THIRD SECTION
\nCASE OF GOBAYEV v. RUSSIA
\n(Application no. 48978\/11)<\/p>\n
JUDGMENT
\nSTRASBOURG
\n15 October 2019<\/p>\n
This judgment is final but it may be subject to editorial revision.<\/p>\n
In the case of Gobayev v. Russia,<\/strong><\/p>\n The European Court of Human Rights (Third Section), sitting as a Committee composed of:<\/p>\n Alena Pol\u00e1\u010dkov\u00e1, President, Having deliberated in private on 24 September 2019,<\/p>\n Delivers the following judgment, which was adopted on that date:<\/p>\n PROCEDURE<\/strong><\/p>\n 1. The case originated in an application (no.\u00a048978\/11) against the Russian Federation lodged with the Court under Article\u00a034 of the Convention for the Protection of Human Rights and Fundamental Freedoms (\u201cthe Convention\u201d) by a Russian national, MrRinatTaymurazovichGobayev (\u201cthe applicant\u201d), on 14\u00a0July 2011.<\/p>\n 2. The Russian Government (\u201cthe Government\u201d) were represented initially by Mr G.\u00a0Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin.<\/p>\n 3. On 17\u00a0December 2015 notice of the application was given to the Government.<\/p>\n THE FACTS<\/strong><\/p>\n I. THE CIRCUMSTANCES OF THE CASE<\/p>\n 4. The applicant was born in 1976 and lives in Beslan, in the Republic of North Ossetia-Alania.<\/p>\n 5. He provided legal services to the municipal unitary enterprise, MUP BeslanskiyeElektricheskieSeti (Power Supply Networks of Beslan \u2013 \u201cthe debtor company\u201d) but the company failed to pay for his services.<\/p>\n A. Available information about the debtor company<\/strong><\/p>\n 6. The debtor company was set up in 2006 in accordance with a decision of the head of the administration of the Pravoberezhnyy District of the Republic of North Ossetia-Alania (\u201cthe district administration\u201d). According to section\u00a01.5 of the debtor company\u2019s articles of association, the district administration was the founder of the debtor company and the owner of its assets.<\/p>\n 7. According to section\u00a02 of its articles of association, the debtor company\u2019s main objectives were to provide a secure electricity supply to consumers, to make a profit, and to improve the quality of the services provided to consumers in Beslan. To achieve those objectives, the company was to perform the following activities: (a) securing the electricity supply to the local population; (b) the construction, installation and reconstruction of electrical equipment; (c) the \u201cimprovement of financial and economic relations\u201d, including, for instance, concluding and performing electricity supply agreements, undertaking cost-saving efforts and seeking a growth in profit; and (d) other activities not prohibited by law. In order to carry out those activities, the company had \u201ca right of economic control\u201d (\u043f\u0440\u0430\u0432\u043e\u0445\u043e\u0437\u044f\u0439\u0441\u0442\u0432\u0435\u043d\u043d\u043e\u0433\u043e\u0432\u0435\u0434\u0435\u043d\u0438\u044f) over assets allocated to it by the district administration (for further details on the right of economic control, see Liseytseva and Maslovv.\u00a0Russia, nos.\u00a039483\/05 and 40527\/10, \u00a7\u00a7\u00a055-75, 9\u00a0October 2014).<\/p>\n 8. On 30\u00a0January 2007 the Assembly of Representatives of the Pravoberezhnyy District recommended that the district administration \u201capprove a lease of the assets allocated to the debtor company\u201d. No further details were contained in the copy of the recommendation supplied to the Court.<\/p>\n 9. By Decree no.\u00a064 of 16\u00a0February 2007 the district administration (a)\u00a0approved the conclusion of a lease agreement between the debtor company and a limited liability company, O.-E. (\u201cthe OOO\u201d); and (b)\u00a0ordered the director of the debtor company to lease the assets under the company\u2019s economic control to the OOO, for a period of forty-nine years.<\/p>\n 10. On 1\u00a0October 2007 the debtor company and the OOO concluded the lease agreement. The debtor company undertook to transfer its fixed assets to the OOO, with the aim of providing an uninterrupted electricity supply to consumers in Beslan, and ensuring the modernisation and due maintenance of the networks. The OOO undertook to accept the assets, to use them solely in accordance with their designated purpose, to ensure they were maintained and to pay the rent.<\/p>\n 11. Pursuant to a detailed transfer and acceptance instrument of 1\u00a0October 2007, compiled \u201cin accordance with the decision of the district administration\u201d, in October 2007 the assets under the debtor company\u2019s economic control \u2013 namely vehicles, several electric transformers and dozens of overhead power lines \u2013 were transferred to the OOO.