AS TO THE ADMISSIBILITY OF
Application No. 13427/87
by S. and A.
against Greece
The European Commission of Human Rights sitting in private
on 4 July 1991, the following members being present:
MM. C.A. NØRGAARD, President
J.A. FROWEIN
S. TRECHSEL
F. ERMACORA
E. BUSUTTIL
G. JÖRUNDSSON
A.S. GÖZÜBÜYÜK
A. WEITZEL
H.G. SCHERMERS
H. DANELIUS
Mrs. G. H. THUNE
Sir Basil HALL
MM. F. MARTINEZ RUIZ
C.L. ROZAKIS
Mrs. J. LIDDY
MM. L. LOUCAIDES
J.-C. GEUS
M.P. PELLONPÄÄ
B. MARXER
Mr. H.C. KRÜGER, Secretary to the Commission
Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 20 November
1987 by S. and A. against Greece and registered on 20 November 1987
under file No. 13427/87;
Having regard to the observations of the respondent Government
of 30 June 1990 and to the applicants' observations in reply submitted
on 22 October 1990;
Having regard to the Government's additional observations of 6
May 1991 and the applicants' additional observations in reply
submitted on 13 June 1991;
Having regard to the report provided for in Rule 47 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The application was initially introduced by Mr. A. and by S.,
a company registered in Greece wholly owned by the former and
currently under liquidation. The applicant Mr. A. died in 1989. His
son and heir expressed the wish to maintain the application. The
applicants are represented before the Commission by Mr. P. Martyr,
solicitor in London.
The facts of the case as submitted by the parties can be
summarised as follows.
By a contract concluded on 22 July 1972 between the Greek
State and Mr. A. it was agreed that the latter would establish an oil
refinery to process crude oil in Megara, Greece. The contract was to
be carried out by Mr A.'s wholly owned company, S., the establishment
of which was contemplated by the contract. Under the contract all
rights and obligations of Mr. A. were automatically to be transferred
to S. upon its incorporation. The Greek Government ratified the
contract by legislative decree L.D. 1211 published in the official
Gazette on 26 July 1972. Under Article 21 of the Contract the Greek
State undertook to acquire not later than 31 December 1972, a plot of
land in Megara for the building of the Refinery. However, the Greek
State failed to acquire the land and consequently Stran was unable to
proceed with the project.
On 14 October 1977 the contract was formally terminated by a
decision of the democratically elected Government pursuant to Law
141/1975 concerning the termination of contracts entered into during
the military regime in Greece.
Prior to the discontinuation of the contract S. had already
incurred expenditure in connection with the project. S. had incurred
liabilities by entering into agreements with Greek and foreign firms
for the supply of services, goods and materials and had arranged loans
to finance the project. A dispute arose between S. and the Greek
State in which S. brought an action dated 10 November 1978 before the
Athens First Instance Court seeking reimbursement of the expenses it
had incurred. These proceedings were subsequently discontinued and
the case was referred to arbitration according to Article 27 of the
contract which provided for disputes between the State and S. arising
out of the contract to be resolved by arbitration. It was moreover
expressly provided by Article 27.9 of the contract:
"The arbitration award shall be definite, final and irrevocable,
and shall constitute an enforceable instrument requiring no
further action for enforcement or any other formality. It shall
be liable to no regular or extraordinary judicial measures, nor
shall it be subject to cancellation or suspension by action
before regular courts of justice. The party failing to comply
with the provisions of the arbitration award shall be obligated
to make good any and all damages (damnum emergens or lucrum
cessans) caused to the other party."
On 17 June 1980 arbitration proceedings commenced in
accordance with the above clause at the suit of the State. The latter
sought that the Arbitration Court declares that all claims for
compensation against the State brought by S. in the action before the
First Instance Court were unfounded (action for a declaratory award).
On 27 February 1984 the Court of Arbitration published its
award accepting a part of the State's claims. The Court of
Arbitration found that the claims by S. were well founded up to
Drachmas 116,273,442, US$16,054,165 and French Francs 614,627 and
unfounded as far as they exceeded the above sums.
On 2 May 1985 the State challenged the award before the
Athens First Instance Court seeking that the award be declared null
and void. By its decision No. 5526/1985 the Athens First Instance
Court dismissed the State's action. On 4 November 1986 the Athens
Court of Appeal confirmed the above decision. On 15 December 1986 the
State appealed to the Court of Cassation. A hearing was originally
scheduled to take place before that court on 4 May 1987 but was
subsequently adjourned to 1 June 1987.
