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FOURTH
SECTION
CASE OF IPTEH SA AND OTHERS v. MOLDOVA
(Application
no. 35367/08)
JUDGMENT
(just
satisfaction-striking out)
STRASBOURG
29
June 2010
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Ipteh SA and Others v. Moldova,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Giovanni Bonello,
Ljiljana
Mijović,
David Thór Björgvinsson,
Ledi
Bianku,
Mihai Poalelungi, judges,
and
Lawrence Early, Section
Registrar,
Having
deliberated in private on 8 June 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 35367/08) against the Republic
of Moldova lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by Ipteh SA – a company incorporated in
Moldova, Worldway Limited – a company incorporated in the
United Kingdom, Kapital Invest SA – a company incorporated in
Romania and Ion Rusu – a Romanian national, on 25 July 2008.
- The
applicants were represented by Ms J. Hanganu, a lawyer practising in
Chişinău. The Moldovan Government (“the Government”)
were represented by their Agent, Mr V. Grosu.
- In
a judgment delivered on 24 November 2009 (“the principal
judgment”), the Court held that there had been a violation of
the applicants' rights under Article 6 § 1 of the Convention and
Article 1 of Protocol No. 1 to the Convention as a result of the
annulment of the privatisation of a building in Chişinău,
in breach of the principles of equality of arms and legal certainty
(Ipteh SA and Others v. Moldova, no. 35367/08, 24 November
2009).
- Since
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 applicants to submit, within three months, their
written observations on that issue and, in particular, to notify the
Court of any agreement they might reach.
THE FACTS
- The
first applicant, Ipteh SA, is a company incorporated in Moldova. The
other applicants are Worldway Limited (“the second applicant
company”) – a company incorporated in the United Kingdom
and holder of 35.29% of the shares of the first applicant; Kapital
Invest SA (“the third applicant company”) – a
company incorporated in Romania and holder of 49.63% of the shares of
the first applicant; and Ion Rusu (“the fourth applicant”)
– a Romanian national born in 1962, living in Iaşi and
holder of 11.72% of the shares of the first applicant company.
- At
the end of the 1990s, Ipteh SA and a third company, I., were owners
of a six-floor building located on the main boulevard of Chişinău
(“the building”). Both companies were State-owned and had
as their only asset different parts of the building.
- In
1999 the State decided to privatise the companies and sold their
shares to a private company, U.
- In
2000 and 2001 the new owner of the companies transferred all parts of
the building to the first applicant company.
- Also
in 2000 the former director of the first applicant company challenged
the privatisation in the courts. However, his action was dismissed by
a final judgment of the Economic Court of the Republic of Moldova of
11 July 2000, the courts having found that the privatisation had been
legal in all respects.
- In
July 2001 the fourth applicant bought 141,772 shares in the first
applicant company.
- In
August 2001 the second applicant company bought the rest of the
shares of the first applicant company.
- In
August 2006 the first applicant company issued 510,000 new shares and
sold them to the third applicant company.
- On
an unspecified date in 2002 the Prime Minister requested the
Prosecutor General's Office to conduct an investigation into the
lawfulness of the privatisation. On 17 February 2002 the Prosecutor
General informed the Prime Minister that he had verified the
lawfulness of the privatisation and had found it to be “in
strict compliance with the legislation in force”. The
Prosecutor General also informed the Prime Minister that the
lawfulness of the privatisation had been thoroughly verified during
the proceedings ending with the final judgment of 11 July 2000.
- On
an unspecified date in 2003 the President of Moldova requested the
Prosecutor General's Office to examine the possibility of challenging
the privatisation of 1999. In a letter of 26 June 2003 the Prosecutor
General informed President V. Voronin that the transaction had been
lawful and that there were no grounds to challenge it. Moreover, he
indicated that after the entry into force of the new Code of Civil
Procedure on 12 June 2003 it had become impossible to bring an appeal
in cassation against the final judgment of 11 July 2000.
- On
19 April 2007 the Prosecutor General's Office instituted proceedings
on behalf of the State in which it contested the lawfulness of the
1999 privatisation of the first applicant company and of company I.
on the ground that two Government regulations concerning the sale of
State- owned shares had been breached. In particular, the Prosecutor
argued that the size of the down payment made by company U. was
smaller than the one provided in the regulations and that the final
price offered for the shares had been too low. The Prosecutor relied
on Article 50 of the Civil Code as a legal basis for his action (see
paragraph 16 below). As a consequence of the alleged illegality of
the privatisation, the Prosecutor's Office also sought the annulment
of all the subsequent transfers and issues of shares as a result of
which the second, third and fourth applicants had become shareholders
of the first applicant company.
