BAILII is celebrating 24 years of free online access to the law! Would you
consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it
will have a significant impact on BAILII's ability to continue providing free
access to the law.
Thank you very much for your support!
[New search]
[Contents list]
[Printable RTF version]
[Help]
FOURTH
SECTION
DECISION
AS TO THE
ADMISSIBILITY OF
Application no.
60642/08
by Emina ALIŠIĆ and
others
against Bosnia and Herzegovina, Croatia, Serbia,
Slovenia and the former Yugoslav Republic of Macedonia
The
European Court of Human Rights (Fourth Section),
sitting on 17 October 2011 as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Nina Vajić,
Boštjan M. Zupančič,
Ljiljana
Mijović,
Dragoljub Popović,
Mirjana
Lazarova Trajkovska, judges,
and Lawrence
Early, Section
Registrar,
Having
regard to the above application lodged on 30 July 2005,
Having
regard to the observations submitted by the parties,
Having
deliberated, decides as follows:
THE FACTS
- The
applicants, Ms Emina Ališić, Mr Aziz SadZak
and Mr Sakib Šahdanović, are citizens of Bosnia and
Herzegovina who were born in 1976, 1949 and 1952, respectively, and
live in Germany. The first applicant is also a German citizen. They
are represented before the Court by Mr B. Mujčin. The
Governments of Bosnia and Herzegovina, Croatia, Serbia, Slovenia and
the former Yugoslav Republic of Macedonia (“the Governments”)
are represented by their Agents, Ms M. Mijić,
Ms Š. StaZnik, Mr S. Carić, Ms N. Pintar Gosenca and
Ms R. Lazareska Gerovska, respectively.
A. The circumstances of the case
- The
facts of the case, as submitted by the parties, may be summarised as
follows.
- Before the dissolution of the Socialist Federal
Republic of Yugoslavia (“the SFRY”), Ms Ališić
and Mr SadZak deposited foreign currency in Ljubljanska Banka
Sarajevo and Mr Šahdanović in the Tuzla branch of
Investbanka. It would appear that the balance in their accounts is
4,715.56 German marks (DEM), DEM 129,874.30 and DEM 63,880.44,
respectively. Mr Šahdanović also has 73 US dollars (USD)
and 4 Austrian schillings in his accounts.
B. Relevant domestic law and practice
1. The SFRY
- Until
the 1989/90 economic reforms, the commercial banking system consisted
of basic and associated banks. Basic banks were as a rule founded and
controlled by socially-owned companies
based in the same region (that is, in one of the Republics –
Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and
Slovenia – or Autonomous Provinces – Kosovo and
Vojvodina). The founders of the Ljubljanska Banka Sarajevo,
headquartered in Bosnia and Herzegovina, were 16 socially-owned
companies from Bosnia and Herzegovina (such as Energoinvest Sarajevo,
Gorenje Bira Bihać, Šipad Sarajevo,
Velepromet Visoko, Đuro Salaj Mostar) and Pamučni
kombinat Vranje from Serbia. At least two basic banks could form an
associated bank, while preserving their separate legal personality.
In 1978, for instance, Ljubljanska Banka Sarajevo, Ljubljanska Banka
Zagreb, Ljubljanska Banka Skopje and a number of other basic banks
founded an associated bank – Ljubljanska Banka Ljubljana.
Similarly, in 1978 Investbanka and some other basic banks founded
Beogradska udruZena Banka Beograd. In the SFRY there were more than
150 basic and 9 associated banks (Jugobanka Beograd, Beogradska
UdruZena Banka Beograd, Vojvođanska Banka Novi Sad, Kosovska
Banka Priština, UdruZena Banka Hrvatske Zagreb, Ljubljanska
Banka Ljubljana, Privredna Banka Sarajevo, Stopanska Banka Skopje and
Investiciona Banka Titograd).
- Being hard-pressed for hard currency, the SFRY made it
attractive for its expatriates and other citizens to deposit foreign
currency with banks based in the SFRY. Such deposits earned high
interest (the annual interest rate often exceeded 10%). Moreover,
they were guaranteed by the State (see, for example, section 14(3) of
the Foreign-Currency Transactions Act 1985
and section 76(1) of the Banks and Other Financial Institutions Act
1989).
The State guarantee was to be activated in case of the bankruptcy or
“manifest insolvency” of a bank at the request of that
bank (see section 18 of the Banks and Other Financial Institutions
Insolvency Act 1989
and the relevant secondary legislation).
None of the banks under consideration in the present case made such a
request. It should be emphasised that savers could not request the
activation of the State guarantee on their own.
- Beginning
in the mid 1970s, the commercial banks incurred foreign-exchange
losses because the dinar exchange rate depreciated. The SFRY
therefore introduced a system for “redepositing” of
foreign currency, allowing commercial banks to transfer citizens’
foreign-currency deposits to the National Bank of Yugoslavia (“the
NBY”), which assumed the currency risk (see section 51(2) of
the Foreign-Currency Transactions Act 1977).
Although the system was optional, commercial banks did not have
another option as they were not allowed to maintain foreign-currency
accounts with foreign banks, as was necessary to make payments
abroad, nor were they allowed to grant foreign-currency loans.
Virtually all foreign currency was therefore redeposited with the
NBY. It should be emphasised that such redepositing was as a rule a
paper transaction: commercial banks actually transferred to the NBY
less than USD 2 billion, but their claims against the NBY arising
from that scheme amounted to USD 12 billion (see Kovačić and
Others v. Slovenia [GC], nos. 44574/98, 45133/98 and 48316/99, §§
36 and 39, ECHR 2008-...; see also decision AP 164/04 of the
Constitutional Court of Bosnia and Herzegovina of 1 April 2006, §
53).
