SECOND SECTION
DECISION
Application no. 31893/03
PROCON S.R.L.
against the Republic of Moldova
The European Court of Human Rights (Second Section), sitting on 14 June 2016 as a Chamber composed of:
Işıl Karakaş, President,
Nebojša Vučinić,
Paul Lemmens,
Valeriu Griţco,
Ksenija Turković,
Stéphanie Mourou-Vikström,
Georges Ravarani, judges,
and Stanley Naismith, Section Registrar,
Having regard to the above application lodged on 7 July 2003,
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
1. The applicant, Procon S.R.L., is a company registered in Moldova. It was represented before the Court by Mr F. Nagacevschi, a lawyer practising in Chișinău.
2. The Moldovan Government (“the Government”) were represented by their Agent, Mr L. Apostol.
I. THE CIRCUMSTANCES OF THE CASE
3. The facts of the case, as submitted by the parties, may be summarised as follows.
A. The privatisation of the premises rented by the applicant
4. The applicant company rented part of the basement of a State-owned building (the Ginta-Latină theatre, “G-L”). The premises were equipped for use as a bar (“the bar”).
5. By decision no. 37 of 30 June 1998 the Commission for Privatisation of Rented Property (“the Commission”, a subdivision of the Department of Privatisation and Administration of State Property, “the Department”) allowed the privatisation of the bar and set the initial price at 423,390 Moldovan lei (“MDL”, the equivalent of approximately 57,373 United States Dollars (“USD”) at the time). On 21 August 1998 the Commission adopted decision no. 40 allowing the applicant company to pay the price of the bar.
6. On 5 October 1998 the applicant company received a letter from the Department in which it was invited to appear before it in order to receive information about the modalities of payment, failing which the bar would be offered for privatisation at an auction.
7. On 13 November 1998 the Commission adopted decision no. 42 (“the 1998 decision”) confirming the permission to privatise the bar and setting the final price at MDL 348,676 (the equivalent of approximately USD 47,250 at the time).
8. On 24 December 1998 the applicant company concluded a contract with the Department for the purchase of the bar from the State. The applicant company paid the full price indicated in the contract (MDL 348,676).
B. The first set of court proceedings
9. On 15 January 1999 G-L initiated court proceedings against the Department, seeking to have the 1998 decision overturned and have the bar’s activity suspended. It argued that the type of property which the Commission had allowed the applicant company to buy was part of a building constituting national cultural heritage and was one of the types of property (room with a technical lines hub, common use room for the entire building) not subject to privatisation in accordance with the law.
10. According to the applicant company, at its requests of 5 February and 31 May 1999 it was accepted on the latter date in the proceedings as a third party having its own claims.
11. Following several decisions regarding procedural matters, on 4 May 2000 the Economic Court of the Republic of Moldova rejected G-L’s claim. No appeal was lodged and the judgment became final fifteen days later.
12. The Prosecutor General requested the Supreme Court of Justice to reopen the proceedings as part of an extraordinary remedy. On 28 November 2001 the Supreme Court of Justice agreed and quashed the judgment of 4 May 2000, ordering a re-hearing of the case.
13. On 29 October 2002 G-L added to its earlier claims against the applicant company a request to declare the contract of 24 December 1998 for the sale of the bar null and void. The Department also brought a court action against the applicant company on the same day, seeking the annulment of that contract, since its object was property that could not have been lawfully privatised.
14. In the meantime, on 6 September 2001 the Commission adopted decision no. 89 (“the 2001 decision”) by which it annulled the part of the 1998 decision which had authorised the privatisation of the bar, without giving reasons.
15. On 11 October 2002 the applicant company initiated court proceedings, seeking the overturning of the Commission decision mentioned in the preceding paragraph. In that respect it noted that the relevant part of the 1998 decision allowing the privatisation of the bar had been the subject of judicial proceedings ending with the judgment of 11 October 2000 (see paragraph 25 above), which had become final.
16. The Economic Court of the Republic of Moldova decided to join the proceedings of the applicant company against the Commission (concerning the 2001 decision) with those brought by G-L and the Department against the applicant company (concerning the annulment of the sale of the bar).
17. On 18 November 2002 the same court allowed the applicant company’s claims and rejected those of the Department and G-L. It quashed the 2001 decision as unlawful. The court noted that by the final Economic Court judgment of 11 October 2000 (see paragraph 25 below) the 1999 decision had been quashed, and that that judgment confirmed the lawfulness of the decision to allow the privatisation of the bar. The court went on to examine the substance of the case, and found that the privatisation had not been contrary to any legislative provision.
18. The Department and G-L appealed. The applicant company submitted that it had made the purchase in good faith, and emphasised that it had been the initiative of the Department to privatise the bar and that the applicant had been warned that the bar would be sold at auction if it did not purchase it (see paragraph 6 above).
