Communicated on 10 March 2016
FIRST SECTION
Application no. 16346/10
Gevorg SAFARYAN
against Armenia
lodged on 18 March 2010
STATEMENT OF FACTS
The applicant, Mr Gevorg Safaryan, is an Armenian national who was born in 1961 and lives in Yerevan.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 22 October 2007 the Investigative Department of the State Revenue Committee instituted criminal proceedings on account of aggravated tax evasion against the applicant, former executive director and founder of “Pizza Di Roma” LLC (the company) who held 100% of its shares.
On the same date the applicant was detained.
On an unspecified date the applicant was charged under Article 205 § 2 of the Criminal Code for having deliberately concealed the company’s profits during the years 2006 to 2007, as a result of which the company had avoided paying taxes in the amount of AMD 321,649,580 (approximately EUR 680,000) including unpaid taxes and penalties. Charges were also brought against the treasurers of the company, A.G. and S.D., for having assisted the applicant in concealing the company’s profits. The applicant was also charged for not having registered a number of company employees, which had resulted in the company avoiding social payments in the amount of AMD 1,920,000 (approximately EUR 4,060).
On 19 June 2008 the case was sent to the trial court for examination on the merits.
On 9 October 2008 the State Revenue Committee (the SRC) lodged a civil claim against the company within the framework of the criminal proceedings against the applicant. The SRC requested the trial court to make an order to seize AMD 396,943,193 (approximately EUR 840,000) from the company, which amount included the initial tax duties and further penalties imposed on the company.
It appears that the SRC was recognised as a civil claimant within the framework of the criminal proceedings against the applicant.
On 6 November 2008 the applicant was released on bail for the amount of AMD 3,500,000 (approximately EUR 7,400).
On 7 April 2009 the Kentron and Nork-Marash District Court of Yerevan found the applicant guilty as charged and sentenced him to four years’ imprisonment without confiscation of property. The District Court decided that the applicant should not serve his sentence. It also decided to grant the civil claim lodged by the SRC partially in the amount of AMD 221,649,250 (approximately EUR 469,000) and ordered the confiscation of the applicant’s shares in the company, his personal movable and immovable property and the amount of bail paid during the proceedings. Also, the District Court sentenced A.G. and S.D. to three years’ and one year’s imprisonment respectively and exempted them from serving their sentence. The District Court further ordered the confiscation of AMD 39,553,207 from A.G. and AMD 12,084,634 from S.D. in joint responsibility with the applicant.
The applicant lodged an appeal against the judgment of 7 April 2009 in its part relating to the civil claim. He argued, in particular, that in the course of the criminal proceedings no civil claim had been lodged against him and he was not a civil defendant in the proceedings, whereas the SRC had introduced a civil claim against the company requesting the trial court to seize AMD 396,943,193 (approximately EUR 840,000) from the company in fulfilment of its obligations towards the State budget. In such circumstances, he had no opportunity to familiarise himself with the claims advanced or respond to them, while the trial court had no power to order the confiscation of his property in the absence of a duly formulated civil claim lodged against him.
On 19 June 2009 the Criminal Court of Appeal rejected the applicant’s appeal. In doing so it found, in particular, that the trial court had determined correctly the amount of damage caused to the State as a result of the offence committed by the applicant and that, accordingly, the issue of the applicant’s responsibility had been decided properly.
The applicant lodged an appeal on points of law raising similar arguments to those raised in his previous appeal.
On 26 August 2009 the Court of Cassation declared the applicant’s appeal on points of law inadmissible for lack of merit.
According to the applicant, on 26 February 2010 the bailiff made a decision to attach his movable and immovable property in the amount of AMD 39,750,967 (approximately EUR 84,000). Furthermore, by the decision of 2 March 2010, the bailiff attached the applicant’s shares in the company and his movable and immovable property in the amount of AMD 232,732,059 (approximately EUR 493,000). At the same time, the applicant was prohibited from using or alienating his property.
B. Relevant domestic law
1. The Code of Criminal Procedure (in force from 12 January 1999)
According to Article 74 § 1, a physical or legal person is recognised as a civil defendant if, on the basis of a claim introduced during the criminal proceedings, such person can bear civil liability under the law for damage caused as a result of the accused having committed an offence prohibited by the Criminal Code. The decision on recognising a civil defendant is taken by the investigation authority, the prosecutor or the court (Article 74 § 2).
According to Article 75 § 1, the civil defendant has the right, inter alia, to give explanations with regard to the civil claim introduced against him.
Article 156 provides that the prosecutor introduces and defends a civil claim if the pecuniary interests of the State have been infringed.
According to Article 158 § 3, a civil claim should indicate the person who, the person against whom and in which criminal case the claim is introduced, the amount and the basis of the claim.
2. The Law on Limited Liability Companies («Սահմանափակ պատասխանատվությամբ ընկերությունների մասին» ՀՀ օրենք)
According to Article 5 § 1, a limited liability company bears responsibility with its own assets.
Article 5 § 3 states that the participators in a limited liability company do not bear responsibility for the company’s liabilities and they are responsible for the damages caused as a result of the operation of the company within the limits of their investment.
COMPLAINTS
The applicant complains under Article 6 § 1 of the Convention that, in the course of the criminal proceedings against him, he was deprived of the opportunity to familiarise himself with the civil claim lodged by the SRC against the company and submit his arguments in its regard although the trial court, by partially granting the claim, eventually ordered the confiscation of his own property.
The applicant complains that he was deprived of his property in violation of the guarantees of Article 1 of Protocol No. 1 to the Convention.
QUESTIONS TO THE PARTIES
1. Did the applicant have a fair hearing in the proceedings against him, in accordance with Article 6 § 1 of the Convention? In particular, were the principles of equality of arms and adversarial trial respected as regards the determination of the civil claim lodged within the framework of the criminal proceedings against the applicant?
2. Has the applicant been deprived of his property in the public interest and in accordance with the conditions provided for by law, within the meaning of Article 1 of Protocol No. 1?
If so, was that deprivation proportionate to the legitimate aim pursued? In particular, did it impose an excessive individual burden on the applicant (see Immobiliare Saffi v. Italy, [GC], no. 22774/93, § 59, ECHR 1999-V)?
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