- Commercial
banks wishing to participate in the redepositing scheme had to sign
agreements with the national banks in their territorial units (for
example, Investbanka, based in Serbia, had such an agreement with the
National Bank of Serbia). Pursuant to such agreements, commercial
banks had to transfer all newly received foreign currency to the NBY.
At first, Ljubljanska Banka Sarajevo made such transfers via
Ljubljanska Banka Ljubljana (in accordance with a 1981 agreement
between the National Bank of Bosnia and Herzegovina and Ljubljanska
Banka Sarajevo). Later, it made such transfers directly (in
accordance with a 1986 agreement between the same parties). Banks
were granted dinar loans (initially, interest-free) in return for the
value of the transferred foreign currency. The dinars thus received
were then used by commercial banks to give credits, at interest rates
below the rate of inflation, to their founders and other
socially-owned companies headquartered, as a rule, in the same
territorial unit (for instance, in the case of Ljubljanska Banka
Sarajevo, such credits were given to Polietilenka Bihać, Gorenje
Bira Bihać, Šipad Šator Glamoč, Bilećanka
Bileća, UPI Sarajevo, Soko Komerc Mostar, Rudi Čajavec
Banja Luka, Velepromet Visoko, and so on).
- In accordance with the Civil Obligations Act 1978
savers were entitled to collect their deposits at any time, together
with accrued interest, from commercial banks (see sections 1035 and
1045 of that Act). When a saver whose foreign currency had been
redeposited with the NBY wished to withdraw foreign currency from his
or her account with a commercial bank, the commercial bank would
withdraw the same amount of foreign currency from the NBY and at the
same time repay the amount of dinars actually received when
redepositing that person’s foreign currency. Given the rapid
inflation, the amount to be refunded by commercial banks was
negligible.
- In
1988 the redepositing system was brought to an end (by virtue of
section 103 of the Foreign-Currency Transactions Act 1985, as amended
on 15 October 1988). Banks were given permission to open
foreign-currency accounts with foreign banks. Ljubljanska Banka
Sarajevo, like other banks, seized that opportunity and deposited in
total USD 13.5 million with foreign banks abroad in the period from
October 1988 until December 1989.
- Within the framework of the 1989/90 reforms, the SFRY
abolished the system of basic and associated banks described above.
This shift in the banking regulations allowed some basic banks to opt
for an independent status, while other basic banks became branches
(without legal personality) of the former associated banks to which
they had formerly belonged. On 1 January 1990 Ljubljanska Banka
Sarajevo thus became a branch (without separate legal personality) of
Ljubljanska Banka Ljubljana and the latter took over the former’s
rights, assets and liabilities. By contrast, Investbanka became an
independent bank with its headquarters in Serbia and a number of
branches in Bosnia and Herzegovina (including the Tuzla branch at
which Mr Šahdanović had accounts). Moreover, the
convertibility of the dinar was declared and very favourable exchange
rates were fixed by the NBY. It led to a massive withdrawal of
foreign currency from commercial banks. The SFRY therefore resorted
to emergency measures restricting to a large extent the withdrawals
of foreign-currency deposits (see section 71 of the Foreign-Currency
Transactions Act 1985, as amended on 21 December 1990,
providing that as of 22 December 1990 savers could use their deposits
to pay for imported goods or services for their own or close
relatives’ needs, to purchase foreign-currency bonds, to make
testamentary gifts for scientific or humanitarian purposes, or to pay
for life insurance with a local insurance company – before,
savers could use their deposits also to pay for goods and services
abroad; see also section 3 of a decision of the SFRY Government of
April 1991, which was in force until 8 February 1992, and
section 17c of a decision of the NBY of January 1991, which the
Constitutional Court of the SFRY declared unconstitutional on
22 April 1992, limiting the amount which savers could
withdraw or use for the above purposes to DEM 500 at a time, but not
more than DEM 1,000 per month).
It would appear, however, that the above restrictions did not apply
to SFRY citizens living abroad, such as the applicants in this case
(see sections 8(6) and 17 of the decision of the NBY of 17 January
1991 mentioned above).
- The
dissolution of the SFRY took place in 1991/92: the dates of
succession were 8 October 1991 in respect of Croatia and Slovenia,
17 November 1991 in respect of the former Yugoslav Republic of
Macedonia, 6 March 1992 in respect of Bosnia and Herzegovina and
27 April 1992 in respect of the Federal Republic of Yugoslavia
(see Opinion No. 11 of the Arbitration Commission of the
International Conference on the Former Yugoslavia – “the
Badinter Commission”).
- In
all successor States, foreign currency deposited before the
dissolution of the SFRY is commonly referred to as “old”
foreign-currency savings.
2. Bosnia and Herzegovina
(a) Law and practice concerning “old”
foreign-currency savings in general
- In
1992 Bosnia and Herzegovina took over the statutory guarantee for
“old” foreign-currency savings from the SFRY (see section
6 of the SFRY Legislation Application Act 1992).
According to the National Bank of Bosnia and Herzegovina, the
guarantee covered “old” foreign-currency savings in
domestic banks only (see its report 63/94 of 8 August 1994).
- While
during the war all “old” foreign-currency savings
remained frozen, withdrawals were exceptionally allowed on
humanitarian grounds and in some other special cases (pursuant to
decisions of the Presidency of the Republic of Bosnia and Herzegovina
of February 1993,
the National Bank of the Republika Srpska of June
1993
and the Parliament of the Republic of Bosnia and Herzegovina
of March 1995,
as amended in June 1995).
- After
the 1992-95 war, each of the Entities (the Federation of Bosnia and
Herzegovina – “the FBH” – and the Republika
Srpska) enacted its own legislation on “old”
foreign-currency savings. Only the FBH legislation is relevant in the
present case, given that the branches in issue are situated in that
Entity. In 1997 the FBH assumed liability for “old”
foreign-currency savings in banks and branches placed in its
territory (see section 3(1) of the Claims Settlement Act 1997
and the Non-Residents’ Claims Settlement Decree 1999).
