KARAIVANOVA AND MILEVA v. BULGARIA - 37857/05 - Chamber Judgment [2014] ECHR 629 (17 June 2014)

In the case of Karaivanova and Mileva v. Bulgaria,

The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:

          Ineta Ziemele, President,
          Päivi Hirvelä,
          George Nicolaou,
          Nona Tsotsoria,
          Zdravka Kalaydjieva,
          Krzysztof Wojtyczek,
          Faris Vehabović, judges,
and Françoise Elens-Passos, Section Registrar,

Having deliberated in private on 27 May 2014,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 37857/05) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Bulgarian nationals, Ms Maria Georgieva Karaivanova and Ms Petranka Georgieva Mileva (“the applicants”), on 29 September 2005.

2. The applicants were represented by Mr M. Ekimdzhiev and Ms K. Boncheva, lawyers practising in Plovdiv. The Bulgarian Government (“the Government”) were represented by their Agents, Ms N. Nikolova and Ms R. Nikolova, of the Ministry of Justice.

3. The applicants alleged, in particular, that in proceedings concerning restitution of agricultural land the authorities had acted in breach of the principle of legal certainty, had unjustifiably refused restitution in kind, and had delayed the restitution process.

4. On 9 September 2010 the application was communicated to the Government. It was also decided to rule on the admissibility and merits of the application at the same time (Article 29 § 1 of the Convention).

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicants were born in 1928 and 1930 respectively and live in Sofia.

A. The land claimed by the applicants and the construction of the summer camp

6. The applicants were acknowledged as heirs to their father’s rights over a plot of land of 1,219 square metres situated by the sea coast in the area around Sozopol, acquired in the 1930s pursuant to legislation allocating agricultural land to refugees. In the 1950s the authorities considered the land abandoned and later on, in the 1960s, entered it in the register of state-owned property. During the same period the municipality of Stara Zagora took over the use of the land and constructed a student summer camp, which, at the time, consisted of two solid-construction buildings and twenty-two wooden bungalows. The buildings were entered into the register of state-owned property in 1964. At the time of the events in the present case the camp consisted of three solid-construction buildings and twenty-six wooden bungalows, spread over 17,705 square metres of land, which included the plot claimed by the applicants (see paragraph 7 below). During the domestic proceedings discussed below the municipality of Stara Zagora alleged that they had had an agreement with the Sozopol municipality (in the area of which the land was situated) for exchange of land in their respective regions.

B. Decisions of the land commission

7. In 1991, following the enactment of the Agricultural Land Act (“the ALA”), the applicants applied for the restitution of the land. In a decision of 20 October 1997 the Sozopol agricultural land commission held that the land was to be restored in its “actual boundaries”. The commission did not comment on the existence of any buildings or other construction on the plot, referring to it as “an abandoned plot covered with perennial weeds” adjoining a student summer camp. The municipality of Stara Zagora did not participate in those proceedings.

8. On 10 April 1998 the land commission issued an act formally transferring possession of the plot to the applicants on the basis of the above decision. On 22 July 1998 the applicants obtained a notary deed (констативен нотариален акт). However, they did not assume actual possession of the land, which remained occupied by the student camp.

9. Referring to instructions from the Minister of Agriculture and unspecified decisions by the Deputy Minister of Agriculture, on 1 March 1999 the Sozopol land commission reversed its earlier decision concerning the same property and refused to restore to the applicants 879 square metres of the land, which formed part of “the Stara Zagora summer camp”.

10. The applicants applied for judicial review, arguing that the decision of 1 March 1999 was unlawful as it was issued in the absence of new circumstances or evidence which could permit amendments to the decision of 20 October 1997, and that for this reason it should be quashed.

C. The judgment of 26 July 1999

11. On 26 July 1999 the Burgas District Court quashed the decision of 1 March 1999. It found that it had not been open to the land commission to re-examine the matter and upheld the commission’s earlier decision of 20 October 1997 holding that the applicants were entitled to have the 879 square metres of land restored “in actual boundaries”. The District Court further held that, based on the evidence before it, the applicants were entitled to the restitution of the land, no evidence having been presented to it to establish that any lawful construction works within the meaning of section 10(7) of the ALA (see paragraph 31 below) had been carried out prior to that Act’s entry into force. It noted that even though it appeared that the land had undergone a change of use and had ceased to be agricultural, there was no evidence before it to establish that this change had been effected in accordance with the relevant procedures provided for by law.

12. Noting further that the decision of the land commission of 1 March 1999 was also based on findings that the Stara Zagora municipality was the owner of the plot, the District Court found that there was no evidence to establish its property rights; in 1964 the municipality had merely been allowed to use the land, which had remained State-owned. The domestic court noted that in any event,

“[e]ven if a property dispute exists, it is to be decided upon in civil proceedings, and not by the Minister of Agriculture. There is no doubt in law and in legal theory that neither the land commission nor the courts acting in administrative proceedings are competent to examine disputes concerning the property rights of third parties who have not participated in the proceedings”.

13. The District Court did not deal with the potential applicability of section 10b of the ALA (see paragraph 30 below) to the circumstances of the case. No appeal was lodged against its judgment, and it became final on an unspecified date.

D. Decisions of the Burgas Regional Governor

14. On 6 December 1999 the Governor of the Burgas region, to which the Sozopol district belonged, entered the land occupied by the summer camp in the register of “private” State property, in application of the 1996 State Property Act.

