FOURTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 35221/97
by O.N.
against Bulgaria
The European Court of Human Rights (Fourth Section), sitting on 6 April 2000 as a Chamber composed of
MrM. Pellonpää, President,
MrA. Pastor Ridruejo,
MrL. Caflisch,
MrJ. Makarczyk,
MrV. Butkevych,
MrJ. Hedigan,
MrsS. Botoucharova, judges,
andMrV. Berger, Section Registrar,
Having regard to the above application introduced with the European Commission of Human Rights on 17 August 1996 and registered on 10 March 1997,
Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
The applicant is a Bulgarian national, born in 1957 and living in Vratsa.
A.The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
1. Background
On 8 April 1975 the applicant was adopted by Mrs F. Under a contract concluded on 30 April 1975 the applicant undertook to provide daily care for Mrs F. and for her ill sister until the end of their lives and to pay 3,800 levs, in exchange of Mrs F.'s undertaking to transfer the ownership of her apartment to the applicant.
The applicant paid 3,800 levs and discharged his care obligations properly until the end of 1981 when his relations with Mrs F. deteriorated. Since 1981 the applicant and Mrs F. have been parties to several civil proceedings such as proceedings for annulment of the adoption, for enforcement and for rescinding of their 1975 contract and for payment of compensation. A judgment of 12 March 1986 established that the 1975 contract was to be considered rescinded.
2. The proceedings between 1987 and 1992
On 12 January 1987 the applicant brought an action before the Vratsa Regional Court (Окръжен съд) against Mrs F. and two other persons seeking, inter alia, restitution of the 3,800 levs paid and of the value of the care and services furnished by him under the 1975 contract. His action was based on the rule of prohibition of unjust enrichment (неоснователно обогатяване) as enshrined in Section 55 of the Law on Obligations and Contracts (Закон за задълженията и договорите).
The court heard numerous witnesses and experts who established the services performed by the applicant and their value. The court held its last hearing on 15 September 1989 and announced that the judgment would be delivered soon thereafter.
In 1991 the applicant twice addressed the court asking for a speedy delivery of the judgment. In February and June 1991 he also sought to amend his claim arguing that the sharp increase in inflation since 1989 had led to seven fold devaluation of the real value of the Bulgarian currency.
The judgment, which was dated 15 January 1991, was delivered on 8 July 1991.
The court found that the applicant was entitled to restitution of all that he had given under the 1975 contract. This right had arisen on 12 March 1986, the date on which the judicial decision confirming the rescission of the 1975 contract had been delivered. It was further established that the services performed by the applicant and the food, heating fuel and other products provided by him to Mrs F. and her sister for the period 1975 - 1981 amounted to 14,442.65 levs (the 3,800 levs paid by the applicant included), according to prices from the relevant period. The court therefore awarded to the applicant this amount, together with the established interest rate (законна лихва), to be counted as from 12 January 1987, the date of bringing of the applicant's action.
The parties appealed to the Supreme Court (Βърховен съд) which on 31 January 1992 quashed the Regional Court's judgment under Section 208 § 3(b) of the Code of Civil Procedure (Граждански процесуален кодекс) and returned the case for renewed examination as there had been certain procedural irregularities. The Supreme Court was composed of three justices, Mr Shivachev, Mr Belchev and Mrs Krasteva.
3. The proceedings before the Montana Regional Court
The referred case was taken by the Montana Regional Court as there was not a sufficient number of judges at the Vratsa Regional Court.
The Montana Regional Court held 13 hearings. At most of the hearings witnesses and experts were heard, evidence was admitted and oral submissions were made.
At the first hearing on 13 July 1992 the applicant stated the evidence on which he would rely. He later decided to request the appointment of an expert and submitted a motion in writing on 24 August 1992. The court granted the request by decision of 9 September 1992. On 25 September 1992 the expert's report was submitted to the court. The hearing listed for 5 October 1992 was adjourned as there was no confirmation that one of the defendants had received the summons.
On 15 October 1992 and 23 November 1992 the applicant made submissions in writing amending his claim to reflect the inflation and requested the appointment of another expert. On 24 November 1992 the request was granted.
