Last Updated on April 24, 2019 by LawEuro
FIFTH SECTION
DECISION
Application no.7940/07
KHAYAL KFT
against Azerbaijan
The European Court of Human Rights (Fifth Section), sitting on 15 January 2019 as a Committee composed of:
Yonko Grozev, President,
Gabriele Kucsko-Stadlmayer,
Lәtif Hüseynov, judges,
and Milan Blaško, DeputySection Registrar,
Having regard to the above application lodged on 13 February 2007,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Khayal KFT (“the applicant company”), is an Azerbaijani farmer enterprise, which has its seat in Sabirabad, Azerbaijan. The present application was lodged on behalf of the applicant company by Mr Alish Jafarov, who is its head. On 23 July 2010 the President of the Section gave the applicant company leave to present its own case (Rule 36 § 2 in fine of the Rules of Court).
2. The Azerbaijani Government (“the Government”) were represented by their Agent, Mr Ç. Asgarov.
3. On 26 January 2010 the application was communicated to the Government.
A. The circumstances of the case
4. The facts of the case, as submitted by the parties, may be summarised as follows.
5. After a series of commercial transactions had been carried out in the period between 1995 and 1996 between the applicant company and the “Sabirabad-Pambig” open joint-stock company (“Sabirabad-Pambig”), the latter was indebted to the applicant company.
6. On 15 May 2001 the applicant company brought an action in Local Economic Court no. 3, seeking payment of the debt. On 27 June 2001 Local Economic Court no. 3 granted the claim and ordered Sabirabad-Pambig to pay the applicant company 129,340,000 Azerbaijani manats (AZM). The court held that because Sabirabad-Pambig had insufficient financial assets, the execution of the judgment should be secured by selling its property. No appeals were lodged against that judgment and, pursuant to the domestic law, it became final and enforceable one month after its delivery.
7. At the applicant company’s request, by a decision of 27 February 2003, Local Economic Court no. 3 ordered the seizure of part of the property (agricultural machinery) belonging to Sabirabad-Pambig. It appears from the case file that the judgment of 27 June 2001 was enforced following the seizure order.
8. On 28 January 2003 the Ministry of Economic Development (“the Ministry”) appealed against the judgment of 27 June 2001. The Ministry asked for the restoration of the expired time-limit for lodging an appeal, arguing that its procedural rights had been violated in that it had not been informed of the above-mentioned proceedings. The Ministry alleged that, as a shareholder holding 29.02 % of the shares in Sabirabad-Pambig, it should have been informed of the proceedings, so that it could have appealed against the judgment of 27 June 2001.
9. On 3 March 2003 Local Economic Court no. 3 rejected the Ministry’s claim. The court held that Sabirabad-Pambig had been notified of the judgment of 27 June 2001 on 3 August 2001, yet the Ministry had appealed on 28 January 2003, more than a year and seven months after the delivery of the judgment of 27 June 2001.
10. On 25 March 2003 the Economic Court of the Republic of Azerbaijan upheld the lower court’s decision. Following the Ministry’s cassation appeal, on 22 May 2003 the Supreme Court quashed the Economic Court’s decision of 25 March 2003 and remitted the case for fresh consideration.
11. On 6 August 2003 the Economic Court declared admissible the Ministry’s appeal against the judgment of 27 June 2001 on the grounds that the Ministry had lodged its appeal within one month of the date on which it had become aware of the judgment of 27 June 2001.
12. On 26 August 2003 the Economic Court quashed the judgment of 27 June 2001 and delivered a new judgment. The Economic Court held that the applicant company’s claim was unsubstantiated, because although the applicant company had been aware of the existence of the debt since 30 December 1997, it had brought an action as late as 15 May 2001. The court noted that under Article 73 of the Civil Code, in force prior to 1 September 2000, a legal entity had to lodge an action within a year of the date on which it became aware of the alleged violation of its rights and that, therefore, the applicant company’s claim had become time-barred. The court also held that the Ministry was entitled to be a party to the proceedings, since the judgment of 27 June 2001 had affected its interests as a shareholder in Sabirabad-Pambig. Moreover, the court ordered the restitution to Sabiranad-Pambig of the agricultural machinery seized by the order of 27 February 2003.
13. On 8 January 2004 the Supreme Court upheld the Economic Court’s judgment.
14. Following a letter of 21 May 2004 from the President of the Plenum of the Supreme Court, by which he refused to reopen the proceedings, on 20 September 2004 the applicant company lodged a constitutional complaint with the Constitutional Court. The applicant company complained of the application of the law, claiming that the Ministry could not be a party to the proceedings.
