FOURTH SECTION
\nCASE OF HUNGUEST ZRT v. HUNGARY
\n(Application no. 66209\/10)<\/p>\n
JUDGMENT
\n(Just satisfaction)
\nSTRASBOURG
\n16 January 2018<\/p>\n
FINAL
\n16\/04\/2018<\/p>\n
This judgment has become final under Article 44 \u00a7 2 of the Convention. It may be subject to editorial revision.<\/p>\n
In the case of Hunguest Zrt v. Hungary,<\/strong><\/p>\n The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:<\/p>\n Ganna Yudkivska,President, Egidijus K\u016bris, Having deliberated in private on 12 December 2017,<\/p>\n Delivers the following judgment, which was adopted on that date:<\/p>\n PROCEDURE<\/strong><\/p>\n 1.\u00a0\u00a0The case originated in an application (no. 66209\/10) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (\u201cthe Convention\u201d) by a Hungarian company, Hunguest Zrt (\u201cthe applicant company\u201d), on 4\u00a0November 2010.<\/p>\n 2.\u00a0\u00a0In HunguestZrtv. Hungary ((merits) no. 66209\/10, 30\u00a0August 2016, \u201cthe principal judgment\u201d), the Court held that the length of the civil proceedings in question had been excessive and had failed to meet the \u201creasonable time\u201d requirement and that therefore therehad been a violation of Article\u00a06\u00a7\u00a01 of the Convention. Furthermore, the Court found that the cumulative presence of two measures, namely the applicant\u2019s being unable,for an unreasonably long time, to use financial resources that it had had to deposit at the outset of the proceedings and the significant amount of interest that had accrued on the awarded amount \u2013 both circumstances flowing from the length of the civil litigation \u2013 had imposed an individual and excessive burden on it, in violation of Article 1 of Protocol No. 1 to the Convention. The principal judgment became final on 30 November 2016.<\/p>\n 3.\u00a0\u00a0Under Article 41 of the Convention, the applicantcompany sought just satisfaction of 15,000 euros (EUR) combined for pecuniary and non\u2011pecuniary damage concerning the violation of Article 6 \u00a7 1. The applicant company also claimed EUR 1,062,115 in respect of pecuniary damage and EUR\u00a020,000 in respect of non-pecuniary damage concerning the violation of Article 1 of Protocol No.\u00a01.<\/p>\n 4.\u00a0\u00a0Since 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 to submit, within three months, their written observations on that issue and, in particular, to notify the Court of any agreement they might reach (see the principal judgment, \u00a7 39, and point 4 of the operative provisions).<\/p>\n 5.\u00a0\u00a0The applicant and the Government each filed observations.<\/p>\n 6.\u00a0\u00a0Mr P\u00e9terPaczolay, the judge elected in respect of Hungary, withdrew from the case (Rule 28 of the Rules of Court). Accordingly, Ms\u00a0Helena\u00a0J\u00e4derblomwas appointed to sit as an ad hoc judge (Article\u00a026\u00a0\u00a7\u00a04 of the Convention and Rule 29 \u00a7 1).<\/p>\n THE LAW<\/strong><\/p>\n 7.\u00a0\u00a0Article 41 of the Convention provides:<\/p>\n \u201cIf 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.\u201d<\/p>\n A.\u00a0\u00a0Damage<\/strong><\/p>\n 1.\u00a0\u00a0The parties\u2019 submissions<\/em><\/p>\n 8.\u00a0\u00a0The applicant company requested that the Court award just satisfaction of 15,000\u00a0euros (EUR) combined forthe pecuniary and non\u2011pecuniary damage arising from the violation of Article 6 \u00a7 1 of the Convention.<\/p>\n 9.\u00a0\u00a0Concerning the violation of Article 1 of Protocol No.