SECOND SECTION
CASE OF
STOŠIĆ v. SERBIA
(Application no.
64931/10)
JUDGMENT
STRASBOURG
1 October 2013
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 Stošić v. Serbia,
The European Court of Human
Rights (Second Section), sitting as a Chamber composed of:
Guido Raimondi, President,
Danutė Jočienė,
Dragoljub Popović,
András Sajó,
Işıl Karakaş,
Paulo Pinto de Albuquerque,
Helen Keller, judges,
and Stanley Naismith, Section Registrar,
Having deliberated in private on 10 September 2013,
Delivers the following judgment, which was adopted on that
date:
PROCEDURE
The case originated in an
application (no. 64931/10) against the Republic of
Serbia lodged with the Court under Article 34 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Mr Gojko Stošić (“the applicant”), on 29 September 2010.
The applicant was represented by Mr M.
Marjanović and Ms M. Dedović-Marjanović, lawyers
practising in Leskovac. The Serbian Government (“the Government”) were
represented by their Agent, Mr S. Carić.
On 30 March 2012 the application was communicated
to the Government. It was also decided to rule on the admissibility and merits
of the application at the same time (Article 29 § 1).
THE FACTS
The applicant is a Serbian national who was born
in 1943 and lives in Leskovac.
THE CIRCUMSTANCES OF THE CASE
A. Introduction
5. The applicant
was a former employee of LETEKS (u stečaju), a
company based in Leskovac (hereinafter “the debtor”). Since the debtor had failed to fulfil its contractual
obligations toward him, the applicant instituted three sets of civil
proceedings against it.
B. First set of civil and enforcement proceedings
On 20 April 2001 the Leskovac Municipal Court
ordered the debtor to pay the applicant:
(i) holiday pay for 1998 in the amount of 700 Serbian dinars
(RSD), plus interest; and
(ii) RSD 1,490 for his legal costs, plus interest.
On 14 May 2001 the judgment became final.
On 23 August 2002 the applicant filed a request
for enforcement of the above judgment.
On 29 August 2002 the Leskovac Municipal Court
accepted the applicant’s request and issued an enforcement order.
On 25 February 2004 the enforcement proceedings
were stayed because the debtor was undergoing restructuring.
On 20 October 2006 the applicant requested the
Leskovac Municipal Court to continue with the enforcement.
On 11 March 2011 the enforcement proceedings
were stayed again because insolvency proceedings had been opened in respect of
the debtor.
C. The second set of civil and enforcement proceedings
On 19 June 2003 the Leskovac Municipal Court ruled
in favour of the applicant and ordered the debtor to pay him:
(i) salary arrears for the period 1 July 2001 to 31
December 2002, plus interest; and
(ii) the pension, disability, health and unemployment
insurance contributions due for the following periods: 1 January 1991 to 31
December 1992, 1 January 1994 to 31 December 1996, and 1 July 2002 to 31 December
2002.
On 20 July 2003 the judgment became final.
On 20 October 2006 the applicant sought
enforcement of the above judgment, proposing that it be carried out by means of
an auction of the debtor’s movable assets.
On 25 October 2006 the Leskovac Municipal Court
accepted the applicant’s request and issued an enforcement order.
On 17 March 2008 the applicant filed a further request
for enforcement of the judgment, this time proposing that it be carried out by means
of an auction of the debtor’s specific immovable assets.
The Leskovac Municipal Court never ruled on the
applicant’s request of 17 March 2008, but instead on 23 June of that year suspended
the enforcement proceedings because the applicant had failed to pay a deposit of
RSD 640 on account of the enforcement costs.
D. The third set of civil and enforcement proceedings
On 14 March 2007 the Leskovac Municipal Court
ruled in favour of the applicant and ordered the debtor to pay him;
(i) salary arrears for 1 January 2003 to 11 October 2005,
plus interest; and
(ii) the pension, disability, health and unemployment
insurance contributions due for the period 1 January 2005 to 11 October 2005.
On 19 April 2007 the judgment became final.
On 14 March 2008 the applicant filed a request
for the enforcement of the above judgment.
On 12 October 2009 the Leskovac Municipal Court eventually
accepted the applicant’s request and ordered the enforcement of his pecuniary
claims. The enforcement proceedings relating to payment of the social security
contributions were suspended. In its decision, the court awarded the applicant a
fixed sum in respect of enforcement costs.
The applicant’s lawyer lodged an appeal with the
Leskovac High Court.
On 7 April 2011 the Leskovac High Court returned
the file to the first-instance court, ordering it to stay the enforcement proceedings
because insolvency proceedings had been opened in respect of the debtor.
E. Insolvency proceedings
On 16 April 2010 preliminary insolvency
proceedings against the debtor were initiated before the Leskovac Commercial
Court.
