FOURTH SECTION
DECISION
Application no. 4570/06
SOMICO OOD
against Bulgaria
The European Court of Human Rights (Fourth Section), sitting on 14 May 2013 as a Chamber composed of:
Ineta Ziemele, President,
David Thór Björgvinsson,
George Nicolaou,
Ledi Bianku,
Zdravka Kalaydjieva,
Vincent A. De Gaetano,
Paul Mahoney, judges,
and Françoise Elens-Passos, Section Registrar,
Having regard to the above application lodged on 19 January 2006,
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 company, Somico OOD, is a Bulgarian limited liability company, which was set up in 1993 and is based in Sofia. It was represented before the Court by Ms S. Margaritova-Vuchkova, a lawyer practising in Sofia.
2. The Bulgarian Government (“the Government”) were represented by their Agent, Ms R. Nikolova, of the Ministry of Justice.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
1. Privatisation proceedings
4. On 1 February 1993 the applicant company entered into a lease agreement with the Bureau for Servicing the Diplomatic Corps (“the BSDC”), a body of the Ministry of Foreign Affairs, renting from it a State‑owned shop. It appears that the term of the lease agreement was periodically renewed until 31 December 1996.
5. On 30 May 1996 the applicant company submitted a proposal to the Privatisation Agency to purchase the shop under the preferential privatisation procedure available to lessees of State and municipality-owned properties, provided for in section 35 (1) of the Privatisation Act (see paragraph 31 below).
6. In a decision of 22 October 1996 the Privatisation Agency declined the proposal. It reasoned that the conditions under section 35 (1) of the Privatisation Act had not been met, because the BSDC was not a State enterprise and real property included in its assets could not be sold or exchanged.
7. The applicant company applied for judicial review of the Privatisation Agency’s refusal. In a judgment of 14 January 1997, which was considered final, the Supreme Administrative Court (“the SAC”) quashed the decision of 22 October 1996 and instructed the Agency to open a privatisation procedure. The SAC held that the shop was owned by the State and had been assigned to the BSDC for use and management only.
8. Following that judgment, on 13 March 1997 the Privatisation Agency opened a procedure for the shop’s privatisation. On 4 April 1997 its decision to that effect was published in the State Gazette.
9. On an unknown date the BSDC submitted a petition for review (преглед по реда на надзора) of the judgment of 14 January 1997.
10. On 18 September 1997 a five-member panel of the SAC quashed the judgment of 14 January 1997 and remitted the case to a three-member panel of the same court. The five-member panel noted that, notwithstanding the fact that the shop was owned by the State, it was not subject to privatisation because the BSDC did not have the status of a State enterprise.
11. Following a fresh examination, in a judgment of 2 December 1997 a three-member panel of the SAC dismissed the applicant company’s application for judicial review. However, on appeal, in a final judgment of 23 June 1998 a five-member panel of the same court quashed the decision of 22 October 1996 and instructed the Privatisation Agency to open a privatisation procedure aimed at selling the shop to the applicant company. It considered, most notably, that the shop was the property of the State and that the BSDC’s legal status was not an obstacle to the privatisation. It considered, in addition, that the applicant company met all the requirements to benefit from the preferential conditions under section 35 (1) of the Privatisation Act.
12. Following that decision, on 3 August 1998 the Privatisation Agency wrote to the applicant company proposing a price for the shop, inquiring whether the applicant company accepted to buy the shop and inviting it to propose payment conditions.
13. On 6 August 1998 the applicant company informed the Privatisation Agency that it agreed to buy the shop at the price proposed. In addition, it suggested a payment scheme.
14. The signing of the privatisation contract was scheduled for 3 September 1998; however, several hours before the meeting an employee of the Privatisation Agency informed the applicant company by telephone that it would be postponed.
2. Transfer of the property to the Sofia municipality and then to a third party
15. Meanwhile, on 2 September 1998 the Privatisation Agency inquired with the Sofia municipality as to whether there were any restitution claims in respect of the shop. On 11 November 1998 the regional governor of Sofia replied that on 19 October 1998 he had decided to transfer the shop to a third party in compensation for their expropriated property (see below).
16. It transpired subsequently that on 27 July 1998 the BSDC had transferred ownership of the shop to the Sofia municipality. On the same day the Sofia municipal council included it in the assets of the municipally‑owned company managing municipal real properties. It is unclear whether the Privatisation Agency had been informed of those developments at the time.
