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SECOND
SECTION
CASE OF
MOLNAR GABOR v. SERBIA
(Application
no. 22762/05)
JUDGMENT
STRASBOURG
8
December 2009
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Molnar Gabor v.
Serbia,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Françoise
Tulkens,
President,
Ireneu
Cabral Barreto,
Vladimiro
Zagrebelsky,
Danutė
Jočienė,
Dragoljub
Popović,
Nona
Tsotsoria,
Işıl
Karakaş,
judges,
and
Françoise Elens-Passos, Deputy
Section Registrar,
Having
deliberated in private on 17 November 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 22762/05) against the State
Union of Serbia and Montenegro lodged with the Court, under Article
34 of the Convention for the Protection of Human Rights and
Fundamental Freedoms (“the Convention”), by, at that
time, a national of the State Union of Serbia and Montenegro, Mr
Istvan Molnar Gabor (“the applicant”), on 15 June
2005.
- As
of 3 June 2006, following the Montenegrin declaration of
independence, Serbia remained the sole respondent in the proceedings
before the Court.
- The
applicant was represented by Ms A. Horváth, a lawyer
practising in Subotica. The Government of the State Union of Serbia
and Montenegro and, subsequently, the Government of Serbia (“the
Government”) were represented by their Agent, Mr S. Carić.
- The
applicant complained about the continuing refusal of the respondent
State to release all of his foreign currency savings, and in
particular the non-enforcement of the final judgment rendered in his
favour.
- On
15 February 2007 the President of the Second Section decided to give
notice of the application to the Government. Applying Article 29 §
3 of the Convention, it was also decided to examine the merits of the
application at the same time as its admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
A. Relevant background to the applicant's case
- Following
the financial crisis in the former Socialist Federal Republic of
Yugoslavia, as well as the collapse of the banking system in Serbia
in the 1990s, in 1998 and 2002 the respondent State adopted specific
legislation accepting the conversion of foreign currency deposits in
certain banks, including Vojvođanska banka, into a public
debt. The legislation set the time-frame (2016) and the amounts,
including interest, to be paid back to the banks' former clients. It
also explicitly provided, inter alia, that any foreign
currency-related judicial proceedings were to be discontinued (for
details concerning the relevant domestic law see paragraphs 20-27
below).
B. Relevant facts of the applicant's case
- The
applicant was born in 1926 and lives in Subotica, Serbia. He is
retired and receives a pension in the net amount of approximately 250
Euros (“EUR”) monthly.
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
- On
a number of separate occasions, the applicant deposited a certain
amount of his foreign currency savings with the Subotica branch of
Vojvođanska banka, a bank based in Novi Sad.
- In
1991 the said bank refused to release the applicant's funds.
- On
21 July 1993 the applicant filed a civil claim, seeking the release
of his foreign currency deposits with the interest stipulated.
- On
27 September 1993 the Municipal Court in Subotica ruled partly in
favour of the applicant and ordered the bank to pay him: (i)
15,584.41 German Marks (“DEM”), on account of his foreign
currency savings; (ii) 37,460,000,000 Yugoslav Dinars (“YUD”),
for his legal costs;
and (iii) the statutory interest due in respect of the latter as of
27 September 1993.
- On
20 March 1996 the District Court in Subotica upheld this judgment,
adding that the respondent bank should also pay interest on the sum
of DEM 15,584.41 which had been awarded. In particular, this interest
was to be paid as of 1 January 1993, based on the DEM sight deposit
rate (kamata na štedne uloge po viđenju).
- On
2 October 1996 the Supreme Court rejected the respondent's appeal on
points of law (revizija) and confirmed the District Court's
judgment.
- On
24 April 2001 and 26 September 2001, respectively, the applicant
filed two separate requests with the Municipal Court in Subotica,
seeking enforcement of the above judgment by means of a bank account
transfer.
- On
2 April 2002 the Municipal Court rejected those requests, stating
that, under the relevant domestic legislation, all judicial
enforcement proceedings aimed at the collection of foreign currency
deposits had to be discontinued.
- On
30 March 2004 the bank confirmed that the applicant's foreign
currency savings had been converted into a public debt in the amount
of EUR 8,740.18.
- As
of 1 March 2007 the applicant was still owed EUR 6,652, having in the
meantime, in several instalments and on various grounds, been
reimbursed a total of EUR 2,088.18.
- There
is no information in the case file whether the applicant received any
payments thereafter.
II. RELEVANT DOMESTIC LAW
A. Act on the Settlement of Obligations Arising from
the Citizens' Foreign Currency Savings (Zakon o izmirenju obaveza po
osnovu devizne štednje građana;
published in the Official Gazette of the Federal Republic of
Yugoslavia - OG FRY - nos. 59/98, 44/99 and 53/01)
- Articles
1, 2, 3 and 4 provided that all foreign currency savings deposited
with “authorised banks” before 18 March 1995, including
explicitly the deposits held by the bank at issue in the present
case, were to become a public debt.
