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FIRST
SECTION
CASE OF YURIY LOBANOV v. RUSSIA
(Application
no. 15578/03)
JUDGMENT
STRASBOURG
2 December
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 Yuriy Lobanov v.
Russia,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Christos Rozakis, President,
Nina
Vajić,
Anatoly Kovler,
Elisabeth
Steiner,
Khanlar Hajiyev,
Giorgio
Malinverni,
George Nicolaou, judges,
and André
Wampach, Deputy
Section Registrar,
Having
deliberated in private on 9 November 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 15578/03) against the Russian
Federation lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Russian national, Mr Yuriy Ivanovich Lobanov
(“the applicant”), on 23 April 2003.
- The
Russian Government (“the Government”) were represented by
Mrs V. Milinchuk, former Representative of the Russian Federation at
the European Court of Human Rights.
- The
applicant alleged a violation of his property rights.
- On
9 March 2007 the President of the First Section decided to give
notice of the application to the Government.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1938 and lives in Shuya in the Ivanovo Region.
- The
applicant is a holder of 1982 State premium loan bonds (облигации
Государственного
внутреннего
выигрышного
займа
1982 года)
having a total nominal value of 19,845 “promissory roubles”
(see paragraph 17 below).
- In
1982, the USSR issued a State internal premium loan to finance
certain State programmes (see paragraph 13 below). According to the
conditions of the loan, individuals could invest their money in State
premium bonds and redeem them at any time during the term of the loan
with interest at three per cent per annum. The term of the loan was
fixed at twenty years. In that period, 160 State-organised draws were
to be held in which some bonds would win cash prizes.
- In
1992, the Government of the Russian Federation acknowledged its
succession in respect of the obligations of the USSR under the 1982
loan and suspended payments under the 1982 State premium bonds (see
paragraph 14 below).
- Between
1995 and 2000, a series of Russian laws was adopted which provided
for conversion of Soviet securities, including the 1982 loan bonds,
into special Russian promissory notes (see paragraphs 16 to 20
below). The Government was mandated to devise a procedure for the
conversion and fix the value of the promissory notes. Although a
regulation on the conversion was adopted in 2000 (see paragraph 21
below), the actual conversion did not start and application of the
regulation has remained suspended to the present day (see paragraph 22
below).
- In
early 2002, the applicant wrote to the Ministry of Finance to inquire
about possibilities and time-limits for converting his 1982 bonds
into Russian promissory notes. By a letter of 27 April 2002, a deputy
director of the Internal Debt Department confirmed to the applicant
that his bonds should be converted into the Russian promissory notes
in accordance with the Savings Protection Act. The deputy director
went on to explain why the conversion had not yet been possible:
“Section 10 of the [Conversion Procedure] Act
provides that the procedure for calculating the interest accrued on
the Russian promissory notes and the procedure for servicing the
[internal] debt would be set out in a special federal law, which has
not yet been enacted. In this connection, actual payments in
[Russian] roubles under the promissory notes – as provided in
the [Conversion Procedure] Act – cannot be made and the
determination of the value of the [‘promissory rouble’]
would be of no practical significance since its application has not
yet been defined by the legislator.
...
Once the legislation on the procedure for calculating
the interest and the debt-servicing procedure has been adopted, the
Ministry of Finance will make the necessary arrangements for the
conversion of USSR securities... into promissory notes and the
servicing of them; it will also launch an open tender for selection
of the conversion agent ...”
- In
November 2002 the applicant brought proceedings before the Supreme
Court of the Russian Federation challenging the Government for
inactivity and failure to put the redemption programme into effect.
- On
4 December 2002 the Supreme Court refused to examine the applicant’s
claim. It found as follows:
“By virtue of the constitutional principle of
separation of powers, the court may not, in civil proceedings,
require the Government of the Russian Federation to enact a specific
legal act if the law does not explicitly set out the duty of the
Government to adopt appropriate regulation; the claim may not be
accepted for examination by the court.”