17. It also transpired that on 16 April 1998 a third party – the heirs of Ms E.P. – had requested the transfer of the shop in compensation for expropriated real property. As already mentioned, in a decision of 19 October 1998 the regional governor granted their request.
18. The applicant company applied for judicial review of that latter decision. However, on 29 December 1999 the Sofia City Court found its application inadmissible, holding that the applicant company had not been a party to the restitution proceedings and therefore had no standing to challenge the impugned decision.
19. The parties have not informed the Court whether it was possible for the applicant company to challenge the transfer of the property from the State to the municipality, or resort to any other remedy directed against the municipality.
3. Subsequent developments
20. On 1 February 2000 the applicant company sought judicial review of the Privatisation Agency’s failure to finalise the privatisation transaction in compliance with the judgment of 23 June 1998. However, on 19 June 2000 the SAC rejected the application for judicial review as inadmissible, holding that the impugned failure to execute a final judicial act did not represent an administrative decision in itself and therefore was not subject to judicial control.
21. On an unspecified date the applicant company requested the assistance of the Ministry of Economy to finalise the privatisation transaction. In a letter of 21 September 2000 the Minister of Economy invited the Privatisation Agency to comply with the judgment of 23 June 1998.
22. In letters of 20 October 1998, 6 April 2000 and 9 January and 22 February 2001 the applicant company also invited the Privatisation Agency to finalise the privatisation procedure.
23. On 2 March 2001 the Privatisation Agency informed the applicant company that the shop had been transferred to the Sofia municipality and that the regional governor’s subsequent decision to transfer it in compensation to a third party represented a new circumstance which impeded the finalisation of the privatisation transaction.
24. The applicant company applied for judicial review of the Privatisation Agency’s refusal. In a judgment of 11 July 2001 a three‑member panel of the SAC quashed the refusal and instructed the Agency to transfer title to the shop to the applicant company. It reasoned that the applicant company had acquired the right to buy the shop and the Agency was therefore obliged to sign the privatisation agreement. However, upon an appeal by the Privatisation Agency, in a final judgment of 8 January 2002 a five-member panel of the SAC found the applicant company’s application for judicial review inadmissible. It held that the Agency’s refusal to sign a privatisation agreement had not amounted to an administrative decision because, at that stage of the privatisation procedure, the two parties had been acting on an equal footing. Thus, the existing dispute between them could not be settled in administrative proceedings.
25. On 25 June 2001 the applicant company brought a civil action against the Privatisation Agency, seeking to have declared final the preliminary contract which it considered had been reached between them. Mr Y.P. and Ms S.P., heirs of Ms E.P., intervened in the proceedings with a claim for a declaratory judgment against the applicant company and the Privatisation Agency that they were the owners of the shop on the basis of the regional governor’s decision of 19 October 1998.
26. On 23 June 2003 the Sofia City Court dismissed the action of the applicant company and declared that Mr Y.P. and Ms S.P. were the owners of the shop. Upon an appeal by the applicant company, on 23 June 2004 the Sofia Court of Appeal upheld that judgment. It considered, in particular, that following the judgment of 23 June 1998 (see paragraph 11 above) the applicant company and the Privatisation Agency had exchanged correspondence in which they had reached an agreement on the main conditions of the sale of the shop, which represented a preliminary contract. However, the Privatisation Agency had not been the owner of the shop, which meant that the preconditions for declaring the preliminary contract final had not been present.
27. Following an appeal, in a final judgment of 21 July 2005 the Supreme Court of Cassation upheld the lower courts’ judgments. It considered, in particular, that the correspondence between the applicant company and the Privatisation Agency did not represent a preliminary contract.
28. In the meantime, on 5 April 2002 a notary public, acting with the assistance of the police, put Mr Y.P. and Ms S.P. in possession of the shop. It appears that by this time the applicant company, which was still holding the property, was no longer using it and it was in a state of abandon.
B. Relevant domestic law
29. The Transformation and Privatisation of State and Municipal Enterprises Act (Закон за преобразуване и приватизация на държавни и общински предприятия: “the Privatisation Act”) of 1992 provided for the transformation of public property and the privatisation of State and municipality-owned enterprises. It was superseded by other legislation in March 2002.
30. Section 3 of the Act indicated the bodies competent to take decisions on privatisation. As concerns State-owned properties, the competent bodies were either the Privatisation Agency, or, for the most important objects, the Council of Ministers. The body competent to decide on the privatisation of municipally-owned properties was the relevant municipal council.