- Under
Article 10, the State's responsibility in that respect was to be
fully honoured by 2012 through the payment of specified amounts, plus
interest, and according to a certain time-frame.
- Article
22 provided that, as of the date of this Act's entry into force (12
December 1998), “all pending lawsuits, including judicial
enforcement proceedings, aimed at the collection of the foreign
currency covered by this Act shall be discontinued.”
B. Act on the Settlement of the Public Debt of the
Federal Republic of Yugoslavia Arising from the Citizens' Foreign
Currency Savings (Zakon o regulisanju javnog duga Savezne Republike
Jugoslavije po osnovu devizne štednje građana;
published in OG FRY no. 36/02)
- This
Act repeals the Act described above. In so doing, however, it
explicitly acknowledges as part of the public debt all deposits
previously recognised as such (in the total amount of EUR 4.2 billion
as of 31 March 2002). It modifies the time-frame for honouring the
debt in question (from 2012 to 2016) and specifies amended amounts,
plus interest, to be paid annually.
- Pursuant
to Article 13, the banks' clients can make use of their deposits
converted into Government bonds in order to pay taxes or indeed,
under Articles 12 and 14, in advance of the said time-frame, for a
number of purposes such as buying State property, taking part in the
privatisation of State-owned businesses and banks, as well as, under
certain conditions and up to a specified amount, the payment of
medical treatment, medication and funeral costs.
- In
accordance with Articles 10 and 11, former clients of the banks in
question may sell the said bonds on the stock exchange or to other
banks or individuals. Such trading is exempt from all taxation.
- Article
36 reaffirms that “all lawsuits aimed at the collection of the
foreign currency savings covered by this Act, including the judicial
enforcement proceedings, shall be discontinued.”
- This
Act has been in force since 4 July 2002. It was subsequently amended
on two occasions, but these amendments concerned peripheral issues
unrelated to the savers above-described status.
C. Obligations
Act (Zakon
o obligacionim odnosima; published in the Official Gazette of the
Socialist Federal Republic of Yugoslavia - OG SFRY - nos. 29/78,
39/85, 45/89, 57/89 and OG FRY no. 31/93)
- Articles
199 and 200 provide, inter alia, that anyone who has suffered
fear, physical pain or mental anguish as a consequence of a breach of
“personal rights” (prava ličnosti) may,
depending on its duration and intensity, sue for financial
compensation before the civil courts and, in addition, request other
forms of redress “which may be capable” of affording
adequate non-pecuniary satisfaction.
- Article
379 § 1 provides, inter alia, that all claims recognised
by a final court decision shall become time-barred within ten years,
including those claims which would otherwise have become time-barred
within a shorter period of time.
- Article 360
§ 3 provides that courts shall not take into account whether a
given claim is time-barred unless and until there is a
specific objection by the debtor to this effect.
D. Statutory Interest Act (Zakon o visini stope zatezne
kamate; published in OG FRY no. 9/01)
- Article
1 provides that statutory interest shall be paid as of the date of
maturity of a recognised monetary claim in YUD until the date of its
settlement (which includes awards granted by final court judgments).
- Article
2 states that such interest shall be calculated on the basis of the
official retail price index (mesečna stopa rasta cena na
malo) plus another 0.5% monthly (mesečna fiksna stopa).
THE LAW
ALLEGED VIOLATION OF ARTICLE 6 §
1 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL NO. 1
- The
applicant complained about the continuing refusal of the respondent
State to release all of his foreign currency savings instantaneously,
as well as the non-enforcement of the final judgment rendered in his
favour.
The
Court considers that these complaints fall to be examined under
Article 6 § 1 of the Convention and Article 1 of Protocol No. 1,
which, in so far as relevant, read as follows:
Article 6 § 1
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair and public hearing
within a reasonable time by an independent and impartial tribunal
established by law.”
Article 1 of Protocol No. 1
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties.”
A. Admissibility
1. Compatibility
- The
Government noted that the final judgment in question, as well as the
relevant foreign currency legislation had been adopted before the
Serbian ratification of the Convention and Protocol No. 1 thereto.
They concluded, therefore, that the applicant's complaints were
incompatible ratione temporis with the provisions at issue.
- The
applicant maintained that his application concerned a continuing
situation.
- The
Court considers that the issue raised by the Government is closely
linked to the merits of the applicant's complaints, involving such
questions as the continuing nature of the alleged violations and the
proportionality of the effects of the intervening legislation.
Consequently, the Court joins its examination of this question to its
assessment of the merits of the application.
