CASE OF FABRICA DE ZAHĂR DIN GHINDEŞTI S.A. v. THE REPUBLIC OF MOLDOVA (European Court of Human Rights) Application no. 54813/08

SECOND SECTION
CASE OF FABRICA DE ZAHĂR DIN GHINDEŞTI S.A. v. THE REPUBLIC OF MOLDOVA
(Application no. 54813/08)
JUDGMENT
(Just satisfaction)
STRASBOURG
27 April 2021

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

In the case of Fabrica de Zahăr din Ghindeşti S.A. v. the Republic of Moldova,

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

Branko Lubarda, President,
Valeriu Griţco,
Pauliine Koskelo, judges,
and Hasan Bakırcı, Deputy Section Registrar,

Having deliberated in private on 30 March 2021,

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

PROCEDURE

1. The case originated in an application (no. 54813/08) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 12 November 2008 by a company incorporated in Moldova, Fabrica de Zahăr din Ghindești S.A. (“the applicant company”).

2. In a judgment delivered on 3 December 2019 (“the principal judgment”), the Court held that there had been a violation of Article 6 § 1 of the Convention and of Article 1 of Protocol No. 1 to the Convention (Fabrica de Zahăr din Ghindești S.A., no. 54813/08, 3 December 2019).

3. Since the question of the application of Article 41 of the Convention was not ready for decision, the Court reserved it and invited the Government and the applicant company to submit, within three months, their written observations on that issue and, in particular, to notify the Court of any agreement they might reach (ibid., § 29 and point 3 of the operative provisions).

4. The applicant company and the Government each filed observations.

BACKGROUND OF THE CASE

5. Following judicial proceedings between the applicant company and a State owned bank B. which ended with a final ruling of the Supreme Court of Justice of 13 March 2008, the latter was ordered to pay the former 25,216,042 Moldovan lei (MDL) (the equivalent of 1,504,196 euro (EUR) at the time).

6. On 30 October 2008 the Supreme Court of Justice quashed the above judgment after accepting a late appeal on points of law by the bank B. and ordered the re-examination of the case.

7. The Court ruled in the principal judgment that that quashing had been contrary to the principle of legal certainty and had breached the applicant company’s rights guaranteed by Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention (see paragraph 25 of the principal judgment).

8. As a result of the principal judgment, the applicant company and the Government Agent lodged revision requests with the Supreme Court asking for the quashing of its judgment of 30 October 2008. In their request, the Government also asked the Supreme Court to award the applicant company pecuniary damage in an amount of MDL 39,996,096 (the equivalent of EUR 1,996,271).

9. On 24 June 2020 the Supreme Court of Justice partly upheld the above revision requests and, after quashing its judgment of 30 October 2008, restored its judgment of 13 March 2008. The Supreme Court refused to award any damages to the applicant company on the ground that it was for the parties in the proceedings before the Court to negotiate and reach an agreement in respect of them.

RELEVANT LEGAL FRAMEWORK

10. The relevant provision of the Civil Code as applicable at the material time reads as follows:

Article 619. Default interest

“1) Default interest is payable for the delayed execution of pecuniary obligations. Default interest shall be 5% above the interest rate provided for in Article 585 [the National Bank of Moldova’s refinancing interest rate] unless the law or contract provides otherwise. Proof that less damage has been incurred shall be admissible.

2) In non-consumer-related situations default interest shall be 9% above the interest rate provided for in Article 585 unless the law or contract provides otherwise. Proof that less damage has been incurred shall be inadmissible.”

APPLICATION OF aRTICLE 41 OF THE CONVENTION

11. 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.”

I. Damage

12. The applicant company claimed the amount it had lost due to the quashing of the judgment of 13 March 2008 in the amount of MDL 25,216,042 and compensation for default interest calculated from that sum in accordance with the National Bank of Moldova’s refinancing interest rate in an amount of MDL 39,996,096.

13. The applicant company also took issue with the outcome of the proceedings which had ended with the final judgment of the Supreme Court of Justice of 13 March 2008. It explained that, in its view, the outcome of those proceedings had been unfair because the Supreme Court had awarded it less than it had been entitled to. According to its own calculations, the Supreme Court must have awarded it MDL 33,268,193 more than it had. Therefore, the applicant company also claimed this amount from the Court plus the adjacent default interest of MDL 52,767,911.

14. In total the applicant company claimed MDL 151,248,242 (the equivalent of some EUR 7,157,105) for pecuniary damage suffered as a result of the breaches found by the Court in the principal judgment.

15. The Government submitted that, following the Supreme Court’s judgment of 24 June 2020, the applicant company should have claimed compensation from bank B. which had benefited from the abusive quashing of the judgment of 13 March 2008 and not from the Government. More precisely, since bank B. was currently in the process of liquidation, the applicant company should have presented its claims to its liquidator and should have requested to be introduced in the list of the bank’s creditors.

16. The Court reiterates that a judgment in which it finds a breach imposes on the respondent State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Former King of Greece and Others v. Greece [GC] (just satisfaction), no. 25701/94, § 72). In the present case, the reparation should aim at putting the applicant company in the position in which it would have found itself, had the violation not occurred.

17. The Court considers it clear that the applicant company must have suffered pecuniary damage as a result of its lack of control over its possessions and the denial to it of the possibility to use and enjoy them (see Immobiliare Saffi v. Italy [GC], no. 22774/93, ECHR 1999‑V). These losses were incurred as a result of the quashing of the final judgment of 13 March 2008. As a result of the quashing, the applicant company could not use the money awarded to it in the amount of MDL 25,216,042 (the equivalent of EUR 1,504,196 euro at the time) for a period of almost thirteen years.

18. At the same time, the Court considers that there is no causal link between the violations found in the principal judgment and the amount of MDL 33,268,193 claimed by the applicant (see paragraph 12 above) plus the adjacent default interest (see paragraph 13 above). Therefore, the Court dismisses these claims.

19. Having regard to the circumstances of the case, the material in its possession and making its own assessment, the Court awards the applicant company a total amount of EUR 2,000,000 in respect of pecuniary damage.

II. Default interest

20. 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. Holds

(a) that the respondent State is to pay the applicant company, within three months, EUR 2,000,000 (two million euros) in respect of pecuniary damage, plus any tax that may be chargeable, to be converted into the currency of the respondent State at the rate applicable at the date of settlement;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

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

Done in English, and notified in writing on 27 April 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan Bakırcı                              Branko Lubarda
Deputy Registrar                              President

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