CASE OF VEKIC v. CROATIA (European Court of Human Rights) Application no. 68477/17

The case concerns, under Article 1 of Protocol No. 1, the seizure of the applicant’s property in criminal proceedings.


FIRST SECTION
CASE OF VEKIĆ v. CROATIA
(Application no. 68477/17)
JUDGMENT
STRASBOURG
22 April 2021

This judgment is final but it may be subject to editorial revision.

In the case of Vekić v. Croatia,

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

Krzysztof Wojtyczek, President,
Erik Wennerström,
Lorraine Schembri Orland, judges,
and Attila Teplán, ActingDeputy Section Registrar,

Having regard to:

the application against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Croatian and Swiss national, Ms Aleksandra Vekić (“the applicant”), on 12 September 2017;

the decision to give notice to the Croatian Government (“the Government”) of the applicant’s complaint under Article 1 of Protocol No. 1 concerning the seizure of her property in criminal proceedings, and to declare inadmissible the remainder of the application;

the notice given to the Swiss Government of their right to intervene (Article 36 § 1 of the Convention and Rule 44 § 1 (a) of the Rules of Court), and the fact that they did not avail themselves of this opportunity;

the Government’s objection to the examination of the application by a Committee, which, having been considered, is rejected;

the parties’ observations;

Having deliberated in private on 23 March 2021,

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

INTRODUCTION

The case concerns, under Article 1 of Protocol No. 1, the seizure of the applicant’s property in criminal proceedings.

THE FACTS

1. The applicant was born in 1963 and lives in Umag. She was represented by Mr S. Poldan, a lawyer practising in Rijeka.

2. The Government were represented by their Agent, Ms Š. Stažnik.

3. The facts of the case, as submitted by the parties, may be summarised as follows.

I. Background to the case

4. After the death of her father, the applicant inherited, amongst other things, the ownership of a company, A. She was also the director of another company, O.

5. On an unspecified date the Pula-Pola County State Attorney’s Office (Županijsko državno odvjetništvo u Puli-Pola– hereinafter “the State Attorney’s Office”) opened an investigation in respect of the applicant in connection with a suspicion that she had signed, in her capacity as director of company A., three sale agreements by which she and company O. had acquired ownership of several properties owned by company A. without paying the full market value.

6. In the course of the investigation, the State Attorney’s Office questioned a number of witnesses and obtained information about the applicant’s immovable property and bank accounts. It also obtained an expert report concerning the market value of the properties which she and company O. had acquired as a result of the agreements with company A.

7. On 11 November 2016 the State Attorney’s Office indicted the applicant in the Pula-Pola County Court (Županijski sud u Puli-Pola; hereinafter: “the County Court”) on charges of abuse of trust in business dealings in relation to the “disadvantageous” property sale agreements by which company A. had transferred ownership of ten properties to her and company O. In particular, it was alleged in the indictment that:

(i) on 2 January 2015 the applicant had signed, in her capacity as director of company A., a sale agreement by which company A. had sold her four properties (nos. 1938/1, 1924/33, 713/1 and 713/2) for an amount of 103,000 euros (EUR), even though their real value had amounted to 6,083,335.20 Croatian kunas (HRK – approximately EUR 793,942);

(ii) on 5 February 2015 the applicant had signed, in her capacity as director of company A., a sale agreement by which company A. had sold her a property (no. 713/4) for an amount of HRK 4 million (approximately EUR 518,436), even though its real value had been HRK 9,493,403 (approximately EUR 1,230,430);

(iii) on 2 March 2015 the applicant had signed, in her capacity as director of company A., a sale agreement by which company A. had sold company O. five properties (nos. 713/5, 643, 646/1, 646/2 and 646/3) for an amount of HRK 5,600,000 (approximately EUR 729,607), even though their real value had amounted to HRK 9,055,240 (approximately EUR 1,179,780).

8. In view of the above, it was alleged that the applicant had obtained an unlawful pecuniary gain in the amount of HRK 10,787,992 (approximately – on the date of the indictment – EUR 1,436,850) and company O. in the amount of HRK 3,455,240 (approximately – on the date of the indictment – EUR 460,203). It was thus requested in the indictment that this unlawfully obtained pecuniary gain be confiscated from the applicant and company O. respectively.

