judgment of 5 November 2015.
B. Relevant domestic law and practice
1. The Transformation and Privatisation Act and secondary legislation adopted in implementation thereof
20. After 1989, Parliament passed several pieces of legislation providing for the transformation of State-owned enterprises into companies and the privatisation of such companies. The Transformation and Privatisation Act (Закон за преобразуване и приватизация на държавни и общински предприятия) was adopted in 1992. Its section 17a provided in particular that, in the process of transforming a State enterprise, ownership of real estate or other assets that had been used and managed by it should be deemed to pass to the company succeeding it.
21. Privatisation was defined under section 1(3) of the Transformation and Privatisation Act as
“the transfer to private persons or legal entities of
1. shares in companies owned by the State and the municipalities;
2. ownership of entire enterprises, parts of them, assets of liquidated enterprises or properties under construction;
3. State or municipality-owned non-residential properties not included in State or municipally-owned enterprises and used for commercial purposes (such as shops, workshops, warehouses and repair shops).”
22. Pursuant to the Transformation and Privatisation Act and the secondary legislation adopted in the course of its implementation, the stages of a privatisation procedure were as follows: a legal analysis of the property to be privatised was conducted; based on that analysis, the competent authority took a decision to privatise and chose the appropriate method (auction, competition, negotiations); that decision was published in the State Gazette; an independent analysis of the company or assets to be privatised was conducted and the conditions for participation in the auction or competition were announced; the buyers were chosen and a privatisation contract was concluded; and lastly, a specialised body was charged with exercising post-privatisation supervision. The privatisation contract did not need to be concluded before a notary. Such contracts would often contain additional obligations for the buyer, such as the preservation or creation of jobs, or the introduction of measures for environmental protection or to ensure continuation of the privatised company’s activity.
23. Once a decision to privatise had been taken, the company to be privatised was banned from selling or otherwise transferring its fixed assets unless authorised by the body competent to conduct the privatisation (section 21(2) of the Transformation and Privatisation Act).
24. The Regulations on the Exercise of the State’s Property Rights in Enterprises, adopted in 1994 (Правилник за реда за упражняване правата на собственост на държавата в предприятията – “the 1994 Regulations”), were part of the secondary legislation implementing the Transformation and Privatisation Act. Their section 18 provided that fixed assets of State-owned companies could only be sold or transferred to private parties after an auction or a competition (paragraph 1), except where the competent State body had authorised direct negotiations with potential buyers (paragraph 2).
25. In 2002 the Transformation and Privatisation Act was superseded by other legislation.
2. The Obligations and Contracts Act
26. Section 18 of the Obligations and Contracts Act (Закон за задълженията и договорите) requires that all contracts concerning rights in rem should be concluded before a notary (“с нотариален акт”).
27. Section 26(2) of the Act provides that if the appropriate procedure (“предписана от закона форма”) has not been observed, a contract will be null and void. Pursuant to section 34, when a contract is declared null and void, each of the parties is under an obligation to return everything it has received.
28. By section 110 of the Act, except where provided otherwise, all claims lapse after the expiry of five years. Where the claim is for the recovery of something given under a contract which was in fact null and void, the period at issue is considered to start from the moment the contract was concluded (Постановление № 1 от 28.V.1979 г. по гр. д. № 1/79 г., Пленум на ВС; Решение № 172 от 21.03.2011 г. на ВКС по гр. д. № 80/2010 г., IV г. о., ГК; Решение № 100 от 20.06.2011 г. на ВКС по т. д. № 194/2010 г., TК, II т.о.). Limitation periods are not to be applied by the courts of their own motion, but only when an objection has been raised by the interested party (section 120 of the Act).
3. The Property Act
29. Real property can be acquired through adverse possession after either five or ten years of possession, depending on whether the possessor acted in good or bad faith (section 79 of the Property Act – Закон за собствеността). Possession based on a null and void transaction is always considered to have been in bad faith (Постановление № 6 от 27.XII.1974 г. по гр. д. № 9/74 г., Пленум на ВС; Решение № 5268 от 9.07.2013 г. на СГС по гр. д. № 9074/2010 г.).
30. A possessor in bad faith who has been found not to be the owner of a property can claim from the owner the expenses incurred for the property’s upkeep (section 73(2) of the Act). If improvements have been made to the property, he or she can claim the lesser of the amount spent on those improvements and the amount by which the property’s value has augmented as a result (section 74(1)). Where the owner was aware that improvements were being made to the property and did not object, the possessor in bad faith can in any event claim, if higher, the amount by which the property’s value has augmented (section 74(2) in conjunction with section 72(1)). Limitation periods for claiming the value of improvements start to run when a property claim ‒ such as a rei vindicatio claim ‒ is brought, or when the possession of the property at issue is otherwise disturbed (Постановление № 6 от 27.XII.1974 г. по гр. д. № 9/74 г., Пленум на ВС).
