FIRST SECTION
DECISION
Application no. 1680/08
LUBELSKA FABRYKA MASZYN I NARZĘDZI ROLNICZYCH ‘PLON’ against Poland
and 2 other applications
(see list appended)
The European Court of Human Rights (First Section), sitting on 3 October 2017 as a Chamber composed of:
Linos-Alexandre Sicilianos, President,
Kristina Pardalos,
Aleš Pejchal,
Krzysztof Wojtyczek,
Armen Harutyunyan,
Tim Eicke,
Jovan Ilievski, judges,
and Abel Campos, Section Registrar,
Having regard to the above applications lodged on the various dates indicated in the appended table,
Having deliberated, decides as follows:
THE FACTS
1. A list of the applicants is set out in the appendix.
A. The circumstances of the cases
2. The facts of the cases, as submitted by the applicants, may be summarised as follows.
1. Background
3. On 3 January 1946 the State National Council (Krajowa Rada Narodowa) passed the Law on the nationalisation of basic branches of the State economy (Ustawa o przejęciu na własność Państwa podstawowych gałęzi gospodarki narodowej – “the 1946 Act”, see paragraph 46 below). It provided for the nationalisation of enterprises from seventeen branches of industry, regardless of their size. In addition, it concerned all enterprises capable of employing in production more than fifty people on one shift. Owners of the nationalised enterprises were to receive compensation, the amount of which was to be determined by special commissions at a later stage pursuant to a Cabinet ordinance yet to be enacted (see paragraph 47 below). Only enterprises that belonged to German citizens and people who had defected to the enemy were to be taken over by the State without payment of compensation (see paragraph 45 below).
4. The applicants in the first two cases are limited liability companies and the applicants in the third case are heirs of the former owner of a textile mill. All three enterprises were nationalised pursuant to section 3(1) and (5) and section 6(1) of the 1946 Act (see paragraph 46 below). The decisions were given by the Minister for Industry and Trade (Minister Przemysłu i Handlu) on the dates stated below and published in the Official Gazette (Monitor Polski).
2. Application no. 1680/08
5. The applicant company was established in 1937 and registered in the companies register at the Warsaw Regional Court under the name Lubelska Fabryka Maszyn i Narzędzi Rolniczych “Plon”. In 1942 its registered office was transferred to Lublin. In 1945 its assets included a factory building and more than 2.5 hectares of land in Lublin. Until 1947 it manufactured agricultural machinery and farming equipment.
6. On 24 June 1947 the company was nationalised by virtue of a decision of the Minister for Industry and Trade (“the 1947 decision”), which was published in Official Gazette no. 96 of 11 July 1947.
(a) Proceedings for the annulment of the 1947 decision
7. On 24 November 2002 K.Z., an heir of J.Z., one of the former shareholders of the nationalised company, applied to the Minister for Economy (Minister Gospodarki) for the 1947 decision to be declared null and void. He was informed that only the company’s governing body could act for the company. Since by that time all members of the managing board had died, a guardian had to be appointed. On 16 April 2004 the court‑appointed guardian lodged a new application.
8. On 15 September 2004, at a general meeting of the company’s shareholders, it was decided that a winding-up procedure should be initiated and K.Z. was appointed as a provisional liquidator.
9. On 8 June 2007 the Minister for Economy refused the application of 16 April 2004, noting firstly that the enterprise in question had been nationalised pursuant to section 3(1)B of the 1946 Act, which provided that industrial enterprises capable of employing in production more than fifty people on one shift were to be taken over by the State. Capability of employing was to be understood as meaning “the actual capability of employing” on 5 February 1946, the date of entry into force of the 1946 Act, taking into consideration the manufacturing machinery available. However, on the basis of the existing documents, the Minister was unable to establish whether the factory had been capable of employing more than fifty people on one shift. For that reason, the Minister obtained an expert report determining the enterprise’s potential employment capacity on one shift. It emerged from that report that the enterprise’s actual employment capacity at the material time had been 255 people on one shift. The Minister endorsed those findings and concluded that the nationalisation of the company had been lawful, as under section 3(1) B of the 1946 Act it could be effected in respect of enterprises employing a minimum of fifty people on one shift (see paragraph 46 below).
10. The applicant company applied for the matter to be reconsidered, but on 27 September 2007 the Minister upheld the original refusal, referring to the reasons given previously. It further held that the 1947 decision had not been issued in breach of the law and remained valid.
11. On 31 October 2007 the applicant company challenged the above decision on procedural grounds before the Warsaw Regional Administrative Court (Wojewódzki Sąd Administracyjny).
12. On 29 February 2008 the court dismissed the applicant company’s appeal, holding that the 1947 decision had not been issued in breach of the law.
13. On 18 June 2009 the Supreme Administrative Court (Naczelny Sąd Administracyjny) dismissed a cassation appeal by the applicant company.
(b) The applicant company’s claim for compensation for legislative omission
14. On 28 April 2004 the applicant company lodged a claim with the Warsaw Regional Court seeking compensation (8,000,000 Polish zlotys) for the State’s failure to issue the relevant ordinance pursuant to section 7(2) and (5) of the 1946 Act. The claim was based on Article 77 of the Constitution and Article 417 of the Civil Code (see paragraphs 49 and 53 below). The applicant company subsequently changed the legal basis for its claim to Article 4171 § 4 of the Civil Code (see paragraph 51 below). It submitted that the State’s tortious liability for legislative omission had arisen before 1 September 2004 and continued after that date.
