SINEX D.O.O. v. MONTENEGRO - 44354/08 (Judgment : Violation of Article 6 - Right to a fair trial (Article 6 - Administrative proceedings Article 6-1 - Reasonable time) Violati...) [2017] ECHR 748 (05 September 2017)

In the case of Sinex DOO v. Montenegro,

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

          Paul Lemmens, President,
          Nebojša Vučinić,
          Stéphanie Mourou-Vikström, judges,

and Hasan Bakırcı, Deputy Section Registrar,

Having deliberated in private on 4 July 2017,

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

PROCEDURE

1. The case originated in an application (no. 44354/08) against Montenegro lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Sinex DOO, a privately owned company with its seat in Belgrade, Serbia (“the applicant”), on 12 September 2008.

2. The applicant was represented by Mr R. Kojić, a lawyer practising in Belgrade. The Montenegrin Government (“the Government”) were represented by their Agent, Ms V. Pavličić.

3. On 21 May 2015 the application was communicated to the Government.

4. The Government objected to the examination of the application by a Committee. After having considered the Government’s objection, the Court rejects it.

THE FACTS

THE CIRCUMSTANCES OF THE CASE

5. The applicant is a privately owned company which was established in 1989 and registered in Belgrade.

A. Background of the case

6. On 9 September 2003 the applicant and Beranka AD, a socially-owned company, concluded a guarantee agreement. To secure the payment of obligations under this agreement, the applicant and Beranka AD concluded Annex No. 1 on the fiduciary transfer of the latter’s property to the applicant (Anex br. 1 Ugovora o fiducijarnom prenosu prava svojine). In this Annex, the property offered as collateral was: (a) property no. 6 - storehouse (magacin); (b) property no. 29 - power plant (energana); (c) property no. 30 - boiler-room (kotlovnica); (d) property no. 9 - laboratory (laboratorija); and (e) property PM2 - paper machines (papir mašine).

7. On 31 October 2003 the fiduciary transfer of Beranka AD’s property to the applicant was registered by the Real Estate Office in Berane (Direkcija za nekretnine, Područna jedinica Berane).

8. On 8 April 2004 the Commercial Court in Bijelo Polje (Privredni sud u Bijelom Polju) opened insolvency proceedings in respect of Beranka AD.

9. On 5 June 2004 the applicant reported its claim in these proceedings.

10. On 17 September 2004 the Commercial Court refused to recognise this claim.

B. The first set of administrative proceedings

11. Following the decision of 17 September 2004, on 11 October 2004 the insolvency administrator for Beranka AD (stečajni upravnik) lodged a request with the Real Estate Office in Berane seeking that the registration of the fiduciary transfer of property to the applicant be erased. On the same day the Real Estate Office Registry accepted this request.

12. On 5 November 2004 the applicant lodged an appeal with the Real Estate Department in Berane (Uprava za nekretnine Područna jedinica Berane). On 26 November 2004 the Real Estate Department amended the said decision.

13. On 13 April 2005 the Real Estate Department in Podgorica (Uprava za nekrentine u Podgorici) quashed both decisions on appeal and remitted the case for reconsideration.

14. On 1 June 2005 the Real Estate Department in Berane re-registered the fiduciary transfer on properties nos. 6 and 9, as well as on PM2, but refused to re-register the fiduciary transfer on properties nos. 29 and 30.

15. On 22 November 2005 the Real Estate Department in Podgorica upheld this decision.

16. The applicant appealed to the Administrative Court. On 6 February 2007 the Administrative Court quashed the decision of the Real Estate Department in Podgorica and remitted case to the Real Estate Department in Berane. It would appear that the case is still pending before that body.

17. On 11 April 2007 the Administrative Court issued an enforcement decision ordering the registration of the applicant’s fiduciary rights in respect of all properties.