Such savings remained frozen, but they could be used to purchase
State-owned flats and companies under certain conditions (see section
18 of the Claims Settlement Act 1997, as amended in August 2004).
- In
2004 the FBH enacted new legislation. It undertook to repay “old”
foreign-currency savings in domestic banks in that Entity, regardless
of the citizenship of the depositor concerned. Its liability for such
savings in the local branches of Ljubljanska Banka Ljubljana and
Investbanka were expressly excluded (see section 9(2) of the
Settlement of Domestic Debt Act 2004).
- In 2006 the liability for “old”
foreign-currency savings in domestic banks passed from the Entities
to the State. Liability for such savings in the local branches of
Ljubljanska Banka Ljubljana and Investbanka are again expressly
excluded, but the State must help the clients of those branches to
obtain the payment of their “old” foreign-currency
savings from Slovenia and Serbia, respectively (section 2 of the Old
Foreign-Currency Savings Act 2006).
(b) Status of the Sarajevo branch of
Ljubljanska Banka Ljubljana
- As
stated above, in January 1990 Ljubljanska Banka Sarajevo became a
branch of Ljubljanska Banka Ljubljana and the latter took over the
former’s rights, assets and liabilities. Pursuant to the
companies register, the Sarajevo branch acted on behalf and for the
account of the parent bank.
- A
domestic bank, Ljubljanska Banka Sarajevo, was founded in 1993. It
assumed the liability of Ljubljanska Banka Ljubljana for “old”
foreign-currency savings at the Sarajevo branch and the related
claims against the NBY. In 1994 the National Bank of Bosnia and
Herzegovina carried out an inspection and noted many shortcomings.
First of all, its management had not been properly appointed and it
was not clear who its shareholders were. The National Bank therefore
appointed a director of Ljubljanska Banka Sarajevo. Secondly, as a
domestic bank, Ljubljanska Banka Sarajevo could not have assumed the
liability of a foreign bank for foreign-currency savings, as this
would impose new financial obligations on the State (“old”
foreign-currency savings in the Sarajevo branch of the foreign
Ljubljanska Banka Ljubljana would become a liability of a domestic
bank and, by this mere fact, would be covered by the domestic
guarantee for such savings). The National Bank ordered that a closing
balance sheet for the Sarajevo branch of Ljubljanska Banka Ljubljana
as at 31 March 1992 be drawn up urgently and that its relations with
the headquarters be defined. However, this was not done. Ljubljanska
Banka Sarajevo and the domestic authorities continued to act as if
that bank were indeed the successor to the Sarajevo branch of
Ljubljanska Banka Ljubljana: Ljubljanska Banka Sarajevo administered
the savings of the customers of that branch and allowed withdrawals
from the accounts at that branch on humanitarian grounds; similarly,
customers of the Sarajevo branch used their savings in the
privatisation process pursuant to the Claims Settlement Act 1997 in
the FBH (as confirmed by the FBH Privatisation Agency in its letter
to the Slovenian Embassy in Sarajevo of 26 July 2002).
- In
2003 the FBH Banking Agency placed the domestic Ljubljanska Banka
Sarajevo under its provisional administration for the reason that it
had undefined relations with the foreign Ljubljanska Banka Ljubljana.
- On
11 November 2004 the Sarajevo Municipal Court decided that the
domestic Ljubljanska Banka Sarajevo was not the successor to the
Sarajevo branch of Ljubljanska Banka Ljubljana and was not liable for
“old” foreign-currency savings in that branch.
- In
May 2006 Ljubljanska Banka Sarajevo sold its assets and let out on a
five-year lease premises and equipment belonging to the Sarajevo
branch of Ljubljanska Banka Ljubljana to Validus, an investment firm
from Croatia. Validus, in return, undertook to pay debts of
Ljubljanska Banka Sarajevo. The FBH Government then endorsed that
agreement, while making it clear that all premises (including the
premises let out to Validus) as well as the archives of Ljubljanska
Banka Ljubljana’s Sarajevo branch remained under the care of
the FBH Ministry of Finance pending the final determination of the
status of that branch.
- Following
failed attempts to liquidate the domestic Ljubljanska Banka Sarajevo,
in February 2010 the competent court made a bankruptcy order against
that bank. The bankruptcy proceedings are still pending.
(c) Status of the Tuzla branch of
Investbanka
- The Tuzla branch of Investbanka,
unlike the Sarajevo branch of Ljubljanska Banka Ljubljana, has at all
times had the status of a branch without legal personality. It would
appear that it closed at the outset of the 1992-95 war and that it
has never resumed its activities.
- In
January 2002 the competent court in Serbia made a bankruptcy order
against Investbanka. The Serbian authorities then sold the premises
of the Tuzla and other branches of Investbanka situated in the FBH
(the premises of its branches situated in Republika Srpska had been
sold already in 1999). The bankruptcy proceedings are still pending.
- In
April 2010 the FBH Government placed the premises and archives of the
branches of Investbanka situated in the FBH under the care of the FBH
Ministry of Finance until September 2011, but it would appear that
Investbanka no longer has any premises or archives in the FBH.
3. Croatia
- Croatia
agreed to repay “old” foreign-currency savings of its
citizens in domestic banks (including their foreign branches) and
“old” foreign-currency savings which had been transferred
from local branches of foreign banks to domestic banks at the savers’
request (section 14 of the Old Foreign-Currency Savings Act 1993
and the relevant secondary legislation).