II. RELEVANT DOMESTIC LAW AND PRACTICE
- On 30 December 1980 the USSR Cabinet of Ministers
approved, by Resolution no. 1220, the issue of bonds of the 1982
State premium internal loan having nominal values of 25, 50 and 100
Soviet roubles. Their period of circulation was set at twenty years,
from 1 January 1982 to 1 January 2002. Soviet citizens could either
buy the 1982 bonds with their own money or obtain them in exchange
for bonds from the earlier 1966 State premium internal loan. The 1982
bonds could be sold and redeemed throughout the entire period of
circulation.
- On 19 February 1992 the Government of the Russian
Federation issued Resolution no. 97 concerning the 1982 State
internal premium loan and a new Russian internal premium loan to be
issued in 1992. It provided as follows:
“1. To confirm succession of the
Government of the Russian Federation in respect of obligations of the
former USSR to Russian Federation citizens arising out of the bonds
of the 1982 State internal premium loan.
2. Starting from 20 February 1992, to
discontinue sale and purchase of bonds of that loan and holding of
prize draws.
3. To issue the 1992 Russian internal premium
loan.
...
6. To give Russian Federation citizens who
are holders of bonds of the 1982 State internal premium loan the
right to voluntary exchange of the bonds against State securities,
including 1992 Russian internal premium loan bonds, shares in the
Savings Bank of the Russian Federation, and also to credit the
proceeds from sale of bonds to deposits open in the Savings Bank of
the Russian Federation, from 1 October 1992...”
- By
Resolution no. 549 of 5 August 1992, the Russian Government decided
that from 1 October 1992 to 1 October 1993 the Savings Bank would be
authorised to purchase 1982 bonds and exchange them for 1992 bonds at
the rate of 160 Russian roubles for one bond with a nominal value of
100 roubles.
16. On 10 May
1995 the Savings
Protection Act
(no. 73-FZ, ФЗ
«О восстановлении
и защите сбережений
граждан Российской
Федерации»)
was enacted. The
State guaranteed the protection of Russian citizens’ savings,
including their investments in State securities issued by the USSR
and RSFSR before 1 January 1992 (section 1). Guaranteed savings were
recognised as part of the internal State debt of the Russian
Federation secured with the entirety of the assets available at the
disposal of the Government of Russia (sections 2 and 3). Soviet
securities were to be converted into special promissory notes of the
Russian Federation with a special promissory value (sections 5
and 7). Separate laws were to be enacted to determine the procedure
for converting Soviet securities into Russian promissory notes and to
determine their current value (section 12).
- On 6 July 1996 the Promissory Value Act (no. 87-FZ, ФЗ
«О порядке
установления
долговой
стоимости
единицы
номинала
целевого
долгового
обязательства
Российской
Федерации»)
introduced the “promissory rouble” as the currency of
special promissory notes of the Russian Federation (section 1).
The actual value of the “promissory rouble” was to be
determined as a proportion of the “control value” of the
consumer goods basket and its “base value” at the prices
that prevailed in the RSFSR in 1990 (section 2). The “control
value” was to be calculated on a weekly basis by the State
Statistical Service and the “base value” was to be fixed
in a federal law (sections 3 to 7). The Government was to publish the
current value of the “promissory rouble” within one month
of the Act’s coming into force.
- On 4 February 1999 the Base Value Act (no. 21-FZ, ФЗ
«О базовой
стоимости
необходимого
социального
набора»)
was enacted in pursuance of the Promissory Value Act. It set the
“base value” at 464 Soviet roubles. Its application was
suspended from 1 January 2003 to 1 January 2012 by successive federal
laws (no. 176-FZ of 24 December 2002, no. 186-FZ of 23 December
2003, no. 173-FZ of 23 December 2004, no. 189-FZ of 26 December
2005, no. 238-FZ of 19 December 2006, no. 198-FZ of 24 July 2007, and
no. 206-FZ of 24 November 2008).
- On
15 March 1999 the State Statistical Service approved guidelines on
calculation of the “control value” (resolution no. 19).
- On 12 July 1999 the Conversion Procedure Act (no.