II. Seizure of the applicant’s property

9. On 11 November 2016, in an urgent procedure, the State Attorney’s Office asked the County Court to order the seizure (prohibition of alienation and encumbrance) of the five properties which the applicant had obtained from company A. (see paragraph 7(i)-(ii) above) and the freezing of five of her bank accounts, in which she had a total of EUR 579,760.08 and HRK 10,299.54 (approximately EUR 1,370). The State Attorney’s Office also asked the court to order the seizure (prohibition of alienation and encumbrance) of the five properties which company O. had obtained from company A. (see paragraph 7(iii) above).

10. In its request, the State Attorney’s Office referred to the indictment and argued that there was a reasonable suspicion that the applicant had committed the criminal offence in question and unlawfully obtained the pecuniary gain indicated. It also submitted that, in view of the amount of the allegedly unlawfully obtained pecuniary gain and the circumstances in which the alleged criminal offence had been committed, as well as the fact that she lived abroad, the applicant might sell her property and transfer her money abroad and thus make any future possible confiscation of the proceeds of crime extremely difficult, if not impossible.

11. On the same day, the County Court, without notifying the defence of the State Attorney’s Office’s request or obtaining any further submissions from the parties, accepted the request as proposed and ordered the seizure (prohibition of alienation and encumbrance) of the ten properties in question. It also ordered the freezing of the applicant’s bank accounts as requested by the State Attorney’s Office. The court indicated that the measures were to remain in force for a period of up to sixty days of the judgment becoming final. The statement of reasons in the court order contained exactly the same reasoning as the State Attorney’s Office’s request. The seizure order was open to appeal before the Supreme Court (Vrhovni sud Republike Hrvatske), but such appeals did not have suspensive effect.

12. On 18 November 2016 the applicant lodged an appeal with the Supreme Court challenging the seizure order. She contended, in particular, that the State Attorney’s Office’s request for the seizure of her property had not been communicated to her and that she had not been given the opportunity to put forward relevant arguments. Moreover, she argued that the order lacked reasoning and was disproportionate. In particular, she submitted that the value of the confiscated property (immovable property and bank accounts) exceeded by some HRK 15 million (approximately EUR 2 million) the amount of the allegedly obtained pecuniary gain. Thus, in her view, such a measure was contrary to her property rights. In this connection, she relied on the Supreme Court’s case-law (see paragraph 32 below) and that of the Court in Džinić v. Croatia (no. 38359/13, § 36, 17 May 2016). She also contended that such a disproportionate seizure order affected her ability to support herself as it left her without financial means.

13. On 13 December 2016 the Supreme Court dismissed the applicant’s appeal as regards the seizure of her property (immovable property and bank accounts) endorsing, with a short statement of reasons, the County Court’s reasoning. However, the Supreme Court quashed the seizure order as regards company O. on the grounds that the order did not provide sufficient reasoning as regards the question of whether that company had obtained the property in question in good faith. It proceeded to order a re-examination of the case.

14. On 21 December 2016, in the resumed proceedings, the County Court re-examined the case addressing the issues raised by the Supreme Court. On 23 January 2017 the Supreme Court upheld this order.

15. On 5 December 2017 the County Court, acting of its own motion (see paragraph 31 below), examined the need for further seizure of the applicant’s property and decided that the seizure order of 11 November 2016 (see paragraphs 9 and 11 above) should be maintained in its entirety. The County Court repeated the reasoning from its previous order (see paragraphs 10-11 above) and, referring to the risk that the applicant might sell her property and transfer her money abroad, also indicated that she was unemployed and without any income.

16. The applicant appealed to the Supreme Court against the extension of the seizure order, reiterating her previous arguments (see paragraph 12 above). On 26 January 2018 the Supreme Court dismissed her appeal and, with a short statement of reasons, endorsed the reasoning of the County Court. The Supreme Court also indicated that the existence of any disparity between the value of the seized property and the allegedly obtained pecuniary gain would eventually be established in the criminal proceedings.

17. In the subsequent period the County Court several times extended the existing seizure order on the applicant’s property, which was upheld by the Supreme Court.