- The applicants opposed the action and argued, inter
alia, that it was time-barred and contrary to the principle of
legal certainty. They submitted that the provision of Article 86 of
the old Civil Code exonerating the Prosecutor from observing the
three-year time-limit when lodging actions in the interest of the
State was contrary to Article 6 of the Convention and made reference
to Dacia SRL v. Moldova (no. 3052/04, 18 March 2008). They
also submitted that the lawfulness of the privatisation had been
confirmed by a final judgment of 11 July 2000 with the power of res
judicata and that they were bona fide buyers who had been
discriminated against with respect to other companies which had
obtained State property in similar conditions and whose
privatisations had not been contested later by the State. They also
challenged the presiding judge on grounds of lack of impartiality and
argued that in the proceedings which had ended with the final
judgment of 11 July 2000 he had been successfully challenged on such
grounds. However, the challenge was dismissed.
- On
10 June 2008 the Chişinău Economic Court ruled in favour of
the Prosecutor General's Office in the absence of the third and
fourth applicants, who had not been summoned. The court dismissed the
applicants' objection concerning the existence of a final judgment of
11 July 2000. The court did not dispute the applicants' submission
that the proceedings of 2000 had had a similar subject matter;
however, it dismissed the objection on the ground that that judgment
had been adopted in proceedings in which the Prosecutor General's
Office had not been involved. The court also dismissed the
applicants' objection concerning the Statute of Limitations, arguing
that according to Article 86 of the Civil Code an action by the
Prosecutors in the interest of the State could not be time-barred.
- The
applicants appealed on the basis of the same arguments which were put
before the first-instance court. They also complained that not all of
them had had the possibility to take part in the proceedings and that
the judge had lacked impartiality.
- On 28 August 2008 the Supreme Court of Justice heard
the applicants' appeal. During the proceedings, the applicants
challenged judge N.M. from the panel and expressed doubts as to the
manner in which the President of the Supreme Court, Judge I.M., had
composed the panel. On the same day, the Supreme Court dismissed the
appeal and upheld the judgment of the first-instance court.
- The Supreme Court relied on provisions of the old
Civil Code in order to dismiss the applicants' objection concerning
their status as good faith buyers. In particular, the court argued
that according to the old Civil Code property obtained unlawfully
from the State could be claimed back irrespective of the fact that it
had been obtained by a bona fide buyer. However, when
examining the problem of the Statute of Limitations, the Supreme
Court agreed with the applicants' objection concerning Article 86 of
the old Civil Code (see paragraph 16 above). Nonetheless, the court
stated for the first time in the proceedings that since the
Prosecutor had introduced his action after the entry into force of
the new Civil Code, the rules concerning limitations in time
contained in that Code should apply. The Supreme Court expressed the
opinion that the Prosecutor's action concerned the declaration of the
absolute nullity of the privatisation and that therefore, in
accordance with the provisions of Article 217 of the new Civil Code,
it could not be limited in time. The Supreme Court also dismissed the
objection concerning the existence of a final judgment in respect of
the same problem on the same grounds as the first-instance court and
dismissed the objection concerning the non-participation of some of
the applicants in the proceedings.
- On
24 November 2009 the Court examined the merits of the present case
and found a violation of Article 6 and Article 1 of Protocol No. 1 to
the Convention.
- On
22 April 2010 the Supreme Court of Justice of Moldova upheld a
revision request lodged by the applicants against its judgment of 28
August 2008 (see paragraph 19 above) and quashed it. In the same
judgment the Supreme Court of Justice re-examined the merits of the
case, dismissed the Prosecutor General's action and ordered the
Ministry of Finance to compensate the applicants for the pecuniary
and non-pecuniary damage and for the costs and expenses incurred. The
first applicant was awarded 196,952.53 euros (EUR), the second
applicant – EUR 46,545.47, the third applicant – EUR
58,000 and the fourth applicant – EUR 18,434.88. The judgment
became final on the date of pronouncement.
THE LAW
- On
10 May 2010 the applicants informed the Court about the judgment of
the Supreme Court of Justice of 22 April 2010, submitted that they
were no longer interested in pursuing the remainder of the case
before the Court (the reserved Article 41 issue) and asked the Court
to strike it out of the list of cases in view of its settlement at
home.
Having
regard to Article 37 § 1 (a) and (b) of the Convention, the
Court finds that the applicants do not intend to pursue the
application since the matter before it has been resolved.
Furthermore, in accordance with Article 37 § 1 in fine,
the Court finds no special circumstances regarding respect for human
rights as defined in the Convention and its Protocols which require
the examination of the remainder of the application to be continued.
- Accordingly,
the remainder of the case should be struck out of the list.
FOR THESE REASONS, THE COURT UNANIMOUSLY
Decides to strike the remainder of the application out of its
list of cases.
Done in English, and notified in writing on 29 June 2010, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza
Registrar President