15. On 30 May 2006 the Warsaw Regional Court dismissed the applicant company’s claim. It noted that pursuant to section 7 of the 1946 Act owners of nationalised enterprises were to receive compensation within one year of the date on which a notice of final determination of compensation was served. The compensation was to be in the form of securities and, in exceptional cases, also in cash or other values. The amount was to be determined by special commissions. Despite the fact that the 1946 Act contained a clear delegation of legislative powers (delegacja ustawowa), a special ordinance had never been enacted. For those reasons, the commissions had never been formed and the compensation could not have been determined. The impugned legislative omission had occurred in 1946 or 1947 at the latest. In support of that approach the court referred to the Supreme Court’s resolution of 24 November 2005 (see paragraph 54 below). It also observed that in 1946 and 1947 the Cabinet had enacted other ordinances to implement different provisions of the 1946 Act.
16. The court further stressed that the law applicable at the time when the legislative omission had occurred had not imposed tortious liability on the State. That situation had not changed when the Civil Code had entered into force in 1965. Consequently, before the date of entry into force of the Constitution the State had not been liable for legislative omission. The situation had not changed after that date since Article 77 of the Constitution could not be considered an independent basis for vindicating that type of claim. The plaintiff’s claim could have been based on Article 4171 of the Civil Code since that provision concerned the State Treasury’s tortious liability for failure to enact legislation. However, section 5 of the 2004 Amendment Act precluded its application in respect of all events and legal situations that had subsisted before 1 September 2004 (see paragraph 52 below). In the present case, the impugned legislative omission had occurred by the end of 1947 at the latest. It was true that it had continued since, however, in deciding which legal provisions were applicable, regard had to be had to the date when the legal situation had begun and not whether it had continued. Consequently, since Article 4171 of the Civil Code had not been introduced until 1 September 2004, it did not apply to events and situations that had subsisted before its entry into force.
17. On 2 February 2007 the Warsaw Court of Appeal dismissed an appeal by the applicant company, referring to the same grounds as the Regional Court. It held that the obligation to enact an ordinance pursuant to section 7 of the 1946 Act had arisen at the time when that Act had entered into force and the legislative omission had occurred by the end of 1947 at the latest, by which time other ordinances had been enacted. However, the legislative omission could not have given rise to the State’s tortious liability since that liability had not been introduced until 1 September 2004.
18. On 5 December 2007 the Supreme Court, sitting as a bench of three judges, dismissed a cassation appeal by the applicant company. It observed at the outset that the main issue in the case was whether the State Treasury was liable pursuant to Article 4171 of the Civil Code for damage caused after 1 September 2004 by failure to enact a legal act, if such an obligation was provided by section 7 of the 1946 Act and the State authority had failed to comply with it even after 1 September 2004.
19. The Supreme Court held that there was no doubt that under section 7 of the 1946 Act the Cabinet had been obliged to enact an ordinance. It was further not contested by the parties’ that that duty had not been complied with.
20. In its reasoning the Supreme Court had regard to the following. Firstly, until 17 October 1997, the date of entry into force of the Polish Constitution, the law had not imposed liability on the State Treasury for damage caused by legislative omission. Secondly, Article 77 § 1 of the Constitution (see paragraph 53 below) should have been interpreted narrowly, so that the State was liable only for “an act” and not “failure to act”. Consequently, there was no constitutional right to compensation for legislative omission. Thirdly, the legislature had introduced Article 4171 § 4 to the Civil Code in order to tighten the rules governing the State’s civil liability. Fourthly, section 5 of the 2004 Amendment Act unequivocally precluded the application of Article 4171 § 4 in respect of events and legal situations that had subsisted before 1 September 2004. Fifthly, the State was liable for legislative omission only if there was a legal duty to enact (under an act or the Constitution). Such an obligation could not be derived from judicial interpretation. Sixthly, there was no legislative omission if the legislature had enacted a law but it was incomplete or flawed. Lastly, the State’s civil liability for damage caused by legislative omission arose only when there was a direct causal link (adekwatny związek przyczynowy) between the legal provision and the (legislative) omission.
21. The court concluded essentially reiterating the grounds stated in the 2005 Resolution (see paragraph 54 below) that the impugned legislative omission had occurred in 1946 or 1947 at the latest and had continued since. However, Article 77 § 1 of the Constitution could not be considered a legal basis for a claim deriving from an “omission” by public authorities since that provision clearly only covered their “acts”. The provisions of Article 4171, enabling a plaintiff to seek compensation for legislative omission, had only been introduced on 1 September 2004, by virtue of the 2004 Amendment Act. The terms of section 5 of that Act were unambiguous: Article 4171 of the Civil Code did not apply to events and situations that had subsisted before its entry into force. Consequently, its operation was precluded in respect of legislative omissions that originated in facts that had occurred earlier, even if that state of affairs continued to exist to the present day.
3. Application no. 3117/08
22. The applicant company was established in 1928 and registered in the companies register at the Sanok Regional Court under the name “Oterna” Przedsiębiorstwo Naftowe Sp. z o. o. Its assets included the “Ryszoldo” crude oil mine in Turzepole and leased petroleum fields. Until 1947 it carried out the activities described in its articles of association, namely searching for potential underground crude oil, natural gas fields and other minerals, drilling exploratory wells, constructing and operating workshops, constructing and operating refining facilities and carrying out all other activities related to the petroleum industry.
23. On 17 June 1947 the company was nationalised by virtue of a decision of the Minister for Industry and Trade (“the 1947 decision”), which was published in Official Gazette no. 90 of 30 June 1947.
(a) Proceedings for the annulment of the 1947 decision
24. On 16 September 1999 the Minister for Economy refused an application by the applicant company for the 1947 decision to be declared null and void. The applicant company applied for the matter to be reconsidered, but on 28 October 1999 the Minister upheld the original refusal. The applicant company appealed against that decision.