19. On 12 February 2003 the Supreme Court of Justice quashed the judgment of 18 November 2002. It ruled on the merits of the case and found that the lower court had incorrectly interpreted certain aspects of the relevant legislation and concluded that in accordance with the law G-L’s basement was situated in a building that was part of State property which was not subject to privatisation. Accordingly, it declared null and void the contract for the purchase of the bar from the Department, and ordered restitutio in integrum, the applicant to receive the sum paid during the privatisation.
20. According to the Government, the applicant company was allowed to continue renting the bar from the State.
C. The second set of court proceedings
21. In the meantime, while the first set of proceedings was pending, the applicant company sought to have its title to the bar entered in the Territorial Land Registry (“the TLR”), relying on the 1998 decision and the contract with the Department. The TLR rejected that request on 2 and 16 February 1999 because of the Government decision no. 39 of 22 January 1999, under which the entire building had been transferred for free to the Parliament. On 17 March 1999 the applicant company took legal action against the Department (asking for de facto transfer of the property) and against the TLR (asking it to register the company’s title to the privatised property).
22. On 30 June 1999 the Chişinău Economic Court ordered the TLR to register the applicant company’s title to the bar and issue it with the relevant confirmation, and the Department to transfer the property to the applicant company. The court noted that in accordance with the 1998 decision and the contract between the Department and the applicant company the latter had bought the relevant property and that the Department did not object to the applicant company’s claim, while the TLR was absent. No appeal was lodged and the judgment became final.
23. The Prosecutor General requested the Supreme Court of Justice to reopen the proceedings (recurs în anulare), arguing inter alia that another court action concerning the lawfulness of privatisation (the first set of proceedings) was pending. The Supreme Court of Justice rejected that request on 15 December 1999, noting that if the parallel proceedings referred to by the Prosecutor General resulted in the annulment of the contract for the sale of the relevant property, the judgment of 30 June 1999 could be reviewed in accordance with the law.
D. The third set of court proceedings
24. While the first set of proceedings was still pending, on 10 September 1999 the Commission adopted decision no. 59 (“the 1999 decision”) by which it quashed the part of the 1998 decision regarding the permission to privatise the bar, without giving reasons for doing so. On 21 January 2000 the Department informed the applicant company of that decision, specifying that in reaching it the Commission had taken into account the Government decision no. 39 of 22 January 1999 transferring the building to the Parliament.
25. On 12 July 2000 the applicant company initiated court proceedings seeking to overturn the 1999 decision. On 11 October 2000 the Economic Court of Moldova quashed the Commission’s 1999 decision as unlawful, finding that in the meantime the Government decision no. 39 mentioned above had been overturned by Government decision no. 435 of 10 May 2000. G-L was not a party to those proceedings.
26. On 21 November 2001 the Appeals Chamber of the Economic Court of the Republic of Moldova rejected the Department’s appeal as out of time. The judgment of 11 October 2000 became final.
II. RELEVANT DOMESTIC LAW
27. The relevant part of Section 131 of the Code of Civil Procedure (as it was in force at the time of the events) reads as follows:
“Article 131. Acceptance for examination and refusal to examine civil law suits.
... The judge shall refuse to examine the law suit:
... (4) if (s)he accepted for examination a law suit between the same parties, having the same object and the same grounds;
...”.
COMPLAINTS
28. The applicant company complained under Article 6 § 1 of the Convention that the proceedings had been unfair, because of divergent court judgments adopted on the same issue.
29. It also complained under the same Article about the quashing of the final judgment of 4 May 2000.
30. It further complained under the same Article that the proceedings had been excessively long.
31. The applicant company claimed that the Supreme Court of Justice was not an “independent and impartial tribunal” as required by Article 6 § 1 of the Convention.
32. It lastly complained under Article 13 in conjunction with Article 6 § 1 of the Convention because it had not had effective remedies in respect of its complaints regarding the length of proceedings.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION (CONFLICTING JUDGMENTS)
33. The applicant company complained under Article 6 § 1 of the Convention that the principle of legal certainty had been breached by the adoption of a court judgment which treated in a different manner an issue already resolved in a previous final judgment. It considered that the judgments adopted in the second and third sets of proceedings, adopted on 30 June 1999 and 21 November 2001 respectively, confirmed the lawfulness of the permission to privatise the bar, while the judgment of 12 February 2003 declared the sale contract null and void.
34. The Government considered that the courts adopted correct and well-reasoned decisions, in compliance with the imperative provisions of the law.
35. The Court recalls that in all legal systems the principle of res judicata resulting from a final court judgment has limitations ad personam and ad rem (see, for instance, Sivova and Koleva v. Bulgaria, no. 30383/03, § 71, 15 November 2011). In the present case, it needs to verify whether the final judgments adopted on 30 June 1999 and 21 November 2001 established the lawfulness of privatisation of the relevant property, so that the judgment of the Supreme Court of Justice dated 12 February 2003, finding as it did the privatisation null and void, deprived these earlier adopted judgments of their final character.