The Croatian Government stated that the legislation mentioned above
also covered “old” foreign-currency savings of foreign
citizens, but this is contrary to decisions of the Supreme Court of
Croatia Rev 3015/1993-2 of March 1994 and Rev 3172/1995-2 and
Rev 1747 /1995-2 of June 1996)
holding that građanin, the term used in that legislation,
meant a Croatian citizen. It is therefore unclear on what basis the
Croatian Government repaid “old” foreign-currency savings
in Bosnian-Herzegovinian branches of Croatian banks: whether all the
savers had Croatian citizenship or whether it was on the basis of an
ad hoc agreement.
- Some
savers of Ljubljanska Banka Ljubljana’s Zagreb branch have been
successful in obtaining their “old” foreign-currency
savings from a forced sale of assets of that branch located in
Croatia (see decisions of the Osijek Municipal Court of 8 April 2005
and 15 June 2010).
4. Serbia
- Serbia undertook to repay “old”
foreign-currency savings in local branches of domestic banks of its
citizens and of citizens of all States other than the successor
States of the SFRY. Savings of citizens of other successor States in
local branches of domestic banks and savings in domestic
banks’ branches in other successor States remained frozen
pending the succession negotiations (section 21
of the Old Foreign-Currency Savings Act 2002).
All proceedings concerning “old”
foreign-currency savings ceased by virtue of law (section 36 of that
Act).
- In
January 2002 a court in Serbia made a
bankruptcy order against Investbanka. As a result, the State
guarantee on “old” foreign-currency savings was activated
(see section 18 of the Banks and Other Financial Institutions
Insolvency Act 1989 and section 135 of the Foreign-Currency
Transactions Act 1995).
The bankruptcy proceedings are still pending.
5. Slovenia
- Slovenia
agreed to repay “old” foreign-currency savings in
domestic banks and local branches of foreign banks, regardless of the
citizenship of the savers (section 1 of the Old Foreign-Currency
Savings Act 1993).
- After fruitless attempts to register the Sarajevo
branch of Ljubljanska Banka Ljubljana as a separate bank (see the
correspondence between the NBY and the National Bank of Bosnia and
Herzegovina of October 1991 stressing the unlawfulness of such
proposals because Slovenia had meanwhile become an independent State
and Ljubljanska Banka Ljubljana a foreign bank),
Slovenia first nationalised and then, in 1994, restructured
Ljubljanska Banka Ljubljana itself.
A new bank, Nova Ljubljanska Banka, took over the old
Ljubljanska Banka’s domestic assets and liabilities. The old
Ljubljanska Banka retained the liability for “old”
foreign-currency savings in its branches in the other successor
States and the related claims against the NBY.
- In 1997 all proceedings
concerning “old” foreign-currency savings in the old
Ljubljanska Banka’s branches in the other successor States were
stayed pending the outcome of the succession negotiations.
In December 2009 the Slovenian Constitutional Court, upon a
constitutional initiative of two savers at the Zagreb branch of the
old Ljubljanska Banka, declared that measure unconstitutional.
More than 70 sets of proceedings concerning “old”
foreign-currency savings in the old Ljubljanska Banka’s
Sarajevo and Zagreb branches were then resumed. They are still
pending.
6. The former Yugoslav Republic of Macedonia
- This
respondent State agreed to repay “old”
foreign-currency savings in domestic banks and local branches of
foreign banks, regardless of the citizenship of the savers.
C. Relevant international law and practice
1. Relevant international law concerning State
succession
- The matter of State succession is regulated by
customary rules, partly codified in the 1978 Vienna Convention on
Succession of States in respect of Treaties and the 1983 Vienna
Convention on Succession of States in respect of State Property,
Archives and Debts.
Although the latter treaty is not yet in force and only three
respondent States are parties to it as of today (Croatia, Slovenia
and the former Yugoslav Republic of Macedonia), it is a
well-established principle of international law that, even if a State
has not ratified a treaty, it may be bound by one of its provisions
in so far as that provision reflects customary international law,
either codifying it or forming a new customary rule (see Cudak
v. Lithuania [GC], no. 15869/02, § 66, 23 March 2010,
and judgment of the International Court of Justice in the North
Sea Continental Shelf Cases of 20 February 1969, §
71).
- The fundamental rule is that States must together
settle all aspects of succession by agreement (see Opinion No. 9 of
the Badinter Commission, § 4, and Article 6 of the 2001
Guiding Principles on State Succession in Matters of Property and
Debts of the Institute of International Law). If one of the States
concerned refused to cooperate, it would be in breach of that
fundamental obligation and would be liable internationally (see
Opinion No. 12 of the Badinter Commission, § 2). While
it is not required that each category of property and debts of a
predecessor State be divided in equitable proportions, an overall
outcome must be an equitable division (Article 41 of the 1983 Vienna
Convention; Opinion No. 13 of the Badinter Commission; and Articles
8, 9 and 23 of the 2001 Guiding Principles).
2. Agreement on Succession Issues
- This
Agreement was the result of nearly ten years of intermittent
negotiations under the aegis of the International Conference on the
former Yugoslavia and the High Representative (appointed pursuant to
Annex 10 to the General Framework Agreement for Peace in Bosnia and
Herzegovina). It was signed on 29 June 2001 and entered into force
between Bosnia and Herzegovina, Croatia, the Federal Republic of
Yugoslavia (succeeded in 2006 by Serbia), Slovenia and the former
Yugoslav Republic of Macedonia on 2 June 2004.
- The issue of “old” foreign-currency
savings was a contentious one. First, the successor States had
different views as to whether that issue should be dealt with as a
private-law issue between savers and banks under Annex G (Private
Property and Acquired Rights) or as a financial liability of the SFRY
under Annex C (Financial Assets and Liabilities). The latter view
eventually prevailed.
