ZAGORODNIKOV v. RUSSIA

FIRST SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 66941/01
by Sergey Borisovich ZAGORODNIKOV
against Russia

The European Court of Human Rights (First Section), sitting on 30 June 2005 as a Chamber composed of:

MrC.L. Rozakis, President,
MrsS. Botoucharova,
MrA. Kovler,
MrsE. Steiner,
MrK. Hajiyev,
MrD. Spielmann,
MrS.E. Jebens, judges,
and Mr S. Quesada, Deputy Section Registrar,

Having regard to the above application lodged on 31 January 2001,

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

The applicant, Mr Sergey Borisovich Zagorodnikov, is a Russian national, who was born in 1967 and lives in Moscow. He is represented before the Court by Mr A. Glushenkov, a lawyer practising in Moscow. The respondent Government are represented by Mr P. Laptev, the representative of the Russian Federation at the European Court of Human Rights.

A. The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicant is an investor of “Russian Credit”, an insolvent private bank. In 1998–99, he won two legal actions against the bank. Unable to recover his investment despite the judgments in his favour, the applicant launched many proceedings against the bank and various authorities involved in its insolvency.

1. Proceedings concerning settlement

In April 2000, 188,900 of the bank's creditors joined in a union, obtained a settlement with the bank, and asked the Moscow City Commercial Court to ratify it. The applicant disagreed with the settlement and filed to the court his objections.

The court heard the case in four hearings: on 10, 11, 14, and 15 August 2000. The court summoned the 100 creditors who had objected to the settlement, representatives of the creditors union, and representatives of the bank. Since the applicant had received the summons as late as on 14 August, he could participate in the last hearing only. According to the applicant, the presiding judge cut his pleading short.

Throughout the proceedings, the access to the court building was restricted. A policeman at the entrance turned away whoever did not have a summons and an identity card, thus preventing other persons' access to the court room. For this reason, 20–25 visitors missed the first hearing; 3–5 visitors missed each of the later hearings. In each hearing, 45–50 seats remained free. The court's time-table was posted inside the building, and accidental visitors could not know what cases were heard on any given day.

On 15 August 2000, the court ratified the settlement, and the applicant appealed alleging 12 breaches of material and procedural law.

On 9 October 2000, the Appeals Division of the Moscow City Commercial Court upheld the settlement. The applicant participated in the hearing, pleaded his cause, and submitted written arguments. Disagreeing with the judgment, the applicant appealed on points of law.

On 1 December 2000, the Federal Commercial Court of the Moscow Circuit dismissed the appeal on points of law. The applicant participated in the hearing, pleaded his cause, and submitted written arguments.

Both appeal courts ignored the complaint that the hearings had not been public.

2. Proceedings against the bank

In September 2000, the applicant brought an action against the bank. He claimed interest for the outstanding debt.

On 1 November 2000, the Golovinskiy District Court of Moscow closed the proceedings because the settlement had extinguished the claim. On 26 December 2000, the Moscow City Court upheld this decision on appeal.

3. Proceedings against the ARKO

In September 2000, the applicant brought an action against the Agency on Restructuring of Lending Agencies (“ARKO”). He wished to recover the bank's debt from the ARKO, because the ARKO had unlawfully frozen the recovery of debts from the bank.

On 28 September 2000, the Meshchanskiy District Court of Moscow adjourned the proceedings because the applicant had neither paid a court fee nor stated the amount of his claim. On 16 November 2000, the Moscow City Court quashed this decision as to the court fee.

On 29 December 2000, the district court adjourned the proceedings because the applicant had not stated the amount of his claim. Since the applicant had missed the time-limit to appeal against this decision, he had to reintroduce his action.

On 5 April 2001, the district court adjourned the proceedings because the applicant had neither paid a court fee nor stated the amount of his claim nor his full name. On 18 May 2001, the city court upheld this decision on appeal.

In October 2000, the applicant lodged an administrative complaint against the ARKO. He complained that the ARKO had frozen the recovery of the bank's debt unlawfully.

