Sarnelli and Matteoni & others v Italy - 37637/05 [2010] ECHR 1422 (15 September 2010)

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The Committee of Ministers, under the terms of Article 46, paragraph 2, of the Convention for the Protection of Human Rights and Fundamental Freedoms, which provides that the Committee supervises the execution of final judgments of the European Court of Human Rights (hereinafter “the Convention” and “the Court”);

Having regard to the judgments transmitted by the Court to the Committee once they had become final;

Recalling that the violations of the Convention found by the Court in these cases concern the inadequate compensation awarded to the applicants for the expropriation of their land (violation of Article 1 of Protocol No. 1) and the unfairness of the related judicial proceedings due to the retroactive application of a provision (Article 5bis of Law No. 359 of 1992) reducing compensation for expropriation to less than half the market value of the property and taxing it (violation of Article 6, paragraph 1);

Having invited the government of the respondent state to inform the Committee of the measures taken to comply with its obligation under Article 46, paragraph 1, of the Convention to abide by the judgments;

Having examined the information provided by the government in accordance with the Committee’s Rules for the application of Article 46, paragraph 2, of the Convention;

Having satisfied itself that, within the time-limit set, the respondent state paid the applicants the just satisfaction provided in the judgments (see details in Appendix),

Recalling that a finding of violations by the Court requires, over and above the payment of just satisfaction awarded in the judgments, the adoption by the respondent state, where appropriate, of

- individual measures to put an end to the violations and erase their consequences so as to achieve as far as possible restitutio in integrum; and

DECLARES, having examined the measures taken by the respondent state (see Appendix), that it has exercised its functions under Article 46, paragraph 2, of the Convention in these cases and

Information on the measures taken to comply with the judgments in the cases of

These cases concern violations of the applicants’ right to the peaceful enjoyment of their possessions due to the disproportionately low compensation awarded to them in 2004 and in 2000 following the lawful expropriation of their land. The amounts, which were fixed under Article 5bis of Law No. 359 of 1992, were significantly less (by nearly half) than the market value of the property, and furthermore taxed at a rate of 20%, without being based on any reason of public interest (violations of Article 1 of Protocol No. 1).

The European Court found that the expropriations at issue represented for the applicants a disproportionate and excessive burden as they did not form part of any economic, social or political reform or of any other exceptional circumstance. Thus it could find no legitimate public-interest objective to justify reimbursement at less than market value of the property.

In addition, the Court found that Article 5bis of Law No. 359 of 1992, by changing the law applicable to compensation of expropriations under way as well as to pending judicial proceedings concerning them, retroactively applied a new compensation regime providing payments lower than the market value of the goods (see above) thus violating the applicant’s right to fair proceedings (violations of Article 6§1). The government had not demonstrated any “overriding general interest” to justify the retroactive application of this provision.

The European Court awarded just satisfaction in respect of the full amount of pecuniary and non-pecuniary damage sustained. As regards the amount of pecuniary damages, the Court awarded “an amount corresponding to the difference between the value of the property at the time of expropriation and the amount obtained at domestic level, plus indexation and interests so as to offset, at least in part, the long period for which the applicants have been deprived of the land” (judgment Sarnelli, §42, see also §77 of the Matteoni judgment).

Under Article 46 in a judgment concerning, inter alia, the same issues (Scordino No. 1, 36813/97, judgment of 29/03/2006, Mostacciuolo group, 64705/01, Section 4.2), the European Court considered that “the respondent State should, above all, remove every obstacle to the award of compensation bearing a reasonable relation to the value of the expropriated property, and thus ensure, by appropriate statutory, administrative and budgetary measures, that the right in question is guaranteed effectively and rapidly in respect of other claimants affected by expropriation of property, in accordance with the principles of the protection of pecuniary rights set forth in Article 1 of Protocol No. 1, in particular the principles applicable to compensation arrangements” (§237).

