GLAS-METALL TRUST REG. v. SLOVENIA (European Court of Human Rights)

FOURTH SECTION
DECISION

Application no. 47523/10
GLAS-METALL TRUST REG.
against Slovenia

The European Court of Human Rights (Fourth Section), sitting on 12 June 2018 as a Committee composed of:

Vincent A. De Gaetano, President,
Georges Ravarani,
Marko Bošnjak, judges,
and Andrea Tamietti, Deputy Section Registrar,

Having regard to the above application lodged on 16 July 2010,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant company,

Having deliberated, decides as follows:

THE FACTS

1.  Glas-Metall Trust Reg. (“the applicant company”) is a private company registered in Liechtenstein. It was represented before the Court by Mr M. Šipec, a lawyer practising in Ljubljana.

2.  The Slovenian Government (“the Government”) were represented by their Agent, Ms B. JovinHrastnik, State Attorney.

3.  The Liechtenstein Government, to whom a copy of the application was transmitted under Rule 44 § 1 (a) of the Rules of Court, informed the Court by a letter of 21 February 2017 that they did not intend to exercise their right under Article 36 § 1 of the Convention to intervene in the proceedings.

A.  The circumstances of the case

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

5.  It would appear that the applicant company was party to several sets of civil proceedings against the Socialist Federal Republic of Yugoslavia (hereinafter “the SFRY”) concerning damages arising from an alleged unlawful seizure of goods by the Federal Customs Inspectorate.

6.  In 1974 goods that the applicant company had delivered to the state‑owned port of Koper, located in the then Socialist Republic of Slovenia, which formed part of the SFRY, were seized by the Federal Customs Inspectorate. Subsequently, the applicant company claimed before the Koper Basic Court compensation for damage incurred as a result of the aforementioned seizure of its goods.

7.  On 9 April 1991 the Koper Basic Court allowed the applicant company’s claim for compensation in part and ordered the defendant, the SFRY, to pay 1,426,910 Swiss francs (CHF) and 795,000 Italian lire (ITL), together with a considerable amount of interest, as compensation for the pecuniary damage and loss of profit incurred by the applicant company.

8.  Both parties appealed against the judgment.

9.  On 25 June 1991 the Socialist Republic of Slovenia declared its independence and became the Republic of Slovenia (hereinafter “Slovenia”). On that day the National Assembly adopted a number of documents enabling Slovenia to assume authority over its territory, including the Basic Constitutional Charter on the Sovereignty and Independence of Slovenia (hereinafter “the Basic Charter”) and the Constitutional Act Implementing the Basic Charter.

10.  On 27 February 1992 the Koper Higher Court upheld the Koper Basic Court’s judgment in part. It allowed the applicant company’s claim for the amount of CHF 776,661. This part of the claim thus became final and enforceable. The remainder of the claim was remitted to the first‑instance court. The latter part of the claim was subsequently dismissed.

11.  The SFRY appealed on points of law with regard to the amount of CHF 776,661 that it had been ordered to pay to the applicant company.

12.  On 27 January 1993 the Supreme Court dismissed the SFRY’s appeal on points of law. It pointed out that under the rules in force at the time of the seizure, the SFRY had been liable for damage resulting from the actions of its officials and employees working for the Federal Customs Inspectorate.

13.  On 3 October 2001 the applicant company, which was represented by a lawyer, lodged an enforcement request of its claim for the amount of CHF 776,661 with the Ljubljana Local Court against the then Federal Republic of Yugoslavia (a federation then established between Serbia and Montenegro – hereinafter “the FRY”) and Slovenia.

14.  On 22 November 2002 the Ljubljana Local Court refused the applicant company’s enforcement request as inadmissible on the ground that it had failed to provide a valid document permitting enforcement. The applicant company appealed.