<\/p>\n 12. The agreement and the transfer and acceptance instrument were approved by the head of the district administration. The agreement was stated to be subject to State registration (at clause\u00a011.6). According to the applicant, the agreement had never been registered.<\/p>\n 13. It appears that the OOO failed to pay the rent.<\/p>\n 14. On 12\u00a0August 2010 the OOO advised the bailiffs sevice, in reply to its request within enforcement proceedings (see below), that the OOO did not consider itself bound by the debt towards the debtor company for the following reason. The founder of the debtor company, the district administration, was also the founder of two other municipal unitary enterprises which had accumulated considerable debts towards the OOO. However, those enterprises had evaded payment, as the founder had liquidated them despite the existing debts to the OOO.<\/p>\n 15. It appears that no insolvency proceedings have been initiated in respect of the debtor company, and that it has continued to operate to date.<\/p>\n B. Judgments in the applicant\u2019s favour<\/strong><\/p>\n 16. On 4\u00a0February 2009 the Pravoberezhnyy District Court of the Republic of North Ossetia-Alania (\u201cthe district court\u201d) ordered the debtor company to pay the applicant 217,938 Russian roubles (RUB) in respect of unpaid legal fees and interest. The judgment became final on 16\u00a0February 2009.<\/p>\n 17. On 17\u00a0April 2009 the district court ordered the debtor company to pay the applicant RUB\u00a0487,653 in respect of unpaid legal fees, interest and costs. No appeal was lodged against the judgment, which became final ten days later.<\/p>\n C. Enforcement proceedings<\/strong><\/p>\n 18. Enforcement proceedings were brought in respect of the two judgments on 7\u00a0April and 12\u00a0May 2009, respectively.<\/p>\n 19. On 24\u00a0August 2009 the bailiffs service of the Pravoberezhnyy District informed the applicant that the debtor company had not conducted any economic activity, as the entirety of its assets had been leased to the OOO (see paragraph\u00a09 above).<\/p>\n 20. On 19\u00a0May 2010 the district bailiffs service joined all enforcement proceedings against the debtor company, including those arising from the judgments in the applicant\u2019s favour, into a single, joint enforcement procedure. Among the company\u2019s other creditors were pension and tax authorities and a private company.<\/p>\n 21. In September 2010 the joint enforcement proceedings were assigned to the Inter-District Department on Special Enforcement Proceedings of the Bailiffs Service of North Ossetia-Alania.<\/p>\n 22. According to the Government, on 13\u00a0May 2013 the district court granted the bailiffs\u2019 request and ordered unspecified means of transportation owned by the district administration to be seized and allocated to the debtor company under the right of economic control.<\/p>\n 23. On 14\u00a0March 2014 the bailiff discontinued the enforcement proceedings and returned the writs of execution to the applicant, as it was impossible to execute the awards (section 46(1)(4) of the Enforcement Act). The bailiff established that the debtor did not have any assets upon which execution could be levied, and all possible lawful measures taken by the bailiffs to identify any such assets had produced no results.<\/p>\n 24. According to the Government\u2019s latest submissions of 8\u00a0September 2016, on 1\u00a0October 2014 the bailiffs service opened a new set of enforcement proceedings in respect of the judgments in the applicant\u2019s favour. The bailiffs could not identify any property or accounts registered to the debtor company. In October 2014 the bailiff issued the debtor company with an attachment order in respect of unspecified property, as well as a warning about criminal liability for the failure to comply with the domestic judgment. According to the Federal Bailiffs Service\u2019s submissions to the Government, on 3\u00a0February 2015 a bailiff seized \u201cproperty of the debtor organisation\u201d, identified in the submissions as the \u201celectricity supply to the refugee settlement of Tsalyk\u201d, with an estimated market value of RUB\u00a01,674,700.<\/p>\n 25. In May 2015 the property in Tsalyk was referred for sale but in June 2015 the State Assets Authority of North Ossetia-Alania returned the accompanying documents \u201cfor modification\u201d, as the debtor company\u2019s title to the seized property had not been registered.<\/p>\n 26. At a later stage the district administration informed the bailiffs that the above assets were unregistered. Therefore, on 15\u00a0August 2016 the bailiff filed an application for State registration of \u201ca building\u201d in the refugee settlement in Tsalyk.<\/p>\n 27. The parties did not submit any updated information about any progress in the enforcement proceedings. In particular, they did not specify whether the applicant\u2019s claims had been satisfied from any proceeds of the sale of any identified assets.