INDERKINY v. RUSSIA - 10535/09 (Judgment : Violation of Right to a fair trial (Enforcement proceedings Access to court) Violation ...) [2017] ECHR 1123 (12 December 2017)

In the case of Inderkiny v. Russia,

The European Court of Human Rights (Third Section), sitting as a Committee composed of:

          Helen Keller, President,
          Pere Pastor Vilanova,
          Alena Poláčková, judges,
and Fatoş Aracı, Deputy Section Registrar,

Having deliberated in private on 21 November 2017,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 10535/09) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by four Russian nationals: Ms Nadezhda Viktorovna Inderkina, Mr Igor Aleksandrovich Inderkin, Mr Aleksandr Igorevich Inderkin, and Mr Andrey Igorevich Inderkin.

2. The Russian Government (“the Government”) were represented initially by Mr G. Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin.

3. On 23 February 2011 the non-enforcement complaint was communicated to the Government.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

4. The applicants are a family. They were born in 1971, 1968, 1992, 1995, and live in Samara.

A. Judgment in the applicants’ favour

5. On 26 April 2004 the Oktyabrskiy District Court of Samara (“the Oktyabrskiy District Court”) ordered, inter alia, the management of the State unitary enterprise “16th Military Plant” (“the company”) to provide the applicants with a suitable dwelling, while keeping their names on the list of persons awaiting housing.

6. On 11 May 2004 the judgment came into force.

7. On 28 May 2004 the Department of the Bailiffs’ Service for Oktyabrskiy District of Samara opened the enforcement proceedings.

8. On 22 December 2004 the enforcement proceedings were terminated as the company had no available residential accommodation.

9. On 1 October 2007, due to the reorganisation of the company (see paragraph 16 below), the enforcement file was sent to the Department of the Bailiffs’ Service for the Engelsskiy District of Saratov Region.

10. On 21 April 2008 the bailiffs ruled that it was impossible to enforce the judgment in the part relating to the housing, as the new debtor, FGUP 9 TSARZ (see paragraph 16 below), had no available accommodation. The enforcement proceedings were terminated.

11. On 26 August 2009 the Engelsskiy District Court of Saratov Region, following the bailiffs’ application, replaced the debtor in the enforcement proceedings from FGUP 9 TSARZ to OAO 9 TSARZ (see paragraph 17 below).

12. On 14 October 2009 the Oktyabrskiy District Court clarified the judgment of 26 April 2004 stating that the applicants should be provided with an apartment in Samara.

13. Several times in 2004-2011 the parties applied to the Oktyabrskiy District Court for changing the mode of enforcement of the judgment. Each time the courts rejected the applications finding that a payment of the amount representing the cost of an apartment would be equal to modifying the original judgment.

14. The judgment of 26 April 2004 remained unenforced.

B. Available information on the debtor company

15. The company was incorporated as a municipal unitary enterprise. According to its articles of association, the company’s aim was to produce goods and render services for the Ministry of Defense of Russia, as well as for meeting other public needs and making a profit.

16. Under the Order of the Federal Agency for State Property Management dated 22 September 2005 the company was joined to FGUP 9 TSARZ (FGUP 9 Tsentralnyy Avtomobilnyy Remontnyy Zavod - ФГУП 9 ЦАРЗ or ФГУП 9 Центральный Автомобильный Ремонтный Завод). The reorganisation was completed on 13 February 2007, and the latter company became the universal successor of the company.

17. In accordance with the Decree of the President of Russia of 15 September 2008 and the Decree of the Russian Government of 22 November 2008, FGUP 9 TSARZ was further reorganized into OAO 9 TSARZ, a publicly-traded private open joint-stock company incorporated under the laws of Russia.

II. RELEVANT DOMESTIC LAW

18. The domestic provisions relevant to cases on the legal status of State and municipal unitary enterprises with the right of economic control are summarised in Liseytseva and Maslov v. Russia (nos. 39483/05 and 40527/10, §§ 54-127, 9 October 2014), and Samsonov v. Russia ((dec.) no. 2880/10, 18 September 2014).