On 14 December 1992 the proceedings were suspended due to the death of one of the defendants. The applicant was instructed to state whether he wished to pursue the action against the heirs and to provide their names and addresses. He did so on 18 January 1993. On 15 February 1993 the expert appointed by the court filed his report.
The fourth hearing took place on 22 March 1993. Both parties requested leave to submit further evidence and to question witnesses. The applicant requested additional reports from the experts. The hearing was adjourned.
On 17 May 1993 the court held a hearing. One of the experts and one of the witnesses for the applicant did not appear. The court decided to hold another hearing.
On 2 June 1993 the applicant requested in writing that additional questions be put to the experts. Their answers were filed with the court on 29 June 1993.
On 5 July 1993 the court held a hearing. An expert did not appear. The case was listed for a further hearing.
By written motion of 20 August 1993 the applicant increased the amount of the claim in view of the inflation and requested leave to question three additional witnesses.
The next hearing was on 20 September 1993. The applicant sought leave to put additional questions to one of the experts and requested an adjournment as one of his witnesses had not been able to attend.
On 12 October 1993 the applicant requested in writing leave to have another witness examined. On 19 October 1993 an additional expert's report was filed.
The hearing on 25 October 1993 was adjourned upon the request of the applicant who insisted on the questioning of a witness who had not appeared. On 25 October and 1 November 1993 the court rejected the applicant's request for additional questions to one of the experts.
On 17 November 1993 the applicant requested in writing leave to have re-examined a witness who had already been questioned.
At the hearing on 29 November 1993, the ninth hearing in the case, one of the witnesses was unable to attend. An expert's opinion which was due had not been filed. The court listed the case for a further hearing.
On 16 March 1994 the applicant made submissions in writing requesting further reports from the experts. This request was rejected.
The failure of a witness and of an expert to appear at the tenth hearing, which was held on 4 April 1994, prevented the conclusion of the proceedings.
On 19 April 1994 the applicant requested in writing leave to have two additional witnesses summoned and examined. The request was granted.
In the course of the eleventh hearing, on 9 May 1994, the applicant sought to increase the amount of the claim in view of the inflation. The case was adjourned as one of the defendants had not appeared and the relevant law required that all defendants be provided with an opportunity to comment on any amendment of the claim.
On 21 May 1994 the applicant successfully requested the court to order an additional expert's opinion. This was filed on 3 June 1994.
The hearing on 13 June 1994 could not conclude the proceedings for the same reasons as those, which caused the adjournment of the hearing of 9 May 1994.
On 20 June 1994 the applicant requested the further questioning of two witnesses. This was granted.
The last hearing before the Regional Court took place on 12 September 1994. Following all amendments of the amount of the claim, it was finally set by the applicant at 595,365.55 levs as he insisted that the price levels of 1994 should be used.
On 27 September 1994 the Regional Court delivered its judgment. It found that the applicant's right to restitution of what he had given under the 1975 contract had arisen on 12 March 1986. The court awarded to the applicant 15,036.33 levs, together with the established interest rate, to be counted as from 12 January 1987, the date of the submission of the applicant's action.
Addressing the applicant's argument that the inflation should be taken into account the court found, inter alia:
"... upon the rescission of a contract the parties are under the obligation to return whatever they have exchanged in order to restore the situation as it was prior to the execution of the contract. Therefore, the Court finds that the claim is well-founded for its part up to 15,036.33 levs ... and should be dismissed as ill-founded in its remaining part."
4. Appeal and review (cassation) proceedings
The applicant and the defendants appealed to the Supreme Court. On 3 January 1995 the applicant requested in writing a speedy examination of the case.
The appeal was examined by a chamber of the Court, which was composed of three justices, two of whom, Mrs Krasteva and Mr Belchev, had also participated in the examination of the case in 1992. The applicant did not request their removal. The Supreme Court heard the appeals on 17 February 1995.
On 7 March 1995 the Supreme Court dismissed the appeals. According to the Code of Civil Procedure the award of 15,036.33 levs plus interest became enforceable on the same date.
The Supreme Court found inter alia:
"The [Regional] Court correctly awarded restitution of the benefits on the basis of their value as of the moment of their bestowal, as this is the amount with which the [applicant] has actually become poorer. If the pecuniary equivalent of the furnished services were to be awarded under up-to-date prices, the [applicant] would have received more than that of which he was actually deprived. [In cases] of unjust enrichment the benefits bestowed are to be restituted up to the amount of the deprivation suffered."