15. By a decision of 1 February 2005 the Constitutional Court invalidated the Supreme Court’s judgment of 8 January 2004 finding that the recognition of the Ministry as a party to the proceedings and the admissibility of an appeal lodged a year and seven months after the delivery of the judgment of 27 June 2001 had been in contradiction with the domestic law. The Constitutional Court held that the case should be reexamined in a manner and within time-limits stipulated in the law.
16. On the basis of the Constitutional Court’s decision, on 27 May 2005 the Plenum of the Supreme Court quashed the Supreme Court’s judgment of 8 January 2004 and the Economic Court’s judgment of 26 August 2003 and remitted the case to the Economic Court for fresh consideration.
17. On 3 August 2005 the Economic Court declared the Ministry’s appeal against the judgment of 27 June 2001 inadmissible. Following the Ministry’s appeal, on 15 February 2006 the Supreme Court quashed the Economic Court’s decision of 3 August 2005. The Supreme Court held that on 27 May 2005 the Plenum of the Supreme Court, in applying the Constitutional Court’s decision of 1 February 2005, had only quashed the Supreme Court’s judgment of 8 January 2004 and the Economic Court’s judgment of 26 August 2003. Thus, according to the Supreme Court, its decision of 22 May 2003 on recognition of the Ministry as a party to the proceedings was still in force. Furthermore, the Supreme Court held that the case should be examined on the merits by the Economic Court.
18. In the meantime, on an unspecified date in November 2005, Sabirabad-Pambig lodged an appeal against the judgment of 27 June 2001, seeking restoration of the expired time-limit for lodging an appeal. Sabirabad-Pambig alleged that because of frequent changes in the composition of its board of directors and the Ministry’s appeal against the disputed judgment, it had not lodged an appeal in time. On 25 November 2005 Local Economic Court no. 3 dismissed Sabirabad-Pambig’s request, noting that there was no reason for restoration of the expired time-limit for lodging an appeal.
19. On 11 May 2006 the Economic Court delivered a new judgment on the merits. The Economic Court quashed the judgment of 27 June 2001 and dismissed the applicant company’s claim. It held that the claim had become time-barred under Article 73 of the Civil Code as in force before 1 September 2000. The Economic Court also ordered the restitution of the seized agricultural machinery to Sabirabad-Pambig.
20. On 22 September 2006 the Supreme Court upheld the Economic Court’s judgment of 11 May 2006.
B. Relevant domestic law
21. The relevant provisions of the Code of Civil Procedure of 1 September 2000 (“the CCP”) provided, at the material time, as follows:
Article 360
“An appeal may be lodged within one month after official delivery (receipt) of the judgment.”
Article 366
“1. The appellate court shall examine the admissibility of an appeal. The examination shall include existence of the procedural grounds for hearing a case on appeal.
…
3. The court shall deliver a decision on the admissibility of an appeal.
4. A decision rejecting the appeal as inadmissible may be appealed against to the court of cassation instance.”
Article 386
“The substantive law is considered to be breached or misapplied when the court of first-instance makes a mistake in application of the law, does not apply the applicable law or other normative-legal document, or misinterpretes the law.”
Article 417
“417.1. While examining a case, the court of cassation instance is competent to:
417.1.1. uphold the judgment or decision of the apellate court without any changes and dismiss the complaint;
417.1.2. amend the judgment or decision of the appellate court;
417.1.3. quash the judgment or decision of the appellate court in whole or in part and to remit the case to the appellate court for re-examination;
417.1.4. quash the judgment or decision of the appellate court in whole or in part and to deliver a new judgment based on circumstances and the evidence established by the appellate court;
417.1.5. quash the judgment or decision of the appellate court in whole or in part and to hold the claim unexamined in whole or in part in accordance with Articles 259.0.1 -259.0.3 and 259.0.8 – 259.0.10 of the CCP or to terminate the proceedings in accordance with Articles 261.0.1 – 261.0.7 of the CCP.
417.2. A judgment stipulated in Article 417.1.4 of this Code is delivered only if the appellate court breaches or misapplies the substantive law.”
22. The relevant provisions of the Law on farmer enterprise of 8 April 1992 provided, at the material time, as follows:
Article 6
“One of the members of the enterprise is elected as its head.
Head of the enterprise … acts on behalf of the enterprise and represents its interests. By consent of the members of the enterprise, he/she organises the enterprise’s activities, concludes contracts and issues power of attorney on behalf of the enterprise… and also performs other legal actions in connection with the enterprise’s activities.”
COMPLAINTS
23. The applicant company complained under Article 6 § 1 of the Convention about the alleged breach of the principle of legal certainty on account of the quashing of the final judgment of 27 June 2001.
24. The applicant company also complained under Article 13 of the Convention that the domestic remedies were ineffective.
25. Furthermore, in a submission dated 8 July 2010 the applicant company complained under Article 1 of Protocol No. 1 to the Convention about the alleged breach of its property rights.