THE LAW

I. ALLEGED VIOLATION OF ARTICLES 6 AND 13 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

19. The applicants complained of the non-enforcement of the domestic decision given in their favour and of the lack of any effective remedy in domestic law. They relied on Article 6 § 1 and Article 13 of the Convention and on Article 1 of Protocol No. 1 to the Convention, which read as follows:

Article 6 § 1

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

Article 13

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

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.”

20. The Government argued that the company and its successor, FGUP 9 TSARZ, had been a separate legal entity, which carried out their commercial activities independently of the authorities. In respect of OAO 9 TSARZ, the Government submitted that its property was not owned by its founder, the Russian Federation. They submitted, therefore, that the debts of the company and its successors were not attributable to the State. The Government further argued that the applicants had effective domestic remedies in respect of the alleged violation of their rights. In particular, they could lodge a compensatory action and an action for compensation for non-pecuniary damage.

21. The applicants maintained that the debtor company and its successors had been State-run enterprises controlled by the authorities. They submitted that the debtor company carried out the State’s defence order and was not independent from the State. The applicants further submitted that the decision to reorganise FGUP 9 TSARZ into OAO 9 TSARZ, following privatization, was taken by the authorities. As a result, the debtor unitary enterprise seized to exist, while its debt before the applicants was not cleared. The applicants also noted that the authorities ordered the transfer of certain residential premises of FGUP 9 TSARZ mentioned in the judgment of 26 April 2004 to the municipal property. Thus, the applicants insisted that the authorities exercised the direct control over the company’s property, and made enforcement of the judgment in their favour impossible.

A. Admissibility

22. The Court has held that the existing legal framework in Russia does not provide unitary enterprises with a degree of institutional and operational independence that would absolve the State from responsibility under the Convention for the debts of such companies (see Liseytseva and Maslov, cited above, §§ 193-204). In order to determine the issue of State responsibility for the debts of unitary enterprises, the Court must examine whether and how the extensive powers of control provided for in domestic law were actually exercised by the authorities in the present case.

23. The Court notes that the debtor company was set up to produce the goods and services for the national defence sector (see paragraph 15 above). In these circumstances, the Court considers that the company exercised a public duty and was, by virtue of its functions, placed under the actual strict control of the authorities.

24. Furthermore, the actual degree of the State’s control over the debtor company was demonstrated by the fact that the decision to reorganize, first, the company and, later, its successor FGUP 9 TSARZ was taken by the federal authorities and during the reorganization the debts of the predecessor had not been satisfied (Yershova v. Russia, no. 1387/04, § 60, 8 April 2010, and Liseytseva and Maslov, cited above, § 206).

25. In the light of the above and the Court’s case-law on the matter (see Liseytseva and Maslov, cited above, §§ 208-19), the Court finds that the debtor company did not enjoy sufficient institutional and operational independence from the authorities, and dismisses the Government’s ratione personae objection. Accordingly, the State is to be held responsible under the Convention for the debt owed by the respondent company to the applicants, in accordance with the final judgment in their favour.

26. The Court further notes that the applicants’ complaints under Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. They are not inadmissible on any other grounds. They must therefore be declared admissible.

B. Merits

27. The Court notes that the judgment in the applicants’ favour has not been enforced to date.

28. The Court has established above that the State is responsible under the Convention for the debts owed by the respondent company. By failing to comply with the judgment for more than five years (see §§ 5-17 above), the national authorities prevented the applicants from receiving what they could reasonably have expected to receive. The Court has found a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention in respect of issues similar to those in the present case (see Liseytseva and Maslov, cited above, §§ 208-24, and Gerasimov and Others v. Russia, nos. 29920/05 and 10 others, §§ 167-83, 1 July 2014).

29. As regards the effective remedies available to the applicants, the Court has already held, with respect to similar situations in Liseytseva and Maslov (cited above, §§ 165-72), that there were no effective remedies available to the applicants in their attempt to obtain either the execution of awards made against municipal unitary enterprises or compensation for the alleged violations.