2. Exhaustion of domestic remedies
- The
Government further submitted that, as regards the non-enforcement,
the applicant had not exhausted all effective domestic remedies as
required by Article 35 § 1 of the Convention. In the first
place, he should have sought execution of the judgment at issue
before the “1998 foreign currency Act” had entered into
force (see paragraphs 15, 16, 22 and 26 above). Secondly, having
requested enforcement by means of a bank account transfer, he had
subsequently failed to propose alternative means of execution.
Finally, the applicant had not brought a separate civil lawsuit under
Articles 199 and 200 of the Obligations Act (see paragraph 28 above).
- The
applicant maintained that he had complied with the “exhaustion
requirement”, adding that he had been financially unable to
institute the enforcement proceedings any earlier.
- As
regards the Government's submission that the applicant should have
filed a separate civil claim, the Court recalls that it has already
held that this particular remedy was ineffective within the meaning
of Article 35 § 1 of the Convention (see, mutatis mutandis,
ZIT Company v. Serbia, no. 37343/05, §§ 45-47,
27 November 2007). It sees no reason to depart from this finding
in the present case.
- Concerning
the Government's remaining submissions, the Court notes that the
applicant was entitled to request the enforcement of the judgment in
question at any point within a period of ten years, which he
ultimately did (see paragraphs 13-15, 29 and 30 above). Further, as
of 1998 the execution of the said judgment was legally barred,
rendering the issue of the proposed means of enforcement utterly
irrelevant. Neither of these remedies can therefore be considered
effective, as understood by Article 35 § 1.
- It
follows that the Government's objection must be dismissed in its
entirety.
3. Conclusion
- The
Court considers that the applicant's complaints are not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It further considers that they are not inadmissible on
any other ground. They must therefore be declared admissible.
B. Merits
- The
Government maintained that the State was faced with a large-scale
financial crisis, undermining its very foundations (see paragraph 23
above), and essentially had no choice but to adopt legislation aimed
at protecting the public interest. This legislation, however, does
not impose an excessive burden on the applicant who is entitled, just
like any other foreign currency saver in his situation, to the
gradual recovery of his funds.
- The
applicant reaffirmed his complaints.
- The
Court notes that Article 6 § 1 secures to everyone the right to
have any claim relating to his civil rights and obligations brought
before a court or tribunal; in this way it embodies the “right
to a court”, of which the right of access, that is the right to
institute proceedings before courts in civil matters, constitutes one
aspect. However, that right would be illusory if a Contracting
State's domestic legal system allowed a final, enforceable judicial
decision to remain inoperative to the detriment of one party.
Execution of a judgment given by any court must therefore be regarded
as an integral part of the “trial” for the purposes of
Article 6 (see Hornsby v. Greece, judgment of 19 March
1997, Reports of Judgments and Decisions 1997-II, p. 510,
§ 40).
- The
Court further recalls that an applicant may allege a violation of
Article 1 of Protocol No. 1 only in so far as his or her complaints
relate to “possessions” within the meaning of that
provision. “Possessions” can be “existing
possessions” or assets, including claims, in respect of which
an applicant can argue that he has at least a “legitimate
expectation” (which must be of a nature more concrete than a
mere hope) that they will be realised, that is that he or she will
obtain effective enjoyment of a property right (see, inter alia,
Gratzinger and Gratzingerova v. the Czech Republic (dec.)
[GC], no. 39794/98, ECHR 2002 VII, § 69; Kopecký
v. Slovakia [GC], no. 44912/98, § 35,
ECHR 2004 IX). By way of contrast, the hope of recognition of a
property right which it has been impossible to exercise effectively
after the entry into force of Protocol No. 1 with regard to the State
concerned cannot be considered a “possession” within the
meaning of Article 1 of Protocol No. 1 (see Gaćeša
v. Croatia (dec.), no. 43389/02, 1 April 2008).
- Lastly,
it is observed that the second paragraph of Article 1 of Protocol No.
1 reserves to States the right to enact such laws, as they deem
necessary to control the use of property in accordance with the
general interest. In order to implement economic policies,
legislatures must have a wide margin of appreciation both with regard
to the existence of a problem of public concern warranting measures
of control and as to the choice of the detailed rules for the
implementation of such measures. The Court will respect the
legislature's judgment as to what is in the general interest unless
that judgment is manifestly without reasonable foundation (see, in
the “foreign currency context”, Trajkovski v. the
former Yugoslav Republic of Macedonia (dec.), no. 53320/99, 7
March 2002, p. 12).
- Turning
to the present case, whilst having regard to these principles, the
Court observes that as of 3 March 2004, which is when Serbia ratified
the Convention and Protocol No. 1 thereto, the applicant has clearly
had no enforceable legal title which would allow him to seek judicial
execution of the foreign currency award rendered in his favour, nor,
for that matter, a legitimate expectation under domestic law that he
could otherwise obtain all of his savings instantaneously.