25. On 1 August 2001 the Supreme Administrative Court quashed the decision of 28 October 1999 on procedural grounds.
26. On 19 February 2002 the Minister for Economy once again refused to declare the 1947 decision null and void. The Minister examined the documents available and concluded that the applicant company had been nationalised in accordance with the applicable legal provisions in force at the material time. In so far as the applicant company alleged that it had not received any compensation, the Minister noted that nationalisation was not conditional upon payment of compensation. Compensation for nationalised property was to be paid later, after expropriation. The procedure for payment and the amount was to be regulated by means of secondary legislation enacted at a later stage. However, to the present day no legal provisions on the matter had been enacted.
27. On an unknown date the applicant company challenged the above decision before the Warsaw Regional Administrative Court.
28. On 21 January 2004 it dismissed the applicant company’s complaint, finding that the 1947 decision remained valid as it had not been issued in breach of the law. It further held that the fact that the applicant company had not received any compensation for the nationalised property did not mean that the 1947 decision had been null and void.
29. The judgment was upheld by the Supreme Administrative Court on 15 July 2004.
(b) The applicant company’s claim for compensation and registration proceedings
30. On 31 August 2007 the applicant company, acting through its guardian, lodged a claim with the Warsaw Regional Court seeking compensation for the State’s failure to issue the relevant ordinance pursuant to section 7(2) and (5) of the 1946 Act.
31. On 11 April 2008 it rejected the claim on procedural grounds on the basis that a guardian could not act in a company’s name if there were shortcomings in the composition of its governing bodies.
32. Following an appeal, the court set several additional time-limits in order to amend the composition of the applicant company’s governing bodies.
33. On 8 July 2010 it discontinued the proceedings on the grounds that the applicant company failed to submit an excerpt from the companies register.
34. On 2 December 2010 the applicant company applied to amend the companies register. The proceedings were terminated by the Rzeszow Court of Appeal on 3 November 2011.
35. The applicant company submitted that in view of the consistent case-law of the Supreme Court and, in particular, the judgment given in the first case (see paragraph 18 above), a civil claim for compensation had lacked any prospects of success.
4. Application no. 46309/13
36. The applicants’ predecessor owned a textile mill in Pabianice. In 1945 the business consisted of a factory building of 8,607.93 sq. m. and weaving machinery, including numerous power looms (between fifty and eighty, according to various documents). Shortly before the Second World War the factory operated under the name Karol Post Mechaniczna Tkalnia Zarobkowa Pabianice.
37. On 13 February 1948 the company was nationalised by virtue of a decision of the Minister for Industry and Trade (“the 1948 decision”).
38. On 16 March 1992 the applicants applied to the Minister for Economy for the 1948 decision to be declared null and void.
39. On 8 September 2010 the Minister for Economy refused the applicants’ application of 16 March 1992. The Minister held that, according to the documents available, in particular an inventory dated 23 September 1950, the textile mill had had eighty power looms. Pursuant to a Cabinet ordinance of 24 October 1946 cotton textile mills which had more than twenty-four power looms were to be considered “large and medium-sized textile industry”. Consequently, the applicants’ property had been taken over in accordance with the law as applicable at the material time and the 1948 decision remained valid.
40. The applicants applied for the matter to be reconsidered. They relied in particular on the provisions of the Constitution and Article 1 of Protocol No. 1 to the Convention, complaining that they had not received any compensation for the nationalised property.
41. On 29 December 2010 the Minister for Economy upheld its previous decision, referring to the grounds already given. The Minister further noted that, under the relevant provisions of the Code of Administrative Procedure, it could only examine the validity of the decision.
42. On 17 May 2011 the Warsaw Regional Administrative Court gave judgment and dismissed an appeal by the applicants. The court held that the 1948 decision had been issued in accordance with the law. In so far as the applicants alleged that they had not received any compensation, the court stressed that under the 1946 Act nationalisation was not conditional upon payment of compensation. Compensation for nationalised property was to be paid later and determined by special compensation commissions. The composition of the commissions, the rules for the appointment of their members and the rules of procedure were to be determined by an ordinance issued by the Cabinet. However, to the present day the Cabinet had not yet issued an ordinance on the organisation of the compensation commissions and the determination of compensation referred to in section 7(4) and (6).
43. On 27 February 2013 the Supreme Administrative Court dismissed a cassation appeal by the applicants. It reiterated the findings made by the Regional Court and confirmed that the 1948 decision had been given in accordance with the law. The judgment was served on the applicants’ lawyer on 20 May 2013.
B. Relevant domestic law and practice
1. The 1946 Act
44. Following the establishment of the communist regime in Poland nearly all branches of industry, as well as banking, insurance, transport and commercial companies were taken over by the State under the 1946 Act. Section 1 stated that the purposes of nationalisation were as follows:
“In order to ensure the planned rebuilding of the State economy, the economic sovereignty of the State and to foster general well-being, the State shall take over ownership of enterprises under the conditions laid down in this law.”
45. Pursuant to section 2(1), only those industrial, mining, transport, banking, insurance and commercial enterprises that belonged to the Third Reich and the former Free City of Gdańsk, their citizens (except for those of Polish or other nationalities who had been persecuted by the Germans), German and Gdańsk legal entities (except for those set up under public law), companies controlled by German or Gdańsk citizens or administration or those owned by persons who had defected to the enemy were to be taken over by the State without payment of compensation.
46. Section 3(1) of the 1946 Act (as amended) states that the owners of the remaining enterprises were to be compensated for their nationalised property. The relevant part of the provision reads as follows:
“1. The State shall compensate [owners] for taking over ownership of the following:
A. Mining and industrial enterprises in the following sectors of the State economy:
(1) mines and mining leases subject to mining law;
(2) [the] oil and gas industry, including mines, refineries, gasoline production and other processing plants, gas pipes and [the] synthetic fuel industry;
(3) companies that generate, process, transmit or distribute electricity ...;
(4) companies that generate, process, transmit or distribute gas ...;
(5) water supply companies serving more than one municipality ...;
(6) steelworks and non-ferrous metals smelting plants;
(7) [the] arms, aviation and explosives industry;
(8) coking plants;
(9) sugar factories and refineries;
(10) industrial distilleries, spirit refineries and vodka production plants;
(11) breweries with an annual output exceeding 15,000 hectolitres;
(12) yeast production plants;
(13) grain plants with a daily output exceeding 15 tonnes of grain ...;
(14) oil plants with an annual output exceeding 500 tonnes and all refineries of edible fats;
(15) cold stores;
(16) large and medium-sized textile industry;
(17) [the] printing industry and printing houses;
...