THE LAW
A. Complaints under Articles 6 § 1 and 13 of the Convention
26. The applicant company complained about the breach of the principle of legal certainty on account of the quashing of the final judgment of 27 June 2001 and also about the ineffectiveness of domestic remedies.
It relied on Articles 6 § 1 and 13 of the Convention, 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 … hearing … by [a] … tribunal…”
Article 13
“Everyone whose rights and freedoms as set forth in this 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.”
1. The parties’ submissions
27. The Government submitted that the complaint under Article 6 § 1 is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3. They in particular argued that there are no exceptional circumstances justifying Mr A. Jafarov’s claim to be victim in so far as the alleged violations of the applicant company’s rights are concerned. They further argued that Mr A. Jafarov was not authorised to lodge an application on behalf of the applicant company.
28. The applicant company disagreed arguing that Mr A. Jafarov was the head of the applicant company and that the application had been lodged on behalf of the applicant company.
2. The Court’s assessment
29. At the outset, the Court notes that the application was lodged by the applicant company, Khayal KFT, which claimed to be victim of the alleged violations. Mr A. Jafarov never claimed to be the victim personally; he merely acted on behalf of the applicant company and not on his own behalf. Furthermore, having regard to the material in its possession, the Court is satisfied that in the present case Mr A. Jafarov was authorised to lodge the application on behalf of the applicant company. For these reasons, the Court dismisses the Government’s objections. However, it notes that the complaints should be declared inadmissible for the following reasons.
30. The Court reiterates that, in accordance with Article 35 § 1 of the Convention, it may only examine complaints in respect of which domestic remedies have been exhausted and which have been submitted within six months from the date of the “final” domestic decision.
31. The quashing of a final judgment is an instantaneous act which does not create a continuing situation, even if it entails the reopening of the proceedings, as in the instant case (see Topallaj v. Albania, no. 32913/03, § 103, 21 April 2016, with further references). Consequently, it was the Economic Court’s judgment of 26 August 2003 which allegedly breached the applicant company’s rights under Article 6 § 1 of the Convention, without creating a continuing violation (see paragraph 12 above).
32. The Court observes that by its judgment of 26 August 2003 the Economic Court both quashed the judgment of 27 June 2001 and dismissed the applicant company’s claim. This instantaneous act constituted an alleged breach of the principle of legal certainty, which requires that where the courts have finally determined an issue their ruling should not be called into question. The principle of legal certainty also does not allow a party to seek the review of a final and binding judgment merely for the purpose of a rehearing and a fresh determination of the case (see Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999‑VII). The judgment of 26 August 2003 was subject to an ordinary appeal and the applicant company indeed appealed against it to the Supreme Court. The Court does not find it necessary to determine whether, under domestic law (see paragraph 21 above), this ordinary appeal could theoretically remedy the alleged breach of the principle of legal certainty in the circumstances of the present case because, even assuming that it could, the application was in any event lodged out of time.
33. The Court observes that following a series of appeals and the decision of 1 February 2005 delivered by the Constitutional Court, on 3 August 2005 the Economic Court declared the Ministry’s appeal, upon which the judgment in question had been quashed, inadmissible. However, even assuming that the decision of 3 August 2005 was capable of affecting the position in respect of the applicant’s complaint about the alleged breach of the principle of legal certainty, it was quashed by the Supreme Court on 15 February 2006 and the case was remitted to the Economic Court for further examination. The judgment of the Supreme Court was final and not subject to an appeal.
34. Consequently, at the latest, the date triggering the start of the six‑month time-limit in respect of the complaints about the alleged breach of the principle of legal certainty and ineffectiveness of the domestic remedies was 15 February 2006. The application was introduced on 13 February 2007. Therefore the applicant company’s complaints under Articles 6 § 1 and 13 of the Convention must be rejected pursuant to Article 35 §§ 1 and 4 of the Convention as being out of the six-month time‑limit.
B. Complaint under Article 1 of Protocol No. 1 to the Convention
35. In its observations dated 8 July 2010, lodged with the Court in reply to the Government’s observations of 21 May 2010, the applicant company complained under Article 1 of Protocol No. 1 to the Convention about alleged breach of its property rights.
36. The Government did not make any comment on this.
37. The Court notes that the applicant company raised this complaint for the first time in its observations of 8 July 2010, which were lodged in reply to those of the Government. Taking into consideration that the date of the “final decision” for the purposes of Article 35 § 1 of the Convention in respect of the complaint under Article 1 of Protocol No. 1 to the Convention was 22 September 2006 in the present case (see paragraph 20 above), the Court notes that this complaint was lodged out of time and does not comply with the six‑month rule.
38. Accordingly, this complaint must also be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 7 February 2019.
Milan Blaško Yonko Grozev
Deputy Registrar President
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