Information Note on the Court’s case-law
November 2022
Văleanu and Others v. Romania - 59012/17, 12854/18, 28856/18 et al.
Judgment 8.11.2022 [Section IV]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Continuing ineffectiveness of restitution mechanism for property confiscated or nationalised by the communist regime, despite new remedies under Law no. 165/2013, placing excessive burden on applicants: violation
Article 46
Article 46-2
Execution of judgment
General measures
Respondent State required to take further general measures to address continuing structural problem in restitution mechanism for property confiscated or nationalised by the communist regime
Facts – The complaints submitted in the applications concerned administrative and/or judicial proceedings instituted by the applicants under various restitution laws passed in Romania since 1991, with a view to obtaining restitution or compensation for their property confiscated or nationalised by the communist regime.
Law – Article 1 of Protocol No.1:
(a) General Remarks – The main issue raised by the present applications related to the current validity of the general conclusions set out by the Court in the case of Preda and Other v. Romania as to the general functioning of the mechanism established by Law no. 165/2013 offering a range of remedies in respect of property that had wrongly passed into State ownership under the communist regime. Those conclusions had been drawn immediately after that Law had come into force, thus without the benefit of hindsight as to its actual effectiveness once put into practice. The applicants’ main contention was that the restitution mechanism, as applied by the domestic authorities, including throughout the past eight years after the implementation of the Law, had proven to be ineffective and inconsistent, and had placed an excessive burden on them.
The factual information before the Court revealed that up to date the applicants had been unable to see their property claims satisfied. Their complaints therefore required a post factum review of the effectiveness of the restitution mechanism made available by the respondent State, eight years after its previous examination of the matter in the case of Preda and Others.
While being fully aware of the factual complexity, both due to the time that had elapsed and the legal solutions that had been proposed, the Court, applying the relevant general principles laid out in Kopecký v. Slovakia [GC] and in Maria Atanasiu and Others v. Romania, the pilot judgment on the Romanian restitution mechanism, had to rule on the effectiveness, for the applicants’ situation, of the remedies proposed in the system currently in force, introduced by the Law and its implementing regulations, as amended throughout the relevant period. Furthermore, in the particular circumstances, the Court had to determine whether the conduct of the Romanian authorities – regardless of whether it might be an interference or a failure to act or a combination of both, had been justifiable in the light of the applicable principles.
The Court found it established that the conduct complained of might be considered to have pursued a legitimate aim in so far as the restitution laws had been implemented to mitigate the consequences of mass infringements of property rights caused by the communist regime, the balancing of the rights at stake, as well as the gains and losses of the great number of people affected by the process of transforming the State’s economy and legal system. It had also been within the wide margin of appreciation of the national authorities, which were entitled to select not only the measures to regulate ownership relations within the country, but also the appropriate time for their implementation.
The Court then proceeded to identify a number of potential problematic issues which it examined in turn.
(b) Non-enforcement cases – Although the applicants had obtained several final court decisions acknowledging their property rights and the relevant domestic authorities had been ordered to grant them possession of the property and issue them with the corresponding title deeds restoring ownership or give a decision on their restitution claim, the judgments in question had still not been enforced. Thus, for a third time, after the pilot judgment in Maria Atanasiu and Others and Preda and Others, the Court was faced with cases burdened with a political, historical and factual complexity flowing from a problem that should have been resolved by all the authorities assuming full responsibility for finding a solution.
Several reasons could be identified for the non-enforcement of the final judgments. One of the main reasons was the authorities’ inability to grant them possession of the property claimed, since it was already occupied and/or had been given to third parties and no other equivalent property was available or acceptable, in the applicants’ view, to be offered to them in exchange. The Court reiterated that extensive restitution legislation was hardly capable of doing full justice in the diverse circumstances of the very large number of different individuals concerned; it was in the first place for the domestic authorities, and in particular Parliament, to assess the advantages and disadvantages involved in the various legislative alternatives available, bearing in mind that this was a policy decision.