18. On 13 July 2020 the County Court again extended the seizure order reiterating the arguments from its previous decisions. The applicant challenged the County Court’s decision before the Supreme Court.

19. On 20 August 2020 the Supreme Court, relying on the Constitutional Court’s decision of 14 July 2020 (see paragraph 26 below), quashed the County Court’s decision of 13 July 2020 and ordered a re-examination of the case. It found that the County Court had failed to provide reasons as to the scope of seizure of the applicant’s property.

20. In the resumed proceedings, on 11 September 2020 the County Court ordered the seizure of the applicant’s four properties (see paragraph 7(i) above) and the company O’s five properties. The court considered that the value of the properties in question was sufficient and proportionate to secure the enforcement of a possible confiscation order.

21. The applicant challenged the County Court’s decision before the Supreme Court. She also lodged a request with the County Court to revoke the seizure order initially made with respect to her bank accounts and one piece of property. The relevant proceedings in this respect seem to be pending.

22. The criminal proceedings against the applicant are also still pending.

III. The constitutional court proceedings

23. On 25 January 2017 the applicant lodged a constitutional complaint with the Constitutional Court (Ustavni sud Republike Hrvatske) against the Supreme Court’s decision of 13 December 2016 (see paragraph 13 above). She argued, in particular, that the lower courts’ decisions lacked the relevant reasoning and that the Supreme Court had failed to provide any reasons as regards her specific complaints. She also repeated the arguments she had raised before the Supreme Court as regards her inability to participate effectively in the proceedings leading to the adoption of the seizure order and the proportionality of the seizure (see paragraph 12 above). In that connection, she relied on the Court’s case-law in Džinić (cited above).

24. On 2 March 2017 the Constitutional Court declared the applicant’s constitutional complaint inadmissible on the grounds that the lower courts’ decisions did not concern a decision on the merits of any of her rights or obligations or any criminal charge against her. The Constitutional Court’s decision was served on the applicant’s representative on 17 March 2017.

25. In the meantime, on 8 March 2017, the applicant lodged another constitutional complaint with the Constitutional Court against the Supreme Court’s decision of 23 January 2017 (see paragraph 14 above).

26. On 14 July 2020 the Constitutional Court quashed theSupreme Court’s decision of 23 January 2017 and the County Court’s decision of 21 December 2016. Relying on the Court’s case-law in Džinić (cited above), the Constitutional Court considered that the County Court should re‑examine its decision in order to determine whether the scope of seizure of the applicant’s property was proportionate.

RELEVANT LEGAL FRAMEWORK AND PRACTICE

I. Relevant domestic law

27. Article 48 of the Constitution (Ustav Republike Hrvatske, Official Gazette no. 56/1990, with further amendments) guarantees and protects the right to ownership.

28. Section 62 of the Constitutional Court Act (Ustavni zakon o Ustavnom sudu Republike Hrvatske, Official Gazette no. 99/1999, with further amendments) provides that anyone may lodge a constitutional complaint with the Constitutional Court if he or she considers that a decision of a State body, a body of local and regional self-government, or a legal person with public authority, which has decided on his or her rights and obligations, or about a suspicion or accusation of a criminal act, has violated his or her human rights or fundamental freedoms, or his or her right to local and regional self-government guaranteed by the Constitution.

29. Pursuant to Article 5 of the Criminal Code (Kazneni zakon, Official Gazette no. 121/2011, with further amendments), no one can retain the proceeds of crime.

30. The relevant provisions of the Confiscation of the Proceeds of Crime Act (Zakon o postupku oduzimanja imovinske koristi ostvarene kaznenim djelom i prekršajem, Official Gazette no. 145/2010), as applicable at the time of adoption of the freezing order in the applicant’s case, are set out in Džinić v. Croatia (no. 38359/13, § 36, 17 May 2016). In addition, section 11(1)(e) of that Act allowed for the possibility to order the freezing of bank accounts.