On 16 October 2000, the Meshchanskiy District Court adjourned the proceedings, because the complaint concerned damage and hence should have been termed as a civil action, not as an administrative complaint. The applicant could not appeal against this decision because he had received it after the time-limit for appeal had expired.

4. Proceedings against the Golovinskiy District Court

In July 2001, the Golovinskiy District Court of Moscow froze the bank's debts.

In October 2001, applicant sued the court because he considered that this injunction had breached his rights.

On 11 October 2001, the Koptevskiy District Court of Moscow closed the proceedings because the Golovinskiy District Court's injunction could be appealed against only to a higher court. On 22 November 2001, the Moscow City Court upheld this decision on appeal.

5. Proceedings concerning enforcement

In November 2001, the Meshchanskiy District Court stopped the enforcement of the bank's outstanding debts because of the settlement. The applicant appealed against this decision. On 10 January 2002, the Moscow City Court upheld this decision on appeal.

6. New proceedings against the ARKO

In October 2001, the applicant brought a new action against the ARKO. He asserted that the ARKO had made it impossible to recover the debt from the bank.

On 25 December 2001, the Meshchanskiy District Court dismissed the action. On 22 February 2002, the Moscow City Court upheld this judgment on appeal.

7. Proceedings in the Constitutional Court

In 2001, the applicant applied to the Constitutional Court. He asserted that certain provisions of the Law on Insolvency and of the Law on Restructuring of Lending Agencies contradicted the Constitution.

On 22 July 2002, the Constitutional Court dismissed this application. According to the applicant, the court ignored one of his complaints, withheld from the plaintiffs their adversaries' submissions, bullied plaintiffs, and cut them short.

8. Proceedings against the Central Bank

In July 2001, the applicant brought an action against a transactions office of the Central Bank. He asserted that the office had prevented him from recovering the debt.

On 1 August 2002, the Zamoskvoretskiy District Court of Moscow referred the case to the Meshchanskiy District Court.

On 23 January 2003, the Meshchanskiy District Court stopped the proceedings because an earlier judgment had resolved the dispute. On 18 March 2003, the Moscow City Court quashed the decision on appeal and ordered the district court to examine the case on the merits.

On 16 March 2004, the Meshchanskiy District Court dismissed the action. On 30 July 2004, the Moscow City Court upheld this judgment on appeal.

9. New proceedings in the Constitutional Court

In August 2002, the applicant applied to the Constitutional Court again. He asserted that the Law on Restructuring of Lending Agencies contradicted the Constitution.

On 18 December 2002, the Constitutional Court dismissed this application because only some of the law's provisions, not the entire law, had been applied to the applicant.

10. Proceedings against the State

In June 2002, the applicant brought an action against the State. He asserted that by passing the unconstitutional Law on Restructuring of Lending Agencies, the State had caused him damage.

On 17 March 2003, the Basmannyi District Court of Moscow dismissed the action because the applicant's losses had been caused by the bank, not by the State. On 2 September 2003, the Moscow City Court upheld this judgment on appeal.

B. Relevant domestic law

The commercial courts ratified the settlement under the Code of Commercial Procedure of 1995. Article 9 of the Code required the proceedings to be public:

Article 9. Publicity of proceedings

“Proceedings in commercial courts shall be public. A hearing in camera shall be possible if [the case concerns] State, commercial, and other secrets....”

COMPLAINTS

1. With regard to the proceedings set out in section 1 above, the applicant complained under Article 6 of the Convention that the proceedings had not been public.

2. As regards the same set of proceedings, the applicant complained under Article 6 of the Convention that that he had been unable to participate in the first three hearings.

3. He maintained furthermore, under Articles 6, 13, and 14 of the Convention, and under Article 1 of Protocol No. 1 that the first-instance court had cut his pleading short, that the settlement had been unjust, and that he had had no effective remedy against it.