B. Industrial enterprises not listed in subsection “A” if they are capable of employing in production more than fifty persons on one shift.
...
C.
(1) Transport enterprises (standard gauge and narrow-gauge railways, electric railways and aviation transport enterprises);
(2) Communication enterprises (telephone, telegraph and radio enterprises).”
47. Section 7 lays down the general principles for the payment of compensation for nationalised property. The relevant parts state as follows:
“1. The owner of an enterprise whose ownership has been taken over by the State (section 3) shall receive compensation from the State Treasury within one year of the date on which a notice of final determination of the amount of compensation is served on him.
2. Such compensation shall in principle be paid in securities; however, in exceptional and economically justified cases it may also be paid in cash or other values.
3. The amount of compensation due shall be determined by special commissions. The persons concerned shall have the right to participate in proceedings before those commissions. If need be and in any event if requested to do so by the persons concerned, the commission shall appoint appropriate experts.
4. The composition of the commissions, the rules for the appointment of their members, the quorum, the rules of procedure before the commissions and rules for appealing against their decisions shall be determined by an ordinance issued by the Cabinet.
5. The following factors shall be taken into account in determining compensation:
(a) general deterioration of the value of the State property;
(b) the net value of the commercial property on the date of nationalisation;
(c) deterioration of the value of the enterprise caused by war losses or losses incurred by the enterprise in connection with the war and occupation in the period from 1 September 1939 to the date of nationalisation;
d) the amount of expenditure after 1 September 1939;
e) special circumstances affecting the value of the enterprise (concession terms, licences etc.).
6. A Cabinet ordinance shall determine detailed rules governing the calculation of compensation, assessment of the circumstances listed in subsection 5 and means of payment of compensation (subsection 2) and depreciation of securities.”
48. Pursuant to section 10, the Cabinet and the relevant Ministers are entrusted with the implementation of the 1946 Act. However, from 5 February 1946, the date of entry into force of the 1946 Act, to the present day the Cabinet have not issued an ordinance on the organisation of the compensation commissions and the determination of compensation referred to in section 7(4) and (6).
2. The State’s liability in tort
(a) Provisions of the Civil Code applicable from 10 October 1994 to 1 September 2004
49. Articles 417 et seq. of the Civil Code provide for the State’s liability in tort. In the version applicable until 1 September 2004, Article 417 § 1, which lays down a general rule, read as follows:
“The State Treasury shall be liable for damage caused by a State official in the performance of the duties entrusted to him.”
(b) Provisions of the Civil Code applicable from 1 September 2004
50. On 1 September 2004 the Law of 17 June 2004 on amendments to the Civil Code and other statutes (Ustawa o zmianie ustawy – Kodeks cywilny oraz niektórych innych ustaw − “the 2004 Amendment Act”) entered into force. The relevant amendments were in essence aimed at widening the scope of the State Treasury’s liability in tort under Article 417 of the Civil Code, including the addition of a new Article 4171 and provision being made for the State’s tortious liability for failure to enact legislation, a concept known as “legislative omission” (zaniechanie legislacyjne).
51. Following the 2004 Amendment Act, the relevant part of Article 4171 § 4, reads as follows:
“If damage has been caused by failure to enact a law [akt normatywny] where there is a statutory duty to do so, the incompatibility of the failure to enact that law shall be established by the court dealing with the claim for compensation.”
52. However, under the transitional provisions of section 5 of the 2004 Amendment Act, Article 417 as applicable before 1 September 2004 applies to all events and legal situations that subsisted before that date.
(c) Constitutional tort
53. The concept of the State’s civil liability for a constitutional tort was introduced into the Polish legal order on 17 October 1997, the date of entry into force of the 1997 Polish Constitution. The relevant part of Article 77 § 1 of the Constitution states as follows:
“Everyone shall have the right to compensation for any harm done to him by any act of a public authority in breach of the law.”
(d) The Supreme Court’s case-law on compensation for legislative omission in nationalisation cases
(i) Resolution of 24 November 2005 (no. III CZP 82/05)
54. In its resolution of 24 November 2005 (“the 2005 Resolution”), the Supreme Court, sitting as a bench of three judges, dealt with the following legal questions submitted to it by the Warsaw Court of Appeal:
“Is the State Treasury liable for damage caused by failure to enact a law if the duty to enact that law, laid down in section 7(4) and (6) of [the 1946 Act] was not fulfilled until the date of entry into force of [the 2004 Amendment Act], and, if so,
when should this duty have been performed and did compensation for failure to enact the above law correspond to unreceived compensation for the enterprise nationalised by the State, determined in accordance with the principles laid down in section 7(2) and (5) of [the 1946 Act]?”
55. The question arose in the context of a case brought by a certain E.K., who sought compensation for the nationalisation of her family’s printing house and, as a basis for her claim, invoked Article 4171 of the Civil Code, relying on the State’s legislative omission consisting of its failure to issue the relevant ordinance. The Supreme Court’s answer in the operative part of the resolution reads:
“Until the date of entry into force of [the 2004 Amendment Act] the Cabinet’s failure to issue an ordinance pursuant to section 7(4) and (6) of [the 1946 Act] did not constitute a basis for a claim by an owner of a nationalised enterprise for compensation for [nationalisation].”
