Communicated on 9 March 2016
FOURTH SECTION
Application no. 36407/12
S.C. CONTINENTAL HOTELS S.A.
against Romania
lodged on 5 June 2012
STATEMENT OF FACTS
The applicant, S.C. Continental Hotels S.A., is a Romanian company, which was set up in 1999 and is located in Bucharest. It is represented before the Court by S.C.A. Popovici Nițu & Associații, a law office located in Bucharest.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Background information concerning the applicant company
The applicant, SC Continental Hotels SA, is a former State‑owned company. It was set up in 1990 under Law no. 15/1990.
In the applicant company’s property was included a hotel and the plot of land on which the hotel was situated. In 1994 the Ministry of Tourism issued a title of property in this regard.
In 1995 the applicant company was transformed in a private company.
As the hotel was in an advanced degree of degradation the authorities authorized its demolition in 1996.
2. Civil proceedings for the restitution of the hotel and of the land
In 1994 the legal successors of the former owner of the land and of the hotel, deprived by the State of his property during the communist regime, instituted civil proceedings against the applicant company for restitution of the land and of the hotel.
By a judgment delivered on 16 November 1995 the Bucharest District Court allowed their civil action and ordered the restitution of the hotel and of the appurtenant land to the plaintiffs.
On 1 June 1996 the Bucharest County Court dismissed an appeal lodged by the applicant company against that judgment.
The applicant company lodged an appeal on points of law with the Bucharest Court of Appeal. On 18 December 1996 the court allowed the applicant company’s appeal on the ground that the lower courts had not complied with procedural rules concerning jurisdiction. It quashed their decisions and remitted the case to the Constanţa District Court for a new examination on the merits.
At the request of one of the plaintiffs the case was remitted to the Buzău District Court.
In 1997 the case was registered with the Buzău County Court.
At a hearing held on 3 November 1997 the applicant company had asked the court to introduce as party in the trial a State authority called the State Property Fund (“FPS”) from which it had acquired the shares in the privatisation process and which, in its opinion, should guarantee the payment of compensation for the hotel and the appurtenant land in case that the plaintiffs’ claims would be allowed. The applicant company based its request on the relevant provisions of Civil Code concerning the liability of the seller for the quiet possession of the sold assets and his obligation to guarantee the buyer in case of eviction and on the liability clauses contained by the privatisation contract.
On 15 June 1998 the Buzău County Court dismissed the plaintiffs’ action on the ground that the hotel and the land had been legally included in the applicant company’s patrimony.
The plaintiffs lodged an appeal with the Ploieşti Court of Appeal.
The appeal court suspended the trial between 10 May 1999 and 22 December 2006 as there were pending civil proceedings between the legal successors of the former owner concerning their entitlement to claim the restitution of the hotel and of the appurtenant land.
On 20 March 2009 the Ploieşti Court of Appeal allowed the plaintiffs’ action. The applicant company lost the property over the land and was ordered to pay 11,138,275 Romanian lei (“RON”) to the plaintiffs, corresponding to the value of the demolished hotel. By the same decision, the Authority for Capitalization of the State’s Assets (AVAS), a successor of the State authority FPS, was identified as the State authority responsible to compensate the applicant company for the damage caused to it. Accordingly, AVAS was ordered to repay the applicant company the amount of RON 11,138,275.
The applicant company lodged an appeal on points of law claiming that it had not received any compensation for the lost land. AVAS and the plaintiffs also lodged appeals on points of law.
By a decision of 2 December 2009 the High Court of Cassation and Justice allowed all the appeals on points of law, quashed the last decision and sent the case to the Ploieşti Court of Appeal.
During the appeal proceedings before the Ploieşti Court of Appeal the applicant company filed a request to have the Ministry of Finance introduced as party to the proceedings on account of the fact that following the adoption of Law no. 221/2009 it had the obligation to compensate the victims of the confiscation measures taken by the communists between 1945‑1989.
By a decision of 16 December 2010 the Ploieşti Court of Appeal allowed the civil action lodged by the plaintiffs and dismissed the request to have the Ministry of Finance as guarantor. The applicant company was obliged to the restitution of the land and to the payment of a compensation of RON 11,138,275 for the demolished hotel. It also ordered AVAS to pay to the applicant company the amount it had to pay for the demolished hotel and RON 2,209,200 for the land it lost, as well as all the court expenses.
All the parties lodged appeals on points of law.
By a decision of 6 December 2011 the High Court of Cassation and Justice dismissed the applicant company’s appeal. It allowed the appeal lodged by AVAS and dismissed the applicant company’s request to be compensated by AVAS as being lodged by a person not having locus standi.
B. Relevant domestic law and practice
1. Relevant provisions concerning the privatisation of commercial companies
Under Article 324 of Emergency Government Ordinance no. 88/1997 concerning the privatisation of commercial companies, as approved by Law no. 44/1998, the privatised commercial company had locus standi to institute civil proceedings to be compensated for the damage caused as a result of the restitution of real estate to the former owner, deprived of his property by the State during the communist regime.
Article 324 was expressly repealed by Article 56 of Law no. 137/2002 concerning measures for the acceleration of the privatisation process. However, Article 30 § 3 of the law expressly stipulated that Article 324of the ordinance remained applicable to all the sale-purchase agreements of shares already concluded when the law entered in force in 2002.
2. Decision no. 18/2011 of the High Court of Cassation and Justice
In a decision delivered on 17 October 2011 and published in the Official Gazette on 16 December 2011, the High Court of Cassation and Justice had confirmed the ultra-activity of Article 324 of the EGO in connection with the sale-purchase agreements concluded before the entry in force of Law no. 137/2002.
COMPLAINTS
The applicant company complains under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention that as a result of an erroneous interpretation of the relevant domestic legislation by the High Court of Cassation and Justice it was deprived of compensation by the competent State authority for the damage caused to it by allowing a civil action for restitution lodged by the legal successors of the former owner of property.
QUESTIONS TO THE PARTIES
1. Did the applicant company have a fair hearing in the determination of its rights and obligations, in accordance with Article 6 § 1 of the Convention, in view of the fact that the High Court of Cassation and Justice dismissed its compensation claim on the ground that it lacked locus standi?
2. Did the dismissal of the applicant company’s compensation claim by a final decision delivered by the High Court of Cassation and Justice on 6 December 2011 constitute an interference with the applicant company’s right to the peaceful enjoyment of its possessions, within the meaning of Article 1 of Protocol No. 1? If so, was the interference proportionate in its impact on the applicant company’s right under Article 1 of Protocol No. 1?
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