On 13 July 2010 the court issued an interim
measure and prohibited any enforcement action being taken against the debtor.
On 25 January 2011 it opened insolvency
proceedings in respect of the debtor.
In May 2011 the applicant duly registered a
claim for the sums specified in the judgments of 20 April 2001, 19 June 2003
and 14 March 2007.
On 6 December 2011 the applicant’s claims based
on the above judgments were recognised in the total amount of RSD 864,838.93.
On 14 September 2012 some of the debtor’s
property was sold.
As at the date of this judgment, the insolvency
proceedings in respect of the debtor were still ongoing.
F. The debtor’s status
On 5 December 2006 the debtor was privatised.
On 8 April 2008 the contract for the sale of the
debtor was annulled because the buyer in question had failed to fulfil his
contractual obligations.
From June 2008 the debtor was comprised of predominantly
State-owned capital.
G. Other relevant facts
On 31 October 2010, the applicant lodged a joint
constitutional appeal with other former employees of the debtor.
As at the date of this judgment, the case was still
pending before the Constitutional Court.
II. RELEVANT DOMESTIC LAW
A. Enforcement Procedure Act 2000 (Zakon o izvršnom
postupku; published in the Official Gazette of the Federal Republic of
Yugoslavia- OG FY-nos. 28/00, 73/00 and 71/01)
Article 4 § 1 provided that all enforcement
proceedings were to be conducted urgently. Articles 63-84, 134-176 and
180-188 set out details as regards enforcement by means of a bank transfer or an
auction of the debtor’s movable and immovable assets.
B. Enforcement Procedure Act
2004 (Zakon o izvršnom postupku; published in the Official Gazette of
the Republic of Serbia - OG RS - no. 125/04)
The Enforcement Procedure Act 2004 (“the 2004
Act”) entered into force on 23 February 2005, thereby repealing the Enforcement
Procedure Act 2000 (“the 2000 Act”). Article 5 § 1 of the 2004 Act provides
that all enforcement proceedings are to be conducted urgently. In accordance
with Article 12 § 5, an appeal against an enforcement order does not in
principle suspend enforcement. In accordance with Article 304, all enforcement
proceedings instituted prior to 23 February 2005 are to be conducted pursuant
to the previous 2000 Act.
C. Insolvency Act (Zakon o stečaju;
published in OG RS no. 104/2009, 99/2011 and 71/2012)
This Act regulates the framework
for initiating and conducting insolvency proceedings against legal persons.
Article 2 provides that the aim of insolvency is to ensure the most favourable
collective settlement for creditors. Article 8 states that all insolvency
proceedings are to be conducted urgently. In accordance with
Articles 19 § 1 and Article 22 § 1, in insolvency proceedings against
socially/State-owned companies the role of the insolvency administrator is to
be performed by the Privatisation Agency. Article 93 §§ 1 and 2 provide that “from
the date insolvency proceedings are instituted” the debtor cannot be simultaneously
subject to a separate enforcement procedure. Any ongoing enforcement
proceedings are thus to be stayed, while new enforcement proceedings cannot be
instituted for as long as the insolvency proceedings are still pending.
D. Other relevant domestic law and practice
The relevant domestic law concerning the status of
socially-owned companies is outlined in the case of R. Kačapor and
Others v. Serbia (nos. 2269/06, 3041/06, 3042/06, 3043/06, 3045/06
and 3046/06, §§ 57-64 and §§ 71-76, 15 January 2008). Further, the
relevant case-law of the Constitutional Court in respect of socially-owned
companies, together with the relevant provisions concerning constitutional
appeals and the privatisation of socially-owned companies are outlined in the
case of Marinković v. Serbia ((dec.) no. 5353/11, 29 January 2013,
§§ 26-29 and §§ 31-44).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 OF THE
CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1
The applicant complained about the respondent
State’s failure to enforce three final judgments rendered
in his favour against the same socially/State-owned company. He relied
on Article 6 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. Exhaustion of domestic remedies
The Government submitted that the Constitutional
Court had harmonised its case-law with that of the Court in the context of the
respondent State’s liability for non-enforcement of final judgments rendered
against socially-owned companies. They further maintained that the applicant’s
case was still pending before the Constitutional Court, and that his
application should therefore be rejected for non-exhaustion of domestic
remedies.
The applicant argued that a constitutional
appeal could not be considered effective in the particular circumstances of his
case.
The Court observes that it
has already held in cases such as the applicant’s that a constitutional appeal
should indeed be considered to be an effective domestic remedy within the
meaning of Article 35 § 1 of the Convention, but only in respect of
applications against Serbia lodged after 21 June 2012 (see
Marinković v. Serbia, cited above, § 59).
It sees no reason to hold otherwise in the
present case, and notes that the applicant had lodged his complaints with the
Court on 29 September 2010.