Second, the successor States could not agree whether the guarantees
of the SFRY of “old” foreign-currency savings should be
taken over by the State in which the bank in issue had its head
office or by the State in the territory of which the deposit had been
made. That question was eventually left open, but the successor
States agreed to negotiate it, without delay, under the auspices of
the Bank for International Settlements (“the BIS”). The
relevant provisions of the Agreement read as follows:
Article 2 § 3 (a) of Annex C
“Other financial liabilities [of the SFRY]
include:
(a) guarantees by the SFRY or its National Bank of
Yugoslavia of hard currency savings deposited in a commercial bank
and any of its branches in any successor State before the date on
which it proclaimed independence; ...”
Article 7 of Annex C
“Guarantees by the SFRY or its NBY of hard
currency savings deposited in a commercial bank and any of its
branches in any successor State before the date on which it
proclaimed its independence shall be negotiated without delay taking
into account in particular the necessity of protecting the hard
currency savings of individuals. This negotiation shall take place
under the auspices of the Bank for International Settlements.”
- In
2001/2 four rounds of negotiations regarding the distribution of the
SFRY’s guarantees of “old” foreign-currency savings
were held. As the successor States could not reach an agreement, in
September 2002 the BIS informed them that the expert, Mr Hans Meyer,
had decided to terminate his involvement in the matter and that the
BIS had therefore no further role to play in this regard. It
concluded as follows:
“If, however, all five successor States were to
decide at a later stage to enter into new negotiations about
guarantees of hard currency savings deposits and were to seek the
BIS’ assistance in this regard, the BIS would be prepared to
give consideration to providing such assistance, under conditions to
be agreed.”
It
would appear that four successor States (all but Croatia) notified
the BIS of their willingness to continue the negotiations shortly
thereafter. Croatia did so in October 2010 and received a response in
November 2010 which, in so far as relevant, reads as follows:
“...the BIS did recently reconsider this issue and
believes that its contribution to any new round of negotiations, as
part of a good offices role, could not bring added value, also
bearing in mind the amount of time which lapsed since the last round
of negotiations, as well as its current priorities in the field of
monetary and financial stability. However, we would like to emphasise
that the organisation of the bi-monthly meetings in Basel offers the
practical opportunity for the governors of the successor States to
discuss this matter between them on an informal basis at the BIS.”
- It
should be noted that a comparable issue of the SFRY’s
guarantees of savings deposited with the Post Office Savings Bank and
its branches had been settled outside the negotiations of the
Agreement on Succession Issues, in that each of the States had taken
over the guarantees as to the branches in its territory.
- Pursuant
to Article 4 of this Agreement, a Standing Joint Committee of senior
representatives of the successor States was established to monitor
the effective implementation of the Agreement and to serve as a forum
in which issues arising in the course of its implementation could be
discussed. It has so far met three times: in Skopje in 2005, in
Ljubljana in 2007 and in Belgrade in 2009. It would appear that
Slovenia requested every time that the question of “old”
foreign-currency savings be put on the agenda and that the other
successor States rejected that request. The fourth meeting of the
Standing Joint Committee was to be held in Sarajevo in 2010, but it
would appear that it has not yet taken place.
- The
following provisions of this Agreement are also relevant in this
case:
Article 5
“(1) Differences which may arise over the
interpretation and application of this Agreement shall, in the first
place, be resolved in discussion among the States concerned.
(2) If the differences cannot be resolved in such
discussions within one month of the first communication in the
discussion the States concerned shall either
(a) refer the matter to an independent person of
their choice, with a view to obtaining a speedy and authoritative
determination of the matter which shall be respected and which may,
as appropriate, indicate specific time-limits for actions to be
taken; or
(b) refer the matter to the Standing Joint
Committee established by Article 4 of this Agreement for resolution.
(3) Differences which may arise in practice over
the interpretation of the terms used in this Agreement or in any
subsequent agreement called for in implementation of the Annexes to
this Agreement may, additionally, be referred at the initiative of
any State concerned to binding expert solution, conducted by a single
expert (who shall not be a national of any party to this Agreement)
to be appointed by agreement between the parties in dispute or, in
the absence of agreement, by the President of the Court of
Conciliation and Arbitration within the OSCE. The expert shall
determine all questions of procedure, after consulting the parties
seeking such expert solution if the expert considers it appropriate
to do so, with the firm intention of securing a speedy and effective
resolution of the difference.
(4) The procedure provided for in paragraph (3) of
this Article shall be strictly limited to the interpretation of terms
used in the agreements in question and shall in no circumstances
permit the expert to determine the practical application of any of
those agreements. In particular the procedure referred to shall not
apply to
(a) The Appendix to this Agreement;
(b) Articles 1, 3 and 4 of Annex B;
(c) Articles 4 and 5(1) of Annex C;
(d) Article 6 of Annex D.
(5) Nothing in the preceding paragraphs of this
Article shall affect the rights or obligations of the Parties to the
present Agreement under any provision in force binding them with
regard to the settlement of disputes.”
Article 9
“This Agreement shall be implemented by the
successor States in good faith in conformity with the Charter of the
United Nations and in accordance with international law.”
3. International practice concerning a pactum
de negotiando in inter-State cases
- The
obligation flowing from a pactum de negotiando, to negotiate
with a view to concluding an agreement, must be fulfilled in good
faith according to the fundamental principle pacta sunt servanda.
- The
International Court of Justice stated in its judgment of 20 February
1969 in the North Sea Continental Shelf Cases (§ 85):
“...the parties are under an obligation to enter
into negotiations with a view to arriving at an agreement, and not
merely to go through a formal process of negotiation as a sort of
prior condition for the automatic application of a certain method of
delimitation in the absence of agreement; they are under an
obligation so to conduct themselves that the negotiations are
meaningful, which will not be the case when either of them insists
upon its own position without contemplating any modifications of
it...”
