MERKURIY-R LTD v. AZERBAIJAN

THIRD SECTION

DECISION

Application no. 15905/15
MERKURIY-R LTD
against Azerbaijan

The European Court of Human Rights (Third Section), sitting on 27 May 2025 as a Committee composed of:

 Oddný Mjöll Arnardóttir, President,
 Lətif Hüseynov,
 Canòlic Mingorance Cairat, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 15905/15) against the Republic of Azerbaijan lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 23 March 2015 by Merkuriy-R Ltd (“the applicant company”), a company based in Baku, which was represented by Mr F. Mammadov, a lawyer based in Azerbaijan;

the decision to give notice to the Azerbaijani Government (“the Government”), represented by their Agent, Mr Ç. Əsgərov, of the complaints under Article 6 of the Convention (length of proceedings) and Article 1 of Protocol No. 1 to the Convention, and to declare the remainder of the application inadmissible;

the parties’ observations;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1.  Between 1996 and 1998 the applicant company constructed shops on a 0.7 ha plot of land allocated to it by the Baku City Executive Authority (“the BCEA”) for its use for the construction of a shopping centre, pursuant to orders issued in 1995 and 1996. It did not register its title to those shops.

2.  On 23 May 2007 representatives of the Nizami District Executive Authority (“the NDEA”), the BCEA and the Ministry of Transport demolished the shops on the basis of Order no. 1255 of the BCEA of 1 February 2006, which approved an action plan envisaging extensive redevelopment work to improve the transport system in Baku. The plot of land allocated to the applicant company fell within the zone designated for the planned redevelopment and was expropriated.

3.  On an unspecified date in October 2007 the applicant company lodged a complaint with Baku Administrative-Economic Court no. 2 against the Ministry of Transport, the BCEA and the NDEA. It subsequently amended that complaint, seeking compensation in the amount of 17,347,000 Azerbaijani manats (AZN) in respect of the demolition of 277 shops measuring a total of 3,800 sq. m, AZN 120,000 in respect of lost profit and AZN 5,551,040 in interest for late payment. The applicant company also asked the court to order the BCEA and the NDEA to allocate it a plot of land of the same size and quality in exchange for the expropriated plot of land. Azeryolservis Open Joint-Stock Company (“Azeryolservis OJSC”) and the Ministry of Finance were involved in the proceedings as third parties. The applicant company submitted two valuation reports which valued the buildings on the land (277 shops measuring 3,800 sq. m) at AZN 9,375,000 and the plot of land at AZN 12,160,000.

4.  By a final judgment of 24 September 2014, the Supreme Court amended a judgment of a lower court, granting the applicant company’s claims in part by awarding it AZN 1,431,000 in respect of pecuniary damage (including an additional 20% in compensation, in accordance with Presidential Decree no. 689 of 26 December 2007) to be paid jointly by the Ministry of Transport and Azeryolservis OJSC. The court noted that, in the absence of any ownership documents in respect of the shops and the plot of land in question, the applicant company had submitted, as proof of the existence of the demolished property, the lease agreements in respect of only 36 shops measuring a total of 1,192.5 sq. m. It held that the applicant company was therefore entitled to compensation only in respect of that property. Relying on three expert valuation reports commissioned by the lower courts and two valuation reports submitted by the applicant company, the Supreme Court considered compensation on the basis of AZN 1,000 per square metre to be appropriate, in view of the property conditions. The domestic courts also took note of the fact that, by an order of 27 February 2009, the BCEA had allocated a 1,400 sq. m plot of land to the applicant company for its use and had given it permission to construct a commercial building thereon in exchange for the plot of land in question.

5.  The applicant company complained under Article 6 of the Convention that its right to a trial within a reasonable time had been breached. It also complained under Article 1 of Protocol No. 1 to the Convention that the compensation awarded by the domestic courts had not been adequate.

THE COURT’S ASSESSMENT

6.  The Court’s case-law on the concept of “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention has been summarised, inter alia, in Akhverdiyev v. Azerbaijan (no. 76254/11, § 73, 29 January 2015) and Aliyeva and Others v. Azerbaijan (nos. 66249/16 and 6 others, §§ 102-04, 21 September 2021).

7.  The Government argued that the applicant company had failed to submit any valid document establishing its ownership rights over the shops in question and had only been able to prove the existence of non-residential property measuring 1,192.5 sq. m. The applicant company argued that it had owned 277 shops with a total surface area of 3,800 sq. m.

8.  The Court notes that the applicant company failed to register its title to the shops in question and did not therefore have any ownership documents. In such circumstances, there are no elements that would lead the Court to disregard the domestic courts’ factual findings made on the basis of the lease agreements (see paragraph 4 above). It cannot therefore be established that the non-residential area beyond the 36 shops measuring a total of 1,192.5 sq. m amounted to the applicant company’s “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention. It follows that the part of the complaint relating to that non-residential area is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4 (compare Rahimov v. Azerbaijan [Committee] (dec.), no. 40026/09, §§ 14 and 17, 7 July 2022).