In May 1995 the applicant and the defendants submitted to a five-member chamber of the Supreme Court petitions for review (cassation) (преглед по реда на надзора) against the judgments of 27 September 1994 and 7 March 1995.
A hearing was listed for 16 November 1995. It was adjourned until 18 January 1996 upon the applicant's request in view of the unavailability of his legal representative.
The hearing on 18 January 1996 was adjourned as the defendants had not been properly summoned.
The hearing eventually took place on 7 March 1996.
On 10 June 1996 the Supreme Court, sitting in a five-member chamber, dismissed the applicant's petition for review
The Court confirmed that according to the relevant law the applicant could not claim re-evaluation according to up-to-date prices.
Also, dealing with the applicant's complaint that the same justices decided twice in his case, the court stated inter alia:
"... the examination of the [second appeal] by the same chamber which had previously quashed the lower court's judgment and had returned the case to it under Section 208 § 3 of the Code of Civil Procedure not only is not a breach of procedure, but is desirable in view of the [chamber's] cognizance of the matter and the [need for] economy ... The grounds under Section 208 § 3 for returning a case to the first instance court are such that the [appellate] court does not decide on the merits."
On 30 July 1996 the defendants paid to the applicant the amount of 68,676 levs, which represented the principal sum due plus interest.
B.Relevant domestic law and practice
The relevant provisions of the Law on Obligations and Contracts read as follows:
Section 55
"Anyone who has received something without a causa or pursuant to a causa which has not realised or has ceased to exist, shall be under the obligation to return it..."
Section 57 § 2:
"If the object to be restituted has been ... consumed by the beneficiary when he already knew that he possessed it without causa, the latter owes its real value ... However, if the object [to be restituted] has been ... consumed by the beneficiary before the invitation [to return it] the latter owes only that of which he has benefited ..."
According to the practice of the Supreme Court (реш. No.65 от 8.12.1981г. на ОСГК на ΒС по гр.д. No. 30/81):
"The consequence of the rescission of a bilateral contract is that the parties shall return whatever they have exchanged in order to restore the situation as it was prior to the execution of the contract. The restitution is due because the contract which had been the legal ground of the exchange has ceased to exist. The restitution ... is due under Section 55 § 1 of the Law on Obligations and Contracts..."
The statutory default interest rate applicable to judicial awards is established by acts of the Council of Ministers (Министерски съвет). It was 6 percent per annum between 1987 and mid-1991 and was, thereafter and during the relevant period of time, equal to the basic interest rate, as established by the Bulgarian National Bank, increased by three points. At different periods of time between 1991 and 7 March 1995, when the judgment awarding 15,036.33 levs to the applicant became enforceable, the interest rate thus varied between 15 and 60 percent per annum.
Section 208 § 3(b) of the Code of Civil Procedure provides that the appellate court has to refer the case back for renewed examination by the lower court where the latter's judgment has been quashed because of a violation of the party's right to fully participate in the proceedings.
COMPLAINTS
1.The applicant complains under Article 6 of the Convention that the civil proceedings instituted by him in 1987 were pending for more than nine years. He states, inter alia, that the judges deliberately delayed the proceedings.
2.The applicant also complains, invoking Article 6 of the Convention, that the same Supreme Court justices decided twice on his case and that they were partial.
3.The applicant also complains that the courts delivered unjust decisions when they refused to take into account the inflation and awarded him sums many times lesser than the real value of what he had given under the 1975 contract.
The applicant argues that the courts wrongly applied the relevant law, which clearly requires that the parties are under the obligation to return whatever they have exchanged in order to restore the situation "as it was prior to the execution of the contract". According to the applicant the situation could be considered restored only if the party concerned paid the real value of the benefits bestowed upon him or her. Thus, the courts accepted that the services, which the applicant had furnished to Mrs F. and to her sister were worth 15,036.33 levs, which at the relevant time corresponded to the value of about 42,500 cups of coffee. This was the real value of which the applicant was deprived and of which Mrs F. and her sister benefited at the time. The applicant states that instead of receiving back this real value, he was awarded an amount, which in 1997 can barely buy 100 cups of coffee.