31. The Confiscation of the Proceeds of Crime Act was repealed on 27 July 2017 (Official Gazette 70/2017) and the specific provisions concerning the seizure and confiscation of property in criminal proceedings were introduced into the Code of Criminal Procedure (Zakon o kaznenom postupku, Official Gazette no. 152/2008, with further amendments). These provisions – which were applicable to the extension of the freezing order in the present case – essentially follow the same approach as regards the possible scope of seizure of property as those contained in the Confiscation of the Proceeds of Crime Act (Article 557a of the Code of Criminal Procedure). Moreover, the Code of Criminal Procedure introduced the obligation for the courts to verify every three months the need for further seizure and to consider whether the same aim could be achieved with less severe measures, including the acceptance of cash deposits as securities (Article 557e). Under Article 557g of the Criminal Code, if the accused has been acquitted or the proceedings discontinued, he or she can claim compensation in respect of any damage caused by the seizure of property. Such claims are to be directed against the State.

II. Relevant practice

32. On 30 September 2016, in case no. I Kž-Us-102/16-3, the Supreme Court stressed the following:

“Article 1 of Protocol No. 1 [to the Convention] protects the right to peaceful enjoyment of possessions … This means, in particular, that as regards the seizure of property [in criminal proceedings] it must be established whether a fair balance implicit in that provision has been struck, which means whether there is proportionality between the value of the frozen property and the amount of the allegedly unlawfully obtained pecuniary gain …”

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 of protocol no. 1

33. The applicant complained that the seizure of her property in the criminal proceedings against her had been contrary to the requirements of Article 1 of Protocol No. 1, 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.”

A. Admissibility

1. Submissions by the parties

34. The Government argued that the applicant had failed to comply with the six-month time-limit for lodging an application with the Court. In their view, the final decision in the case had been the Supreme Court’s decision of 23 January 2017 (see paragraph 14 above) and not the Constitutional Court’s decision of 2 March 2017 (see paragraph 24 above), since a constitutional complaint was not a remedy to be exhausted.

35. The Government also contended that following the Constitutional Court’s decision in the applicant’s favour of 14 July 2020, and the subsequent County Court’s decision of 11 September 2020 limiting the scope of the seizure order, the applicant could no longer claim to be the victim of a violation of Article 1 of Protocol No. 1. Moreover, if the applicant considered that the subsequent scope of the seizure order had been excessive, it remained open to her to challenge that measure before the relevant courts, including the Constitutional Court.

36. The applicant submitted that the Constitutional Court’s decision of 14 July 2020 demonstrated that the Government’s arguments as regards the relevance of that remedy and the compliance with the six-month time-limit were misplaced.

37. The applicant accepted that the Constitutional Court’s decision amounted to an implicit recognition of a breach of her rights in relation to the extensive scope of the seizure order. However, that extensive scope of the seizure had remained in force for some four years before the County Court adopted its decision on 11 September 2020. Thus, the Constitutional Court’s and the County Court’s decisions in no way compensated for the breach of her rights in that period, which was at issue in the present case. Moreover, the County Court had failed explicitly to lift the seizure order with respect to her bank accounts and the real property. She was therefore required to submit a new request asking that the seizure in that part be formally lifted.

2. The Court’s assessment

38. As regards the applicant’s compliance with the six-month time-limit, the Court has in a number of cases against Croatia and in different contexts already examined and rejected the same objection raised by the Government relating to the use by the applicants of constitutional complaints before bringing their applications to the Court (see Pavlović and Others v. Croatia, no. 13274/11, §§ 30-38, 2 April 2015; and, more recently, Kardoš v. Croatia, no. 25782/11, §§ 38-39, 26 April 2016, with further references). The Constitutional Court’s decision in the applicant’s case of 14 July 2020 confirms the effectiveness of that remedy and its relevance for the purpose of the six-month rule. The Government’s objection in this respect is therefore rejected.

