FOURTH SECTION
\nDECISION<\/p>\n
Application no. 7629\/10
\nS.C. VINALCOOL ARGE\u015e S.A.
\nagainst Romania<\/p>\n
The European Court of Human Rights (Fourth Section), sitting on 9\u00a0October\u00a02018 as a Committee composed of:<\/p>\n
Paulo Pinto de Albuquerque, President,
\nEgidijus K\u016bris,
\nIulia AntoanellaMotoc, judges,
\nand Andrea Tamietti, Deputy Section Registrar,<\/p>\n
Having regard to the above application lodged on 9 December 2009,<\/p>\n
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,<\/p>\n
Having deliberated, decides as follows:<\/p>\n
THE FACTS<\/strong><\/p>\n 1.\u00a0\u00a0The applicant, S.C. VinalcoolArge\u015f S.A., is a Romanian limited company with its headquarters in Pite\u015fti. The applicant company was represented before the Court by Ms R. Folescu, a lawyer practising in Pite\u015fti.<\/p>\n 2.\u00a0\u00a0The Romanian Government (\u201cthe Government\u201d) were represented by their Agent, Ms C. Brumar, from the Ministry of Foreign Affairs.<\/p>\n A.\u00a0\u00a0The circumstances of the case<\/strong><\/p>\n 3.\u00a0\u00a0The facts of the case, as submitted by the parties, may be summarised as follows.<\/p>\n 1.\u00a0\u00a0Background of the case<\/em><\/p>\n 4.\u00a0\u00a0The applicant company was created under Law no. 15\/1990 on the Reorganisation of State-owned Companies into Commercial Companies. Under Article 20 of that Law, it took over the assets of a former economic unit owned by the communist State. The State owned all the shares in the new company and administered them through the State Property Fund (FondulPropriet\u0103\u0163ii de Stat \u2013 \u201cthe F.P.S.\u201d). In 1994 the Ministry of Agriculture and Food issued a certificate (\u201cthe 1994 certificate\u201d) recording which possessions constituted the company\u2019s assets.<\/p>\n 5.\u00a0\u00a0On 8 January 1998 the F.P.S. transferred its shares in the applicant company to the Oltenia Financial Investment Company (Societatea de Investi\u0163iiFinanciareOltenia S.A. \u2013 \u201cS.I.F. Oltenia\u201d). Founded in 1993 as a private property fund, S.I.F. Oltenia was reorganised in accordance with Law no. 133\/1996 on the Transformation of Private Ownership Funds in Financial Investment Companies and is currently an entirely privately\u2011owned company. In exchange, the F.P.S. received shares in other State-owned companies. The applicant company thus became a privately\u2011owned company.<\/p>\n 6.\u00a0\u00a0On 8 June 2005 S.I.F. Oltenia sold 66.9 % of the shares in the applicant company to private entities (the current shareholders).<\/p>\n 2.\u00a0\u00a0Proceedings against the applicant company for the restitution of property<\/em><\/p>\n 7.\u00a0\u00a0Meanwhile, on 29 October 2002, three individuals brought an action against the applicant companyfor the restitution of property, claiming that the land recorded in the 1994 certificate had been unlawfully confiscated from their grandparents by the communist State. They relied on the provisions of Lawno. 10\/2001 on the Restitution of Property.<\/p>\n 8.\u00a0\u00a0In a judgement of 16 October 2003, the Arge\u015f County Court ordered the applicant company to surrender to the plaintiffs the land and the buildings erected on it. The court found that the plaintiffs\u2019 grandparents had been the rightful owners of the assets, which had been unlawfully nationalised in 1950. It considered that the 1994 certificate issued to the applicant company (see paragraph 4 above) did not constitute a valid property title deed, as it only acknowledged the factual situation existing as at the date of its delivery.<\/p>\n 9.\u00a0\u00a0The applicant company appealed. On 1 July 2004 the Arge\u015f Court of Appeal found that the buildings had been demolished and that their restitution was thus no longer possible. It therefore replaced the obligation to return the buildings with an order to pay compensation to the plaintiffs.<\/p>\n 10.\u00a0\u00a0The High Court of Cassation and Justice upheld those findings in a final decision adopted on 7 February 2006.<\/p>\n 11.\u00a0\u00a0On 8 March 2007 the applicant company surrendered possession of the land.<\/p>\n 3.\u00a0\u00a0Action in compensation against the State<\/em><\/p>\n 12.\u00a0\u00a0On 2 May 2007 the applicant company brought an action against the State and the Authority for Recovery of State Assets (AutoritateapentruValorificareaActivelorStatului \u2013 \u201cthe A.V.A.S.