15.  On 12 February 2003 the Ljubljana Higher Court allowed the applicant company’s appeal, stating that the first‑instance judgment was final and enforceable for the amount of the claim that the applicant company was seeking to enforce. It further noted that the claim was being enforced against the FRY and Slovenia, entities which had not been indicated as debtors in the judgment. Such situations were regulated by Section 24 of the Enforcement and Securing of Civil Claims Act (see paragraph 27 below – hereinafter “the Enforcement Act”). The court observed that in the Constitutional Act Implementing the Basic Charter (see paragraph 9 above), Slovenia undertook to assume a share of the former SFRY’s national debts pertaining to Slovenia on the basis of an agreement with other former Yugoslav republics. The court was also of the view that it should first be determined whether the applicant company’s claim should be resolved within the framework of the succession process.

16.  On 3 April 2003 the Ljubljana Local Court stayed the enforcement proceedings, finding that the applicant company’s claim was to be resolved within the framework of the succession of the former SFRY. The applicant company appealed against the decision.

17.  On 15 April 2004 the Ljubljana Higher Court upheld the appeal in part. It took the view that the proceedings could be stayed only with respect to Slovenia, and not with respect to the FRY. It also ordered the first-instance court to decide on the enforcement request against Slovenia.

18.  On 12 February 2007 the applicant company withdrew the enforcement request in so far as it was lodged against the FRY.

19.  On 9 April 2008 the Ljubljana Local Court invited the applicant company to submit, within fifteen days, a document certified by a public authority proving that liability for payment of its claim had been transferred to Slovenia.

20.  On 14 April 2008 the applicant company replied to the request, stating that it considered the transfer of liability to have been confirmed in the Basic Charter and the Constitutional Act Implementing the Basic Charter (see paragraph 9 above). It also submitted a prior judgment in which a higher court in another case had taken the view that Slovenia ought to be considered liable for damage incurred on its territory that had been caused by the authorities of the former SFRY.

21.  On 6 May 2008 the Ljubljana Local Court terminated the proceedings with regard to the FRY and refused the enforcement request against Slovenia. The Local Court was of the view that the question of the transfer of the applicant company’s claim to the successor states of the SFRY had not yet been resolved and that the applicant company had not proved that liability for payment of its claim had been transferred to Slovenia. In its opinion it could have done so by obtaining an official document from the Public Agency for Succession confirming that liability for payment of its claim had in fact been transferred to Slovenia.

22.  On 19 May 2008 the applicant company appealed against this decision, arguing that the transfer of liability had already been confirmed by the Constitutional Act Implementing the Basic Charter (see paragraph 9 above) and therefore should not have been considered as a matter of succession.

23.  On 17 December 2008 the Ljubljana Higher Court dismissed the applicant company’s appeal, concurring with the first-instance court.

24.  The applicant company lodged a constitutional complaint against the higher court’s decision. It also requested that the Office of the State Prosecutor General lodge a request for the protection of legality (an extraordinary remedy) with the Supreme Court.

25.  On 5 May 2009 the State Prosecutor General refused the applicant company’s request. Consequently, the applicant company lodged another constitutional complaint against the refusal of its request.

26.  On 15 January 2010 the Constitutional Court dismissed the applicant company’s constitutional complaint against the letter of the State Prosecutor General refusing its request (see paragraph 25 above). As regards the merits of the judicial decisions, the Constitutional Court declined to consider the applicant company’s complaint, stating that the alleged violations of its constitutionally guaranteed rights had not occurred.

B.  Relevant domestic law

27.  The Enforcement Act, in force at the relevant time (Official Gazette no. 51/98 with amendments), provided rules on enforcement proceedings. Section 24 stated that a court could allow an enforcement initiated against a person not named in the executory title as the debtor, if the creditor had proved by way of an official or statutorily certified document that the claim had been transferred or otherwise assigned to that person. If this was impossible, the creditor could prove that the claim had been transferred by submitting a final court decision rendered in contentious proceedings.

COMPLAINTS

28.  The applicant company complained that the allegedly arbitrary refusal, by the domestic courts, to enforce its claim against Slovenia had amounted to a violation of its rights under Article 6 of the Convention and Article 1 of Protocol No. 1.

THE LAW

29.  The applicant company complained about it being unable to enforce a final judgment, in breach of Article 6 of the Convention and Article 1 of Protocol No. 1.