39. With respect to the applicant’s victim status, the Court notes at the outset that it follows from the applicant’s arguments that her complaint relates to the period of seizure of her property between 11 November 2016 (the first seizure of the property) and 11 September 2020 (when the County Court, complying with the Constitutional Court’s decision of 14 July 2020, reduced the scope of the seizure order). In this connection, while the acknowledgment of a breach of the applicant’s property rights in the Constitutional Court’s decision is relevant for the purpose of her victim status, that decision in itself, including the subsequent County Court’s decision, does not amount to an appropriate redress for the impugned disproportionate seizure of the applicant’s property in the relevant period. The Government have not shown the certainty of any other avenue of redress. It thus follows that in the absence of an appropriate and sufficient redress – notably compensation for any non-pecuniary damage entailed by the seizure of property at issue (see Džinić v. Croatia, no. 38359/13, §§ 86‑87, 17 May 2016, and Apostolovi v. Bulgaria, no. 32644/09, §§ 65‑73, 7 November 2019) – the applicant can claim to be a victim of the violation complained of (see, for instance,Burdov v. Russia (no. 2), no. 33509/04, §§ 54-56, ECHR 2009, with further references). The Government’s objection is therefore rejected.

40. The Court also notes that the application is neither manifestly ill‑founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.

B. Merits

3. Submissions by the parties

41. The applicant argued that the seizure of her property in the criminal proceedings had amounted to an interference with her right to peaceful enjoyment of her possessions. She contended that the interference in question had not been lawful, had not been in the public interest and had been disproportionate. In particular, she stressed that the seizure of all the immovable property forming the subject matter of the alleged unlawful transaction had in itself been excessive and that, on top of that, a significant amount of funds in her bank accounts had been unnecessarily frozen. Thus, she contended that the value of the seized property (immovable property and bank accounts) exceeded the value of the allegedly unlawfully obtained pecuniary gain by some HRK 15 million (approximately EUR 2 million). In this connection, she argued that it was impossible to differentiate between her property and the property of company O.

42. The applicant further contended that the domestic courts had failed to conduct a proportionality assessment and to reply to her specific arguments concerning the disparity between the seized property and the amount of the allegedly unlawfully obtained pecuniary gain. They had thus breached her right to peaceful enjoyment of her possessions and seriously put her financial status and ability to support herself at risk.

43. The Government accepted that the seizure of the applicant’s property in the criminal proceedings against her had amounted to an interference with her property rights. In their view, that interference had been lawful as it had been based on the Confiscation of the Proceeds of Crime Act and the Code of Criminal Procedure. Moreover, it had pursued a legitimate aim, that of ensuring the possibility of confiscation of the proceeds of crime. They also considered that the interference in question had been proportionate and that many aspects of the case differed from the circumstances of the Džinić case (cited above) relied on by the applicant.

44. In this connection, the Government pointed out that the domestic authorities had duly established the exact value of the applicant’s property, including the amount of funds in her bank accounts. According to the Government, the seizure order had not been excessively broad in scope or disproportionate as it exceeded the value of the pecuniary gain which the applicant had allegedly unlawfully obtained by some EUR 1,200,000. Moreover, the major part of the value of the seized property concerned the value of the immovable property forming the subject matter of the applicant’s alleged unlawful activity. It had been necessary to seize all this property as the applicant was its sole owner, and it had not been possible to apply other less severe measures to secure the enforcement of a possible confiscation order. In this connection, the Government considered that it was necessary to make a clear distinction between the property owned by the applicant and that owned by company O., which had a separate legal personality. Lastly, they argued that there was nothing to indicate that the applicant had been seriously and personally affected by the seizure order. In any event, it would be open to her, in the event that she was acquitted or the proceedings against her discontinued, to seek compensation for any possible damage from the State.

4. The Court’s assessment

45. At the outset, the Court finds it important to clarify the scope of the case. It notes that in the criminal proceedings the domestic authorities seized property belonging to the applicant and company O. However, in the present case company O. is not an applicant before the Court and is, as pointed out by the Government, a legal entity with a separate legal personality. Moreover, it has not been argued that there are any circumstances allowing the applicant to bring an application to the Court with respect to an interference with company O.’s property (see Albert and Others v. Hungary [GC], no. 5294/14, §§ 120-145, 7 July 2020). Thus, the scope of the case is limited to the seizure of the applicant’s property. The Court also reiterates its finding above that the scope of the applicant’s case relates to the seizure of her property in the period between 11 November 2016 and 11 September 2020 (see paragraphs 37 and 39 above).