. It
follows that the Government’s objections concerning the exhaustion of domestic
remedies must be dismissed.
2. Conclusion
The Court finds, moreover, that the applicant’s
complaints are not manifestly ill-founded within the meaning of Article 35 § 3
of the Convention. No other grounds for declaring them inadmissible have been
established. They must therefore be declared admissible.
B. Merits
1. The arguments of the parties
In respect of the first set of enforcement proceedings,
the Government observed that they had been stayed on 25 February 2004, before
the Convention had entered into force in respect of Serbia on 3 March 2004,
and that the debtor had been privatised on 5 December 2006. Taking this into
account, they maintained that the respondent State’s liability could only be established
for the period between 8 April 2008, when the privatisation of the debtor had
been annulled, and 13 July 2010, when the Commercial Court had prohibited any enforcement
action being taken against the debtor.
In relation to the second set of proceedings,
they argued that the State could not be considered responsible for having
violated the applicant’s rights because in the course of the enforcement
proceedings he had not complied with the court order requiring him to make an advance
payment of the enforcement costs.
Concerning the third set of proceedings, the
Government noted that the judgment at issue had been adopted after the debtor
had been privatised and that in this sense the respondent State could not be
considered liable for allegedly having violated the applicant’s rights. They
argued that the applicant had contributed to the length of the enforcement
proceedings since he had lodged appeals against the court’s decisions.
Lastly, the Government maintained that the respondent
State’s liability could only be engaged in so far as it related to the
enforcement proceedings against the debtor, while the subsequent insolvency
proceedings against the debtor should not be assessed in the context of a
violation of the Convention rights. They also argued that the State could not be
held responsible for the debtor’s lack of assets.
The applicant disagreed and reiterated his
original complaints.
2. The Court’s assessment
The Court observes that the final judgments
given in the applicant’s favour were adopted on 20 April 2001, 19 June 2003 and
14 March 2007 and became final on 14 May 2001, 20 July 2003 and 19 April 2007 respectively,
but that they remain unenforced.
The Court reiterates that irrespective
of whether a debtor is a private or a State-controlled entity, it is up to the
State to take all necessary steps, within its competence, to enforce a final
court judgment and, in so doing, to ensure the effective participation of its
entire apparatus (see, mutatis mutandis, Pini and Others v. Romania, nos.78028/01 and 78030/01, §§ 174-189, ECHR 2004-V,
and, mutatis mutandis, Hornsby v. Greece, 19 March 1997, § 41, Reports
of Judgments and Decisions 1997-II). Therefore,
the fact that the debtor was privatised for a certain period of time cannot
absolve the respondent State from its obligation under the Convention to take
all necessary steps to secure the enforcement of the final court judgment
rendered in the applicant’s favour.
Although the enforcement proceedings in respect
of the judgment of 20 April 2001 were stayed on 25 February 2004 because the debtor
was undergoing restructuring, they were resumed and stayed again on 11 March
2011 because insolvency proceedings had been opened in respect of the debtor. The
Government, however, did not offer any convincing argument justifying the
delays in the first set of enforcement proceedings. The Court notes that the
judgment of 20 April 2001, although final and enforceable as of May 2001, has
yet to be executed. The impugned situation has thus already been pending for
more than nine years and six months since the ratification of the Convention
and Protocol No. 1 by the respondent State on 3 March 2004 (the period which
falls within the Court’s jurisdiction ratione temporis).
In the context of socially/State-owned companies
a period of non-execution should not be limited to the enforcement stage only,
but should also include the subsequent insolvency proceedings (see, inter
alia, R. Kačapor and Others, cited above, § 115). Having
regard to the fact that in the course of the insolvency proceedings the
applicant duly submitted his claims based on the judgments rendered in his
favour against the debtor, including claims based on the judgment of 19 June
2003, the Government’s argument relying on the applicant’s failure to advance
the costs of the enforcement proceedings is irrelevant in the circumstances of
the case. Moreover, the Court is not persuaded that the advancement of the
enforcement costs would in any event have led to the enforcement of the judgment
in question in the absence of any evidence showing that at least one judgment
rendered against the debtor, in cases similar to the applicant’s, had been
enforced.
While it is true that the judgment of 14 March
2007 was adopted when the debtor was private company, it is noted that the
privatisation of the debtor was annulled on 8 April 2008 and that it is now
owned by the State in its entirety.
In accordance with the domestic law, an appeal against
an enforcement order does not suspend enforcement (see paragraph 38 above),
therefore the Government’s argument that the applicant had contributed to the
length of the third set of enforcement proceedings cannot be regarded as
convincing.
It is the State’s obligation to ensure that
final decisions against its organs, or entities or companies owned or
controlled by the State are enforced in good time and the State cannot cite
lack of funds as an excuse for not honouring judgments against it or against
entities or companies controlled by it (see Yuriy Nikolayevich Ivanov v.