In that connection, the choice made by the Romanian legislature in passing the Law in 2013 had been the prevalence of the restitutio in natura principle, meaning that claimants were entitled to obtain the property claimed, and only as a subsidiary possibility and under specific conditions, could obtain compensatory measures, the first such measure being the proposal to be granted possession of another equivalent property. At the time the national authorities had already been aware of the existence of concurring and valid claims in respect of the same land. So, once they had made their choice, it had been incumbent on them to act in good time, in an appropriate manner and with utmost consistency. However, even if the respondent State had initially envisaged that the restitution process at the level of the local and regional commissions would be achieved by 1 January 2016, that time‑limit had been subsequently extended and ultimately scrapped. The claimants thus had no foreseeable prospects as to when the restitution proceedings would be finalised. The Court also noted with some concern that legislative initiatives, emanating from the central administrative authority called upon to monitor and coordinate the application of the law in the assessment of restitution claims, and which attempted to render the restitution mechanism more effective by proposing concrete and inspiring solutions, were still ongoing, with no foreseeable prospects as to their outcome.
Some of the applicants had already obtained some compensation for loss of use of their acknowledged property and/or compensation in respect of non-pecuniary damage for the non‑enforcement, either on the basis of tort law provisions or under the Civil Procedure Code, while, however, in other situations, their respective compensation claims had been dismissed on account of the lack of bad faith on the part of the debtor, i.e. the local authorities. However, in the particular field of non‑enforcement of outstanding judgments by the State authorities, which, moreover, dealt with restitution claims, the assessment of the debtor’s fault (good or bad faith) appeared to be irrelevant, in view of the general principles laid out in the Court’s case-law on the matter, finding the State authority liable to promptly and diligently enforce with no further action required on the part of the creditor. Furthermore, the Court expressed doubt as to the effectiveness of the avenues under the Civil Procedure Code in the circumstances.
Accordingly, the fact that the applicants had not obtained the enforcement of their outstanding judgments and had no certainty as to when that might happen constituted a violation of the rights guaranteed by Article 1 of Protocol No. 1. These findings were also relevant in the cases of the applicants who, despite having seen their entitlement to restitution acknowledged at administrative level and the domestic courts having obliged the relevant administrative authorities to issue a decision on their restitution and/or compensation claims, were still in a situation where no final response to their claims had been issued.
(c) Cases raising issues concerning the amount of compensation awarded – In 2017, after the adoption of the Preda and Others judgment, the legislature had added new valuation criteria, namely the location and technical specifications of the property at the time of the deprivation. Although compensation under the domestic law was calculated with reference to the 2013 valuations established by the Chamber of Notaries, and as of 9 July 2021, those issued in the year prior to the compensation decision, regard was still given to the above criteria. Thus, the new valuation system, partly relying on data which had been pertinent more than fifty years ago, might potentially raise difficult and contentious issues in practice on account of the sometimes insufficiently relevant information as to the property’s precise description at the time of the deprivation owing to, inter alia, the inherent urban developments that had taken place since. Such developments could not be disregarded if compensation was to remain equivalent to the value of the property in kind.
In the present case, there had been significant disparities between what the applicants had claimed to be entitled to in compensation, on the basis of reports produced by valuation experts and what the domestic authorities had actually awarded them in applying the relevant law. The applicants had been awarded compensation in amounts many times lower than what the market value of the respective property had been according to the valuation reports submitted by them. The Court considered that, on the basis of the material before it, there were convincing elements which sufficiently demonstrated that the amounts awarded to them in compensation had not reasonably related to the value of the property, within the meaning of its case-law. In the light of that finding, which must be seen against the underlying context of significantly long delays in the restitution process, the Court concluded that the applicants in applications nos. 59012/17, 47070/18 and 21500/19 had been made to bear an excessive individual burden.
(d) Cases concerning the annulment of the applicants’ titles without compensation (applications nos. 28856/18, 25503/19 and 34359/19) – The national courts’ findings which had led to the applicants’ titles being declared null had mainly focused on the fact that third parties had better title, as per the applicable domestic law.
The two criteria set out by the Court in Velikovi and Others v. Bulgaria for deciding whether the principle of proportionality had been complied with in cases involving the annulment of the applicants’ titles to their property were applicable, mutatis mutandis, in the present case. As to the first criterion, the applicants’ titles had been essentially annulled because they had been issued plots of land which already belonged to third parties, in breach of the mandatory rules concerning restitution of property. Nevertheless, it had neither been argued nor disputed that the applicants had acted other than in good faith, the defects rendering the titles null being fully attributable to the issuing administrative authorities. As to the second criterion, despite the provisions of Law no. 165/2013 the applicants in applications nos. 28856/18 and 25503/19 appeared to have their restitution claims still pending before the administrative authorities, with no clear and foreseeable indication as to when they would see their proceedings finalised. Further, the applicant in application no. 34359/19 had no prospects of obtaining any compensation whatsoever, as indicated by the relevant administrative authorities in their interpretation of the applicable legal rules.