46. It is common ground between the parties that the applicant is the owner of the property seized in the criminal proceedings. There is therefore no dispute that the immovable property and bank accounts in question are her “possessions”. Nor is it disputed that the seizure of her property amounted to an interference with her right to peaceful enjoyment of her possessions under Article 1 of Protocol No. 1. According to the Court’s established case-law, this interference relates to the control of the use of property (see Džinić, cited above, §§ 60-61, with further references).

47. The seizure of the applicant’s property in the context of the criminal proceedings against her was based on section 11 of the Confiscation of the Proceeds of Crime Act and 557a of the Code of Criminal Procedure, which allow for the possibility of prohibiting an owner from alienating or encumbering immovable property, and the freezing of bank accounts for the purpose of securing the possibility of confiscation of the proceeds of crime (see paragraphs 30-31 above). Accordingly, the Court is satisfied that the seizure of the applicant’s property was lawful. It also finds that this seizure, aimed at anticipating a possible confiscation of property, was in the “general interest” of the community and thus pursued a legitimate aim (Ibid, §§ 63‑66).

48. As regards the proportionality of the interference, the Court refers to the general principles of its case-law set out in Džinić (cited above, §§ 67‑69). In particular, it notes that the freezing of assets in the context of criminal proceedings with a view to making them available to satisfy a possible confiscation, forfeiture or fine is not as such open to criticism. However, since it carries with it a risk of unduly fettering the ability of the people holding rights in those assets to dispose freely of them, it must be accompanied by enough procedural safeguards to ensure that the measure is not arbitrary or disproportionate. The available procedures as a whole must afford those affected by the freezing a reasonable opportunity to put their case to the competent authorities with a view to enabling them to strike a fair balance between the competing interests at stake (see Apostolovi, cited above, § 96, and the cases cited therein).

49. In the present case, the criminal proceedings against the applicant were instituted concerning the allegedly disadvantageous property sale agreements by which she obtained ownership of five properties without paying the full market value. Thus, the allegedly unlawfully obtained pecuniary gain, and the damage caused to company A. (which had previously owned the property), was the difference between the established market value of the property in question and the amount which the applicant paid for it. In particular, it was alleged that she had obtained an unlawful pecuniary gain in the amount of HRK 10,787,992 (approximately – on the date of the indictment – EUR 1,436,850), and it was thus requested in the indictment that this unlawfully obtained pecuniary gain be confiscated from her upon her conviction (see paragraphs 7-8 above).

50. At the same time, in order to secure the possibility of confiscation, the State Attorney’s Office proposed and the County Court agreed to seize the immovable property which the applicant had obtained from company A. by prohibiting any alienation and encumbrance and to freeze five of her bank accounts (see paragraphs 9-11 above). Taking into account the established total value of the immovable property in question (approximately EUR 2,024,372) and the total amount of money in the applicant’s bank accounts (approximately EUR 581,130), it follows that the total value of the seized property was approximately EUR 2,605,502 (see paragraphs 7(i)-(ii) and 9 above). Thus, the value of the seized property exceeds any amount of pecuniary gain which could be confiscated from the applicant by approximately EUR 1,168,652.

51. In the Court’s view, this shows that the scope of the seizure order significantly exceeded the scope of any possible confiscation order. Indeed, in the present case, even if the applicant were to be found guilty at the end of the proceedings and a confiscation order were to be imposed, it could clearly relate only to the difference in value of the immovable property obtained and the amount paid for it. In any event, whatever the circumstances, the very seizure of the immovable property in question could have sufficiently secured the enforcement of any prospective confiscation order, as it was also later established by the County Court in its decision of 11 September 2020 (see paragraph 20 above). It is therefore difficult to understand why, in addition to the seizure of the immovable property whose established value, according to the State Attorney’s Office, already exceeds the amount proposed for confiscation, it was necessary to freeze an additional amount of approximately EUR 581,130 in the applicant’s bank accounts.

52. In this connection, while the Court does not consider that the fact that the seizure order was made without notice being served on the applicant in itself raises an issue in terms of safeguards, it reiterates that – given the one-sidedness of the proceedings, the freezing order’s potentially far‑reaching consequences, and the fact that it takes effect immediately (any appeal against it having no suspensive effect) – careful consideration of the requests for such orders is called for in each individual case (see Apostolovi, cited above, § 98, with further references).