162-FZ, ФЗ «О
порядке
перевода
государственных
ценных
бумаг
СССР
и сертификатов
Сберегательного
банка
СССР
в целевые
долговые
обязательства
Российской
Федерации»)
confirmed that bonds of the 1982 State internal premium loan which
are still in circulation in Russia are part of the guaranteed savings
of Russian citizens (section 1). Sections 3 to 8 set out the
general principles for conversion of the bonds into special
promissory notes of the Russian Federation. The debt servicing
procedure was to be governed by a separate federal law (section 10).
Section 11 specified that the guarantees of the Savings Protection
Act were fully applicable to securities which had not been converted
into Russian promissory notes and that no statute of limitation
applied to claims arising out of those securities.
- In pursuance of section 15 of the Conversion Procedure
Act, on 29 January 2000 the Russian Government approved a
regulation on the procedure for conversion of USSR securities into
Russian promissory notes (Resolution no. 82). It set out that
conversion into promissory notes would be performed by putting a
stamp on the face of the bonds, which would certify the fact of
conversion and also the nature, face value and interest rate of the
new promissory note (paragraph 3). Converted bonds were to be entered
into a register maintained by the Ministry of Finance (paragraph 4).
The conversion was to be carried out by a designated lending agency,
which the Ministry of Finance was to choose by tender (section 5).
- Starting from 2003, the application and implementation
of Resolution no. 82 was repeatedly suspended by successive
Government Resolutions (no. 625 of 14 October 2003, no. 349 of 13
July 2004, no. 489 of 4 August 2005, no. 467 of 28 July 2006, no. 479
of 25 July 2007, no. 558 of 22 July 2008, no. 594 of 21 July 2009,
and no. 387 of 1 June 2010).
- On 17 March 2004 the Presidium of the Moscow Regional
Court quashed, by way of supervisory review, all the judgments in a
civil case in which the claimants sued the Russian Government for
their failure to determine the value of the “promissory rouble”
(decision no. 229). It held as follows:
“The claims raised by Mr and Ms K. fall outside
the courts’ competence; a court may not encroach on the
competence of the executive body by requiring it to perform actions
or to issue regulations which are within the competence of that body.
The court may only ... assess the compliance of the Government
regulations with Russian federal legislation. Besides, district
courts have no competence over such claims. Pursuant to Article 220 §
1 of the Code of Civil Procedure, a court shall discontinue the
proceedings if the claim may not be examined and determined in civil
proceedings.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
- The
applicant complained, without invoking a specific Convention
provision, about a violation of his property rights owing to the
failure of the Russian authorities to fulfil their obligations under
the 1982 State premium bonds. The Court considers that this complaint
falls to be examined from the standpoint of Article 1 of Protocol No.
1 which 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. Admissibility
1. Compatibility ratione
temporis
- The
Court observes at the outset that the bonds which are at issue in the
present case were introduced in 1982, that is before the ratification
of the Convention by Russia, which occurred on 5 May 1998.
Accordingly, the Court must verify, even though this objection was
not raised by the Government in the present case, whether it has
competence ratione temporis to examine the present application
(see Blečić v. Croatia [GC], no. 59532/00, §
67, ECHR 2006 ...).
- The
Court reiterates that its jurisdiction ratione temporis covers
only the period after the ratification of the Convention or its
Protocols by the respondent State. From the ratification date
onwards, all the State’s alleged acts and omissions must
conform to the Convention or its Protocols and subsequent facts fall
within the Court’s jurisdiction even where they are merely
extensions of an already existing situation (see Broniowski v.
Poland (dec.) [GC], no. 31443/96, § 74, ECHR 2002 X).
- Accordingly,
the Court is competent to examine the facts of the present case for
their compatibility with the Convention only in so far as they
occurred after 5 May 1998, the date of ratification of Protocol No. 1
by Russia. It may, however, have regard to the facts prior to
ratification inasmuch as they could be considered to have created a
situation extending beyond that date or may be relevant for the
understanding of facts occurring after that date.
- The
factual basis for the applicant’s Convention claim is the
alleged failure of the Russian State to satisfy his entitlement to
redemption of the Soviet bonds which he had acquired in 1982.