31. Under section 35 (1) of the Privatisation Act, lessees of State and municipality-owned property could propose to buy the property rented by them, without a public auction or competition and for a price equal to the property’s value assessed by certified experts in accordance with rules adopted by the Government. Those preferential conditions were applicable to lessees of State and municipality-owned property who had concluded lease contracts before 15 October 1993 and where the said contracts were still in force on the date of the respective privatisation proposal.
32. Section 35 (2) of the Privatisation Act, as worded after October 1997, provided that where a refusal by the competent administrative body to initiate a privatisation procedure following a proposal by the interested party had been quashed by means of a final court judgment, the relevant administrative body was obliged, within two months of the judgment becoming final, to initiate the privatisation procedure, prepare the privatisation of the property at issue and offer to sell the property to the entitled party.
33. Paragraph 6 of the transitional and concluding provisions of the Privatisation Act addressed different situations of conflict of competing privatisation and restitution interests. It provided, in particular, that in cases where a privatisation contract had already been concluded, the parties claiming to have restitution rights were to be compensated through shares in the companies which had acquired the property, if any such shares were owned by the State or municipalities, or through compensation bonds.
COMPLAINTS
34. The applicant company complained that the Privatisation Agency’s failure to comply with the Supreme Administrative Court’s judgment of 23 June 1998 had breached Article 6 § 1 of the Convention. The applicant company complained in addition under Article 1 of Protocol No. 1 that the Privatisation Agency had infringed its statutory right to purchase the shop under the preferential conditions of section 35 (1) of the Privatisation Act.
35. The applicant company raised the following further complaints:
(a) Relying on Article 6 § 1 and Article 13 of the Convention, it complained that the civil proceedings which ended with the final judgment of the Supreme Court of Cassation of 21 July 2005 (see paragraphs 25-27 above), had been unfair because the courts, in assessing whether a privatisation procedure had validly been opened, had encroached on the competence of the administrative courts. Moreover, it considered that there had been a conflict between the judgment of the Supreme Court of Cassation of 21 July 2005 (see paragraph 27 above) and the judgment of the Supreme Administrative Court of 8 January 2002 (see paragraph 24 above).
(b) The applicant company also complained under Article 6 § 1 of the Convention that the total length of all sets of proceedings instituted by it between 22 October 1996 when the Privatisation Agency gave its first decision and 21 July 2005 when the Supreme Court of Cassation gave its final judgment, had been unreasonable.
(c) Lastly, the applicant company complained, under Article 1 of Protocol No. 1 and Article 13 of the Convention, that it had been unlawfully deprived of possession of the disputed shop between 5 April 2002 and 21 July 2005.
THE LAW
A. Complaints related to the Privatisation Agency’s failure to finalise the privatisation procedure
36. The applicant company complained, in the first place, under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1, that the Privatisation Agency had failed to finalise the procedure for the privatisation of the shop.
37. The Government argued that the applicant company had failed to exhaust the available domestic remedies, because it had, in particular, failed to bring a tort action against the State. The Government argued, in addition, that the authorities had made efforts to comply with the judgment of 23 June 1998. However, new circumstances had arisen which had rendered the execution of the judgment impossible, namely third parties had requested compensation under the restitution legislation and the Sofia regional governor had granted their request.
38. The applicant company disputed these arguments. It contended, in particular, that the Privatisation Agency had been obliged to enforce the judgment of 23 June 1998 by initiating a privatisation procedure and selling it the shop. Moreover, it considered that the Sofia regional governor had obstructed the judgment’s enforcement and had eventually rendered the enforcement impossible by transferring the property to a third party.
39. The Court takes note of the Government’s objection for non‑exhaustion of domestic remedies. However, it does not consider it necessary to decide on the matter, given that, for the reasons below, it finds the present complaints in any event inadmissible.
40. The Court is of the view that a question arises in the case as to whether the complaints at issue were raised within six months of the “final decision”, or, in the specific circumstances of the case, of the final relevant developments affecting the complaints.