THE LAW
1.The applicant complains under Article 6 § 1 of the Convention of the length of the civil proceedings, which he instituted in 1987. He also complains that the same Supreme Court justices decided twice on his case and that they were partial.
Article 6 § 1 of the Convention, insofar as relevant, provides as follows:
“Right to a fair trial
1. In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal ...”
The Government submit that the applicant never invoked Article 6 of the Convention before the domestic courts and that therefore he has not exhausted all domestic remedies as required by Article 35 § 1 of the Convention.
As regards the length of the proceedings the Government submit that in the period of time after 7 September 1992, when Bulgaria ratified the Convention, there were no delays imputable to the authorities. On the other hand, some delays were caused by the applicant, who did not submit all his requests for the questioning of witnesses and experts' reports in the beginning, but kept adding new requests. Twice hearings were adjourned without any of the parties to the present case being responsible, when the defendant died and when some witnesses had not received their summons.
The Government further stress the factual complexity of the case, which necessitated 6 accounting reports and 3 technical reports. Clarifying the facts as regards the care, which the applicant had provided to Mrs F. between 1975 and 1982 required the examination of tens of witnesses and the collection and analysis of numerous invoices and other documents. The case-files of many other cases between the same parties, the subject matter of which had been relevant to the dispute, were enclosed to the case file. At the end of the proceedings the case-file consisted of 4,372 pages.
In respect of the alleged partiality of the Supreme Court justices, the Government submit that the participation of the same justices in the examination of the applicant's second appeal was in conformity with Bulgarian law.
The applicant replies that he has exhausted all domestic remedies. In particular, at least on two occasions he protested against delays in the proceedings.
He further submits that the Supreme Court caused a delay of more than two years when on 31 January 1992 it unnecessarily quashed the lower court's judgment and returned the case for a renewed examination. This re-examination took up the time until September 1994. Furthermore, the Regional Court spent time in hearing evidence on irrelevant issues.
The applicant further disputes the Government's statement that he had been responsible for most of the delay. In particular, on 5 October 1992 the hearing was adjourned to 14 December 1992 due to the fact that one of the defendants had not been summoned properly. The hearing on 22 March 1993 was adjourned upon the request of both parties for leave to adduce further evidence. Two other adjournments were necessary as expert witnesses had not appeared or had failed to present their reports. Some of the adjournments were the result of combined circumstances, such as the absence not only of witnesses for the applicant, but also of experts appointed by the court. On 9 May and 13 June 1994, the defendants were responsible for the delays.
In respect of the alleged partiality of the courts the applicant submits, inter alia, that his request for exemption from court fees was rejected despite the clear evidence that his financial means were insufficient.
The Court reiterates that the purpose of Article 35 § 1 of the Convention is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court. This provision must be applied “with some degree of flexibility and without excessive formalism”; it is sufficient that the applicant should have raised before the national authorities, “at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law”, the complaints he intends to make subsequently in Strasbourg (see, among other authorities, the Arslan v. Turkey judgment of 8 July 1999, Reports of Judgments and Decisions 1999-.., p. .., § 33).
In the present case the Government have not indicated the existence of an effective remedy which could, but has not been, employed by the applicant in respect of the length of the proceedings. As regards the complaint related to the composition of the Supreme Court, it suffices to note that the applicant raised this issue in his petition for review (cassation). The Government's objection must be therefore rejected.
Turning to the substance of the complaint that the proceedings were unreasonably lengthy the Court notes that the period to be taken in consideration began not on 12 January 1987, when the applicant brought an action before the Vratsa Regional Court, but on 7 September 1992, when the Convention entered into force in respect of Bulgaria. The period ended on 10 June 1996, when the Supreme Court delivered its final judgment. It therefore lasted about three years and nine months (see the Proszak v. Poland judgment of 16 December 1997, Reports 1997-VIII, p. 2772, § 30).
However, in order to determine the reasonableness of the length of the proceedings after the date of the Convention's entry into force in respect of Bulgaria, regard must be had to the state of the case as of 7 September 1992 (see the above cited Proszak judgment, § 31). In this respect the Court notes that as of that date the case was under examination at the first instance level and had yet to be dealt with on the merits, then on appeal and in the review (cassation) proceedings.