Following the formal dissolution of the USSR in December 1991, the
Russian Government confirmed its succession in respect of obligations
arising out of the 1982 bonds and launched a programme for their
redemption and exchange for the bonds of a new Russian internal loan
(see paragraph 14 above). This programme was discontinued in 1995
upon enactment of the Savings Protection Act, which declared the
bonds to be part of the Russian State’s internal debt and
guaranteed the Russian citizens’ investments in State
securities issued by the USSR and RSFSR before 1 January 1992,
including the 1982 bonds.
- Since
the enactment of the Savings Protection Act the applicant has
continuously held a claim against the Russian State arising out of
the 1982 bonds. This claim existed both on the date of ratification
of the Convention by Russia and on the date of submission of the
application to the Court. Despite the changes in the implementing
legislation which was in part suspended in application, the relevant
provisions of the Savings Protection Act have never been revoked or
annulled. In addition, the Conversion Procedure Act, adopted in 1999,
explicitly acknowledged the existence of the entitlement and
specified that no statute of limitation applied to claims arising out
of USSR securities which had not yet been converted into Russian
promissory notes (see paragraph 20 above). It follows that the legal
basis for the entitlement which is the subject matter of the
applicant’s complaint before the Court has been established in
domestic legislation on a continuing basis.
- It
follows that, in so far as the applicant’s complaint is
directed against the failure of the Russian State to implement the
entitlement vested in him under Russian law – an entitlement
which existed on 5 May 1998 and still exists today – the Court
has temporal jurisdiction to entertain the application.
2. Compatibility ratione
materiae
- The
Government did not express a view as to whether they considered the
1982 bonds to have been the applicant’s “possessions”
within the meaning of Article 1 of Protocol No. 1. Nevertheless, the
Court has to satisfy itself that it has jurisdiction ratione
materiae in any case brought before it. To hold the contrary
would mean that where a respondent State waived its right to plead or
omitted to plead incompatibility, the Court would have to rule on the
merits of a complaint against that State concerning a right not
guaranteed by the Convention (see Blečić, loc.
cit.).
- The
Court reiterates that the concept of “possessions” in the
first part of Article 1 of Protocol No. 1 has an autonomous meaning,
which is not limited to ownership of physical goods and is
independent of the formal classification in domestic law: certain
other rights and interests, such as debts, constituting assets can
also be regarded as “property rights”, and thus as
“possessions” for the purposes of this provision. The
issue that needs to be examined is whether the circumstances of the
case, considered as a whole, conferred on the applicant title to a
substantive interest protected by Article 1 of Protocol No. 1
(see Broniowski (dec.), cited above, § 98).
- The
Court observes that the instant case is similar to the recent case of
Suljagić v. Bosnia and Herzegovina, in which it was
determined that a claim arising out of the foreign currency savings
deposited with Yugoslav banks before the dissolution of the Socialist
Federal Republic of Yugoslavia amounted to a “possession”
within the meaning of Article 1 of Protocol No. 1 (no.
27912/02, §§ 34-36, 3 November 2009). Similarly to
Mr Suljagić, the applicant in the present case decided to
invest his savings in 1982 State premium loan bonds. In accordance
with the conditions of the loan, he acquired an entitlement to have
the bonds redeemed by the State with accumulated interest at any time
during the entire period of the bonds’ circulation, which had
been fixed at twenty years, that is until 2002 (see paragraph 13
above). As noted above, the Russian State acknowledged its
succession in respect of the USSR’s obligations arising out of
the 1982 bonds and took upon itself the obligation to have them
converted into special Russian promissory notes which could be
exchanged for cash upon determination of their value. The Court
therefore finds that the applicant had, and still has, a claim
amounting to a “possession” within the meaning of Article
1 of Protocol No. 1.
- It
follows that the application is compatible ratione materiae with
the provisions of the Convention.
3. Compatibility ratione
personae
- The
Government pointed out that the 1982 bonds had been an obligation of
the USSR.