Therefore, the annulment of the applicants’ titles on account of the State authorities’ failure to comply with the legal provisions relevant to the procedure for issuing title deeds, without any compensation, had placed an excessive individual burden in respect of applications nos. 28856/18, 25503/19 and 34359/19.
(e) Case concerning the applicant’s loss of use claims (application no. 31613/19) – The domestic courts had dismissed the applicant’s compensation claims on the ground that the authorities had not been at fault for the non-enforcement of the outstanding judgment given in her favour, since, on the one hand, the land already belonged to third parties and, on the other hand, the applicant herself had refused to accept the alternative proposal made to her, namely to receive in exchange several scattered smaller plots, allegedly of an inferior value. From that perspective and against the background of the applicant’s complaint that the domestic courts had failed to acknowledge her right to compensation for loss of use of a property to which she had long been entitled but not yet granted possession of owing to the deficiencies of the restitution mechanism, and having regard to its previous conclusions relating to such deficiencies, the Court considered that the outcome of the proceedings complained of had placed a disproportionate and excessive burden on the applicant.
(vi) Conclusions as to the effectiveness of the mechanism – The prolonged non-enforcement of outstanding judgments given in the applicants’ favour and the lack of an effective remedy; the annulment of the applicants’ titles on account of the State’s failure to correctly implement the applicable law and without any compensation; as well as the failure of the authorities to ensure that the compensation awarded was reasonably related to the current value of the property, constituted sufficient elements to conclude that, despite the safeguards introduced by the Law and validated a priori by the Court in Preda and Others, the restitution mechanism continued to fall short of being comprehensively effective and convincingly consistent so as not to place an excessive burden on the applicants.
Conclusion: violation of Article 1 of Protocol No.1 (unanimously).
Article 46: Despite significant general steps taken by the respondent State since the pilot judgment, to remedy the structural problem related to the restitution mechanism, that problem still existed. The respondent State had to put in place more straightforward measures aimed at streamlining and clarifying the procedures and criteria to be applied once it had been established and confirmed either directly by the claimant concerned, or by a court in relevant enforcement proceedings, that an outstanding judgment was objectively impossible to enforce. Such measures might include putting aside any alternative solution to the said impossibility to enforce, other than the award of financial compensation, calculated so as to ensure that it was reasonably related to the value of the property claimed, and calculated at the time of the actual payment of the full amount, or, if applicable, of the first instalment of the full amount. In this connection, appropriate budgetary measures had to be taken so as to provide adequate funds in respect of those claimants who were entitled to receive compensation in value. It was also particularly important that appropriate arrangements be made in order to ensure that the restitution process was conducted without any further unnecessary delays in order to provide genuine effective relief for violations of their property rights. In that connection, the Court emphasised the importance of setting short but realistic and binding time-limits for the completion of the administrative proceedings still pending before the relevant authorities, where claimants had not yet obtained a response to their restitution claims.
Therefore, in view of the extent of the recurrent problem at issue, and in the light of the identified weaknesses and shortcomings of the overall restitution mechanism, the Court found it crucial that the respondent State continued its consistent efforts and adopted further appropriate measures, with a view to bringing its legislation and practice into line with the Court’s findings in the present case and with its relevant case‑law, so as to achieve complete compliance with Article 1 of Protocol No. 1 and Article 46.
Article 41: Non-pecuniary damage awarded to each applicant ranging from EUR 500 to EUR 10,000; claim in respect of pecuniary damage reserved.
(See also Kopecký v. Slovakia [GC], 44912/98, 28 September 2004, Legal Summary; Velikovi and Others v. Bulgaria, 43278/98 et al., 15 March 2007, Legal Summary; Maria Atanasiu and Others v. Romania, 30767/05 and 33800/06, 12 October 2010, Legal Summary; Preda and Others v. Romania, 9584/02 et al., 29 April 2014, Legal Summary)
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This summary by the Registry does not bind the Court.
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