As to the course of the proceedings during the period of three years and nine months, falling within the Court's competence ratione temporis, the Court cannot but agree with the Government that since September 1992 they went through three levels of jurisdiction, that no notable delays imputable to the authorities may be discerned, and that the applicant apparently contributed to certain extent for the delays regard being had to his numerous and repeated requests for submission of additional evidence and appointment of experts. It is further observed that the courts listed the case for hearings at short intervals and worked actively on it.
The Court also notes that the case was factually complex and involved serious evidential difficulties. The courts needed to establish events dating from the period of time between 1975 and 1981 and concerning, inter alia, the amount of food, heating fuel and other goods provided by the applicant to Mrs F. and her sister, and the quantity and quality of services performed by him. Numerous witnesses had to be heard and several accounting and other experts were appointed.
In sum, based on the criteria established in its case-law (see, among other cases, the Humen v. Poland judgment of 15 October 1999, Reports 1999- , p. , § 60), the Court concludes that the complaint concerning the length of the civil proceedings, insofar as it falls within the Court's competence, is manifestly ill founded within the meaning of Article 35 § 3 of the Convention.
As to the remainder of the applicant's complaints under Article 6 of the Convention, the Court recalls that there are two tests for assessing whether a tribunal is impartial within the meaning of Article 6 § 1: the first, the “subjective test”, consists in seeking to determine the personal conviction of a particular judge in a given case and the second, “the objective test”, in ascertaining whether the judge offered guarantees sufficient to exclude any legitimate doubt in this respect (see the Gautrin and Others v. France judgment of 20 May 1998, Reports 1998-III, p. 1030, § 58).
Insofar as the applicant alleges subjective bias on the part of certain judges, the Court finds that these allegations are unsubstantiated.
Furthermore, in respect of the composition of the Supreme Court, it is observed that the present case does not concern examination by the same justices of an appeal against their own decision, which may raise an issue under Article 6 § 1 (see the De Haan v. the Netherlands judgment of 26 August 1997, Reports 1997-IV, pp. 1392, 1393, §§ 51 - 52), but the fact that two of the justices, who had participated in quashing the Regional Court's judgment and in referring the case back to it for renewed examination, were later dealing with the applicant's appeal against the Regional Court's second judgment, after the renewed examination of the case.
The Court recalls in this respect that there is no general rule resulting from the obligation to be impartial that a superior court which sets aside an administrative or judicial decision is bound to send the case back to a different jurisdictional authority or to a differently composed branch of that authority, or any rule requiring that after having set aside a judgment and referred the case for renewed examination, a higher court must deal in a different composition with an appeal against the fresh judgment of the lower court. Furthermore, it is common in the Convention countries that higher courts deal with similar or related cases in turn (see the Ringeisen v. Austria judgment of 16 July 1971, Series A no. 13, p. 40 § 97; the Gillow v. the United Kingdom judgment of 24 November 1986, Series A no. 109, p. 28 § 73; appl. no. 15975/90, Dec. 1.7.91, DR 71, p. 245).
The remaining complaints under Article 6 § 1 of the Convention are therefore also manifestly ill-founded.
It follows that this part of the application must be rejected under Article 35 § 4 of the Convention.
2.The applicant complains that the courts delivered unjust decisions when they refused to take into account the inflation and awarded him sums many times lesser than the real value of what he had given under the 1975 contract.
The Court finds that the above complaint falls to be examined under Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“Protection of property
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.”
The Government submit that the facts invoked by the applicant may only lead to a finding of a violation of Article 1 of Protocol No. 1 in two hypothetical situations: if the relevant law was applied wrongly so as to deprive the applicant of his right to peaceful enjoyment of his possessions, or if the relevant law was applied with such a delay so as to bring about the same result. However, none of these hypothetical situations occurred in the present case.
In particular, the courts applied correctly the pertinent law and awarded to the applicant the monetary equivalent of the services provided by him to Mrs F. based on their value at the time when they were effected. Indeed, it was this value which Mrs F. received and which she was under an obligation to reimburse. In the Government's view the courts' approach was in conformity with the law and the jurisprudence which required, in cases of unjust enrichment, that the party who has received something without an existing causa, must return it. Where an object is concerned, the object itself must be returned. If money was paid, the exact sum received must be reimbursed. In the applicant's case, the value which Mrs F. had received and was ordered by the courts to reimburse was the equivalent of what she would have paid, between 1975 and 1981, for the services performed by the applicant. Naturally, she would have paid according to the price levels at the time.