Ukraine, no. 40450/04, § 54, 15 October 2009).
The applicant sought enforcement of three final judgments
rendered in his favour on 23 August 2002, 20 October 2006 and 14 March 2008,
respectively. In May 2011, in the course of the insolvency proceedings, he
submitted claims based on the above judgments and on 6 December 2011 the
Leskovac Commercial Court recognised the applicant’s claims. Hence, the period of
debt recovery in the applicant’s case has so far lasted between five years and five
months and nine years and six months since the Convention entered into force in
respect of Serbia on 3 March 2004.
The Court observes that it has frequently found
violations of Article 6 of the Convention and/or Article 1 of Protocol No.
1 to the Convention in cases raising issues similar to those raised in the
present case (see R. Kačapor and Others, cited above, §§
115-116 and § 120; Marčić
and Others v. Serbia, no. 17556/05, § 60, 30 October 2007; Crnišanin and
Others v. Serbia, nos. 35835/05, 43548/05, 43569/05 and 36986/06, §§ 123-124
and §§ 133-134, 13 January 2009; Rašković and Milunović v. Serbia,
nos. 1789/07 and 28058/07, § 74 and § 79,
31 May 2011; and Adamović v. Serbia, no. 41703/06, § 41, 2 October 2012).The Court finds no arguments in the case capable of persuading it to
reach a different conclusion.
. Therefore, the Court finds that
there has been a breach of Article 6 of the Convention and Article 1 of
Protocol No. 1 to the Convention.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
Article 41 of the
Convention provides:
“If the Court finds that there
has been a violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only partial
reparation to be made, the Court shall, if necessary, afford just satisfaction
to the injured party.”
A. Damage, costs and expenses
The applicant requested that the State be
ordered to pay, from its own funds, the sums awarded by the final judgments
rendered in his favour and 4,000 euros (EUR) in respect of the non-pecuniary
damage suffered. The applicant also claimed EUR 1,972.11 for the legal costs
incurred before the domestic courts and the Court.
The Government considered the claims excessive
and unjustified.
Having regard to the violations found in the
present case and its own case-law (see R. Kačapor and Others, cited
above, §§ 123-126, and Crnišanin and Others, cited above, § 139), the
Court considers that the applicants’ claims for pecuniary damage must be
accepted. The Government shall therefore pay the applicant the sums awarded in
the final domestic judgments adopted on 20 April 2001, 19 June 2003 and 14
March 2007 respectively, less any amounts which may have already been paid in
respect of the said judgments.
As regards the applicant’s claim for
non-pecuniary damage, the Court reiterates that it is an international judicial
authority contingent on the consent of the States signatory to the Convention,
and that its principal task is to secure respect for human rights, rather than
compensate applicants’ losses minutely and exhaustively. Unlike in national
jurisdictions, the emphasis of the Court’s activity is on passing public
judgments that set human rights standards across Europe.
For this reason, in cases involving many
similarly situated victims a unified approach may be called for. This approach
will ensure that the applicants remain aggregated and that no disparity in the
level of the awards will have a divisive effect on the applicants (see, for
instance, Goncharova and Others and 68 other “Privileged Pensioners” cases
v. Russia, nos. 23113/08 et al., §§ 22-24, 15 October 2009). The Court notes that this case is
one of many similar cases that concern the respondent State’s liability for its
failure to enforce final domestic judgments rendered against
socially/State-owned companies.
In the view of above, the Court considers it
reasonable and equitable to award EUR 2,000 to the applicant. This sum is to cover
any non-pecuniary damage, as well as costs and expenses.
B. Default interest
The Court considers it appropriate that the
default interest rate should be based on the marginal lending rate of the
European Central Bank, to which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
1. Declares the application admissible;
2. Holds that there has been a violation of
Article 6 of the Convention and of Article 1 of Protocol No. 1 to the
Convention;
3. Holds
(a) that the respondent State is to pay the applicant,
from its own funds and within three months from the date on which the judgment
becomes final in accordance with Article 44 § 2 of the
Convention, the sums awarded in the final domestic judgments rendered in his
favour, less any amounts which may have already been paid in respect of the
said judgments;
(b) that the respondent State is to pay the
applicant, within the same period, EUR 2,000 (two thousand euros) in respect of
non-pecuniary damage, costs and expenses, plus any tax that may be chargeable
on this amount which is to be converted into the
currency of the respondent State at the rate applicable at the date of
settlement;
(c) that from the expiry of the above-mentioned
three months until settlement simple interest shall be payable on the above
amounts at a rate equal to the marginal lending rate of the European Central Bank
during the default period plus three percentage points;
4. Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 1 October 2013,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Stanley Naismith Guido
Raimondi
Registrar President