\u00a01, the applicant company claimed EUR 20,000 in respect of non-pecuniary damage. As regards pecuniary damage,it submitted that it had suffered a real loss when its own money, deposited in a bailiff\u2019s trust account, had yielded no interest, while it had been ordered to pay accrued interest on the money due to the plaintiff. The amount in question, 275 million Hungarian forints (HUF), deposited in the bailiff\u2019s trust account,had yielded no interest between 27\u00a0March 2001, that is the date of depositing the amount, and 17\u00a0December\u00a02009, when enforcement of the second-instance court\u2019s judgment had taken place. The applicant referred to the provisions of the Civil Code of 1959, which was in force at that time, on calculating late\u2011payment interest. By applying that method to the full amount of the deposit for the period from 27\u00a0March 2001 to 17 December 2009, the applicant company claimed EUR\u00a01,062,115inrespect of pecuniary damage.<\/p>\n 10.\u00a0\u00a0The Government contested the claims as excessive.<\/p>\n 11.\u00a0\u00a0They consideredit reasonable to pay the applicant EUR 5,000 in respect of the excessive length of the civil proceedings that had been in violation of Article 6 \u00a7 1 of the Convention.<\/p>\n 12.\u00a0\u00a0Concerning the violation of Article 1 of Protocol No. 1,they arguedthat if the domestic courts had closed the case within a reasonable time, then the applicant company would have paid less default interest under the domestic rules. Under the Court\u2019s case-law, proceedingsat three levels of jurisdiction were reasonably expected to end in five years. Accordingly, if the case had been finished by 31 May 2005, the Court would have found no violation of Article 6 \u00a7 1.In the view of the Government therefore, only the protraction of the case after 1 June 2005 should be taken into account when calculating the losses sustained by the applicant company.<\/p>\n 13.\u00a0\u00a0The Government argued in particular that if the proceedings had ended sooner the applicant would have incurred a lower amount of default interest. In that case, it could have recovered part of its deposit (rather than having finally to supplement it) and, moreover, the recovered sum itself could have produced interest. According to the opinion of an expert accountant submitted by the Government, terminating the case at a stage that was compatible with the Court\u2019s case-law under Article 6 \u00a7 1 would have allowed the applicant company to pay HUF 94,148,677 less in default interest, to recover HUF 28,509,912 from the deposit and gain interest of HUF\u00a017,989,751 on the latter amount. Altogether, the course of action taken by the authorities had caused the applicant to pay HUF\u00a0140,648,340 (approximately EUR 465,000) in excess of what would have been payable under normal circumstances.<\/p>\n 14.\u00a0\u00a0Lastly, the Government did not accept any claim in respect of non\u2011pecuniary damage by the applicant, a company.<\/p>\n 2.\u00a0\u00a0The Court\u2019s assessment<\/em><\/p>\n 15.\u00a0\u00a0The Court reiterates that a judgment in which it finds a breach of the Convention or its Protocols 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. If national law does not allow reparation or allows only partial reparation, Article 41 of the Convention empowers the Court to afford the injured party such satisfaction as appears to it to be appropriate (see Bitt\u00f3 and Others v. Slovakia (just satisfaction), no.\u00a030255\/09, \u00a7 20, 7 July 2015).<\/p>\n 16.\u00a0\u00a0The Court has found on many occasions, applying to the circumstances of the case the criteria developed in its case-law (see, among many other authorities, Frydlender v. France [GC], no. 30979\/96, \u00a7\u00a043, ECHR 2000-VI), that an overall length of about five years in a civil case examined on three levels of jurisdiction does not indicate a violation of Article 6 \u00a7 1 of the Convention (see, for example,L\u00e1szl\u00f3 S\u00e1ndorn\u00e9 T\u00f3th v.