<\/p>\n D. Adjustment and interest proceedings<\/strong><\/p>\n 28. In his observations and claims for just satisfaction of 10\u00a0June 2016, the applicant provided the following information about the developments in his case.<\/p>\n 1. Index-linking of the judgment debt of 4\u00a0February 2009<\/em><\/p>\n 29. On 21\u00a0July 2014 the district court adjusted the award of 4\u00a0February 2009 on account of inflation and ordered the debtor company to pay the applicant a further RUB\u00a081,000.50 in addition to the initial unenforced award \u2013 that is, a total of RUB\u00a0298,938.50.<\/p>\n 30. On 27\u00a0April 2016 the district court further index-linked both the initial judgment debt of 4\u00a0February 2009 and the further amount awarded on 21\u00a0July 2014, accordingly increasing the total amount the debtor company was to pay the applicant to RUB\u00a0363,695.<\/p>\n 31. No appeals were lodged against the awards, nor have they been paid.<\/p>\n 2. Index-linking of the judgment debt of 17\u00a0April 2009<\/em><\/p>\n 32. On 21\u00a0July 2014 the district court, by a separate decision, index\u2011linked the award of 17\u00a0April 2009 in line with inflation and ordered the debtor company to pay the applicant RUB\u00a0181,243.50 in addition to the initial unenforced award \u2013 that is, a total of RUB\u00a0668,896.50.<\/p>\n 33. On 27\u00a0April 2016 the district court, by a separate decision, further index-linked both the initial judgment debt of 4\u00a0February 2009 and the amount awarded on 21\u00a0July 2014 in line with inflation and accordingly increased the total amount owed by the debtor company to the applicant to RUB\u00a0813,794.<\/p>\n 34. No appeals were lodged against the awards, nor have they been paid.<\/p>\n 3. Default interest proceedings<\/em><\/p>\n 35. On 8\u00a0December 2014 the district court awarded the applicant RUB\u00a0335,229 in default interest in respect of the judgments of 4 February and 17\u00a0April 2009 and the two index-linking decisions of 21\u00a0July 2014, for the period until 1\u00a0November 2014 (see paragraphs\u00a029 and 32 above).<\/p>\n 36. The court observed that a notification of the hearing had been sent to the debtor company\u2019s only address, but the court had received \u201cinformation that there [was] no such organisation\u201d. However, the court also noted that both the State Register of Legal Entities and a letter of 20\u00a0November 2014 from the district administration confirmed that the debtor company\u2019s address was correct and up to date.<\/p>\n 37. On 27\u00a0April 2016 the district court index-linked the above award in line with inflation and increased it to RUB\u00a0384,396.<\/p>\n 38. On 19\u00a0April 2016 the district court awarded the applicant RUB\u00a0147,652 in default interest for the period between 1\u00a0November 2014 and 1\u00a0March 2016 in respect of the judgments of 4\u00a0February and 17\u00a0April 2009, 8\u00a0December 2014 (see paragraph\u00a035 above) and the two index-linking decisions of 21\u00a0July 2014 (see paragraphs\u00a029 and 32 above).<\/p>\n 39. No appeals were lodged against any of those awards by the debtor company, nor were the awards honoured.<\/p>\n E. Information submitted by the applicant concerning the power supply network in Tsalyk<\/strong><\/p>\n 40. On 30\u00a0January 2004 the Government of North Ossetia transferred the power supply network in Tsalyk to the district administration, in order to provide a power supply to a refugee camp. On 10\u00a0November 2005 the district administration accepted the above assets on its balance sheet.<\/p>\n 41. On 9\u00a0April 2008 the North Ossetia Department of the Federal Service for Environmental and Technological Oversight (\u201cthe Rostekhnadzor\u201d) conducted an inspection of the power network in response to numerous complaints by the inhabitants of the Tsalyk refugee camp about numerous power cuts. The Rostekhnadzor established that the relevant facilities were intended to be transferred from the district administration\u2019s balance sheet to the debtor company\u2019s. However, the transfer had not taken place.<\/p>\n 42. According to a judgment of 18\u00a0May 2016 by the Commercial Court of the Republic of North Ossetia-Alaniya (case no.\u00a0A61-4006\/2015) given in unrelated proceedings involving the district administration, the latter was the factual owner of the relevant power supply network, and there was no evidence of any other person\u2019s title to the assets.<\/p>\n II. RELEVANT DOMESTIC LAW AND PRACTICE<\/p>\n A. Provisions of the Insolvency Act referred to by the applicant<\/strong><\/p>\n 43. The enforcement of court awards and more generally debt claims against insolvent or presumably insolvent debtor legal entities are regulated by the Insolvency Act of 26\u00a0October 2002 (Law no.