- The
Court observes that, by Resolution no. 97 of 19 February 1992, the
Russian Government explicitly confirmed its succession in respect of
obligations of the former USSR to Russian citizens arising out of the
1982 State internal premium loan (see paragraph 13 above). The same
guarantee was contained in sections 1 to 3 of the 1995 Savings
Protection Act, which recognised USSR securities, including 1982
bonds held by Russian citizens, as part of the Russian State’s
internal debt secured with the entirety of the assets at the Russian
Government’s disposal (see paragraph 16 above). It appears
therefore that the Russian State took upon itself an obligation to
settle the debt arising out of the bonds. The applicant being a
Russian national and holder of the 1982 bonds, he was undoubtedly
eligible to benefit from the settlement.
- It
follows that the Russian Federation has voluntarily accepted its
responsibility in respect of the applicant’s entitlement and
that no issue arises regarding the compatibility ratione personae
of the present application.
4. Exhaustion of domestic remedies
- Finally,
the Government claimed that the applicant had not exhausted domestic
remedies because he had not applied to a district court or to a
prosecutor.
- The
applicant responded that a district court would not be competent to
decide on such an issue.
- The
Court observes that the Government did not refer to any legislative
provisions or case-law in support of their allegation that a district
court or a prosecutor’s office would have been able to provide
effective redress in a situation where an individual complains about
the Government’s failure to adopt implementing legislation. It
is further noted that the Presidium of the Moscow Regional Court,
ruling on a similar claim concerning the Government’s failure
to act, held that district courts have no competence over such claims
and that such claims may not be examined or determined in civil
proceedings (see paragraph 23 above). Accordingly, the Court
dismisses the Government’s objection as to non-exhaustion of
domestic remedies.
5. Conclusion as to the admissibility of the
application
- As
far as compliance with Article 1 of Protocol No. 1 is concerned, the
Court considers that the application raises serious issues of fact
and law under the Convention, the determination of which should
depend on an examination of the merits.
- No
ground for declaring the application inadmissible has been
established. It must therefore be declared admissible.
B. Merits
1. Arguments by the parties
- The
Government submitted that in 1992 the Russian Federation had taken on
the USSR’s obligations arising out of the 1982 bonds and had
offered their holders a choice between having them redeemed by the
Savings Bank and having them converted into 1992 Russian bonds. The
applicant had not made use of either option.
- The
applicant contended that both options had only existed from 1992 to
1995, during a period of high inflation and sharp devaluation of
Russian currency, and had therefore been financially disadvantageous
for bond holders. He pointed out that the Russian State had
acknowledged its debt arising out of the 1982 bonds but that the
Russian Government had done nothing to extinguish it, despite the
federal laws that had already been adopted.
2. The Court’s assessment
- The
Court notes at the outset that for the purposes of Article 1 of
Protocol No. 1 the applicant’s “possessions”
consisted in his entitlement to obtain some form of compensation for,
or redemption of, the 1982 bonds. As noted above, although the debt
arising out of the bonds had been recognised by the Russian State in
a series of legislative acts, the absence of implementing regulations
has made redemption of the bonds impossible. The thrust of the
applicant’s complaint was thus directed against the lack of
legal regulation of his entitlement and absence of a specific
procedure for redemption of bonds of that type. This element
distinguishes the present case from those cases in which the
legislative framework had already been put in place but applicants
were dissatisfied with the level of compensation available to them
(see, for example, Grishchenko v. Russia (dec.), no. 75907/01,
8 July 2004). On the other hand, the Court has recently had an
opportunity to examine a series of cases substantially similar to the
present one, in which the absence of implementing regulations for
redemption of a different type of Russian bonds, Urozhay-90,
was at issue (see Malysh and Others v. Russia, no. 30280/03,
11 February 2010; SPK Dimskiy v. Russia, no. 27191/02, 18
March 2010; and Tronin v. Russia, no. 24461/02, 18 March
2010). It will draw inspiration from its findings in those cases in
its analysis of the present one.