C. The second set of administrative proceedings

18. Following the Commercial Court’s decision of 17 September 2004 (see paragraph 10 above), the applicant lodged an objection. The hearings concerning the objection were held on 11 August 2004, 31 May 2005 and 17 April 2006. On 24 August 2006 the Commercial Court dismissed the applicant’s objection.

19. On 17 January 2007 the Real Estate Department in Berane again erased the fiduciary transfer of Beranka AD’s property from the public register. On 24 February 2007 the applicant lodged an appeal against this decision.

20. On 3 September 2007 the Ministry of Finance upheld the decision of the Real Estate Department to erase the applicant’s fiduciary rights.

21. On 8 July 2008, upon an appeal by the applicant, the Administrative Court quashed the decision of the Ministry and remitted the case to the Real Estate Department in Berane for reconsideration.

22. On 2 October 2008 the Real Estate Department in Berane ordered the removal of the applicant’s rights on Beranka AD’s property from the public register.

23. On 9 April 2009 the Ministry of Finance quashed the decision of 2 October 2008 and remitted case to the first instance.

24. On 8 April 2010 the Real Estate Department in Berane stayed the proceedings, because it needed some documents which were in the file of a case pending before the Commercial Court. This decision was quashed by decision of the Ministry of Finance and the matter was remitted to the first instance.

25. On 26 October 2011 the Real Estate Department adopted a decision allowing the deletion of the applicant’s rights from the public register. The same authority confirmed that decision on 2 November 2011.

26. On 16 November 2011 the applicant filed an objection with the Ministry of Finance.

27. On 9 July 2012 the applicant also lodged an appeal with the Administrative Court. On 30 November 2012 the Administrative Court rendered a decision in the applicant’s favour and ordered the Ministry of Finance to reconsider on the applicant’s prior objection.

28. On 14 June 2013 the Ministry of Finance remitted the case to the first instance. The proceedings are still pending before the Real Estate Department in Berane.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

29. The applicant complained under Article 6 § 1 of the Convention about the length of the administrative proceedings concerning the registration of its fiduciary rights. In so far as relevant, this Article reads as follows:

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

A. Admissibility

30. The Government submitted that the applicant had not exhausted available domestic remedies.

31. The applicant contested this argument.

32. The Court notes that at the time when the present application was lodged there were no effective remedies in Montenegro as regards complaints relating to the length of proceedings. In particular, a request for review (kontrolni zahtjev) became effective as of 4 September 2013 (see Vukelić v. Montenegro, no. 58258/09, § 85, 4 June 2013), an action for fair redress (tužba za pravično zadovoljenje) became effective as of 18 October 2016 (see Vučeljić v. Montenegro (dec.), no. 59129/15, § 30, 18 October 2016), while a constitutional appeal became effective as of 20 March 2015 (see Siništaj and Others v. Montenegro, nos. 1451/10 and 2 others, § 123, 24 November 2015, and Vučeljić v. Montenegro (dec.), cited above, § 31). In view of that, the Court cannot but conclude that, whereas before the lodging of the application before the Court the applicant had no effective remedy at its disposal, the Government’s objection must be rejected.

33. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B. Merits

34. The applicant complained that the administrative proceedings concerning the registration of its fiduciary rights had not been concluded within a reasonable time as required by Article 6 § 1 of the Convention.

35. The Government maintained that there had been no violation of Article 6 of the Convention.

36. The Court notes that there are two sets of administrative proceedings in the present case.

37. The first set of administrative proceedings was initiated by the insolvency administrator on 11 October 2004. However, the period to be taken into account begun on 5 November 2004, being a date when the applicant lodged an appeal with the Real Estate Department in Berane (see paragraph 12 above). On 6 February 2007 the Administrative Court remitted the case to the Real Estate Department in Berane and the case is still pending before that body. The first set of proceedings has thus already lasted for twelve years and eight months.