\u00a0127-FZ). Section\u00a03 of the Insolvency Act, as in force at the material time, defined the state of bankruptcy of a legal entity as follows:<\/p>\n \u201cA legal entity is regarded as being unable to satisfy the claims of creditors in respect of pecuniary obligations and (or) to fulfil its obligations in respect of mandatory payments if the respective obligations and (or) obligation are not complied with within three months of the date on which compliance should have occurred.\u201d<\/p>\n 44. Insolvency proceedings in respect of a legal entity could only be instituted by a court if the overall amount of debt claims exceeded RUB\u00a0100,000 (section\u00a06 of the Insolvency Act). Whilst the executive body of the debtor had the right to file for bankruptcy in circumstances where it was obvious that the debtor would have been unable to fulfil its obligation in due time (section 8 of the Insolvency Act), it had a legal duty to do so if the forced seizure of the debtor\u2019s property in satisfaction of a claim would have made the debtor\u2019s economic activity extremely difficult or impossible (section\u00a09 of the Insolvency Act).<\/p>\n 45. If any indicators of bankruptcy as established by section\u00a03 of the Insolvency Act materialised, the head of the debtor company was required to inform the owner of the unitary enterprise\u2019s assets thereof. The owner of the unitary enterprise\u2019s assets had to take timely measures to prevent the insolvency of the legal entity (section\u00a030 of the Insolvency Act).<\/p>\n B. Relevant provisions on municipal unitary enterprises<\/strong><\/p>\n 46. The owner of the property under the economic control of a unitary enterprise defines the purpose and aims of the company. The owner oversees the use of the property assigned to the company in conformity with its stipulated purpose and the maintenance of that property (Article\u00a0295 of the Civil Code).<\/p>\n 47. The State or municipal unitary enterprise may dispose of assets only in a manner which does not prevent it from carrying out its activities in accordance with its statutory purpose and aims. Transactions made in violation of this requirement must be declared void (section\u00a018(3) of the State Unitary Enterprises Act).<\/p>\n 48. As clarified by paragraph\u00a010 of Ruling no.\u00a010\/22 of the Plenary Session of the Supreme Court and the Supreme Commercial Court of Russia adopted at the Plenary session of 29\u00a0April 2010, transactions of the type mentioned above must be declared void irrespective of whether the owner consented to them.<\/p>\n 49. By Ruling no.\u00a06\/8 of 1\u00a0July 1996 the Plenary Session of the Supreme Court and the Supreme Commercial Court of Russia reiterated that the owner\u2019s rights in respect of the assets allocated to a state or municipal unitary company under the right of economic control were listed in Article\u00a0295 \u00a7 2 of the Civil Code and emphasised that the owner was not entitled to seize, lease or otherwise dispose of such assets. Acts of disposal by the State and local authorities of the assets allocated to the unitary enterprise under its economic control had to be declared invalid pursuant to a claim by the respective enterprise (paragraph\u00a040 of the Ruling). According to Ruling no.\u00a010\/22 of 29\u00a0April 2010 (cited in paragraph 48 above), the owner cannot dispose of such assets irrespective of the consent of the enterprise (paragraph\u00a05 of the Ruling).<\/p>\n 50. The company\u2019s financial documents are subject to a compulsory annual audit and must be forwarded to the competent State and municipal authorities (section\u00a026 of the Unitary Enterprises Act). The owner sets the company\u2019s economic performance targets and oversees its achievement of those targets (section 20 of the Act).<\/p>\n 51. Other relevant domestic provisions and case-law governing unitary enterprises with the right of economic control are summarised in Liseytseva and Maslov(cited above, \u00a7\u00a7\u00a054-127), and Samsonov v. Russia ((dec.), no.\u00a02880\/10, 16\u00a0September 2014).<\/p>\n THE LAW<\/strong><\/p>\n I. ALLEGED VIOLATION OF ARTICLE\u00a06 OF THE CONVENTION AND ARTICLE\u00a01 OF PROTOCOL\u00a0No.\u00a01 ON ACCOUNT OF THE NON-ENFORCEMENT<\/p>\n 52. The applicant complained of the non-enforcement of domestic decisions given in his favour. He relied on Article\u00a06 \u00a7 1 of the Convention and on Article 1 of Protocol\u00a0No.\u00a01 to the Convention, which read as follows:<\/p>\n Article\u00a06\u00a0\u00a7\u00a01<\/p>\n \u201cIn the determination of his civil rights and obligations … everyone is entitled to a fair … hearing … by [a] … tribunal …\u201d<\/p>\n Article\u00a01 of Protocol\u00a0No.\u00a01<\/p>\n \u201cEvery 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.<\/p>\n 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.