41. The Court reiterates in this connection that the six-month rule provided for in Article 35 § 1 has a number of aims. Its primary purpose is to maintain legal certainty by ensuring that cases raising issues under the Convention are examined within a reasonable time, and to prevent the authorities and other persons concerned from being kept in a state of uncertainty for a long period of time (see, among many other authorities, Sabri Güneş v. Turkey [GC], no. 27396/06, §§ 39-40, 29 June 2012). The six‑month rule serves the interests not only of the respondent Government, but also of legal certainty as a value in itself. That is why the Court has to examine compliance with the rule even in the absence of an objection by the Government to that effect (see Walker v. the United Kingdom (dec.), no. 34979/97, ECHR 2000-I; Blečić v. Croatia [GC], no. 59532/00, § 68, ECHR 2006‑III; and Manolov and Racheva‑Manolova v. Bulgaria, no. 54252/00, § 25, 11 December 2008).
42. As concerns the present case, the Court observes that by a final judgment of 23 June 1998 the Supreme Administrative Court found that the applicant company met the requirements to benefit from the preferential conditions for privatisation under section 35 (1) of the Privatisation Act and instructed the Privatisation Agency to open a privatisation procedure and offer to sell it the shop (see paragraph 11 above). However, although the parties started negotiations, ultimately the privatisation procedure remained unfinished because in the meantime ownership of the shop was transferred to the Sofia municipality and then to a third party seeking compensation under the restitution legislation (see paragraphs 16-18 above).
43. Subsequently the applicant company initiated several sets of judicial proceedings aiming to oblige the Privatisation Agency to complete the privatisation procedure (see paragraphs 20-27 above). However, the Court is not convinced that these procedures could effectively bring about the enforcement of the judgment of 23 June 1998. It is true that at the time when that judgment was given, the Privatisation Agency was competent to take a decision on the privatisation of the shop and to conclude a privatisation contract, as the property was State-owned (see paragraph 30 above). However, the situation changed later in 1998 when the property was transferred to the Sofia municipality; in the absence of a revocation of that transfer the Agency was no longer authorised to transfer the shop, any decision on possible privatisation being within the competence of the Sofia municipal council (ibid.).
44. Thus, the Court does not see how the proceedings brought by the applicant company against the Privatisation Agency after 2000 could provide it with any appropriate redress. In respect of the applicant company’s claim to have the preliminary contract between it and the Privatisation Agency declared final, this is also evident from the Sofia City Court’s judgment of 23 June 2003. This was the only domestic court which accepted the applicant company’s assertion that the agreement between the two parties on the sale of the shop represented a preliminary contract; nevertheless, it found that it was unable to declare that contract final because the Privatisation Agency was no longer competent to transfer the property (see paragraph 26 above). The applicant company has not shown that in the proceedings at issue it could obtain a declaration that a preliminary contract should be considered final and enforceable even where the respondent party was no longer the owner of the disputed property and did not have the power to dispose of it.
45. Nor has the applicant company satisfied the Court, given the considerations above, that the proceedings it brought seeking judicial review of the Privatisation Agency’s refusals to finalise the privatisation procedure (see paragraphs 20 and 24 above), could effectively bring about such finalisation.
46. The Court notes in addition that the property at issue was transferred to the Sofia municipality on 27 July 1998 and that apparently the applicant company became aware of these developments soon afterwards, because it attempted, unsuccessfully, to challenge the property’s further transfer to the heirs of Ms E.P.; its claim in that respect was dismissed on 29 December 1999 (see paragraphs 16-18 above). In any event, the applicant company must have become aware of the developments above, at the latest, on 2 March 2001, when it was informed of them in an express letter by the Privatisation Agency (see paragraph 23 above). After that date the applicant company has not taken any steps capable of effectively redressing the complaints it raises before the Court; as already discussed, the steps it took could not serve that end.
47. It is not the Court’s task to determine whether in the particular situation the applicant company did have at its disposal any effective remedies, for instance to challenge the transfer of the property to the Sofia municipality, as the parties have not made submissions in that regard (see paragraph 19 above). It suffices for the Court to note that after 2 March 2001 at the latest there were no developments which it could consider relevant and that the procedures initiated by the applicant company after that date could not provide it with any meaningful redress. Accordingly, the Court finds that the six-month time-limit provided for in Article 35 § 1 of the Convention started running, at the latest, on that date.
48. The complaints under examination were raised on 19 January 2006, when the applicant company lodged its application with the Court. It follows that the complaints has been introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.
B. Remaining complaints
49. The applicant company raised other complaints under Articles 6 § 1 and 13 of the Convention and Article 1 of Protocol No. 1 (see paragraph 35 above).
50. In the light of all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols.
51. It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Françoise Elens-PassosIneta Ziemele
RegistrarPresident
Full & Egal Universal Law Academy