- The
Court reiterates that the boundaries between the State’s
positive and negative obligations under Article 1 of Protocol No. 1
do not lend themselves to precise definition. The applicable
principles are nonetheless similar. Whether the case is analysed in
terms of a positive duty of the State or in terms of an interference
by a public authority which needs to be justified, the criteria to be
applied do not differ in substance. In both contexts regard must be
had to the fair balance which needs to be struck between the
competing interests of the individual and of the community as a
whole. It also holds true that the aims mentioned in that provision
may be of some relevance in assessing whether a balance has been
struck between the demands of the public interest involved and the
applicant’s fundamental right of property. In both contexts the
State enjoys a certain margin of appreciation in determining the
steps to be taken to ensure compliance with the Convention (see
Broniowski v. Poland [GC], no. 31443/96, § 144, ECHR
2004 V, and Hatton and Others v. the United Kingdom [GC],
no. 36022/97, §§ 98 et seq., ECHR 2003-VIII).
- In
the present case the applicant’s submission under Article 1 of
Protocol No. 1 was that the Russian State, having conferred on him an
entitlement to seek redemption of the 1982 bonds, made it impossible
to benefit from that entitlement, by failing for years to adopt the
implementing regulations. That situation may well be examined in
terms of a hindrance to the effective exercise of the right protected
by Article 1 of Protocol No. 1 or in terms of a failure to secure the
implementation of that right (compare Broniowski, § 146,
and Malysh and Others, § 75, both cited above).
- The
Court will determine whether the conduct of the Russian State was
justifiable in the light of the principles of lawfulness, pursuance
of a legitimate aim in the public interest and striking of a fair
balance between the general interest of the community and the
applicant’s right to the peaceful enjoyment of his possessions
(see, for a detailed description of those principles, Broniowski,
cited above, §§ 147-151).
- As
regards the lawfulness requirement, the Court notes that the
application of the Base Value Act and the Government-approved
conversion regulation, which were together the necessary elements for
performing the conversion of 1982 bonds into Russian promissory
notes, was repeatedly suspended through the Government regulations
and federal laws for each successive year (see paragraphs 18 and 22
above). It is therefore satisfied that an interference with, or a
restriction on, the exercise of the applicant’s right to the
peaceful enjoyment of his possessions was “provided for by law”
within the meaning of Article 1 of Protocol No. 1.
- As
the Court has already observed in the Malysh and Others
judgment with regards to the existence of a legitimate aim in the
public interest, in the 1990s the Russian State went through a
tumultuous transition from a State-controlled to a market economy.
Its economic well-being was further jeopardised by the financial
crisis of 1998 and the sharp devaluation of the national currency.
Even though it has achieved relative prosperity and wealth in recent
years, the Court agrees that defining budgetary priorities in terms
of favouring expenditure on pressing social issues to the detriment
of claims with a purely pecuniary nature was a legitimate aim in the
public interest (see Malysh and Others, § 80, cited
above).
- On
the question of the striking of a fair balance between the general
interest and the applicant’s rights, the Court reiterates that
the rule of law underlying the Convention and the principle of
lawfulness in Article 1 of Protocol No. 1 require States not only to
respect and apply, in a foreseeable and consistent manner, the laws
they have enacted, but also, as a corollary of this duty, to ensure
the legal and practical conditions for their implementation (see
Broniowski, cited above, §§ 147 and 184). In the
context of the present case, those principles required the Russian
State to fulfil in good time, in an appropriate and consistent
manner, the legislative promises it had made in respect of claims
arising out of the 1982 bonds (compare Malysh and Others, §
82, cited above). In particular, it was incumbent on the authorities
to legislate on the conditions for implementation of the
bond-bearers’ entitlement, with a view to satisfying the
undertaking that had been created through the enactment of the
Savings Protection Act and follow-up legislation.
- In
the period that immediately followed the enactment of the Savings
Protection Act in 1995, the Russian Parliament promptly enacted a
number of legislative acts that were required for its successful
implementation, such as the 1996 Promissory Value Act, the 1999 Base
Value Act, and the 1999 Conversion Procedure Act. Those acts laid
down a legislative framework for settlement of bond-bearers’
entitlements, which had been continuously recognised as part of the
State’s internal debt. In early 2000, the Russian Government
adopted a regulation on the application of the conversion procedure.