\u201d<\/p>\n 53. The Government argued that the decisions in the applicant\u2019s favour had been issued against a commercial organisation, which was independent from the authorities and did not perform any public function. Furthermore, the debtor company had not been liquidated and was still in operation, so the debts were still recoverable. In particular, in 2015 the bailiffs had seized the power supply network in Tsalyk, and were taking measures to sell the assets, so that the debts could be recovered from the proceeds of the sale. The Government accordingly submitted that the company\u2019s debts were not attributable to the State.<\/p>\n 54. The applicant maintained that the State was responsible for the debtor company\u2019s debts. He argued that the debtor company performed a public function, that the property initially allocated to it constituted socially important assets, and that the debtor company was placed under the authorities\u2019 control. The owner had disposed of its assets as it had seen fit, as it had transferred them to the OOO. The lease agreement had not been properly registered, as it had deprived the company of the ability to perform its objectives as set out in its memorandum and articles, and therefore had clearly been in breach of the domestic law. As a result of the transfer, the company had become unable to perform its functions, let alone satisfy its creditors\u2019 claims. For years, it had been de facto insolvent. However, despite all evidence of its insolvency, the owner had failed to take steps to improve its situation, and no authority had filed an insolvency petition, despite their obligation to do so. There had been no prospects of successful enforcement of the judgments in his favour. The Government\u2019s reference to the company\u2019s alleged title to the electricity supply facility in Tsalyk was unsubstantiated.<\/p>\n A. Admissibility<\/strong><\/p>\n 1. Compatibility ratione personae<\/em><\/p>\n 55. The Court will first address the Government\u2019s argument that the judgment debts could have been recovered directly from the debtor company, and that State responsibility could not be relied on as the debtor had not been liquidated and was in operation at the material time.<\/p>\n 56. The Court reiterates its findings in Zhdanov and Others v.\u00a0Russia where the debtor unitary enterprise was not insolvent or subject to liquidation at the time of the events, and it was not argued that it lacked sufficient funds or operational capacity to enforce the judgment in the applicant\u2019s favour. In that case, the Court found that, as long as the company had sufficient assets on its balance sheet, the State could not be held responsible for the company\u2019s failure to pay its debts (see, mutatis mutandis, Zhdanov and Others v.\u00a0Russia (dec.), nos.\u00a048028\/07 and 15\u00a0others, \u00a7\u00a7 63-64, 28 June 2016).<\/p>\n 57. However, unlike in Zhdanov and Others, in the present case the applicant convincingly demonstrated \u2013 and it was not disputed by the Government \u2013 that, as early as in 2007, the unitary enterprise had been stripped of all its assets as a result of their transfer to the OOO (see paragraphs\u00a09, 11 and 12 above). Since then, it has accumulated debts towards its creditors, including the applicant. As confirmed by the bailiffs, since 2007 it has not conducted any economic activity, including the performance of its objectives as set out in its articles of association (see paragraph\u00a019 above). It appears, however, that the assets\u2019 transfer has never been disputed at the domestic level, even though a unitary enterprise could only dispose of assets in a manner which did not prevent it from carrying out its activities in accordance with its purpose and aims (see paragraphs\u00a047\u201148 above). No measures have either been taken or are anticipated which would improve the debtor\u2019s situation. Further, no insolvency proceedings have been formally set in motion in respect of the debtor company, despite clear indications to that effect in the domestic law (see paragraphs\u00a043 and 44 above). Finally, no trace of the debtor company was found at its only known address in 2014, even though the authorities kept confirming that the address was valid and up to date (see paragraph\u00a036).<\/p>\n 58. The Court further notes that in 2009-2014 the bailiffs service informed the applicant that there were no prospects of successful enforcement, as the debtor company had no assets (see paragraph\u00a023 above). The Court rejects the Government\u2019s reference to the bailiffs\u2019 attempt to enforce in 2015 \u2013 that is, seven years after the enforcement proceedings began \u2013 by seizing and selling the power supply network in the refugee camp, as there is nothing in the case materials to suggest that the network has ever been transferred to the debtor company. On the contrary, as established by the authorities, its sale was impossible and, moreover, by 2016 the assets had not been registered at all (see paragraphs\u00a025-26 and 40\u201142 above).