COMPLAINT
31. The applicants complained, relying on Article 1 of Protocol No. 1 and Article 13 of the Convention, that the applicant company had been unfairly deprived of the property it had acquired on the strength of the 1997 contract, in particular because at the time it had paid the agreed price in full and had subsequently had no means of recovering it.
THE LAW
32. The Court is of the view that the complaint falls to be examined solely under Article 1 of Protocol No. 1, which 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. Arguments of the parties
1. The Government
33. The Government argued, firstly, that the two individual applicants − even though shareholders in the applicant company − had not been authorised to apply to the Court on its behalf because at the time of lodging the application the insolvency courts had already appointed a trustee for it (see paragraph 19 above).
34. The Government furthermore argued that there had been no violation of Article 1 of Protocol No. 1. They maintained that the applicant company should have known that the 1997 contract was null and void as it had not been concluded according to the statutory requirements. It was not a privatisation contract, as was evident from the fact that it did not fall within the scope of section 1(3) of the Transformation and Privatisation Act, had not been concluded following the complex privatisation procedure provided for in the privatisation legislation, and did not contain any additional obligations for the applicant company such as the ones typical for privatisation contracts. All this meant that the 1997 contract should have been concluded before a notary, as required under section 18 of the Obligations and Contracts Act. This had not been the case, and the applicant company could not reasonably have expected to acquire ownership.
35. In support of their position the Government submitted an excerpt from a legal treatise (Георги Христозов, “Приватизационният договор”, 2000), which distinguished between a privatisation contract, usually relating to entire enterprises or shares in them, and a contract concerning individual properties belonging to a State or municipally-owned company. The conclusion was that, since the latter type of property was transferred by the company itself and not by the State, the respective contract, if it concerned rights in rem, had to be concluded before a notary (p. 17).
36. The Government submitted in addition an article by a legal scholar discussing the validity requirements of contracts concluded under section 18 of the 1994 Regulations (Екатерина Стоянова-Матеева, “Форма за действителност на сделките на разпореждане на вещни права върху недвижими имоти на държавни предприятия – ЕТД по чл. 18 от ПРУПСДП”, сп. Собственост и право, кн. 7/99). The article concluded in particular (on p. 13) that
“there can be no doubt that any transfer of property under section 18 of [the 1994 Regulations] is in fact an ordinary sale or exchange permitting a State-owned enterprise [transformed into] a State-owned company to engage in business transactions and is not an instance of a privatisation sale, in respect of which the special rules [not requiring a contract concluded before a notary] apply.”
In addition (p. 14):
“In conclusion, the foregoing considerations come to show that any [contract concerning] the transfer of property under section 18 of [the 1994 Regulations] needs to be concluded before a notary, in accordance with the general rule of section 18 of [the Obligations and Contracts Act], as otherwise there is a risk of its being declared invalid.”
37. Lastly, the Government opined that, after the initiation of rei vindicatio proceedings against it by Incoms-Telecom Holding AD, the applicant company could nevertheless have attempted to recover the price it had paid under the 1997 contract, despite the likelihood of Incoms-Telecom Holding AD relying on the expiry of the relevant limitation period.
2. The applicants
38. Mr Vidolov and Ms Vidolova’s heirs disputed the Governemnt’s argument that the individual applicants did not have standing to lodge an application on behalf of the applicant company. They pointed out that the trustee appointed in the insolvency proceedings had been selected by the company’s creditors, specifically by Incoms-Telecom Holding AD, and therefore could not adequately represent the company before the Court.
39. Mr Vidolov and Ms Vidolova’s heirs insisted that in 1997 the contract the applicant company had entered into had been a privatisation contract, and that it had accordingly been valid, despite not being concluded before a notary. Relying on the Court’s findings in Velikovi and Others v. Bulgaria (nos. 43278/98 and 8 others, 15 March 2007), they argued that the respondent State, being the owner of Incoms‑Telecom Holding EAD, had been entirely responsible and in control of the preparation of the contract and that the applicant company had been a passive participant in the process, merely “subjecting itself to the procedures, authorisations and decisions taken by State bodies”. They argued also that the respondent State had failed to adopt the legislation necessary for the protection of good faith participants in the privatisation process and that the applicable legislation concerning privatisation had been unclear, had changed often and had been unforeseeable.
40. Mr Vidolov and Ms Vidolova’s heirs considered, in the next place, that it was unjust that the applicant company could no longer recover the price it had paid for the properties due to the expiry of the five-year period, whilst Incoms-Telecom Holding AD could still seek to recover those properties, even if it had acted in bad faith. They contended that this was “inequality based on statute”, which failed to take into account the particular circumstances or the party who bore responsibility for the nullity of the 1997 contract. The situation obtained was thus in breach of Article 1 of Protocol No. 1.