30.  Article 6 § 1, in so far as relevant, provides:

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

Article 1 of Protocol No. 1 to the Convention 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.  The parties’ submissions

31.  The Government argued that in enforcement proceedings it was impossible to resolve issues such as disputes over whether a claim has passed to another person. The applicant company initiated enforcement proceedings more than nine years after its claim had become final and enforceable, which was only shortly before it became time-barred. Apart from initiating against Slovenia enforcement proceedings of a claim addressed to a third person, the applicant company remained passive during that period. Even though it was aware that the SFRY no longer existed, it did not initiate proceedings in order to obtain a declaratory judgment proving that the claim had passed to Slovenia. The Government also pointed out that the applicant company could have done so on its own motion as this was allowed by law (see paragraph 27 above) and submitted several pieces of case-law from which it stems that legal succession can be established in contentious proceedings. Therefore, in the Government’s opinion, the applicant company has failed to exhaust available domestic remedies.

32.  The applicant company maintained that the question of succession of Slovenia was regulated by the Basic Charter and by the Constitutional Act Implementing the Basic Charter (see paragraph 9 above). It would have made submissions in this respect and in respect of the question of transfer of claim in the proceedings before the Koper Basic Court, had it been able to do so. The applicant company pointed out that the Ljubljana Local Court asked to prove the succession by submitting evidence that the court itself had known was impossible to obtain; it also did not ask the applicant company to submit a court decision in this respect (see paragraph 21 above).

B.  The Court’s assessment

33.  The Court reiterates that Article 35 § 1 of the Convention sets out the rule on exhaustion of domestic remedies, the purpose of which is to afford Contracting States the opportunity to prevent or put right alleged violations against them before those allegations are submitted to the Court. That rule is based on the assumption, reflected in Article 13 – with which it has a close affinity – that there is an effective domestic remedy available in respect of the alleged breach of an individual’s Convention rights. In this way, it is an important aspect of the principle that the machinery of protection established by the Convention is subsidiary to the national systems safeguarding human rights (see Brincat and Others v. Malta, nos. 60908/11 and 4 others, § 55, 24 July 2014). Furthermore, the Court has held that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust domestic remedies (see Akdivar and Others v. Turkey, 16 September 1996, § 71, Reports of Judgments and Decisions 1996‑IV).

34.  In the present case, the Court notes that the applicant company was trying to enforce a final judgment issued against the SFRY. Its enforcement request was directed against Slovenia and during the enforcement proceedings an issue arose as to Slovenia’s liability for the SFRY’s debt in question. The applicant company’s enforcement request was ultimately rejected for its failure to show that the debt had been transferred to Slovenia.

35.  The Court notes in this connection that according to domestic law, in cases where the creditor intended to initiate enforcement proceedings against a person that was not named as the debtor in the executory title, he or she had two options to prove that the debt had been transferred to the party indicated in the enforcement request. Firstly, he or she could do so by submitting an official or statutorily certified document demonstrating such a transfer. Secondly, if this was not possible, the creditor could prove that the claim had been transferred by way of submitting a final court decision rendered in (separate) contentious proceedings (see paragraph 27 above). The Court further observes that the case-law submitted by the Government clearly shows that the second option had been successfully used in practice by creditors in situations similar to that of the applicant company (see paragraph 31 above) and that the latter did not argue otherwise (see paragraph 32 above).

36.  It is true that the Ljubljana Local Court’s decision, when rejecting the applicant company’s enforcement request, referred to the first option provided under the aforementioned law, in particular to the possibility to obtain, from the Public Agency for Succession, an official document confirming the liability of Slovenia for the payment of the debt in question (see paragraph 21 above). However, had the applicant company, which was represented by a lawyer of its own choosing (see paragraph 13 above), considered it impossible to obtain such a document, it could have instituted contentious proceedings in order to obtain a court decision resolving the issue of the transfer of the debt from the SFRY to Slovenia. Instead of doing so, the applicant company in the enforcement proceedings merely relied on its interpretation of the Basic Charter and the Constitutional Act Implementing the Basic Charter and on a view taken by a higher court in another case (see paragraph 20 above).

37.  In view of the above, the Court considers that the complaint must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 5 July 2018.

Andrea Tamietti                                                            Vincent A. De Gaetano
Deputy Registrar                                                                       President

SHEIN Many GEO's

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