<\/p>\n 59. The Court notes that is not called upon to address either the validity of the above-mentioned transfer of assets, or the formal lawfulness of the authorities\u2019 ensuing actions, including those of the debtor company\u2019s owner, or the choice not to bring insolvency proceedings in respect of the debtor company, in terms of the domestic law (see Liseytseva and Maslov, cited above, \u00a7\u00a0212). However, in view of the elements outlined above, the Court finds it established that, by contrast to Zhdanov and Others, for more than ten years to date the debtor company has not performed its objectives under the terms of its articles of association or any other economic activity, has not shown any assets on its balance sheet, and has not been able to meet its creditors\u2019 claims, including the applicant\u2019s ones. There is nothing to suggest that by 2016, the date of the parties\u2019 latest submissions, there had been any prospects of the successful enforcement of the judicial awards in the applicant\u2019s favour.<\/p>\n 60. Accordingly, in the present case there is no reason to depart from the Court\u2019s settled approach to the State responsibility for the debts of unitary enterprises on the ground that the company was formally regarded as operating in terms of the domestic law.<\/p>\n 61. Otherwise, the Court has already dealt with the remaining Government\u2019s arguments in the case of Liseytseva and Maslov. The Court held that the existing legal framework in Russia did not provide unitary enterprises with the degree of institutional and operational independence that would absolve the State from any responsibility under the Convention for the debts of such companies (see Liseytseva and Maslov, cited above, \u00a7\u00a7\u00a0193-204). In order to determine the issue of State responsibility for the debts of unitary enterprises, the Court must examine whether and how the extensive powers of control provided for in the domestic law were actually exercised by the authorities in a given case (ibid., \u00a7\u00a7\u00a0204-06). The present case is similar to Liseytseva and Maslov (ibid., \u00a7\u00a7\u00a0208-19) from the standpoint of the debtor company\u2019s functions and the degree of actual control exercised by the authorities over its activities, as follows.<\/p>\n 62. Firstly, the company was set up to provide services of vital importance to the local population, such as an electricity supply (see paragraph\u00a07 above). The property allocated for those purposes enjoyed special treatment under the domestic law, constituting \u201csocially important assets\u201d. The tariffs for the electricity supply services were set by the authorities. Therefore, the company was, by virtue of its functions, placed under the strict control of the authorities (see, among many other cases, Liseytseva and Maslov, cited above, \u00a7\u00a7\u00a0208-10; Lyatskaya v.\u00a0Russia, no.\u00a033548\/04, \u00a7\u00a014, 18 September 2008; and Yershova v.\u00a0Russia, no.\u00a01387\/04, \u00a7\u00a058, 8\u00a0April 2010).<\/p>\n 63. Secondly, the owner disposed of the debtor company\u2019s assets as it saw fit. In particular, it ordered that the entirety of the assets allocated to the debtor company be leased to the OOO, and it formally approved the respective transfer (see paragraphs\u00a09 and 12 above). As a result, as established by the bailiffs, the debtor company was no longer able to perform any economic activity and was unable to satisfy its creditors\u2019 claims given its lack of assets (see paragraphs\u00a019 and 23 above). Further, it was not argued that the district administration, which had to oversee the use of the property assigned to the debtor company (see paragraph\u00a046 above) as well as set the debtor company\u2019s economic performance targets and oversee their achievement (see paragraph\u00a050 above), was unaware of the company\u2019s situation. However, it appears that for years the founder avoided taking any measures to remedy it.<\/p>\n 64. In the Court\u2019s view, these elements demonstrate that a strong degree of State control was actually exercised by the municipal authority over the debtor company. Accordingly, the Court finds that the debtor company did not enjoy sufficient institutional and operational independence from the authorities, and dismisses the Government\u2019sratione personae objection.<\/p>\n 65. Therefore, the State is to be held responsible under the Convention for the debt owed by the debtor company to the applicant in accordance with the final judgments in his favour.<\/p>\n 2. Conclusion<\/em><\/p>\n 66. The Court further notes that the non-enforcement complaint is not manifestly ill-founded within the meaning of Article\u00a035\u00a0\u00a7\u00a03\u00a0(a) of the Convention and it is not inadmissible on any other grounds. It must therefore be declared admissible.