However, for reasons that remain unclear to the Court, as no
explanation was put forward by the Government, starting from 2003 the
application and implementation of the existing legal framework
governing redemption of the 1982 bonds was repeatedly suspended, year
by year. The information available to the Court does not allow it to
find that the Russian Government took any measures in that period
with a view to satisfying the claims arising out of the bonds. An
appropriate balancing exercise determining the exact amount that
would be required to settle the debt under the bonds in relation to
other priority expenses could not have been possible in the absence
of crucial figures, such as the quantity and total valuation of the
remaining bonds. While the Court agrees that the radical reform of
Russia’s political and economic system, as well as the state of
the country’s finances, may have justified stringent financial
limitations on rights of a purely pecuniary nature, it finds that the
Russian Government were not able to adduce satisfactory grounds
justifying, in terms of Article 1 of Protocol No. 1, the continuous
failure over many years to implement an entitlement conferred on the
applicant by Russian legislation (compare Malysh and Others, §
83, cited above).
- As
regards the conduct of the applicant, the Court has no competence
ratione temporis to examine the options that were available to
the bond-bearers prior to the ratification of the Convention and the
Protocol. It notes, however, that since the enactment of the Savings
Protection Act he has had a legitimate expectation of obtaining some
form of compensation for, or redemption of, his bonds. He did not
remain passive, but rather displayed an active attitude by making
requests to the competent authorities and lodging claims with the
domestic courts. In these circumstances, it cannot be said that the
applicant was responsible for, or culpably contributed to, the state
of affairs which he complained about (compare Broniowski, §
181, and Malysh and Others, § 84, both cited above).
Rather, as the Court has found on the strength of the evidence before
it, the hindrance to the peaceful enjoyment of his possessions was
solely attributable to the respondent State.
- On
balance, the Court considers that the Russian authorities, by
imposing successive limitations on the application of the legislative
and regulatory provisions establishing the basis for the applicant’s
right to redemption of the 1982 bonds and by failing for years to put
into practice the procedure for implementation of that entitlement,
kept the applicant in a state of uncertainty, which was incompatible
in itself with the obligation arising under Article 1 of Protocol No.
1 to secure the peaceful enjoyment of possessions, notably with the
duty to act in good time and in an appropriate and consistent manner
where an issue of general interest is at stake (see Broniowski,
§§ 151 and 185, and Malysh and Others, § 85,
both cited above).
- There
has therefore been a violation of Article 1 of Protocol No. 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If 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.”
A. Pecuniary damage
- The
applicant submitted that he was the holder of 1982 bonds with a total
nominal value of 19,845 “promissory roubles”. Pursuant to
the Conversion Procedure Act, interest on the converted securities
was to accrue at a rate no lower than ten per cent per annum and the
current value of his bonds amounted to 39,690 “promissory
roubles”. In January 2003, the “promissory rouble”
was equivalent to 32 Russian roubles (RUB); its current value is
unknown. Multiplying the last known value of the “promissory
rouble” by the current nominal value of his bonds and making an
adjustment for the time that lapsed since 2003, the applicant
assessed his claim in respect of pecuniary damage at RUB 1,500,000.
- The
Government submitted that no compensation should be awarded to the
applicant because there had been no violation of his rights.
- The
Court considers that the question of the application of Article 41
in respect of pecuniary damage is not ready for decision.
Accordingly, it shall be reserved and the subsequent procedure fixed,
having regard to any agreement which might be reached between the
Government and the applicant (Rule 75 § 1 of the Rules of
Court).
B. Non-pecuniary damage
- The
applicant asked the Court to determine the appropriate award in
respect of non-pecuniary damage.
- The
Government submitted that the applicant had failed to produce any
evidence of non-pecuniary damage.