The Government further state that Mrs F. also owed the statutory interest rate as of 12 January 1987 and until the final payment. Thus, the principal and interest due to the applicant as of 7 March 1995, when the award became enforceable, was 37,070 Bulgarian levs (about 3,300 FF at that time). It is true that the statutory interest rate, as determined by the Council of Ministers, was lower than the percentage of the inflation. However, reiterating their position in respect of the applicant's complaint under Article 6 of the Convention that the courts were not responsible for any significant delay in the proceedings, the Government argue that the present case must be distinguished from the case of Akkus v. Turkey (judgment of 9 July 1997). In their view there was no causal link between the loss suffered by the applicant as a result of the inflation and the acts of the authorities. Indeed, Bulgaria faced enormous economic difficulties during the period under consideration and that affected everyone in the country. The Government stress that an attempt to throw blame and seek sanctions for what was an inevitable reality, would be inappropriate.
The applicant replies, inter alia, that in 1987 he brought an action alleging that justice required that he is compensated for the care and services he performed for Mrs F., only to find himself, nine years later, in an even worse situation. He was awarded only token compensation. The courts were responsible for that as they did not examine the case within a reasonable time and in any event were biased and decided wrongly.
In particular, it was not true that the relevant law was applied correctly. The law required that there must be restoration of the situation as it had been before the execution of the 1975 contract. The token compensation awarded to the applicant did not do this. The heirs of Mrs F. were not ordered to restore the real value which she had benefited from and the applicant did not obtain what he had been deprived of. Moreover, according to the relevant case-law of the Bulgarian Supreme Court, the applicant was entitled to restitution in kind, insofar as his claim concerned goods, such as heating fuel, food and medicaments, which he had provided to Mrs F. Pecuniary compensation was only applicable in respect of the services and objects which could not be awarded in kind. In the light of this case-law, it was wrong to calculate the sum due to the applicant in respect of, for example, food and fuel, on the basis of the price levels from 1975 - 1981. In fact the courts wrongly considered that the applicant's claim was a purely pecuniary claim.
Objecting against the Government's reference to the economic difficulties, which the whole country suffered, the applicant submits that the issue in his case is simple and concrete. The issue is that courts should not cause unjust enrichment by their judgments. They should not give a windfall to one person at the expense of another by awarding thousands of times less than originally due. This question has little to do with the economic problems in the transition to a market economy. It concerns the general principle that the national justice system should give justice.
As to the applicability of Article 1 of Protocol No. 1, the Court points out that the concept of “possessions” in its first part has an autonomous meaning which is not limited to ownership of physical goods and is independent from the formal classification in domestic law: certain other rights and interests constituting assets can also be regarded as “possessions” for the purposes of this provision (see the Beyeler v. Italy judgment of 5 January 2000, Reports 2000- , p. , § 100).
The Court observes that the applicant's complaints concern his claim for restitution and compensation, as generated in accordance with the rules of unjust enrichment under the applicable general law of obligations. His claim was recognised by the domestic courts as having arisen in 1986. A claim of this nature constitutes an asset and therefore amounts to "a possession” within the meaning of the first sentence of Article 1 of Protocol No. 1. This provision is accordingly applicable in the present case (see the Pressoss Compania Naviera S.A. and Others v. Belgium judgment of 20 November 1995, Series A no. 332, p. 21, § 31).
As the Court has stated on a number of occasions, Article 1 of Protocol No. 1 comprises 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 possessions; 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 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, as a recent authority, the above cited Beyeler judgment, § 98).
The Court further recalls that there is no State interference with rights protected under Article 1 of Protocol No. 1 where the facts complained of are not the product of an exercise of State authority but concern exclusively relationships of a contractual nature between private individuals (see the Gustafsson v. Sweden judgment of 25 April 1996, Reports 1996-II, p. 658, § 60).