38. The second set of administrative proceedings commenced on 24 February 2007 (see paragraph 19 above) and is currently pending before the Real Estate Department in Berane. These proceedings have thus already been pending for more than ten years and four months.

39. The Court notes that both sets of administrative proceedings concern the same issue. It seems that on 17 January 2007 the Real Estate Department in Berane opened the second set of proceedings while the first set was pending before it. In accordance with the Court’s settled case-law when different sets of proceedings relate to the same issue, those proceedings are to be considered as a whole for the purposes of Article 6 § 1 analysis (see Cravcenco v. Moldova, no. 13012/02, §§ 46-49, 15 January 2008). Accordingly, the period to be taken into account in the present case started on 5 November 2004, which was the date when the applicant lodged an appeal with the Real Estate Department in Berane, in the first set of proceedings (see Stanka Mirković and Others v. Montenegro, no. 33781/15 and 3 others, § 54, 7 March 2017) and is still ongoing. The overall length of proceedings is thus already twelve years and eight months.

40. The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII).

41. Having examined all the material submitted to it, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case. Having regard to its case-law, especially in cases raising issues similar to the one in the present case, characterised by the repeated re-examination by a lower body following remittal by a higher body (see, among others, Stanka Mirković and Others v. Montenegro, cited above, § 55), the Court considers that in the instant case the length of the proceedings was excessive and failed to meet the “reasonable time” requirement.

42. There has accordingly been a breach of Article 6 § 1.

II. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION

43. The applicants complained of the lack of an effective domestic remedy, relying on Article 13 of the Convention, which provides as follows:

“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.”

44. The Government made no comments.

45. Having regard to its findings in previous cases, the Court finds that there has also been a violation of Article 13 of the Convention in the instant case, taken together with Article 6 § 1, on account of the lack of an effective remedy under domestic law for the applicants’ complaints concerning the length of the proceedings in question (see Stanka Mirković and Others, cited above, § 63; see also Stakić v. Montenegro, no. 49320/07, §§ 59-60, 2 October 2012).

III. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

46. The applicant also complained of the breach of its property rights guaranteed by Article 1 of Protocol No. 1 to the Convention, which reads as follows:

“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.”

47. The Government contested this complaint.

48. However, given that the relevant domestic authorities are yet to decide on the registration of the applicant’s fiduciary rights in the public register, the Court considers that this complaint is premature.

49. Consequently, it must be rejected for non-exhaustion of domestic remedies, pursuant to Article 35 §§ 1 and 4 of the Convention.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

50. 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

51. The applicant claimed 9,000 euros (EUR) in respect of non-pecuniary damage.

52. The Government contested this claim.

53. In the Court’s view, it is clear that the applicant sustained some non-pecuniary loss arising from the breach of its rights under Articles 6 and 13 of the Convention, for which it should be compensated. Making its assessment on an equitable basis, as required by Article 41 of the Convention, the Court awards the applicant EUR 5,500 for non-pecuniary damage, plus any tax that may be chargeable.

B. Costs and expenses

54. The applicant also claimed EUR 31,500 for the costs and expenses incurred before the Court.

55. The Government contested this claim.

56. Regard being had to the documents in its possession and to its case-law, the Court considers it reasonable to award the sum of EUR 500 covering costs for the proceedings before the Court.

C. Default interest

57. 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 complaints under Articles 6 § 1 and 13 of the Convention admissible;

2. Declares the complaint under Articles 1 of Protocol No. 1 inadmissible;

3. Holds that there has been a violation of Article 6 § 1 of the Convention;

4. Holds that there has been a violation of Article 13 of the Convention;

5. Holds

(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final, in accordance with the Article 44 § 2 of the Convention, the following sums:

(i) EUR 5,500 (five thousand five hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii) EUR 500 (five hundred euros), plus any tax that may be chargeable, in respect of costs and expenses;

(b) 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;

6. Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 5 September 2017, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan Bakırcı Paul Lemmens
Deputy Registrar President

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