53. However, in the present case, when ordering the seizure of the applicant’s property the County Court conducted no assessment of the proportionality of the seizure order and merely confined itself to repeating the reasoning put forward by the State Attorney’s Office as to why the seizure of property was needed (see paragraph 11 above). Moreover, the applicant clearly raised an issue about the scope of the seizure order in her appeal to the Supreme Court, relying on its case-law as well as that of the Court (see paragraph 12 above), both of which required an assessment of whether the value of the seized property corresponded to the possible confiscation claim (see Džinić, cited above, § 80, and paragraph 32 above). However, the Supreme Court failed to address this issue and merely endorsed the County Court’s reasoning (see paragraph 13 above).

54. Similarly, in the subsequent extensions of the seizure order until 11 September 2020, the County Court failed to address the issue about the scope of the seizure order. For its part, the Supreme Court also failed to address the applicant’s explicit complaint that the order had been excessively broad in scope, merely indicated that the existence of any disparity between the value of the seized property and the allegedly obtained pecuniary gain would eventually be established in the criminal proceedings (see paragraphs 15-17 above). However, as has already been explained, the seizure of property amounts to an interference with the applicant’s right to peaceful enjoyment of possessions and the domestic courts have a duty to ensure that such a measure is not arbitrary or disproportionate (see paragraphs 46 and 48 above), which is a matter distinct from the actual outcome of the criminal proceedings. This also answers the Government’s argument that it would be open to the applicant, in the event that she was acquitted or the proceedings against her discontinued, to seek compensation for any possible damage from the State. Indeed, this argument refers to a hypothetical situation and could only have become relevant had such an outcome actually occurred (see, for instance, Nedyalkov and Others v. Bulgaria (dec.), no. 663/11, §§ 99-100, 10 September 2013).

55. Lastly, as regards the Government’s argument that the applicant had other sufficient financial means, the Court notes that the principal issue in the present case is the alleged excessively broad scope of the seizure order in the relevant period fettering the applicant’s ability to dispose freely of her assets and not the effects of the seizure order on her general financial situation (compare Džinić, cited above, §§ 80-81). In any event, the Court notes that the domestic courts’ decisions do not contain any assessment as regards the actual effects of the seizure order on the applicant’s general financial situation and that, consequently, the Government’s arguments in this regard cannot affect the above analysis (see Apostolovi, cited above, § 104).

56. In sum, the Court notes that the impugned seizure of the applicant’s property in the context of the criminal proceedings at issue, although in principle legitimate and justified, was imposed and kept in force without an assessment of whether the value of the seized property corresponded to the possible confiscation claim. The Court therefore finds that the application of such a measure in the relevant period was not adequate to demonstrate that a requirement of fair balance inherent in Article 1 of Protocol No. 1 was satisfied (see Džinić, cited above, § 80).

57. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.

II. APPLICATION OF ARTICLE 41 OF THE CONVENTION

58. 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

59. The applicant claimed EUR 100,000 in respect of pecuniary and non-pecuniary damage and the costs and expenses of the domestic proceedings.

60. The Government considered the applicant’s claim excessive, unfounded and unsubstantiated.

61. Regard being had to its case-law (see Džinić, cited above, §§ 86-87) and the material available before it, the Court rejects the applicant’s claim for pecuniary damage and the costs and expenses of the domestic proceedings as unsubstantiated. On the other hand, ruling on an equitable basis, it awards her EUR 2,000 in respect of non-pecuniary damage, plus any tax that may be chargeable on this amount.

B. Costs and expenses

62. The applicant claimed HRK 18,750 in respect of the costs and expenses of the proceedings before the Court.

63. The Government considered the applicant’s claim unsubstantiated and unfounded.

64. The Court awards the applicant EUR 2,470 in respect of costs and expenses of the proceedings before it, plus any tax that may be chargeable on this amount.

C. Default interest

65. 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 1 of Protocol No. 1 to the Convention;

3. Holds

(a) that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the Croatian kunas 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 2,470 (two thousand four hundred and seventy euros), plus any tax that may be chargeable to the applicant, 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;

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

Done in English, and notified in writing on 22 April 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Attila Teplán                                       Krzysztof Wojtyczek
Acting Deputy Registrar                              President

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