<\/p>\n B. Merits<\/strong><\/p>\n 67. The Court notes that the judgments in the applicant\u2019s favour have not been enforced to date. The Court has, on several occasions, found violations of Article\u00a06 of the Convention and of Article\u00a01 of Protocol\u00a0No.\u00a01 to the Convention in respect of issues similar to those in the present case (see, for instance, Liseytseva and Maslov, cited above, \u00a7\u00a7 208-24). The Court sees no reason to reach a different conclusion in the present case. By failing to take the necessary measures to comply with the final judgments in the instant case for ten years to date, the authorities have deprived the provisions of Article\u00a06\u00a0\u00a7\u00a01 of all useful effect, and have also prevented the applicant from receiving the money he was entitled to receive, which amounted to a disproportionate interference with his peaceful enjoyment of possessions.<\/p>\n 68. Therefore, there has been a violation of Article\u00a06\u00a0\u00a7\u00a01 of the Convention and of Article\u00a01 of Protocol\u00a0No.\u00a01 to the Convention on account of the non-enforcement of the two final and binding judgments in the applicant\u2019s favour.<\/p>\n II. ALLEGED VIOLATION OF ARTICLE\u00a013 OF THE CONVENTION<\/p>\n 69. The applicant complained of the lack of an effective remedy in respect of the non-enforcement. He relied on Article\u00a013 of the Convention which reads as follows:<\/p>\n \u201cEveryone whose rights and freedoms as set forth in [the] 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.\u201d<\/p>\n 70. The Court considers that this complaint should be declared admissible. However, having regard to its findings relating to Article\u00a06 and Article\u00a01 of Protocol\u00a0No. 1, the Court considers that it is not necessary to examine whether, in this case, there has been a violation of Article\u00a013.<\/p>\n III. APPLICATION OF ARTICLE\u00a041 OF THE CONVENTION<\/p>\n 71. Article\u00a041 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. Damage<\/strong><\/p>\n 72. The applicant made the following claims in respect of pecuniary damage. First, he claimed 1,709,537 Russian roubles (RUB) representing the unpaid debts under the judgments of 4\u00a0February and 17\u00a0April 2009, as index-linked by the decisions of the district court of 21\u00a0July 2014 and 27\u00a0April 2016, plus the interest awarded by the district court on 8\u00a0December 2014 (as index-linked on 27\u00a0April 2016) and 19\u00a0April 2016.<\/p>\n 73. He further claimed RUB\u00a058,310 and RUB\u00a03,150 in respect of a further increase of the above awards on account of the inflation rate up to 1\u00a0September 2016, and submitted details of his respective calculations. He also claimed RUB\u00a08,878 in relation to a court fee, and RUB\u00a0206,906.14 and RUB\u00a091,698.75 for the fees for two credit lines that he had opened with two private banks, allegedly as a result of the non-enforcement.<\/p>\n 74. He further claimed EUR\u00a019,555 in respect of non-pecuniary damage.<\/p>\n 75. The Government considered that the claim in respect of RUB\u00a01,709,537 was unsubstantiated as those amounts could still be recovered at the domestic level. They further submitted that the claims in respect of the amounts the applicant owed to the banks for making use of credit lines and for the court fee were irrelevant to the present application. Finally, they disputed the claim in respect of non-pecuniary damage as unreasonable and stressed that nothing was to be awarded under that head as the applicant\u2019s rights had not been violated.<\/p>\n 76. The Court has found a violation of Article\u00a06\u00a0\u00a7\u00a01 of the Convention and Article\u00a01 of Protocol\u00a0No.\u00a01 to the Convention in that the judgments in the applicant\u2019s favour have not been enforced to date. The most appropriate form of redress in respect of a violation of Article\u00a06 is to ensure that the applicant as far as possible is put in the position in which he would have been had the requirements of Article 6 not been disregarded (see Poznakhirina v. Russia, no.\u00a025964\/02, \u00a7\u00a033, 24\u00a0February 2005). The Court finds that in the present case this principle also applies, having regard to the violation found, and considers that the Government should pay the applicant the equivalent in euros of the unpaid judgment debts under the initial judgments in his favour.<\/p>\n 77. The Court further considers that the adequacy of the compensation would be diminished if it were to be paid without reference to various circumstances liable to reduce its value, such as an extended delay in enforcement (see, mutadis mutandis, Gizzatova v.