\u201d \u2013 a new organisation encompassing the former F.P.S. \u2013 see paragraph 4 above) seeking compensation for the loss it had incurred because of the restitution of its assets to their former owner. It estimated the damage at 643,280.16\u00a0Romanian lei (RON \u2013 approximately 190,000 euros at the relevant time). It relied on Government Emergency Ordinance no.\u00a088\/1997 on the Privatisation of Commercial Companies (\u201cOrdinance No.\u00a088\/1997\u201d \u2013 see paragraph 15 below).<\/p>\n 13.\u00a0\u00a0On 15 May 2008 the Arge\u015f County Court granted the action. It observed that the applicant company had been privatised in 1998 by the State and held that the A.V.A.S. and the State were responsible for the loss incurred by the applicant, under the provisions of Article 324 of Ordinance no.\u00a088\/1997 (see paragraph 15 below). It therefore ordered the defendants to pay RON\u00a0643,280.16 to the applicant company. Both parties appealed.<\/p>\n 14.\u00a0\u00a0In a final decision of 23 June 2009, the High Court of Cassation and Justice quashed that ruling. It held that the applicant company had been privatised by means of a non-pecuniary assignment under normative provisions which had been expressly abolished by Ordinance no.\u00a088\/1997. Consequently, the privatisation had not been covered by the provisions of Ordinance no. 88\/1997, which had only regulated privatisation by means of sale contracts. The court concluded that the State\u2019s liability could not be engaged.<\/p>\n B.\u00a0\u00a0Relevant domestic law<\/strong><\/p>\n 15.\u00a0\u00a0Ordinance no. 88\/1997 read as follows, in so far as relevant, as at the date of the facts (specifically 8 January 1998 \u2013 see paragraph 5 above):<\/p>\n Article 1<\/p>\n \u201cThis ordinance sets the legal framework for selling shares in companies owned by the State or by the local public administration, as well as for selling assets belonging to companies in which the State or the local public administration own shares …\u201d<\/p>\n Article 5<\/p>\n \u201cThe State Property Fund is a public-interest institution, with legal personality, subordinated to the Government, which acts [to diminish] the participation of the State and of the local public authorities in the economy by selling … shares [in itself].\u201d<\/p>\n Article 324<\/p>\n \u201c1.\u00a0\u00a0The public institutions involved in privatisation grant compensation to companies which have been privatised or are in the process of privatisation for the damage caused to them by the restitution to the former owners of assets that were nationalised by the State. …<\/p>\n 5.\u00a0\u00a0If the companies are ordered, by final court decisions, to pay compensation for confiscated possessions when restitution in kind is not possible, the public institutions involved in the privatisation [in question] will pay such compensation directly to the rightful owners.<\/p>\n 6.\u00a0\u00a0The State guarantees the fulfillment by the public institutions of the obligations set out in this Article.\u201d<\/p>\n 16.\u00a0\u00a0Under the relevant provisions of Law no. 137\/2002 concerning measures for accelerating the process of privatisation (Article 29 \u00a7 3), the public institutions involved in privatisation will pay compensation to buyers with whom they have concluded sale contracts and not to the companies themselves. Under Article 30 \u00a7 3 of the same Law, the new regulations did not apply to sale contracts concluded before the entry into force of the regulation; such contracts remained under the authority of Ordinance no.\u00a088\/1997. This interpretation was reaffirmed by the High Court of Cassation and Justice in its decision no. 18 of 17 October 2011 adopted in the examination of an appeal in the interest of law.<\/p>\n 17.\u00a0\u00a0Contractual liability for dispossession, (garan\u0163iapentruevic\u0163iune) as regulated by the Civil Code as at the date of the facts, is described in Costescu v. Romania (dec.), no. 13636\/02, \u00a7 18, 3 March 2009. This liability is also applicable to commercial transactions.<\/p>\n COMPLAINT<\/strong><\/p>\n 18.\u00a0\u00a0The applicant company complained that by dismissing its action against the A.V.A.S. and the State, the courts had wrongly interpreted the provisions of Ordinance no. 88\/1997 and had disregarded its right to receive compensation for the loss of possessions, thus breaching its right to fair proceedings and causing it damage. It relied on the provisions of Articles\u00a01, 6 and 13 of the Convention and of Article 1 of Protocol No. 1 to the Convention.<\/p>\n