- The decision of the Arbitral Tribunal for the
Agreement on German External Debts in the case of Greece v. the
Federal Republic of Germany of 26 January 1972 reads, in so far as
relevant, as follows (§§ 62-65):
“However, a pactum de negotiando is also
not without legal consequences. It means that both sides would make
an effort, in good faith, to bring about a mutually satisfactory
solution by way of a compromise, even if that meant the
relinquishment of strongly held positions earlier taken. It implies a
willingness for the purpose of negotiation to abandon earlier
positions and to meet the other side part way. The language of the
Agreement cannot be construed to mean that either side intends to
adhere to its previous stand and to insist upon the complete
capitulation of the other side. Such a concept would be inconsistent
with the term ‘negotiation’. It would be the very
opposite of what was intended. An undertaking to negotiate involves
an understanding to deal with the other side with a view to coming to
terms. Though the Tribunal does not conclude that Article 19 in
connection with paragraph II of Annex I absolutely obligates either
side to reach an agreement, it is of the opinion that the terms of
these provisions require the parties to negotiate, bargain, and in
good faith attempt to reach a result acceptable to both parties and
thus bring an end to this long drawn out controversy...
The agreement to negotiate the disputed monetary claims,
in this case, necessarily involves a willingness to consider a
settlement. This is true, even though the dispute extends not only to
the amount of the claims but to their existence as well. The
principle of settlement is not thereby affected. Article 19 does not
necessarily require that the parties resolve the various legal
questions on which they have disagreed. For example, it does not
contemplate that both sides are expected to see eye to eye on certain
points separating them, such as whether the disputed claims legally
exist or not, or whether they are government or private claims. As to
these points, the parties, in effect, have agreed to disagree but,
notwithstanding their contentions with regard to them, they did
commit themselves to pursue negotiations as far as possible with a
view to concluding an agreement on a settlement...
The Tribunal considers that the underlying principle of
the North Sea Continental Shelf Cases is pertinent to the
present dispute. As enunciated by the International Court of Justice,
it confirms and gives substance to the ordinary meaning of
‘negotiation’. To be meaningful, negotiations have to be
entered into with a view to arriving at an agreement. Though, as we
have pointed out, an agreement to negotiate does not necessarily
imply an obligation to reach an agreement, it does imply that serious
efforts towards that end will be made.”
COMPLAINT
- The
applicants complained that they were still not able to withdraw their
“old” foreign-currency savings from their accounts at
Ljubljanska Banka Ljubljana’s Sarajevo branch and Investbanka’s
Tuzla branch. They relied on various Articles of the Convention.
THE LAW
- Although the applicants relied on various Articles of
the Convention, the Court considers that the application falls to be
examined under Article 1 of Protocol No. 1 taken alone and in
conjunction with Articles 13 and 14.
Article
1 of Protocol No. 1 to the Convention 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.”
Article
13 provides:
“Everyone 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.”
Article
14 provides:
“The enjoyment of the rights and freedoms set
forth in [the] Convention shall be secured without discrimination on
any ground such as sex, race, colour, language, religion, political
or other opinion, national or social origin, association with a
national minority, property, birth or other status.”
A. Preliminary remarks
- It is noted that the Court has already dealt with
various aspects of the issue of “old” foreign-currency
savings in the following cases: Trajkovski v. “the
former Yugoslav Republic of Macedonia” (dec.),
no. 53320/99, ECHR 2002 IV, concerning a Macedonian bank;
Kovačić and Others, cited above, concerning the
Zagreb branch of Ljubljanska Banka Ljubljana; Suljagić v.
Bosnia and Herzegovina, no. 27912/02, 3 November 2009,
concerning a Bosnian-Herzegovinian bank; and Molnar Gabor v.
Serbia, no. 22762/05, 8 December 2009, concerning a Serbian
bank).
- Turning
to the present case, the Slovenian Government argued that the
applicants had failed to prove that they had not withdrawn their
savings or that they had not used them in the privatisation process
in Bosnia and Herzegovina or that they had not otherwise obtained
payment. They referred to two similar cases (Kovačić and
Others, cited above, and Višnjevac v. Bosnia
and Herzegovina (dec.), no. 2333/04, 24 October 2006) in which
the applicants had been repaid their “old”
foreign-currency savings in the Sarajevo and Zagreb branches of
Ljubljanska Banka Ljubljana. Given the applicants’ response,
the comments of the Governments of Bosnia and Herzegovina and Serbia,
and the documents in the file, the Court sees no reason to doubt that
the applicants still have “old” foreign-currency savings
in the amounts indicated in paragraph 3 above.
B. Jurisdiction ratione materiae
1. The parties’ submissions
- The
Slovenian Government argued that the applicants did not have
“possessions” within the meaning of Article 1 of Protocol
No. 1, but a mere hope of recognition of the survival of an old
property right which had long been impossible to exercise
effectively, on the grounds that the SFRY had applied emergency
measures that significantly restricted the withdrawal of
foreign-currency savings as early as 1990/91. They added that the
conditions for the activation of the State guarantee on
foreign-currency savings in the banks in issue had not been met
before the dissolution of the SFRY. What is more, even if those
conditions had been met, the applicants would not have had an
individual claim against the SFRY under the SFRY law (in other words,
the SFRY guarantee could not have been enforced by the savers
themselves, but only by insolvent or bankrupt banks). Therefore, no
financial obligations towards the applicants could have passed to the
successor States following the dissolution of the SFRY (even assuming
that there was automatic succession in respect of financial
obligations of dissolved States, which was not the case in the
opinion of the Slovenian Government). Nor did the duty of the
successor States to negotiate the distribution of the SFRY’s
guarantee of “old” foreign-currency savings, arising from
international law and the Agreement on Succession Issues in
particular, create an individual right for the applicants to obtain
the payment of their savings from Slovenia.