In this respect the present case is distinguishable from the cases of Akkuş and Aka where the respondent State's responsibility was clearly engaged. These cases concerned an obligation of the State to pay to the applicants compensation arising out of expropriation of property. The failure of the authorities to pay in due time and with a proportionate adjustment for the inflation led to findings of violation of Article 1 of Protocol No. 1 (see the Akkuş v. Turkey judgment of 9 July 1997, Reports 1997-IV, p. 1300, and the Aka v. Turkey judgment of 23 September 1998, Reports 1998-VI, p. 2668).
In the present case the substance of the applicant's position appears to be that the responsibility of the State under Article 1 of Protocol No. 1 is engaged in that domestic legislation and judicial practice did not allow recovery of the real value of his claim. The State is responsible, in the applicant's view, on three grounds. First, it is maintained that in his case the courts wrongly applied the relevant law. Secondly, it is submitted that the courts did not decide within a reasonable time, thus allowing the inflation to destroy the value of the claim. The third argument is that the applicable domestic law and case-law disregarded the inflation to such an extent that they caused a de facto deprivation of property in that the applicant, a creditor whose claim has been fully recognised, was only entitled to recover “one thousandth” of its value.
In so far as the applicant's complaint may be understood to concern the assessment of the evidence and the result of the proceedings before the domestic courts, the Court reiterates that, according to Article 19 of the Convention, its duty is to ensure the observance of the engagements undertaken by the Contracting Parties in the Convention. In particular, it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as they may have infringed rights and freedoms protected by the Convention (see the Garcia Ruiz v. Spain judgment of 21 January 1999, Reports 1999- , p. ..., § 28).
As regards the alleged failure to decide within a reasonable time, even assuming that the responsibility of the State under Article 1 of Protocol No. 1 may in certain circumstances be engaged, the Court refers to its conclusions in respect of the applicant's Article 6 complaint. Moreover, in the context of the complaint under Article 1 of Protocol No. 1 the relevant period of time is only two years and six months, as it ends in March 1995, when the judicial award in the applicant's case became enforceable.
In respect of the third limb of the applicant's complaint the Court considers that there has been no interference with the applicant's rights under Article 1 of Protocol No. 1 by a State authority. It must consider, nevertheless, whether there has been a failure on the part of the State to observe an obligation arising out of the general rule of peaceful enjoyment of property as set forth in the first sentence of Article 1 § 1 of Protocol No. 1.
In this respect the Court recalls that Article 1 of Protocol No. 1 does not oblige a State to maintain the purchasing power of sums deposited with financial institutions (appl. no. 8724/79, Dec. 6.3.80, DR 20, p. 226 ; appl. no. 29785/96. Dec. 4.9.96, DR 88, p. 163).
The Government state that the applicant's claim, which he brought against Mrs F., was a pecuniary claim which depreciated as any other pecuniary claim or deposit in the country, due to the inflation. The applicant replies that his claim was for the value of goods and services, which the debtor was under an obligation to restore in kind.
The Court need not decide this dispute which, moreover, concerns mostly interpretation of domestic law, as it considers that Article 1 of Protocol No. 1 to the Convention does not give raise to any positive obligation for the State to maintain the value not only of deposits, but also of claims or any other asset. It does not require from States to apply “an inflation-rate-compatible” default interest rate to private claims. The Convention cannot be seen as imposing on States obligations concerning their economic policy in dealing with the effects of inflation and other economic phenomena.
It is true that the applicant claims that justice required that the State, either through legislation or its courts, should not have left him to bear disproportionally the consequences of inflation, to the benefit of the other party to the civil proceedings.
In this respect it cannot be disputed, and the Government do not deny, that in the context of the relations between the applicant and the adverse party to the civil proceedings, it was him who suffered from the depreciation of the Bulgarian currency and the inflation. However, imposing on the State the positive obligation to remedy such situations through legislation or judicial decision would be no less than imposing an obligation to guarantee the value of possessions despite inflation or other economic phenomena. The Court already found, however, that no such obligation exists under the Convention.
The Court finds, therefore, that the complaint under Article 1 of Protocol no. 1 to the Convention is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with paragraph 4 of this provision.
For these reasons, the Court, unanimously,
DECLARES THE APPLICATION INADMISSIBLE.
Vincent BergerMatti Pellonpää
RegistrarPresident
Full & Egal Universal Law Academy