56. The resolution contains extensive reasoning, the main thrust of which reads as follows:
“[As regards the timeframe for the issue of the ordinance], the determination of the beginning of that situation carries with it a certain element of arbitrariness since [the 1946 Act] does not lay down any term within which the ordinance referred to in section [7](4) and (6) should be issued. Assuming that in general the absence of a term is tantamount to a duty to enact a law without undue delay, it can be considered that the discharge of the statutory authorisation, assuming the existence of willingness of the authorised body (the Cabinet) should have taken place in 1946 or 1947 at the latest. This is supported by the fact that the Cabinet issued ordinances implementing other provisions (including section 2(7) of the Act, a fundamental provision for the interest of the State).
[As regards the State’s civil liability for legislative omission], ... it should be concluded that before the entry into force of the 1997 Constitution the State had not been liable under civil law for the consequences of its legislative inactivity ...
17 October 1997, marking the entry into force of the Constitution, is the relevant date as its constitutes the beginning of the existence in the legal order of, inter alia, Article 77 § 1 of the Constitution, proclaiming the right of “everyone” to compensation for any harm done to him by any act of a public authority in breach of the law ...
Assuming that Article 77 § 1 does not contain a provision making it possible to draw from it a direct basis for a claim for compensation for the legislature’s inactivity, it must be said that the rules for the State’s liability in the sphere of law-making should be established by means of an ordinary statute, determining in a more detailed manner than the Article 77 §1 premises for an effective claim ...
Article 4171 § 4 of the Civil Code, as introduced by [the 2004 Amendment Act], satisfies the requirement of detailed premises. The relevant temporal consequences are clearly set out in section 5, evidently indicating the prospective operation of Article 4171 § 4 of the Civil Code. A formulation laying down the non-retroactive nature of the provision is telling in that it refers to “events and legal situations that subsisted before its entry into force” ... In consequence, the assessment of the effects of legislative omission subsisting before 1 September 2004 was governed by [earlier provisions]. The relevant Article 417, in the version before the amendment, did not include legislative omission as it was based on a completely different premise, namely, the absence of the State’s civil liability for the legislature’s acts ...”
(ii) Resolution of 6 July 2006 (no. IIICZP 37/06)
57. On 6 July 2006 the Supreme Court, sitting as a bench of three judges, adopted a resolution in reply to a legal question submitted by the Warsaw Court of Appeal. It held in particular that legislative omission causing the State’s liability for damage only occurred when a legal act had not been enacted despite an obligation arising from a legal provision (the Constitution or another act). However, that obligation had to be expressed in a clear and unequivocal manner, excluding the possibility of it having to be determined in the process of judicial interpretation; such practice could be considered an interference with the legislature’s competences.
(iii) Resolution of 19 May 2009 (no. III CZP 139/08)
58. In a resolution of 19 May 2009 the Supreme Court, sitting as a bench of seven judges, dealt with the following legal question submitted by the Ombudsman:
“Is the State Treasury liable for damage caused by legislative omission, if the legislature’s inactivity subsisted before 1 September 2004?”
The Ombudsman argued in his pleadings that judicial practice on the matter was unclear. The Supreme Court’s answer in the operative part of the resolution reads as follows:
“The State Treasury is liable for damage caused by failure to enact a legal act, if the obligation to enact that act arose after the date of entry of the Polish Constitution [17 October 1997].”
59. The Supreme Court referred to its 2005 resolution, noting that that approach had been endorsed in its subsequent judgments of 13 April 2007 (no. ICSK 488/06) and 5 December 2007 (no. ICSK 273/07) (see paragraph 18 above). In the latter case the court also held that Article 77 § 1 of the Constitution could not be considered a legal basis for a claim deriving from an “omission” by public authorities. A similar approach was adopted in a judgment of 5 September 2008 (no. I CSK 41/08). The court concluded that it was irrelevant when the damage actually happened or whether it had increased in time, but if the legislative omission occurred before 1 September 2004, Articles 417 and 4171 of the Civil Code could not be relied on.
(e) The Constitutional Court’s case-law on compensation for legislative omission in nationalisation cases
60. The Constitutional Court (Trybunał Konstytucyjny) on many occasions confirmed that a situation occurring before the entry into force of the Constitution could not be a basis for a claim under Article 77 § 1 for compensation for the unlawful action of a public authority. In particular, the Court gave such a ruling in judgments of 23 September 2003 (K 20/02), 1 September 2006 (SK 14/05) and 8 December 2009 (SK 34/08), as well as in decisions of 9 June 2010 (Ts 308/08) and 16 November 2010 (Ts 308/08).
61. On 13 June 2011 the Constitutional Court heard a constitutional complaint lodged by the company Elektrownia w Kielcach spółka akcyjna, challenging the constitutionality of section 5 of the 2004 Amendment Act in so far as it precluded the application of Article 4171 of the Civil Code in situations that had subsisted before the entry into force of the Amendment Act on 1 September 2004. The claimant invoked, in particular, Article 77 § 1 (right to compensation for the unlawful action of a public authority) read in conjunction with Articles 2 (rule of law), 64 §§ 1 and 2 (right of ownership) read in conjunction with Article 21 §§ 1 and 2 (protection of ownership) and Article 32 § 1 (equality before the law) and Article 45 § 1 (right of fair trial) of the Constitution.