On 25 May 1987 the Parliament enacted Law 1701/1987 by
publication in the official Gazette. The principal stated object of
this law was to expropriate the assets in certain oil companies
and to provide for compensation. Moreover, Article 12 of the Law
1701/1987 provides as follows:
"1. The true and lawful meaning of the provisions of Article 2
para. 1 of Statute No. 141/1975 concerning the termination of
contracts entered into between 21 April 1967 and 24 July 1974 is
that, upon the termination of these contracts, all their terms,
conditions and clauses including the arbitration clause, are ipso
facto repealed and the arbitration tribunal no longer has
jurisdiction.
2. Arbitration awards and/or decisions of paragraph 1 are no
longer valid or enforceable.
3. Any principal or ancillary claim against the Greek State,
expressed either in foreign or local currency, which arise out of
any of the contracts statutorily sanctioned entered into between
21 April 1967 and 24 July 1974 and terminated pursuant to Law No.
141/1975, are now proclaimed to be prescribed.
4. Any court proceedings at whatever level pending at the time of
the enactment of this statute, in respect of claims of the
paragraph above, are cancelled."
On 10 July 1987 the First Chamber of the Court of Cassation
gave its judgment No. 1387/1987 declaring, inter alia, that the
provisions in Article 12 of Law 1701/1987 were unconstitutional. The
Chamber referred the matter to the Plenary Court of Cassation.
The Plenary Court of Cassation held a hearing on
25 February 1988. It gave its judgment No. 4/1989 on 16 March 1989
declaring that the provisions in Article 12 of Law 1701/1987 were not
unconstitutional per se. However, the application of Article 12
para. 4 to the present case constituted a "clear intervention in
and an encroachment on the competence of the Courts" and was therefore
contrary to the constitutionally secured principle of the separation
of powers. The matter was accordingly remitted back to the First
Chamber of the Supreme Court for an examination of the State's appeal.
A hearing before the First Chamber of the Court of Cassation
took place on 12 February 1990. The Court gave its judment on
11 April 1990. It quashed the challenged judgment of the Court of
Appeal and declared the arbitration award null and void.
COMPLAINTS
1. The applicants complain that they have not been entitled to a
fair hearing in the determination of their civil rights to
compensation. They note that they joined in the arbitration
proceedings in reliance upon the good faith of the State which called
for and took part in these proceedings. On the contrary the State,
having failed in the arbitration proceedings, embarked upon a series of
dilatory appeals which resulted in further failure for them. The
applicants observe that Law 1701/1987 was enacted five days before the
hearing in their case before the Court of Cassation. They find that
the purpose of this Law was to bar the applicants from having their
claims resulting from the discontinuation of the contract determined.
In this respect they submit that Article 12 of the Law 1701/1987
constitutes an unfair and calculated attempt to interfere with and
encroach upon the powers of the judiciary.
The applicants also observe that the judgment of the Plenary
of the Court of Cassation by declaring Article 12 para. 4 of Law
1701/1987 inapplicable to their case does not remedy the situation
they complain of. The sole effect of that judgment is that the
proceedings have not been cancelled. However, the applicability of
paras. 1 to 3 of Article 12 of Law 1701/1987 in fact puts an end to the
litigation since under these provisions the arbitration award is no
longer valid or enforceable and their claims are prescribed.
The applicants consider that this constitutes an infringement
of the rule of law and a violation of Article 6 para. 1 and Article 13
of the Convention.
2. The applicants also submit that their case has not been
determined within a reasonable time as required by Article 6 para. 1
of the Convention. They note that their case is pending before Greek
Courts since 10 November 1978.
3. Finally the applicants complain that as a result, on the one
hand, of the lengthy and dilatory proceedings and, on the other hand, of
the provisions of Article 12 of the Law 1701/1987 they are deprived of
their property rights which have been recognised by the arbitration award.
They invoke Article 1 of Protocol No. 1 to the Convention.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 20 November 1987 and
registered on the same date.
Between November 1988 and December 1989 the Secretary to the
Commission requested the applicants to submit further information and
documents relating to the then pending domestic proceedings. The
applicants submitted the information requested on 25 January 1990.
On 2 April 1990 the Commission decided to bring the
application to the notice of the respondent Government and to invite
them to submit written observations on the admissibility and merits of
the application before 15 June 1990.
After obtaining a prolongation of the above time limit the
Government submitted their observations on 30 June 1990.
The applicants submitted their observations in reply on
24 October 1990.
On 1 March 1991 the Commission decided to invite the
Government to submit further written observations on the admissibility
and merits of the application.
The Government submitted such observations on 6 May 1991. The
applicants' further observations in reply were submitted on 13 June
1991.