- In
particular, the provisions of the Acts described at paragraphs 22 and
26 above, read in conjunction, barred the enforcement of the
applicant's judgment as of 12 December 1998. Consequently, the Court
considers that the said legislation extinguished the impact of the
final judgment in question well before the respondent State's
ratification. The applicant, therefore, cannot now be said to have a
continuing right to the enforcement sought.
- The
Court further holds that, given the dire reality of the Serbian
economy at the relevant time (see paragraph 12, footnote 1, and
paragraph 23 above) and the wide margin of appreciation afforded to
States in respect of matters involving economic policy, the impugned
legislation, providing for the gradual reimbursement of the funds
here at issue (see paragraphs 23-27 above), struck a fair balance
between the general interest of the community and the applicant's
persisting legitimate claim to his original savings, as well as the
property rights of all others in the same situation as him (see
mutatis mutandis, Trajkovski v. the former Yugoslav
Republic of Macedonia, cited above, pp. 12-14).
- In
such circumstances the Court finds that there has been no violation
of Article 6 § 1 of the Convention or of Article 1 of Protocol
No. 1.
FOR THESE REASONS, THE COURT
- Declares the application admissible unanimously;
- Holds by 4 votes to 3 that there has been no
violation of Article 6 § 1 of the Convention;
- Holds by 4 votes to 3 that there has been no
violation of Article 1 of Protocol No. 1.
Done in English, and notified in writing on 8 December 2009, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Françoise Elens-Passos Françoise
Tulkens
Deputy Registrar President
In accordance with Article 45 § 2 of the Convention and Rule 74
§ 2 of the Rules of Court, the joint dissenting opinion of
Judges Tulkens, Popović and Karakaş
is annexed to this judgment.
F.T.
F.E.P.
JOINT DISSENTING OPINION OF JUDGES TULKENS, POPOVIĆ
AND KARAKAŞ
Much
to our regret we could not follow the majority of our colleagues in
this case, for the sake of following reasons.
In
the present case the respondent State failed to execute a final
judgment given in the applicant's favour. We are of opinion that the
reason invoked by the State for such an interference with an
individual's rights is not acceptable. It is not open to a State
authority to cite lack of funds as an excuse for not honouring a
judgment debt. We do admit that a delay in the execution of a
judgment may be justified in particular circumstances, but the delay
may not be such as to impair the essence of the right protected under
Art. 6.1 of the Convention (see Burdov v. Russia, ECHR
2002-III paragraph 35, and Immobiliare Saffi v. Italy [GC]
ECHR 1999-V paragraph 74).
We
would also like to underline the fact that the applicant's situation
in this case is significantly different from the presumed majority of
other savers, whose savings had also been transformed into a public
debt, but who have never obtained a final judgment ordering release
of their deposits. That is why we consider that it was not justified
for the authorities to intervene in the execution of a final judgment
rendered at the domestic level, although it was done in a manner
permitted by the relevant domestic legislation. For that reason we
conclude that the right of access to court as protected by Art. 6. of
the Convention was impaired (see Jeličić
v. Bosnia and Herzegovina, ECHR 2006- paragraphs 38-46).
Our
conclusion is that the impossibility of obtaining the execution of
the final judgment at issue constitutes an interference with the
right to the peaceful enjoyment of possessions, as set out in the
first sentence of the first paragraph of Art. 1 First Protocol (see
Burdov, paragraph 40 and Jeličić,
paragraphs 47-49).
As
to the respondent Government's objection to the Court's jurisdiction
ratione temporis we are of opinion that all facts fall within
the Court's jurisdiction if they are only extensions of an already
existing situation at the moment of the ratification of the
Convention by a member state (see Yagci and Sargin v. Turkey,
Judgments and Decisions 1995, A 319 paragraph 40; Almeida Garret,
Mascarenhas Falcao and Others v. Portugal, ECHR 2000-I paragraph
43). It is to be noted that the applicant in the present case has
been unable to have his judgment legally enforced as of 1998, which
situation has continued to this date.
Last
but not least we find it necessary to stress the reason for
maintaining of the coherence of the Court's case-law. We consider the
ruling in Jeličić to be
binding in this case as a leading precedent. Although the Court may
depart from its previous rulings the Court is entitled to it only “if
it is persuaded that there were cogent reasons for doing so”
(see Cossey v. United Kingdom, Judgments and Decisions
1990, A 184 paragraph 35; Chapman v. United Kingdom, ECHR
2001-I paragraph 70; Christine Goodwin v. United Kingdom, ECHR
2002-I paragraph 74; Mamatkulov and Askarov v. Turkey, ECHR
2005- paragraph 121). In the present judgment we cannot find any
reference to cogent reasons which led our colleagues to depart from
the Court's previous ruling in a case which was identical to the
present one.