62. The relevant part of the Constitutional Court’s decision (no. SK 26/09) reads as follows:
“4.7. ...The Constitutional Court held that the authorisation included in section 7 of the [1946 Act] not only referred to a regulation in a legal act (akt podstawowy) of the fundamental guarantees of property law which – in accordance with current constitutional standards – could not be accepted but also did not include any instructions as to the content of an ordinance which was to be enacted more than 60 years ago. Consequently, in the light of the provisions of the Constitution it is difficult to assume that non-fulfilment of the duty to enact an ordinance on compensation for nationalised property derived from [the 1946 Act] amounted to “[an] unlawful action of a public authority” for which the Constitution imposes liability on the State. Even if the state of legislative omission still persists, it should at the same time be concluded that the duty is non-enforceable. Thus, it is evident that on the basis of the laws applicable only a statute could regulate compensation for the claimant’s nationalised property. Even so, potential validation (konwalidacja) of section 7 of the [1946 Act] authorising the enactment of an ordinance would have required a statute. The Constitutional Court is not competent to authorise this. Accordingly, the Constitutional Court considers that the assumption that an “unlawful” legislative omission still continues is unwarranted, particularly after the entry into force of the Constitution, and in the light of the standards therein. Moreover, in view of the declaratory nature of that authorisation it is not possible to conceive what criteria the [civil] court should use today to determine the amount of compensation due to former owners of property nationalised in 1946. In summarising this part of the analysis, the Constitutional Court considered that declaring section 5 of the Amendment Act unconstitutional in so far as it precluded the application of the amended provisions of the Civil Code in situations which concerned a failure to enact an ordinance and which arose in the pre-constitutional period and which also continued after the Amendment Act entered into force (the direct application of a new statute) would not have changed the legal situation of the applicant in the desired sense. In the light of current constitutional standards, it is difficult to accept that the duty imposed on the Cabinet by section 7 of the 1946 Act has any legal effect. Consequently, it could not be established that there was an “unlawful action of a public authority” within the meaning of Article 77 § 1 of the Constitution.
On a passing note, the Court noticed that in reality the only temporal rule which would have satisfied the applicant, that is would have given rise to compensation, would have had to be phrased: anyone who has suffered damage as a result of a failure to enact a legal act, notwithstanding when it has occurred and notwithstanding the existence of a current obligation to enact a legal act, may request [the damage] to be redressed in accordance with the new provisions, namely Article 417 1 § 4 of the Civil Code. A legal rule of this content would not only be contrary to the rule lex retro non agit, but would also appear to be unacceptable to the rational legislator. It is also absolutely clear that such far-reaching State liability could not be derived from Article 77 § 1 of the Constitution, which was also demonstrated above in section 4.2. The Constitutional Court stresses that section 5 of the Amendment Act forms part of the legal system and is meant to introduce new civil law provisions into that system. These provisions, on the other hand, were meant to fulfil the legislator’s wish expressed in Article 77 § 1 of the Constitution. Section 5 of the Amendment Act must respect the rules of constitutional order from which it derives its strength. It cannot therefore be given another meaning which would allow it to achieve objectives not provided for by the Constitution.”
3. Code of Administrative Procedure
63. Article 156 § 1 of the Code of Administrative Procedure (“the CAP”) (Kodeks postępowania administracyjnego) sets out the grounds on which a final administrative decision may be annulled:
“1. A public administration authority shall declare a decision null and void if:
(1) it has been issued in breach of the rules governing competence;
(2) it has been issued without legal basis or in flagrant breach of the law;
(3) concerns a case already decided by means of another final decision;
(4) it has been addressed to a person who is not a party to the case;
(5) it was unenforceable on the date of its issuance and its unenforceability is of a permanent nature;
(6) it would give rise to a punishable offence in the event that it has been enforced;
(7) it has a flaw making it null and void by the force of law.”
64. There is no time-limit for a party to lodge a request to have an administrative decision declared null and void under Article 156 § 1.
65. Article 160 sets out the principles for compensation for loss caused by the issuance of an administrative decision subsequently annulled on the grounds listed in Article 156 § 1.
66. It was repealed by the 2004 Amendment Act with effect from 1 September 2004 (see also paragraph 50 above) and replaced by new Article 4171 § 2 of the Civil Code. However, under section 5 of the 2004 Amendment Act, which sets out transitional rules, Article 160, in the version applicable on the repeal date, still applies to “events and legal situations” that subsisted before the entry into force of the 2004 Amendment Act.
4. Legislative initiatives concerning restitution and compensation for property taken under the communist regime
67. In September 1999 the Government introduced in Parliament the Bill on the restitution of immovable property and certain kinds of movable property taken from natural persons by the State or by the Warsaw Municipality, and on indemnities (Projekt ustawy o reprywatyzacji nieruchomości i niektórych ruchomości osób fizycznych przejętych przez Państwo lub gminę miasta stołecznego Warszawy oraz o rekompensatach).
68. It provided for two forms of restitution, namely restitution in natura or indemnity in the form of securities, with regard to property that had been taken over by the State or by the Warsaw Municipality by virtue of certain laws passed under the communist regime, including the Decree on agrarian reform and the Decree on the nationalisation of certain forests. The bill prescribed the eligibility conditions for restitution. It further stipulated that restitution would be equal to 50% of the actual value of the lost property.
69. The bill provoked a heated debate involving all sections of society, the media and all political parties and factions. It was enacted by Parliament on 7 March 2001 and the relevant Bill of Parliament transmitted to the President of the Republic for signature. However, exercising his right of veto, he refused to sign it.
70. Ultimately, the Sejm (lower house of the Polish parliament) failed to gather the three-fifths majority required under Article 122 § 5 of the Constitution to override the President’s veto during a vote on 25 May 2001. As a consequence, the Restitution Bill did not enter into force.
71. Subsequent attempts to enact restitution law were unsuccessful.
COMPLAINTS
A. Applications nos. 1680/08 and 3117/08
72. The applicants complained that they had been deprived of their property in violation of Article 1 of Protocol No. 1 to the Convention on account of the fact that their claim for compensation for legislative omission, for the period after 1 September 2004, had not been satisfied. In particular, they referred to the fact that the State had failed to issue the relevant ordinance pursuant to the 1946 Act enabling them to enforce that right.
73. They also complained under Article 6 of the Convention that they did not have access to a court for their claims for compensation for legislative omission.