The
submissions of the Serbian Government were in line with those of the
Slovenian Government. In contrast, by referring to Suljagić,
cited above, the remaining Governments submitted that the applicants’
savings undoubtedly constituted “possessions” within the
meaning of Article 1 of Protocol No. 1.
- The
applicants admitted that they had not been able to use their “old”
foreign-currency savings in any meaningful way since 1990/91 and that
they had been in a contractual relation with their banks only, as
opposed to the SFRY. However, they argued that their claims had
nevertheless survived.
2. The Court’s assessment
-
In accordance with the Court’s established case-law, Article 1
of Protocol No. 1 does not guarantee the right to acquire property
(see Slivenko and Others v. Latvia (dec.) [GC],
no. 48321/99, § 121, ECHR 2002-II). An applicant can
allege a violation of Article 1 of Protocol No. 1 only in so far
as the impugned decisions related to his “possessions”
within the meaning of this provision. The concept of “possessions”
has an autonomous meaning which is not limited to the ownership of
physical goods and is independent from the formal classification in
domestic law: certain other rights and interests 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 in each case 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 Anheuser-Busch Inc. v. Portugal [GC],
no. 73049/01, § 63, ECHR 2007 I, and the authorities cited
therein).
- The applicants in the present case, upon depositing
foreign currency with commercial banks, acquired an entitlement to
collect at any time their deposits, together with accumulated
interest, from the banks (see paragraphs 5 and 8 above). While it is
true that the SFRY and its commercial banking sector had difficulties
in honouring their financial obligations from late 1990 onwards and
the SFRY had to apply emergency measures restricting significantly
the withdrawals of foreign-currency deposits, the Court agrees with
the applicants that their claims have nevertheless subsisted for the
following reasons.
- The legislation of the successor States has never
extinguished the applicants’ claims or deprived them of legal
validity in any other manner and there has never been any doubt that
some or all of those States will in the end have to repay the
applicants. Indeed, the successor States have on many occasions
clearly demonstrated their unequivocal commitment to ensuring that
those in the present applicants’ situation obtain the payment
of their “old” foreign-currency savings in one way or
another (contrast Bata v. the
Czech Republic (dec.), no. 43775/05, 24 June 2008,
where the respondent State has never demonstrated any sign of
acceptance or acknowledgment of the applicant’s claim and has
remained hostile to all such claims since the fall of the communist
regime). Moreover, those States have accepted that the “old”
foreign-currency savings were part of the financial liabilities of
the SFRY which they should divide, as they divided other financial
liabilities and assets of the SFRY (see paragraph 38 above). Given
the special features of this case, it must be distinguished from
cases such as X, Y and Z v. Germany (no. 7694/76, Commission
decision of 14 October 1977, Decisions and Reports (DR) 12, p.
131), S.C. v. France (no. 20944/92, Commission decision of 20
February 1995, DR 80, p. 78), and Abraini Leschi and Others v.
France (no. 37505/97, Commission decision of 22 April 1998, DR
93, p. 120) in which it was held that the impugned international
treaties, in the absence of any implementing legislation, had not
created individual rights to compensation for the applicants which
could fall within the scope of Article 1 of Protocol No. 1.
- The
present case must also be distinguished from the cases regarding the
effect of inflation on national-currency savings in which the Court
held that Article 1 of Protocol No. 1 did not impose any general
obligation on States to maintain the purchasing power of sums
deposited with banks by way of a systematic indexation of savings
(see Rudzińska v. Poland (dec.), no. 45223/99, ECHR
1999 VI; Gayduk and Others v. Ukraine (dec.),
nos. 45526/99, 46099/99, 47088/99, 47176/99, 47177/99, 48018/99,
48043/99, 48071/99, 48580/99, 48624/99, 49426/99, 50354/99, 51934/99,
51938/99, 53423/99, 53424/99, 54120/00, 54124/00, 54136/00, 55542/00
and 56019/00, ECHR 2002 VI; Appolonov v. Russia (dec.),
no. 67578/01, 29 August 2002; and Kireev v. Moldova and Russia
(dec.), no. 11375/05, 1 July 2008), in that the present case
does not concern the purchasing power or indexation, but a general
access to the applicants’ savings.
- The
Court concludes that this objection of the Serbian and Slovenian
Governments must thus be dismissed.
C. Jurisdiction ratione personae and ratione
loci
1. The parties’ submissions
- The
respondent States maintained that the applicants were not within
their jurisdiction, but within the jurisdiction of another respondent
State on various grounds, such as the location of the branch in
question and the head office of the parent bank as well as the
private-law nature of the relationship between savers and banks.
The
applicants responded that all the States, as the successors of the
SFRY, were responsible for this succession issue.
2. The Court’s assessment
- As
regards the argument of some respondent States that the issue of
“old” foreign-currency savings was not a succession
issue, but a private-law issue, the Court notes that that proposition
has already been considered in the context of the respondent States’
succession negotiations and they have accepted that the “old”
foreign-currency savings were part of the SFRY’s financial
liabilities which they should share (paragraph 38 above). Given also
the obligation of the respondent States to together settle all
aspects of succession by agreement (see paragraph 36 above), this
objection must be dismissed.
D. Jurisdiction ratione temporis
1. The parties’ submissions
- The Croatian, Serbian and Slovenian Governments
maintained that the case concerned events which had taken place
before the entry into force of the Convention and Protocol No. 1 in
respect of them. The applicants stated that the impugned situation
was of a continuing nature.
2. The Court’s assessment
- In
accordance with its established case-law, the temporal jurisdiction
of the Court 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.