41. Lastly, Mr Vidolov and Ms Vidolova’s heirs claimed that the applicant company had been unable to seek compensation for the improvements it had made to the properties. They argued that in that regard as well, its situation had been similar to that of the applicants in Velikovi and Others (cited above).
B. The Court’s assessment
42. The Court takes note of the Government’s objection that the two individual applicants lacked standing to apply to the Court on behalf of the applicant company, given that in the insolvency proceedings against it the courts had appointed a trustee to represent it (see paragraph 33 above). Mr Vidolov and Ms Vidolova’s heirs contested this argument (see paragraph 38 above). The Court notes in addition that the applicant company has in the meantime been wound up (see paragraph 3 above).
43. Nevertheless, the Court finds that it does not have to decide whether the two individual applicants had standing to apply on behalf of the company, because the application is in any event inadmissible for the reasons set out below.
44. As the Court has stated on a number of occasions, Article 1 of Protocol No. 1 contains three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are not, however, ‘distinct’ in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, among other authorities, Beyeler v. Italy [GC], no. 33202/96, § 98, ECHR 2000‑I).
45. The Court is of the view that the second paragraph of Article 1 of Protocol No. 1 applies to the present case. With regard to this rule, with its specific reference to “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 ...”, the Court has held that there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. States enjoy a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question, in the case at hand the protection of legal certainty (see J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, §§ 55 and 68-70, ECHR 2007‑III). In all cases, the requisite balance will not be achieved if the person concerned has had to bear an individual and excessive burden (see, among other authorities, Brosset‑Triboulet and Others v. France [GC], no. 34078/02, § 86, 29 March 2010, and Béláné Nagy v. Hungary [GC], no. 53080/13, § 115, ECHR 2016).
46. The Court will first address the applicants’ challenge of the domestic law, which provided for a five-year limitation period in respect of the claim by the applicant company to obtain the price it had paid under the 1997 contract, while the other party could recover what it had conferred under the same contract within a much longer period, namely ten years. The applicants described this arrangement as “inequality based on statute”. This situation resulted from the application of the general rules of domestic law, as interpreted by the national courts. The rules provide that all claims lapse after the expiry of five years, and the limitation period for recovering anything conferred under a contract which is deemed to be null and void commences from the moment the contract is concluded (see paragraph 28 above). At the same time, possession based on a contract which is null and void is always considered to have been acquired in bad faith, meaning that the period for acquiring ownership through adverse possession is ten years (see paragraph 29 above).
47. The Court considers that it is not its task to determine in abstracto whether the rules of domestic law described above are reasonable and necessary to guarantee the right of property and the principle of legal certainty. While, in the circumstances of the present case, the application of the above rules resulted in a certain discrepancy in the legal rights of the two parties concerned, this is not sufficient to cause the Court to hold that the respondent State overstepped its margin of appreciation when enforcing laws to control the use of property. Rather, the Court will have to examine all the relevant aspects of the case at hand and decide, on the basis of such an overall assessment, whether the applicant company was made to bear an exceptional and individual burden.
48. The 1997 contract whereby the applicant company bought the properties from Incoms-Telecom Holding AD was found by the national courts to be null and void for two reasons. Firstly, a contract of this type required an express authorisation from the Council of Ministers, but the authorisation obtained on 14 June 1996 for the aforementioned sale was of a general nature and did not specify the properties concerned (see paragraph 15 above). Secondly, the contract at issue had not been concluded before a notary, as required under section 18 of the Obligations and Contracts Act (see paragraph 26 above) since none of the exceptions to that rule applied, in particular the one concerning privatisation contracts (see paragraph 16 above).
49. The Court finds nothing to contradict the Government’s argument (see paragraph 34 above) that the nullity of the contract must have been sufficiently evident at the time of its conclusion. It takes note, in particular, of the reasons given by the domestic courts, as summarised in the preceding paragraph. The contract did not fall within the scope of section 1(3) of the Transformation and Privatisation Act, and did not relate to State or municipally-owned property but property belonging to the company Incoms-Telecom Holding AD. Furthermore, it had not been concluded in accordance with the special procedure provided for in the privatisation legislation, and it did not contain any additional obligations for the buyer of the kind that were typical for privatisation contracts. Taking into account the lack of any judicial decision taking the opposite view and the consensus on the part of legal scholars (see paragraphs 35-36 above), the conclusion that the contract at issue was not a privatisation contract and that the general rules on transfer of property therefore applied to it could not be judged to be unforeseeable and certainly not arbitrary.