B. Application no. 46309/13
74. The applicants complained that they had been deprived of their property in violation of Article 1 of Protocol No. 1 to the Convention on account of the fact that their right to compensation under the 1946 Act had not been satisfied, even though the legal basis for their claim had still been in force. They further asserted that the State’s failure to issue the ordinance enabling them to enforce their right had constituted a continuing situation.
THE LAW
A. Joinder of the applications
75. Given their similar factual and legal background, the Court considers that the three applications should be joined pursuant to Rule 42 § 1 of the Rules of Court.
B. Complaint under Article 1 of Protocol No. 1 to the Convention
76. The applicants alleged that they had been unable to obtain compensation for their property nationalised under the 1946 Act notwithstanding the fact that the authorities had been obliged to compensate them under the provisions of that Act. They relied on Article 1 of Protocol No. 1 to the Convention, 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.”
77. The Court considers that it must first determine whether Article 1 of Protocol No. 1 to the Convention is applicable in the instant cases.
78. The Court reiterates that an applicant may allege a violation of Article 1 of Protocol No. 1 only in so far as the impugned decisions relate to his or her “possessions” within the meaning of that provision. The concept of “possessions” has an autonomous meaning which is independent from the formal classification in domestic law (see Former King of Greece and Others v. Greece [GC], no. 25701/94, § 60, ECHR 2000‑XII). “Possessions” can be “existing possessions” or assets, including claims, in respect of which an applicant can argue that he has at least a “legitimate expectation” (which must be more solid than a mere hope) that they will be realised, that is, that he or she will obtain effective enjoyment of a property right (see Gratzinger and Gratzingerova v. the Czech Republic (dec.) [GC], no. 39794/98, § 69, ECHR 2002‑VII).
79. Moreover, the Court notes that where the proprietary interest is in the nature of a claim it may be regarded as an “asset” only where it has a sufficient basis in national law, for example where there is settled case-law of the domestic courts confirming it (see Kopecký v. Slovakia [GC], no. 44912/98, § 52, ECHR 2004‑IX).
80. The Court observes at the outset that the applicants’ complaints do not concern the nationalisation decisions given prior to 10 October 1994, the date of entry into force in respect of Poland of Protocol No. 1 to the Convention. The applicants rather complain about the impossibility to obtain compensation for the nationalised property in view of the approach adopted by the domestic courts when dealing with claims for legislative omission. The Court’s competence ratione temporis to deal with the applications is therefore not excluded (see Malhous v. the Czech Republic (dec.) [GC], no. 33071/96, ECHR 2000‑XII). The Court also notes that it is only competent to examine complaints of violations of the Convention which took place after its entry into force in respect of the respondent State.
81. The Court further notes that the applicants formulated the wording of their complaints differently. While two applicants (applications nos. 1680/08 and 3117/08) limit their complaints to the legislative omission that allegedly occurred after 1 September 2004, the applicants in application no. 46309/13 submit that they had continuingly been unable to enforce their right to compensation laid down in the 1946 Act. However, the Court considers that in essence the main thrust of these complaints is the same, namely that following the failure to implement the Cabinet’s obligation to provide compensation for the nationalisation of the enterprises in question, the applicants had been unable to obtain compensation for the alleged legislative omission.
82. Therefore, the issue that needs to be examined is whether the circumstances of the cases, considered as a whole, conferred on the applicants title to a substantive interest protected by Article 1 of Protocol No. 1 (see, among many other examples, Beyeler v. Italy [GC], no. 33202/96, § 100, ECHR 2000‑I, and Kopecký v. Slovakia, cited above, § 52). In the present cases, that approach requires the Court to have regard to the following points of law and of fact.
83. The Court notes that the 1946 Act provided for the nationalisation of industrial property. Pursuant to its provisions, former owners (with certain exceptions) were to receive compensation for nationalised property within one year of the date on which a notice of final determination of the amount of compensation due was served. The modalities on the organisation of the compensation commissions and the determination of compensation were to be specified in an ordinance issued at a later stage (see paragraph 47 above).
84. The Court observes that to the present day the Cabinet has not enacted any such ordinance (see paragraph 48 above). While, no restitution law in respect of nationalisation of industry carried out after the Second World War has been enacted either (see, paragraphs 67-71 above), the Court points out that the State has a wide margin of appreciation when passing laws in the context of a change of political and economic regime (see, inter alia, Kopecký v. Slovakia cited above, § 35 and Von Maltzan and Others v. Germany (dec.) [GC], nos. 71916/01 and 2 others, § 77, ECHR 2005‑V).
85. The Court further observes that in all three cases under consideration, administrative authorities’ confirmed that the nationalisation decisions had been given in accordance with the law (see paragraphs 13, 29 and 43. above). Consequently, the applicants could not have claimed any damages for nationalisation under Article 160 of the CAP or Article 417 1 § 2 of the Civil Code (see, a contrario Ogórek v. Poland (dec), no. 28490/03, § 33-36, 18 September 2012 and Pikielny v. Poland (dec.) no. 3524/05 § 58, 18 September 2012).
86. The applicants (applications nos. 1680/08 and 3117/08) attempted another legal avenue and brought claims for compensation for legislative omission in the domestic courts on account of the State’s failure to issue the relevant ordinance pursuant to section 7 of the 1946 Act (see paragraphs 14 and 30 above). In the first case, three levels of court, including the Supreme Court, dismissed the claim, finding that the impugned legislative omission occurred in 1946 or 1947 at the latest, when other ordinances to the 1946 Act had been enacted. However, that legislative omission could not give rise to tortious liability on the part of State since there had been no such liability until 1 September 2004. Pursuant to section 5 of the 2004 Amendment Act, Article 4171 of the Civil Code had not applied to events and situations that arose before its entry into force (see, paragraph 52, above). Consequently, neither the Constitution nor the provisions of the Civil Code enabled a plaintiff to seek compensation for failure to enact an ordinance (see paragraphs 15, 17 and 18 above).
