Information Note on the Court’s case-law No. 121
July 2009
Zaharievi v. Bulgaria - 22627/03
Judgment 2.7.2009 [Section V]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Form of execution of judgment in the applicant’s favour which resulted in reduction in compensation actually awarded: violation
Facts: In 1947 a mill belonging to the applicants’ father was nationalised and subsequently taken over by a State company. At a later date the State initiated a procedure to privatise the company. In 1998, following the entry into force of the Law of 1997 on compensation of owners of nationalised immovable property, the applicants applied to the competent authority for compensation. The procedure was concluded in 2003 by a judgment of the Supreme Administrative Court awarding the applicants a number of shares in the above-mentioned company, calculated on the basis of their book value (corresponding to the difference between the company’s assets and liabilities expressed in value per share). In the meantime the company concerned had been taken over by another company. The applicants were thus given the same number of shares in the resulting company in execution of the judgment in their favour. They then asked the authorities to increase the number of shares, arguing that the book value of the shares of the new company was much lower than that of the shares in the initial company which they had been awarded. Their request was refused on the grounds that it was no longer possible to change the compensation as the court judgment had been final. The applicants appealed to the Supreme Administrative Court against that decision, but to no avail.
Law: As the operative provisions of the judgment in the applicants’ favour had not been properly executed, there had been an interference with their right to the peaceful enjoyment of their possessions. As the company referred to in the judgment had ceased to exist, it did not appear unreasonable as such to have the judgment executed against the new company. The authorities should nevertheless have verified the adequacy and effectiveness of this solution with regard to Article 1 of Protocol No. 1. It was true that the parties had not provided any factual means of assessing the difference in the book values of the two companies’ shares in order to establish whether the applicants had suffered a loss and, if so, how much. However, the Court considered that it was not its role to assess the values in question, but rather to ascertain whether the national authorities had taken the necessary steps to ensure the adequacy of the compensation thus afforded, that is, whether the exchange for shares in the new company had been consistent with the judgment of the Supreme Administrative Court, and whether the authorities had justified the possible decrease in compensation. In this regard the Court noted the “mechanical” nature of the solution adopted, the authorities having at no time examined whether the value of the same number of shares differed from one company to the other. In actual fact the respective value of the companies differed considerably. As a result, the shares in the new company had not been worth as much as those in the first company which the applicants had been awarded. The refusal of the authorities to review the situation on the grounds that the judgment had become final could not justify the interference, the applicants having submitted credible, convincing proof in support of their allegations, showing a significant difference in the values of the two companies’ shares. In conclusion, the Court found that the automatic awarding of shares in the new company, combined with the lack of an effective remedy to have the merits of the applicant’s request for more shares examined, had upset the fair balance which had to be struck between the general interest and the interests of the individual, and the applicants had borne an individual and excessive burden.
Conclusion: violation (unanimously).
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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