36. It is to be noted first that the parties never expressly asked, as part of the second and third sets of proceedings, that the courts determine the lawfulness of privatisation. It is clear from the materials of the case that the second set of proceedings concerned the TLR’s refusal to register the applicant company’s title based on the 1998 decision and contract because of a 1999 Government decision transferring the entire building to the Parliament (see paragraph 21 above), as well as the Department’s de facto failure to transfer the privatised property. It is true that the court relied on the 1998 decision and the contract for the purchase of the bar as the basis for its decision. However, none of the parties questioned the lawfulness of the privatisation.
37. The third set of proceedings concerned a decision taken by the Commission in 1999 on the basis of the above-mentioned 1999 Government decision (see paragraphs 24 and 25 above). Again, in these proceedings the courts were not asked to examine the validity of the original decision to allow privatisation in 1998 from the stand point of the prohibition to sell certain State property, but whether the 1999 Commission decision could lawfully annul part of the original 1998 decision taken by the same authority.
38. It is therefore apparent that not only did the parties not ask the courts to examine the lawfulness of the privatisation as such, but the second and third sets of proceedings each had an object distinct from that of the first set of proceedings. Indeed, the latter concerned the lawfulness of the privatisation of the disputed bar from the point of view of the legal prohibition on privatising certain State property, a provision pre-dating the 1998 decision and the sale contract.
39. The applicant company’s position may also be understood as meaning that while adopting the judgments of 30 June 1999 and 21 November 2001 the courts must have implicitly dealt with the issue of lawfulness of privatisation, the more so that one of them relied on the 1998 decision and the contract between the applicant company and the Department and that subsequently a court found that the decision of 11 October 2000 had confirmed the lawfulness of privatisation (see paragraph 17 above). In this respect, the Court notes that while these judgments were adopted before any judgment in the first set of proceedings, the latter had been initiated by G-L before any other court action was filed (see paragraph 9 above). Subsequently the case became one of G-L and the Department against the applicant company (see paragraph 10 above) and its main object was from the very beginning the lawfulness of privatisation and of the sale contract from the point of view of the legal prohibition to sell certain State property.
40. Under the law applicable at the time (see paragraph 27 above) the courts could not accept for examination a law suit having the same object and grounds and between the same parties if another such law suit had already been accepted for examination. Accordingly, had the second and third sets of proceedings dealt with the same issue of lawfulness of privatisation and of the contract as the first set of proceedings filed earlier, such subsequent court actions would have been left without examination. The application of this procedural rule confirms, in the Court’s opinion, the fact that each set of proceedings in the present case had its own, separate object. So does the position of the Supreme Court of Justice in rejecting the Prosecutor General’s request for the reopening of the second set of proceedings (see paragraph 23 above), finding that were the contract for the sale of the bar to be annulled in a subsequent judgment as part of the first set of proceedings, the judgment of 30 June 1999 could be reviewed.
41. Therefore, neither the finding of the Supreme Court of Justice that privatisation had been contrary to the law, nor its annulment of the sale contract jeopardised the principle of legal certainty.
Accordingly, this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3(a) and 4 of the Convention.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION (QUASHING OF A FINAL JUDGMENT)
42. The applicant company complained under Article 6 § 1 of the Convention about the quashing, on 28 November 2001, of a final court judgment in its favour concerning the validity of the privatisation (see paragraph 12 above).
43. The Government argued that the complaint in that respect had been lodged out of time.
44. The Court reiterates that “the quashing of a final judgment is an instantaneous act which does not create a continuing situation, even if it entails a reopening of the proceedings” (see Frunze v. Moldova (dec.), no. 42308/02, 14 September 2004). The quashing of the final judgment in this case took place on 28 November 2001. The six-month period started running from that date, while this application was introduced on 7 July 2003, more than six months later.
Therefore, the complaint was introduced outside the time-limit set down by Article 35 § 1 of the Convention, and must be rejected as inadmissible pursuant to Article 35 § 4 of the Convention.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
45. The applicant company complained under Article 6 § 1 that the length of the proceedings had been excessive and that the Supreme Court of Justice had not been an “independent and impartial tribunal”, and also under Article 13 in conjunction with Article 6 § 1 of the Convention, because it had not had effective remedies in respect of its complaints regarding the length of proceedings.
46. Having regard to all the material in its possession, the Court finds that these complaints do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. The Court notes, in particular, that the applicant company did not complain under Article 1 of Protocol No. 1 to the Convention and did not ask the domestic courts for a fair compensation for any losses caused to it as a result of the annulment of the contract because of an error of the State authority in offering the property for sale unlawfully. In this respect the case differs from Dacia S.R.L. v. Moldova (no. 3052/04, §§ 51-66, 18 March 2008).
It follows that the remainder of the application must be rejected as manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Done in English and notified in writing on 7 July 2016.
Stanley NaismithIşıl Karakaş
RegistrarPresident
Full & Egal Universal Law Academy