\u00a0Russia, no. 5124\/03, \u00a7\u00a028, 13 January 2005). The Court notes that the domestic courts in 2014 and 2016 granted the applicant\u2019s claims for index-linking of the awards and also ordered the debtor to pay him default interest (see paragraphs\u00a029, 30, 32, 33, 35, 37 and 38 above). None of those decisions, in their turn, have been enforced by the debtor unitary enterprise. While no additional complaint was raised by the applicant in respect of these judgments \u2013 and, indeed, any such complaint would fall outside the scope of the applicant\u2019s initial application \u2013 the Court will refer to those domestic courts\u2019 decisions as evidence substantiating the applicant\u2019s calculation of the inflationary loss and the default interest. The Court further notes that the Government have not disputed either the amount claimed, the method of calculating the losses chosen by the applicant (an inflation adjustment plus default interest, as further adjusted to the inflation rate), the period in question, or the method of calculation used by the domestic courts. It accordingly sees no reason to disagree with those calculations.<\/p>\n 78. In sum, the Court awards the applicant the equivalent in euros of RUB\u00a01,709,537 \u2013 to cover the unpaid judgments in the applicant\u2019s favour of 4\u00a0February and 17\u00a0April 2009, as increased by the two sets of index-linking proceedings of 27\u00a0April 2016, plus the amount awarded to the applicant as default interest, as subsequently index-linked (see paragraph\u00a072 above) \u2013 that is 22,882 euros (EUR), plus any tax that may be chargeable, in respect of pecuniary damage. As regards the remainder of the claims, the Court does not discern a causal link between the violation found and the pecuniary damage alleged and it therefore rejects the remainder of the claims under this head.<\/p>\n 79. Having regard to all relevant circumstances and to its case-law (seeVoronkov v.\u00a0Russia, no.\u00a039678\/03, \u00a7\u00a068, 30\u00a0July 2015, with further references), the Court further awards the applicant EUR\u00a02,000 in respect of non-pecuniary damage, plus any tax that may be chargeable, and rejects the remainder of the claims under this head.<\/p>\n B. Costs and expenses<\/strong><\/p>\n 80. The applicant claimed RUB\u00a053,733.61 for the costs and expenses incurred before the Court. That amount consisted of RUB\u00a050,000 paid by the applicant under two legal services agreements and RUB\u00a03,202.96 for postal expenses. He further contended that the cost of sending his correspondence to the Court on 14\u00a0July 2011 should be index-linked to the inflation rate, and provided a calculation respectively.<\/p>\n 81. The Government agreed that the applicant had substantiated his claims in relation to the amount of RUB\u00a053,202.96 with relevant documents and they submitted that that amount could be awarded to the applicant. However, they disputed the applicant\u2019s method of calculation of the adjustment of the cost for the postal services as unsubstantiated and unreliable.<\/p>\n 82. Regard being had to the documents in its possession and to its case\u2011law, and noting the Government\u2019s position on the matter, the Court considers it reasonable to award the applicant the equivalent in euros of RUB\u00a053,202.96, that is EUR\u00a0730, plus any tax that may be chargeable to the applicant. It rejects the remainder of the applicant\u2019s claims in respect of costs and expenses.<\/p>\n C. Default interest<\/strong><\/p>\n 83. 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.<\/p>\n FOR THESE REASONS, THE COURT, UNANIMOUSLY,<\/strong><\/p>\n 1. Declaresthe application admissible;<\/p>\n 2. Holdsthat there has been a violation of Article\u00a06 of the Convention and Article\u00a01 of Protocol\u00a0No.\u00a01 to the Convention on account of the non\u2011enforcement of the two final judgments in the applicant\u2019s favour;<\/p>\n 3. Holdsthat there is no need to examine the complaint under Article\u00a013 of the Convention;<\/p>\n 4. Holds<\/p>\n (a) that the respondent State is to pay the applicant, within three months, the following amounts,to be converted into the currency of the respondent State at the rate applicable at the date of settlement:<\/p>\n (i) EUR\u00a022,882 (twenty-two thousand eight hundred and eighty\u2011two euros), plus any tax that may be chargeable, in respect of pecuniary damage;<\/p>\n (ii) EUR\u00a02,000 (two thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;<\/p>\n (iii) EUR\u00a0730 (seven hundred and thirty euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;<\/p>\n (b) that 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 5. Dismissesthe remainder of the applicant\u2019s claim for just satisfaction.<\/p>\n Done in English, and notified in writing on 15 October 2019, pursuant to Rule\u00a077\u00a0\u00a7\u00a7\u00a02 and 3 of the Rules of Court.<\/p>\n Stephen Phillips \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Alena Pol\u00e1\u010dkov\u00e1
\nDmitry Dedov,
\nGilberto Felici, judges,
\nand Stephen Phillips, 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 President<\/p>\n