Communicated on 7 March 2016
FOURTH SECTION
Application no. 7629/10
S.C. VINALCOOL ARGEŞ S.A. PITEŞTI
against Romania
lodged on 9 December 2009
STATEMENT OF FACTS
1. The applicant, S.C. Vinalcool Argeş S.A. Piteşti, is a Romanian private company with its headquarters in Piteşti. It is represented before the Court by Ms R. Folescu, a lawyer practising in Piteşti.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
1. The applicant company’s legal status
3. The applicant company was created under Law no. 15/1990 on the Reorganisation of State-owned Companies into Commercial Companies. Under Article 20 of that Law, it took over the assets of a former economic unit owned by the communist State. The State owned all the shares in the new company and administered them through the State Property Fund (Fondul Proprietăţii de Stat – “the F.P.S.”). In 1994 the Ministry of Agriculture and Food issued a certificate recording which possessions belonged among the company’s assets.
4. On 8 January 1998 F.P.S. transferred its shares in the applicant company to the Oltenia Financial Investment Company (Societatea de Investiţii Financiare Oltenia S.A. – “S.I.F. Oltenia”). Founded in 1993 as a Private Property Fund, S.I.F. Oltenia was reorganised in accordance with Law no. 133/1996 on the Transformation of Private Ownership Funds in Financial Investment Companies and is currently an entirely privately‑owned company. In exchange, F.P.S. received shares in other State-owned companies. The applicant company thus became a privately-owned company.
5. On 8 June 2005 S.I.F. Oltenia sold 66.9 % of the applicant company’s shares to private entities, the current shareholders.
2. Proceedings against the applicant for restitution of property
6. On 29 October 2002 three individuals brought an action against the applicant company for restitution of property, claiming that the land recorded in the 1994 certificate had been unlawfully confiscated from their grandparents by the communist State. They relied on the provisions of Law no. 10/2001 on the Restitution of Property.
7. In a judgement of 16 October 2003, the Argeş County Court ordered the applicant company to surrender to the plaintiffs the land and the buildings erected on it. The court found that the plaintiffs’ grandparents had been the rightful owners of the assets, which had been unlawfully nationalised in 1950. It considered that the 1994 certificate issued to the applicant company did not constitute a valid property title deed, as it only acknowledged the factual situation existing as at the date of its delivery.
8. The applicant company appealed. On 1 July 2004 the Argeş Court of Appeal found that the buildings had been demolished and that their restitution was thus no longer possible. It therefore replaced the obligation to return the buildings with an order to pay compensation to the plaintiffs.
9. The High Court of Cassation and Justice upheld those findings in a final decision adopted on 7 February 2006.
10. On 8 March 2007 the applicant company surrendered the possession of the land.
3. Action in compensation against the State
11. On 2 May 2007 the applicant company brought an action against the State and the Authority for Recovery of State Assets (Autoritatea pentru Valorificarea Activelor Statului – “the A.V.A.S.” – a new organisation which encompassed the former F.P.S.) seeking compensation for the loss it had incurred because of the restitution of its assets to their former owner. It estimated the damage at 643,280.16 Romanian lei (RON). It relied on Government Emergency Ordinance no. 88/1997 on the Privatisation of Commercial Companies (“Ordinance No. 88/1997”).
12. On 15 May 2008 the Argeş County Court granted the action. It observed that the applicant company had been privatised in 1998 by the State and held that the A.V.A.S. and the State were responsible for the loss incurred by the applicant, under the provisions of Article 324 of Ordinance no. 88/1997. It therefore ordered the defendants to pay RON 643,280.16 to the applicant company. Both parties appealed.
13. In a final decision of 23 June 2009, the High Court of Cassation and Justice quashed that ruling. It held that the applicant company had been privatised by means of a non-pecuniary assignment, following normative provisions which had been expressly abolished by Ordinance no. 88/1997. Consequently the privatisation had not been covered by the provisions of Ordinance no. 88/1997, which had only regulated privatisation by means of sale contracts. The court concluded that the State’s liability could not be engaged.
4. Other developments
14. In separate proceedings instituted by three individuals against the A.V.A.S. and the applicant company for restitution of property confiscated by the communist state, the courts accepted that the applicant company could not be held liable under Law no. 10/2001 given that when that Law had entered into force, the property in question had belonged to the company.
B. Relevant domestic law
15. Ordinance no. 88/1997 read as follows in so far as relevant as at the date of the facts:
Article 5
“The State Property Fund is a public interest institution, with legal personality, subordinated to the Government, which acts [to diminish] the participation of the State and of the local public authorities in the economy by selling ... shares [in itself].”
Article 324
“1. The public institutions involved in privatisation grant compensation to companies which have been privatised or are in the process of privatisation for the damage caused to them by the restitution to the former owners of assets that were nationalised by the State. ...
5. If the companies are ordered, by final court decisions, to pay compensation for confiscated possessions when restitution in kind is not possible, the public institutions involved in privatisation will pay such awards directly to the rightful owners.
6. The State guarantees the fulfillment by the public institutions of the obligations set out in this Article.”
16. Under the relevant provisions of Law no. 137/2002 concerning measures for accelerating the process of privatisation (Article 29 § 3), the public institutions involved in privatisation will pay compensation to buyers with whom they have concluded sales contracts and not to the companies themselves. Under Article 30 § 3 of the same Law, the new regulations did not apply to sale contracts concluded before the entry into force of the regulation which remained under the authority of Ordinance no. 88/1997. This interpretation was reaffirmed by the High Court of Cassation and Justice in its decision no. 18 of 17 October 2011 adopted in the examination of an appeal in the interest of law.
COMPLAINTS
17. The applicant company complains that by dismissing its action against the A.V.A.S. and the State, the courts wrongly applied the provisions of Ordinance no. 88/1997 and disregarded its right to receive compensation for the loss of possessions, thus breaching its right to fair proceedings and causing it damage. It relies on the provisions of Articles 1, 6 and 13 of the Convention and of Article 1 of Protocol No. 1 to the Convention.
QUESTIONS TO THE PARTIES
1. Did the applicant company exhaust all the available domestic remedies, within the meaning of Article 35 of the Convention? In particular, did the applicant company have the opportunity to rely on the responsibility for eviction (garanţia pentru evicţiune) under the provisions of the Civil Code in force at the relevant time?
2. Has the applicant company been deprived of its possessions, within the meaning of Article 1 of Protocol No. 1?
If so, was that deprivation necessary?
In particular, did that deprivation 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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