4. Finally, with regard to the proceedings set out in section 1 above, the applicant complained under Article 11 of the Convention that by ratifying the settlement drafted by the creditors union, the courts had forced him into the union.

5. With regard to the proceedings set out in sections 2, 6, 9, and 10 above, the applicant complained under Articles 6 and 13 of the Convention, and under Article 1 of Protocol No. 1 about the outcome of these proceedings. He asserted that the domestic courts had misunderstood relevant facts and law.

6. With regard to the proceedings set out in section 3 above, the applicant complained under Articles 6 and 13 of the Convention that the courts had blocked his access to justice.

7. With regard to the proceedings set out in section 4 above, the applicant complained under Articles 6 and 13 of the Convention that he had no effective remedy against the unlawful decision of the Golovinskiy District Court.

8. With regard to the proceedings set out in section 5 above, the applicant complained under Article 6 of the Convention that the court decisions had prevented him from recovering the debt.

9. With regard to the proceedings set out in section 7 above, the applicant complained under Article 6 of the Convention that the Constitutional Court had ignored one of his complaints, that the presiding judge had bullied plaintiffs and cut them short, and that the court had withheld from the plaintiffs their adversaries' submissions.

10. With regard to the proceedings set out in sections 7, 9, and 10 above, the applicant complained under Articles 6 and 14 of the Convention, and under Article 1 of Protocol No. 1 that the Law on Restructuring of Lending Agencies contradicted the Convention because it unjustly disadvantaged small creditors.

11. With regard to the proceedings set out in section 8 above, the applicant complained under Article 6 of the Convention about the length of these proceedings.

THE LAW

1. The applicant complained under Article 6 of the Convention that the Moscow City Commercial Court had heard the insolvency case in private. In so far as relevant, Article 6 reads as follows:

“1. In the determination of his civil rights and obligations ..., everyone is entitled to a fair and public hearing ... by [a] ... tribunal.... Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.”

The Government rejected this complaint as manifestly ill-founded for the following reasons. First, since the hearing affected as many as 188,900 persons, it was even technically impossible to invite them all. Therefore, the court first of all invited the 100 creditors who had objected to the settlement, representatives of the creditors union, and representatives of the bank. Second, the access to the court building was restricted to ensure order and the parties' procedural rights. Third, the hearing was transparent to the public because so many people participated in it.

The applicant retorted as follows. First, since only as few as several dozen persons wished to participate in the hearing, it was well possible to invite them all. In fact, many a seat in the court room remained free throughout the hearing. Second, many creditors who had objected to the settlement were not let in either. Third, shutting visitors out could improve neither order nor the parties' procedural rights. In fact, one could not visit the court at all, unless he participated in some litigation and could prove it to guards. Last, if visitors are not let in to a hearing, the hearing is not transparent by definition.

The Court considers, in the light of the parties' submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

2. The applicant complained under Article 6 of the Convention that the Moscow City Commercial Court had not summoned him to its hearings of 10, 11, and 14 August 2000.

The Government rejected this complaint as manifestly ill-founded for the following reasons. First, the applicant indeed received the summons too late. But any damage thus caused was made good on appeal. Second, the appeal proceedings were thorough: the Appeals Division examined both facts and law, the Federal Court double-checked the law. The applicant pleaded before both courts and submitted written arguments.

The applicant retorted as follows. First, the appeal courts examined the case superficially, without looking into its substance; they ignored the applicant's certain arguments. Second, one could not generally trust the courts because, for example, they said that the applicant had been summoned in time, whereas the Government asserted that he was not.

The Court considers, in the light of the parties' submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

3. As regards the remainder of the complaints, the Court examined them as submitted by the applicant.

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.

For these reasons, the Court unanimously

Declares admissible, without prejudging the merits, the applicant's complaints that hearings before the Moscow City Commercial Court were not public, and that the Moscow City Court had not summoned him to its hearings;

Declares the remainder of the application inadmissible.

Santiago QuesadaChristos Rozakis
Deputy RegistrarPresident

Full & Egal Universal Law Academy