The Court has also reiterated that ‘in many cases of lawful expropriation, such as a distinct expropriation of land with a view to building a road or for other purposes ‘in the public interest’, only full compensation can be regarded as reasonably related to the value of the property (Scordino No. 1, § 256). However, legitimate objectives of “public interest”, such as those pursued by measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value’ (Matteoni and others, § 50; Scordino No. 1, § 256).

Following the Scordino No. 1 judgment (see above), the Court of Cassation responded with three Orders, (one of 29/05/2006 and two of 19/10/2007) all raising the problem of the compliance of Article 5bis of Law No. 359 of 1992 with the Constitution and the Convention.

In its decision No. 348 of 24/10/2007, the Constitutional Court declared Article 5bis of Law No. 359 of 1992 unconstitutional, and, consequently, also paragraphs 1 and 2 of Article 37 of the Consolidated Text containing measures reforming expropriation (Presidential decree No. 327 of 2001, modified in 2002 and in force since 2003), which endorsed this provision. The Constitutional Court’s reasoning underlined the incompatibility of the provision at issue with both Article 42 of the Constitution and Article 1 of Protocol No. 1 to the Convention, as well as with the case-law of the European Court, on account of the inadequate amount of compensation provided (between 30 and 50% of the estimated market value of the property) subsequently taxed at a rate of 20%. According to the Constitutional Court, such compensation was neither reasonably related to the property value, as advocated by the Strasbourg Court, nor coherent with the notion of “serio ristoro” (serious restoration) affirmed in its own case-law on the subject. However, the Constitutional Court recalled that the legislator will not be obliged to award full compensation: when seeking for a “fair balance” between the demands of the general and individual interests, the legislator will have to take into account the social function of property as protected by Article 42 of the Constitution. The declaration of unconstitutionality determined the retroactive non-application of the provision at issue in all pending domestic proceedings.

The Act on the 2008 Budget (Law No. 244 of 24/12/2007) amended the Consolidated text on expropriation, in particular Article 37, paragraphs 1 and 2. The amended article provides that compensation for expropriation of building land must be fixed at the level of the market value of the property. If the expropriation is carried out pursuing objectives of economic, social or political reform, compensation may be diminished by 25%. The provision at issue applies to all pending proceedings, with the exception of proceedings in which compensation for expropriation has been already accepted or has been finally fixed.

The Italian authorities have indicated that recent judgments of the Court of Cassation on the subject (judgments Nos. 26275 of 14/12/2007, 599 of 14/01/2008, and 3175 of 11/02/2008) confirmed the application of this criterion for compensation, meanwhile recalling the European Court’s case-law on the amount of compensation. According to this case-law, full compensation must be awarded in case of an isolated expropriation. Instead, the reimbursement may be lower than the full market value of the property if the expropriation is carried out as part of a process of economic, social or political reform. The amount must then be converted to current value to offset the effects of inflation and interest must be paid; it must also be completed by compensation for the occupation of the property (interest calculated on the compensation for expropriation for the period previous to expropriation).

The government considers that the measures adopted will prevent similar violations and that Italy has thus complied with its obligations under Article 46 paragraph 1 of the Convention.

1 Adopted by the Committee of Ministers on 15 September 2010 at the 1092nd meeting of the Ministers’ Deputies

Name and application number	Pecuniary damage	Non-pecuniary damage	Costs and expenses	Total
Sarnelli (37637/05)	163 000 EUR	5 000 EUR	-	168 000 EUR
Paid on 15/12/2008
Matteoni and others (65687/01)	5 500 000 EUR	-	10 000 EUR	5 510 000 EUR
Paid on 26/02/2009

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You are here: BAILII >> Databases >> European Court of Human Rights >> Sarnelli and Matteoni & others v Italy - 37637/05 [2010] ECHR 1422 (15 September 2010) URL: http://www.bailii.org/eu/cases/ECHR/2010/1422.html Cite as: [2010] ECHR 1422