30. Accordingly, there has been a violation of Article 6 § 1 and Article 13 of the Convention and of Article 1 of Protocol No. 1 to the Convention on account of the non-enforcement of the final and binding judgment in the applicants’ favour and the lack of effective remedies.

II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

31. The applicants also complained with reference to Articles 6 and 14 of the Convention and Article 2 of Protocol No. 2 to the Convention about length of proceedings, their alleged shortcomings and unfairness.

32. Having regard to all the material in its possession in so far as the complaints fall within the Court’s competence, it finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be rejected as manifestly ill-founded, pursuant to Article 35 §§ 3 (a) and 4 of the Convention.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

33. 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

34. The applicants claimed 3,285,000 Russian roubles (RUB) representing the cost of an apartment they should have obtained under the judgment of 26 April 2004 in respect of pecuniary damage. Each applicant further claimed 6,000 euros (EUR) in respect of non-pecuniary damage.

35. The Government argued that the alleged violations were not attributable to the State, and that the claims were unjustified. In respect of the pecuniary damage, the Government submitted that the applicants did not substantiate their claims, and that the Oktyabrskiy District Court on several occasions had refused to award the applicants the monetary sum instead of an apartment as it would have changed the initial judgment of 26 April 2004 (see paragraph 13 above). In respect of non-pecuniary damage, the Government argued that the applicants’ claims were excessive, and compensation for such damage should not be awarded as there had been no violation of the applicants’ rights.

36. The Court refers at the outset to its consistent position that the enforcement of the domestic judgment remains the most appropriate form of redress in respect of violations of Article 6 like the one found in the present case (see, among many other authorities, Kalinkin and Others v. Russia, nos. 16967/10 and 20 others, § 55, 17 April 2012, and Ilyushkin and Others v. Russia, nos. 5734/08 and 28 others, § 64, 17 April 2012). The Court therefore finds that the respondent State must secure, without further delay, the enforcement by appropriate means of the judgment in the applicants’ favour.

37. As to the non-pecuniary damage, the Court considers it reasonable and equitable to award the applicants jointly EUR 2,000, plus any tax that may be chargeable, in respect of non-pecuniary damage (Voronkov v. Russia, no. 39678/03, §§ 68-69, 30 July 2015).

B. Costs and expenses

38. The applicants also claimed RUB 22,938.40 for the costs and expenses. The amount included postal expenses, legal services, translation services, and the expenses for assessment of property. The applicants enclosed the relevant receipts.

39. The Government argued that the applicants had failed to enclose the agreements in respect of the above-mentioned services. In respect of the legal services, the Government submitted that only RUB 10,000 concerned the proceedings at the Court.

40. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. Regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 424 for costs and expenses in the proceedings before the Court.

C. Default interest

41. 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 complaint concerning non-enforcement of the judgment of 26 April 2004 admissible and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 and Article 13 of the Convention and of Article 1 of Protocol No. 1 to the Convention on account of the non-enforcement of the final and binding judgment in the applicants’ favour and the lack of effective remedies;

3. Holds

(a) that the respondent State, within three months, shall secure, by appropriate means, the enforcement of the judgment of 26 April 2004;

(b) that the respondent State is to pay jointly the applicants, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i) EUR 2,000 (two thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii) EUR 424 (four hundred and twenty four euros), plus any tax that may be chargeable to the applicants, in respect of costs and expenses;

(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 applicants’ claim for just satisfaction.

Done in English, and notified in writing on 12 December 2017, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Fatoş Aracı Helen Keller
Deputy Registrar President

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You are here: BAILII >> Databases >> European Court of Human Rights >> INDERKINY v. RUSSIA - 10535/09 (Judgment : Violation of Right to a fair trial (Enforcement proceedings Access to court) Violation ...) [2017] ECHR 1123 (12 December 2017) URL: http://www.bailii.org/eu/cases/ECHR/2017/1123.html Cite as: [2017] ECHR 1123, ECLI:CE:ECHR:2017:1212JUD001053509, CE:ECHR:2017:1212JUD001053509