9.  As to the remaining complaint, it concerns solely the inadequacy of the compensation awarded by the domestic courts.

10.  The Court reiterates that the domestic courts enjoy a certain margin of appreciation and are better placed than the Court to resolve technical issues as regards the evaluation of facts and the assessment of appropriate compensation. The Court does not replace the domestic courts in determining the value of expropriated property and the amounts to be awarded, unless there is manifest arbitrariness in the process of fixing the compensation (compare Yıltaş Yıldız Turistik Tesisleri A.Ş. v. Turkey, no. 30502/96, § 38, 24 April 2003; Gezer v. Turkey, no. 18704/04, § 39, 6 October 2009; and Yükseller Ltd. Şti. v. Turkey [Committee] (dec.), no. 27530/09, § 59, 19 January 2021). It further reiterates that it is not up to the Court to assess the factual elements which led the domestic courts to adopt one decision rather than another, otherwise it would be setting itself up as a court of third or fourth instance (see Andiçi v. Turkey, no. 27796/03, § 14, 4 March 2008).

11.  The Court notes that the domestic courts fully investigated the circumstances of the case and reached their decisions on the basis of numerous expert valuation reports, as well as information and documents provided by the parties (see paragraphs 3 and 4 above). Despite having failed to register its title to the property in question, the applicant company was awarded compensation by the domestic courts in respect of 36 shops measuring a total of 1,192.5 sq. m. Moreover, it has not been substantiated by the applicant company that the amount awarded by the courts did not reasonably match the value of the property at the date of expropriation (see Andiçi, cited above, § 15, and compare Alaloğlu and Others v. Turkey [Committee], no. 42019/06, § 21, 4 February 2020, and Tarhan v. Turkey [Committee] (dec.), no. 23831/19, § 19, 27 September 2022).

12.  It follows that this part of the complaint is manifestly ill-founded and must be rejected pursuant to Article 35 §§ 3 (a) and 4 of the Convention.

13.  The Government submitted that the plot of land in question did not constitute the applicant company’s possession. The applicant company disagreed, arguing that the land had been allocated to it for its permanent use and thus constituted its possession under domestic law. However, the Court does not find it necessary to resolve this matter, as even assuming that Article 1 of Protocol No. 1 is applicable to the facts of the present case, this part of the complaint is in any event inadmissible for the following reason.

14.  It is clear from the case file that the BCEA had allocated another plot of land to the applicant company for its use and had granted it permission to build a commercial building thereon in return for the expropriated land (see paragraph 4 above). The applicant company failed to provide any substantiated arguments showing that the allocation of that land had not constituted adequate compensation in the circumstances of its case.

15.  It follows that this part of the complaint must also be rejected pursuant to Article 35 §§ 3 (a) and 4 of the Convention.

16.  The Government submitted that the proceedings before the first‑instance court had been adjourned three times owing to the applicant company’s failure to appear before the court. They further submitted that several expert valuation reports had been commissioned by the courts and that the applicant company had not objected to them. The applicant company disagreed without addressing those submissions.

17.  The relevant general principles concerning the excessive length of proceedings have been summarised recently in Ramiz Jafarov v. Azerbaijan (no. 40424/12, § 55, 16 June 2022, with further references).

18.  The Court observes that in the present case the civil proceedings at three levels of jurisdiction lasted almost six years and eleven months, and that the Supreme Court remitted the case twice to the lower courts for reassessment. The Court further observes that the proceedings were admittedly complex, involving several expert valuation reports and numerous parties, namely the applicant company, three respondents and two interested parties (see paragraphs 3 and 4 above and the appended table). The applicant company did not argue that there had been any relevant periods of complete inactivity on the part of the domestic courts. On the other hand, it appears that the applicant company itself failed to appear before the courts on three occasions, which resulted in the proceedings being adjourned (see paragraph 16 above).

19.  In the specific circumstances of the present case, the overall length of the proceedings cannot be regarded as excessive (compare Ordukhanova v. Azerbaijan [Committee], no. 27741/13, §§ 19-21, 23 and 27, 9 May 2023). Accordingly, this complaint is also 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 19 June 2025.

 Olga Chernishova Oddný Mjöll Arnardóttir
 Deputy Registrar President

APPENDIX

Application no. Lodged on

Applicant company’s name

Year of registration

Location

Representative’s

name

Location

Type and size of property

Domestic courts’ judgments/decisions

Compensation awarded/paid at the domestic level

15905/15

23/03/2015

Merkuriy-R Ltd

1999

Baku

Famil

MAMMADOV

Baku

36 shops of 1,192.5 sq. m on a 0.7 ha plot of land

Baku Administrative-Economic Court No. 2, 01/07/2011

Baku Court of Appeal, 21/11/2011

Supreme Court, 25/04/2012

Baku Court of Appeal, 19/12/2012

Supreme Court, 29/05/2013

Baku Court of Appeal, 12/03/2014

Supreme Court, 24/09/2014

AZN 1,431,000 for the demolished shops;

a plot of land of 1,400 sq. m allocated to the applicant company for its use and permission for construction of a commercial building thereon, in exchange for the expropriated plot of land.