87. The Court notes that in its judgment of 13 June 2011 (no. SK 26/09) the Constitutional Court further endorsed that line of reasoning, holding that even if the state of legislative omission still persisted, the duty imposed on the Cabinet by section 7 of the 1946 Act was non-enforceable and the provisions on compensation required the implementation of further legislation. Moreover, in the light of constitutional standards it was difficult to accept that the duty imposed on the Cabinet by section 7 of the 1946 Act had any legal effect (see paragraphs 60 and 62 above).
88. The Court attaches no importance to the fact that the applicant in case no 3117/08 desisted from pursuing its claim (see paragraph 35 above), and the applicants in case no. 46309/13 did not institute such proceedings, as in view of the above findings, the Court has no reason to assume that their claims would have had any prospect of success.
89. In the Court’s view, the applicants’ situation must therefore be distinguished from that in the case of Broniowski v. Poland, where the right to compensation arising from pre-ratification legislation was subsequently incorporated into Polish law and recognised by the national courts (see Broniowski v. Poland (dec.) [GC], no. 31443/96, § 100, ECHR 2002‑X). By contrast, in the present cases the domestic courts, including the Supreme Court and the Constitutional Court, have continually rejected the existence of a right in national law to compensation for legislative omission for failure to enact an ordinance pursuant to section 7 of the 1946 Act or any other claims for compensation for former owners of nationalised property (see paragraphs 54‑62 above). In particular, the Supreme Court held that until the entry into force of the 2004 Amendment Act the State’s failure to issue the relevant ordinance could not constitute a basis for a compensation claim (see paragraph 54 above). In a further judgment it explained that the Civil Code provisions enabling a plaintiff to seek compensation for legislative omission (Article 4171) had been introduced on 1 September 2004 and were unambiguous: the operation of this provision was precluded in respect of legislative omissions that originated in facts that had occurred earlier (see paragraph 18 above). The Constitutional Court also confirmed that, in the light of constitutional standards, it could not be accepted that section 7 of the 1946 Act had any legal effect and that only a statute could regulate compensation for nationalised property (see paragraph 62 above).
90. This interpretation of the domestic law in respect of the concept of legislative omission does not appear to have been arbitrary or manifestly unreasonable. Consequently, in view of the Court’s limited jurisdiction to interpret domestic law (see Jantner v. Slovakia, no. 39050/97, § 32, 4 March 2003), in the circumstances of the present cases, it does not find it necessary to substitute its view for that expressed by the Polish courts, including the Supreme Court and the Constitutional Court.
91. In the light of the conclusions reached by the domestic courts, the Court observes that the applicants’ claims are not based on any statutory provision. It further accepts the domestic courts findings and considers that the provisions of section 7 of the 1946 Act could not be interpreted as establishing any kind of claim or entitlement.
92. Accordingly, the Court finds that the applicants cannot be considered to have had any claim under domestic law that could qualify as a “possession” protected under Article 1 of Protocol No. 1 to the Convention.
93. It follows that these complaints are incompatible ratione materiae with the provisions of the Convention and the Protocols thereto within the meaning of Article 35 § 3, and must be rejected pursuant to Article 35 § 4.
C. Remaining complaints (applications nos. 1680/08 and 3117/08)
94. The applicants alleged a breach of Article 6 § 1 of the Convention and their right of access to a court on account of the fact that their claim for compensation had been unsuccessful (application no. 1680/08) or lacked any prospects of success (application no. 3117/08). The relevant part of Article 6 § 1 states as follows:
“1. In the determination of his civil rights and obligations ... everyone is entitled to a hearing ... by [a] ... tribunal ... ”
1. Application no. 1680/08
95. The Court notes that the applicant company brought a claim for compensation for legislative omission in the Warsaw Regional Court. That claim was examined on the merits on 30 May 2006 and dismissed at first instance (see paragraph 15 above). The judgment was upheld by the Warsaw Court of Appeal and the Supreme Court on 2 February and 5 December 2007 respectively (see paragraphs 17 and 18 above).
2. Application no. 3117/08
96. The Court observes that the applicant company brought a claim for compensation for legislative omission in the Warsaw Regional Court. That claim was rejected on procedural grounds on 11 April 2008 (see paragraph 31 above). The proceedings were subsequently discontinued as the applicant company did not comply with the court’s request to submit certain further documents (see paragraph 33 above). However, the applicant company did not allege that the Warsaw Regional Court had displayed an excessively formalistic approach. Rather, it complained that in view of the consistent practice of the domestic courts its claim in any event lacked prospects of success.
3. Conclusion
97. Having regard to the above, it cannot be said that the applicants in vindicating their claims for compensation against the State, were in any way denied, or unduly hindered in the exercise of their right of access to a court, as defined by the Court (see, among many other examples, Kreuz v. Poland, no. 28249/95, § 52, ECHR 2001‑VI).
98. It follows that these complaints must be rejected as manifestly ill‑founded, pursuant to Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court, unanimously,
Decides to join the applications;
Declares the applications inadmissible.
Done in English and notified in writing on 26 October 2017.
Abel CamposLinos-Alexandre Sicilianos
RegistrarPresident
APPENDIX
No.
Application no.
Lodged on
Applicant
Place of residence
Represented by
1680/08
07/12/2007
Lubelska Fabryka Maszyn i Narzędzi Rolniczych ‘PLON’
Warszawa
Józef FORYSTEK
3117/08
21/12/2007
Przedsiębiorstwo Naftowe
‘OTERNA’
Warszawa
Józef FORYSTEK
46309/13
08/07/2013
Iwona Świątnicka
Warszawa and
Michał Ostojski
Łódź
Grzegorz PARCHIMOWICZ
Full & Egal Universal Law Academy