50. Accordingly, the Court is of the view that, when it entered into the aforementioned contract in 1997, the applicant company should have been aware of the possibility of the contract’s being declared null and void, with all the consequences that this could entail − based on the well-established case-law of the domestic courts − such as a five-year limitation period running from 1997 for the applicant company to seek recovery of the price it had paid, the application to it of the ten-year period of adverse possession, and the possibility for Incoms-Telecom Holding AD successfully to claim back the properties before the expiry of this period. The applicant company thus took a risk which eventually materialised.
51. In arguing that Article 1 of Protocol No. 1 had been breached in their case, Mr Vidolov and Ms Vidolova’s heirs relied also on the Court’s findings in the case of Velikovi and Others (see paragraph 39 above). However, this judgment concerned a different issue – namely the effects of breaches of law committed in the course of the sale by the authorities of flats to private individuals. The Court only found violations of Article 1 of Protocol No. 1 in those cases where the applicants had been deprived of their flats due to minor breaches of the administrative procedure at the time of purchase for which they were not responsible (such as some of the relevant documents not having been signed by the official in whom the relevant authority had been vested but instead by a deputy), or where the national courts had interpreted the applicable legislation in an overly extensive manner (see §§ 217-28 and 236-49 of the judgment cited above). By contrast, the present complaint is set in a completely different legislative and factual context. It does not concern the sale of property by a public authority to private individuals but rather the sale of property by a company, albeit a publicly-owned one, to another company. It concerns a business-to-business transaction, with the requisite demand for due diligence on both sides. The applicant company, which should have had all the relevant information and, if necessary, could have obtained appropriate legal advice, should have assessed the validity of the proposed contract and its possible consequences. In fact, particularly with respect to the requirement that the sale be executed before a notary, the present case is more akin to those cases examined in Velikovi and Others in which the Court did not find violations of Article 1 of Protocol No. 1, concluding that the applicable rules had been breached in such an obvious way that the applicants could not have been unaware of those breaches (see §§ 204-16 of the judgment).
52. The Court is also not convinced that the applicant company had to bear an excessive individual burden on account of the lack of remedies in response to the alleged nullity of the sales contract. Despite the high likelihood of Incoms‑Telecom Holding AD relying on the expiry of the relevant limitation period, the applicant company could still have attempted to recover the price it had paid in 1997, since limitation periods may not be applied by the courts of their own motion (see paragraph 28 above in fine). In any event, the price which the applicant company paid when buying the properties, and would have been prevented from claiming back if Incoms‑Telecom Holding AD had objected that the claim was time-barred, was relatively small. The price the applicant company paid in 1997 equalled EUR 22,000, while the properties’ value in December 2016, according to Mr Vidolov and Ms Vidolova’s heirs, was EUR 2,610,900 (see paragraphs 11-12 above).
53. More importantly, the applicant company could have sought from Incoms-Telecom Holding AD compensation for the improvements it had made to the properties after buying them in 1997. While Mr Vidolov and Ms Vidolova’s heirs did not specify the value of those improvements, the significant difference between the price paid by the applicant company in 1997 and the value of the properties in 2016 suggests that the value of those improvements was, at the least, not negligible. Mr Vidolov and Ms Vidolova’s heirs argued that the applicant company did not have a remedy at its disposal to claim compensation for the improvements (see paragraph 41 above). Contrary to what they claimed, however, domestic law authorised the applicant company to seek such compensation and could even compare its situation for that purpose to that of a possessor in good faith if the applicant company could show that Incoms‑Telecom Holding AD was aware of and did not object to the improvements (see paragraph 30 above). Moreover, the limitation period for claiming compensation for the improvements must have started running in 2003, when a rei vindicatio action was brought against the applicant company (ibid.). The Court notes in that respect that in Velikovi and Others the possibility for the applicants to seek such compensation was precluded by a binding interpretative decision of the Supreme Court (see § 141 of the judgment cited above), an impediment which was not present in the applicant company’s case. It has not been shown that there was any other reason why the applicant company was unable to seek compensation for the improvements it had made. It could have done that soon after it became aware of Incoms‑Telecom Holding AD’s claims against it, without having to await the outcome of the ensuing proceedings.
54. Accordingly, the Court concludes that the nullity of the contract which the applicant company entered into was based on legal provisions which were in force well before its conclusion, and that this nullity and the resulting consequences were foreseeable. Moreover, after becoming aware of Incoms‑Telecom Holding AD’s claims against it, the applicant company could have claimed compensation for the improvements it had made, which apparently accounted for a part of the properties’ value. Therefore, despite any disadvantage the applicant company might have suffered, the Court considers that it was not made to bear an exceptional individual burden contrary to its rights under Article 1 of Protocol No. 1.
55. For these reasons, the Court concludes that the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 18 January 2018.
Milan BlaškoAngelika Nußberger
Deputy RegistrarPresident
Full & Egal Universal Law Academy