- The Court reiterates its constant position that an
applicant cannot be required to furnish any proof of non-pecuniary
damage he or she has sustained (see, among many others, Antipenkov
v. Russia, no. 33470/03, § 82, 15 October 2009;
Pshenichnyy v. Russia, no. 30422/03, § 35, 14 February
2008; Garabayev v. Russia, no. 38411/02, § 113, ECHR
2007 VII (extracts); and Gridin v. Russia,
no. 4171/04, § 20, 1 June 2006). It further considers that the
applicant must have suffered anxiety and frustration on account of
the authorities’ prolonged failure to devise a procedure for
settlement of his entitlement. Making its assessment on an equitable
basis, the Court awards the applicant EUR 1,800 in respect of
non-pecuniary damage, plus any tax that may be chargeable on it.
C. Costs and expenses
- The
applicant did not claim any costs and expenses. Accordingly, there is
no call to make an award under this head.
D. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the application admissible;
- Holds that there has been a violation of Article
1 of Protocol No. 1;
- Holds that as far as any pecuniary damage is
concerned, the question of the application of Article 41 is not ready
for decision and accordingly:
(a) reserves
the said question;
(b) invites
the Government and the applicant to submit, within six months of the
date on which the judgment becomes final in accordance with Article
44 § 2 of the Convention, their written observations on the
matter and, in particular, to notify the Court of any agreement that
they may reach;
(c) reserves
the further procedure and delegates to the President of the
Chamber the power to fix the same if need be;
- Holds
(a) that
the respondent State is to pay the applicant, within three months of
the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 1,800 (one thousand
eight hundred euros) in respect of non-pecuniary damage, plus any tax
that may be chargeable, to be converted into Russian roubles at the
rate applicable on the date of settlement;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points.
Done in English, and notified in writing on 2 December 2010, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
André Wampach Christos Rozakis
Deputy
Registrar President
In accordance with Article 45 § 2 of the Convention and Rule 74
§ 2 of the Rules of Court, the concurring opinion of Judge
Malinverni is annexed to this judgment.
C.L.R.
A.M.W.
CONCURRING OPINION OF JUDGE MALINVERNI
(Translation)
In
the present case I joined the rest of my colleagues in finding a
violation of Article 1 of Protocol No. 1. However, I have
considerable difficulty in subscribing to the reasoning which led the
Court to that conclusion.
In
paragraph 46 of the judgment, the Court points out that the present
case could be considered either in terms of interference with the
applicant’s right to the peaceful enjoyment of his possessions
or in terms of the State’s positive obligations, given that
“the boundaries between the State’s positive and negative
obligations under Article 1 of Protocol No. 1 do not lend themselves
to precise definition”.
One
can only agree with this statement. However, I am of the view that,
when faced with a choice between these two approaches, the Court must
opt for whichever it considers more appropriate, and then adhere to
its choice.
The
judgment does not do this, however. In paragraph 47 already, it
states that “[the] situation may well be examined in terms of a
hindrance to the effective exercise of the right protected by Article
1 of Protocol No. 1 or in terms of a failure to secure the
implementation of that right”.
Paragraphs
48 to 50 favour the interference approach, as they examine whether
the conditions of lawfulness, pursuance of a legitimate aim and
proportionality were met.
Paragraph
51, meanwhile, sees the Court revert to the positive obligations
approach, stating that “[i]n the context of the present case,
those principles required the Russian State to fulfil in good time,
in an appropriate and consistent manner, the legislative promises it
had made in respect of claims arising out of the 1982 bonds”.
The same applies to paragraphs 52 to 54.
I
find this shifting between one approach and another unsatisfactory.
In my view, the present case should have been examined solely in
terms of the State’s positive obligation to enact legislation.
As the judgment itself states, “although the debt arising out
of the bonds had been recognised by the Russian State in a series of
legislative acts”, it was “the absence of implementing
regulations” which made “redemption of the bonds
impossible” (paragraph 45).
The
Russian Supreme Court, moreover, did not err in refusing to examine
the applicant’s claim on the ground that “[b]y virtue of
the constitutional principle of separation of powers, the court may
not, in civil proceedings, require the Government of the Russian
Federation to enact a specific legal act...” (paragraph 12).