THE LAW
The applicants complain that they have not been entitled to a
fair hearing in the determination of their civil right to
compensation, since the issues which were pending before the domestic
courts were determined by the legislator and not by the judiciary.
They also complain of the length of the proceedings and of being
arbitrarily deprived of their established claims to compensation.
They invoke Articles 6 para. 1 and 13 (Art. 6-1, 13) of the Convention
and Article 1 of Protocol No. 1 (P1-1).
The respondent Government first submit that the application is
incompatible ratione temporis with the provisions of the Convention.
They recall that the declaration by Greece under Article 25 para. 1
(Art. 25-1) of the Convention, recognises the Commission's competence
to examine individual applications against Greece only insofar as
these refer to matters occurring after 20 November 1985. The
Government observe in this respect that the litigation between the
applicants and the Greek State originated in 1977, that is before 20
November 1985.
Moreover, the Government submit that the applicants could have
challenged the decision terminating the contract before the Council of
State (Symvoulio tis Epikrateias). Having failed to pursue this
remedy they have not complied with the requirements as to the
exhaustion of domestic remedies in accordance with Article 26
(Art. 26) of the Convention.
The Government finally argue that an action by the legislator
involving an authentic interpretation of the Law 141/1975 was
necessary in order to settle the controversies as to the meaning of
the provisions of this Law. It was not, therefore, an interference
with the applicants' case before the courts.
The applicants submit that their complaints relate to matters
which occurred or at least continued after 20 November 1985.
Furthermore, the applicants admit that proceedings as to the
legality of the termination of the contract could have been instituted
before the Council of State. Nevertheless, by instituting such
proceedings no damages could be claimed. In the applicants' view this
remedy was not, therefore, an effective one. As to the merits of
their complaints, they essentially refer to their initial submissions.
The Commission examined the parties' submissions. It finds
the following:
I. As regards the Commission's competence ratione temporis.
The Commission observes that the applicants complain first of
the passing on 25 May 1987 of the Law 1701/1987 and of the decisions
given by the Court of Cassation on 25 February 1988 and 11 April 1990
implementing this law. It notes that these matters have occurred after
20 November 1985 and are therefore, within its competence ratione
temporis.
As regards the complaints relating to the length of the
proceedings referred to in the application the Commission observes
that the overall litigation ended after 20 November 1985. Therefore,
this matter cannot be regarded as falling outside the Commission's
competence ratione temporis.
The Commission does not overlook in this respect the fact that
questions arise as to what are the exact periods it is competent
either to examine as such or to take into consideration when assessing
the reasonableness of the length of the proceedings under Article 6
para. 1 (Art. 6-1) of the Convention (cf. Eur. Court H.R., Foti and others
judgment of 10.12.82, Series A no. 56 pp. 18-19, para. 53). The same
question may arise with regard to the applicants' complaint that due
to the allegedly lengthy proceedings their right under Article 1 of
Protocol No. 1 to peaceful enjoyment of their possessions has been
infringed. The Commission finds, nevertheless, that these questions
raise complex issues of fact and law which are closely linked to the
merits of the application and are not to be determined at the stage of
admissibility.
Consequently, the Commission finds that the application cannot
be regarded as falling outside the Commission's competence ratione
temporis.
II. As to the exhaustion of domestic remedies.
The Commission recalls that the basis of the rule of
exhaustion of domestic remedies is that before proceedings are brought
in an international judicial organ, the State made answerable must
have an opportunity of redressing the alleged damage by domestic
means. In this respect the remedies which are to be taken into
account are these which are capable of providing an effective and
sufficient means of redressing the wrongs which are the subject of the
international claim (cf. No. 5964/72, Dec. 29.9.75, D.R. 3 p. 57; Nos.
13092/87 and 13984/88, Dec. 5.6.90).
The Commission finds that the Government failed to show in
what way the possibility for the applicants to institute
administrative proceedings in 1977 against the act terminating the
contract could have redressed in any way any of the wrongs which are
the subject matter of the application, i.e. the entry into force and
the implementation of law 1701/1987 in the applicants' case and the
length of the proceedings.
It follows that the Government's objection as to the
exhaustion of domestic remedies must be rejected.
III. As regards the merits of the application.
The Commission examined the parties' submissions and
arguments. It finds that the application raises complex issues of
fact and law and that it cannot be regarded as manifestly ill-founded
within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.
The application must therefore be declared admissible, no
other ground for declaring it inadmissible having been established.
For these reasons, the Commission unanimously
DECLARES THE APPLICATION ADMISSIBLE,
without prejudging the merits.
Secretary to the Commission President of the Commission
(H.C. KRÜGER) (C.A. NØRGAARD)
Full & Egal Universal Law Academy