\u00a0Hungary (dec.), no. 40909\/11, \u00a7 24, 13 June 2017, andVera\u00a0Valerjevna\u00a0Gudovics v. Hungary(dec.),no. 61203\/14, 14 June 2016).Accordingly, the Court accepts the Government\u2019s argument that the instant proceedings could reasonably have been expected to end by 31 May 2005 and that the pecuniary damage to be awarded can only relate to the subsequent period, rather than the entire length of the litigation as argued by the applicant company.Therefore the Court finds it reasonable to follow the Government\u2019s method, as outlined in paragraphs 12 and 13 above, as a basis for calculating just satisfaction in respect of pecuniary damage. That method more objectively reflects the losses sustained by the applicant company in that it is based only on the relevant time period.<\/p>\n The Court therefore awards the applicant EUR 465,000 in respect of the pecuniary damage sustained.<\/p>\n 17.\u00a0\u00a0In respect of non-pecuniary damage, the Court reiterates that the possibility that a commercial company may be awarded pecuniary compensation for non-pecuniary damage cannot be excluded, considering that the situation in issue must have caused the applicant company prolonged uncertainty in the conduct of its business (see Comingersoll S.A. v.\u00a0Portugal [GC] no. 35382\/97, \u00a7 35, ECHR 2000\u2011IV; Centro\u00a0Europa\u00a07\u00a0S.r.l. and Di Stefano v. Italy [GC], no. 38433\/09, \u00a7 221, ECHR 2012; and Rock Ruby Hotels Ltd v. Turkey (just satisfaction), no.\u00a046159\/99, \u00a7 36, 26 October 2010).Making an overall assessment of the relevant considerations on the basis of the material available to it and having regard to the findings of the principal judgment, the Court finds that the applicant should be awarded EUR\u00a06,500 altogether as compensation for the non-pecuniary damage sustainedas a consequence of the violations of Article 6 \u00a7 1 of the Convention and Article 1 of Protocol No. 1.<\/p>\n B.\u00a0\u00a0Costs and expenses<\/strong><\/p>\n 18.\u00a0\u00a0The applicant company also claimed EUR 6,750plus VAT for the costs and expenses incurred before the Court. That amount corresponds to 40.5 hours of legal work billable by its lawyer, charged at an hourly rate of HUF\u00a050,000 plus VAT.<\/p>\n 19.\u00a0\u00a0The Government contested those claims as excessive.<\/p>\n 20.\u00a0\u00a0According to the Court\u2019s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the full sum claimed, that is to say EUR 6,750.<\/p>\n C.\u00a0\u00a0Default interest<\/strong><\/p>\n 21.\u00a0\u00a0The 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.<\/p>\n FOR THESE REASONS, THE COURT, UNANIMOUSLY,<\/strong><\/p>\n 1.\u00a0\u00a0Holds<\/em><\/p>\n (a)\u00a0\u00a0that the respondent State is to pay the applicant company, within three months from the date on which the judgment becomes final in accordance with Article\u00a044\u00a0\u00a7\u00a02 of the Convention, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:<\/p>\n (i)\u00a0\u00a0EUR 465,000 (four hundred and sixty-five thousand euros), plus any tax that may be chargeable, for pecuniary damagesustained in respect of the violation of Article 1 of Protocol No. 1 to the Convention;<\/p>\n (ii)\u00a0\u00a0EUR 6,500 (six thousand five hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;<\/p>\n (iii)\u00a0\u00a0EUR 6,750(six thousand seven hundred and fifty euros), plus any tax that may be chargeable to the applicant company, in respect of costs and expenses;<\/p>\n (b)\u00a0\u00a0that 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;<\/p>\n 2.\u00a0\u00a0Dismisses the remainder of the applicant\u2019s claim for just satisfaction.<\/em><\/p>\n Done in English, and notified in writing on 16 January 2018, pursuant to Rule\u00a077\u00a0\u00a7\u00a7\u00a02 and 3 of the Rules of Court.<\/p>\n MarialenaTsirli\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Ganna Yudkivska
\nVincent A. De Gaetano,
\nHelena J\u00e4derblom,<\/p>\n
\nIulia Motoc,
\nCarlo Ranzoni,
\nMarko Bo\u0161njak, judges,
\nand Marialena Tsirli, Section Registrar,<\/p>\n
\nRegistrar\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 President<\/p>\n