Accordingly, the Court is competent to examine the facts of the
present case for their compatibility with the Convention and Protocol
No. 1 only in so far as they occurred after 28 June 1994 as regards
Slovenia, 10 April 1997 as regards the former Yugoslav Republic of
Macedonia, 5 November 1997 as regards Croatia, 12 July 2002 as
regards Bosnia and Herzegovina and 3 March 2004 as regards
Serbia. It may, however, have regard to 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 (see Broniowski v. Poland
(dec.) [GC], no. 31443/96, § 74, ECHR 2002 X). The Court is
obliged to examine its competence ratione temporis of its own
motion, even in the absence of a plea of incompatibility (see Blečić
v. Croatia [GC], no. 59532/00, § 67, ECHR 2006 III).
- Turning
to the present case, the Court notes that the applicants did not
complain of the SFRY’s emergency measures limiting the
withdrawals of foreign-currency deposits in 1990/91 or the domestic
legislation of the respondent States assuming liability for “old”
foreign-currency savings in certain commercial banks under certain
conditions. Nor is this case about any single specific decision or
measure taken before the critical dates. The applicants indeed
complained about the respondent States’ failure to settle the
succession issue of the “old” foreign-currency savings of
those who, like the present applicants, had placed their money in
branches situated in one former Republic of the SFRY of parent banks
based in another former Republic. Given that both the applicants’
claims and the respondent States’ obligation to settle this
issue continue to exist (see paragraphs 53-54 above), the Court
dismisses this objection.
E. Exhaustion of domestic remedies
1. The parties’ submissions
- The
Macedonian Government stated, without going into any details, that
the applicants had failed to exhaust all domestic remedies.
The
Slovenian Government maintained that the applicants should have
brought an action against the Republic of Slovenia before the
Ljubljana District Court. In case of a negative decision on the
merits or a decision to stay such proceedings (see paragraph 33
above), they would have at their disposal a constitutional complaint.
The Slovenian Government submitted a copy of a first-instance
judgment of the Ljubljana District Court of 9 March 2011 in the case
of Mr Andro Perić and Mr Alan Perić (with deposits at
Ljubljanska Banka Ljubljana’s Zagreb branch) against the old
Ljubljanska Banka, Nova Ljubljanska Banka and the State. The court
ordered the old Ljubljanska Banka to pay Mr Andro Perić and Mr
Alan Perić their “old” foreign-currency savings and
dismissed their claims against Nova Ljubljanska Banka and the
Republic of Slovenia. The judgment is subject to appeal.
The
Serbian Government were also of the opinion that the applicants had
failed to exhaust all domestic remedies. They added that Mr
Šahdanović should have registered his claim against
Investbanka in the bankruptcy
proceedings.
In
contrast, the Governments of Bosnia and Herzegovina and Croatia
maintained that there were no effective remedies at the applicants’
disposal, given notably the statutory stay on proceedings concerning
“old” foreign-currency savings in the Investbanka and
Ljubljanska Banka Ljubljana branches located in other successor
States (see paragraphs 29 and 33 above). The Croatian Government also
stated that even if the applicants obtained a judgment ordering the
old Ljubljanska Banka to pay them their savings, it would most likely
not be enforced because the 1994 legislation had left the old
Ljubljanska Banka with limited assets (see paragraph 32 above).
The
applicants agreed with the Governments of Bosnia and Herzegovina and
Croatia.
2. The Court’s assessment
- The Court reiterates that the rule of exhaustion of
domestic remedies referred to in Article 35 § 1 of the
Convention requires applicants first to use the remedies provided by
the national legal system, thus dispensing States from answering
before the European Court for their acts before they have had an
opportunity to put matters right through their own legal system. The
rule is based on the assumption, reflected in Article 13, that the
domestic system provides an effective remedy in respect of the
alleged breach. The burden of proof is on the Government claiming
non-exhaustion to satisfy the Court that an effective remedy was
available in theory and in practice at the relevant time; that is to
say, that the remedy was accessible, capable of providing redress in
respect of the applicant’s complaints and offered reasonable
prospects of success. However, once this burden of proof has been
satisfied it falls to the applicant to establish that the remedy
advanced by the Government was in fact exhausted or was for some
reason inadequate and ineffective in the particular circumstances of
the case or that there were special circumstances absolving him or
her from the requirement (see, amongst many other authorities, T.
v. the United Kingdom [GC], no. 24724/94, § 55, 16 December
1999). It should be reiterated that, although there may be exceptions
justified by the particular circumstances of each case, the
assessment of whether domestic remedies have been exhausted is
normally carried out with reference to the date on which the
application was lodged with the Court (see Baumann v. France,
no. 33592/96, § 47, ECHR 2001-V, and Babylonová
v. Slovakia, no. 69146/01, § 44, ECHR 2006-VIII).
- The
Court has also held that in cases concerning the redistribution of
liability for “old” foreign-currency savings among the
successor States of the SFRY, such as the present case, claimants can
reasonably be expected to seek redress in fora where other claimants
have been successful located in any of the successor States (see
Kovačić and Others, cited above, § 265).
- The
Court notes that this question goes to the heart of the Article 13
complaint. It would thus be more appropriately examined at the merits
stage (compare Broniowski, cited above, § 86).
F. Compliance with Article 1 of Protocol No. 1 of the
Convention taken alone and in conjunction with Articles 13 and 14
- As
regards compliance with Article 1 of Protocol No. 1 taken alone and
in conjunction with Articles 13 and 14, the Court considers, in the
light of the parties’ submissions, 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
other ground for declaring the application inadmissible has been
established.
For these reasons, the Court unanimously
Joins to the merits the question of the exhaustion of domestic
remedies;
Declares the application admissible, without prejudging the
merits of the case.
Lawrence Early Nicolas
Bratza
Registrar President