15. On 20 January 2000 the Governor transferred ownership of the land in issue to the Stara Zagora municipality.

E. Rei vindicatio proceedings

16. Following the judgment of 26 July 1999, the applicants requested the Stara Zagora municipality to vacate the property. As the municipality did not do so, they brought a rei vindicatio claim, claiming that the municipality had no legal grounds to occupy the land in question. The applicants considered the land in issue to be their property on the basis of the land commission’s decision of 20 October 1997, as confirmed by the decision of the Burgas District Court of 26 July 1999. They further claimed compensation for lost profit, and requested that the defendant be ordered to demolish the existing buildings on the land.

17. The Burgas District Court appointed an expert, who visited the plot and confirmed that it lay entirely within the boundaries of the summer camp and was occupied by twelve wooden bungalows, concrete paths, a water fountain and lawns.

18. By a judgment of 14 April 2000 the Burgas District Court allowed the rei vindicatio claim, finding that the Stara Zagora municipality had failed to support its claim that it had validly acquired ownership rights to the plot in issue. Records of meetings held by the municipal councils of Stara Zagora and Sozopol in 1960 showed that steps had been taken with a view to exchanging properties between the two municipalities; however, there was no evidence that the exchange procedure had been finalised through the signing of contracts, as required by law. As to the entry of the land in the register of state-owned property in 1999 and its transfer to the Stara Zagora municipality in 2000 (see paragraphs 14 and 15 above), the District Court pointed out that the relevant decisions had been taken after the judgment of 26 July 1999 and that the municipality’s reliance on these documents contradicted its position that it had acquired the land by virtue of an exchange agreement with the Sozopol municipality.

19. The District Court thus concluded that the Stara Zagora municipality had no legal grounds to retain possession of the plot and ordered it to surrender it to the applicants. In addition, it awarded the applicants 10,000 Bulgarian levs in damages for lost profit resulting from their inability to use the plot from 20 October 1997 to 20 October 1999.

20. On 1 November 2000 the Burgas Regional Court upheld the above judgment and dismissed an appeal lodged by the Stara Zagora municipality, which argued that the decision to restore ownership to the applicants was not binding on it as it had not been a party to the proceedings, that the lower court had erred in applying the legislation relevant to exchange of property between municipalities, and that it had failed to take into account the fact that following its designation for a summer camp the land was no longer agricultural and was therefore not subject to restitution.

21. The Stara Zagora municipality lodged an appeal on points of law against the judgment of 1 November 2000. It contested the assumption of the lower courts that the applicants had obtained ownership rights, pointing out that their restitution claims had been allowed in proceedings to which it had not been a party and in which it had not had a reasonable opportunity to defend its rights. It considered that the applicants could not seek restitution of the land “in actual boundaries” because the ALA did not envisage the restitution of land which was had ceased to be agricultural before its entry into force. Furthermore, it contested the lower courts’ conclusion that it had not itself become an owner of the land, given that, in its view, the requirements of the law, as in force in 1960, had been complied with.

22. On 21 January 2002 the Supreme Court of Cassation quashed the judgment of 1 November 2000 and remitted the case to the Burgas Regional Court, finding that it had failed to properly examine whether the preconditions for the restitution of the plot, in particular under sections 2 and 10b of the ALA (see paragraphs 29-30 below), were met. It pointed out that former owners of agricultural land were not entitled to restitution in kind where construction carried out on it prevented its return.

23. The Burgas Regional Court re-examined the case. It admitted an expert opinion saying that the land could be re-cultivated for the purposes of agricultural use after a possible removal of the existing temporary buildings.

24. By a judgment of 26 March 2003 the Regional Court dismissed the applicants’ rei vindicatio claim. It accepted the objection raised by the Stara Zagora municipality that section 10b of the ALA prohibited restitution of land in cases where “a complex of construction works” had been put in place on the plot. In addition, relying on section 24(2), (3) and (4) of the ALA (see paragraphs 32 below), the Regional Court found that the restitution of the plot in issue was barred on the ground that it served an important need of the Stara Zagora municipality, namely to provide holiday facilities for students.

25. The applicants lodged an appeal on points of law, arguing, inter alia, that the judgment of 26 July 1999 had been binding on all parties and it had not been open to the courts to re-examine whether the land claimed by them met the requirements for restitution in kind.

26. In a final judgment of 30 March 2005, the Supreme Court of Cassation upheld the Burgas Regional Court’s judgment. As to the arguments raised by the applicants, it found that the applicants had been aware of the fact that a third party had competing interests in the summer camp and that these claims remained to be examined in subsequent proceedings. Noting that the disputed plot was not formally allocated as urban territory, the Supreme Court found that section 10(7) of the ALA was not applicable. However, the buildings on the land in question formed a part of a “complex of construction works” within the meaning of section 10b of the ALA, with temporary and permanent buildings, paths, and other infrastructure. The Supreme Court considered that it was unacceptable to separate one part of that complex and return it to its former owners. It noted in this regard that the approach proposed by the applicants would be contrary to the intent of the law, which was to offer compensation where restitution in kind was inappropriate.

27. Following the developments above and the ensuing impossibility to obtain restitution in kind, the applicants have not sought to receive compensation in lieu of restitution, as they were entitled to do under the ALA.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. Restitution of agricultural land

28. The relevant parts of the domestic law and practice concerning restitution under the ALA have been summarised in the Court’s judgments in the cases of Lyubomir Popov v. Bulgaria (no. 69855/01, §§ 83-95, 7 January 2010) and Sivova and Koleva v. Bulgaria (no. 30383/03, §§ 29-44 and 57-60, 15 November 2011).

29. Most notably, section 2 of the Act defines agricultural land, including as subject to restitution, as land which is being used for agricultural production, is not situated within the boundaries of an urban territory, and on which

“... no buildings have been constructed by industrial or other commercial enterprises, tourist or health establishments, religious communities or other public organisations ..., and [which] is not a part of any courtyards or storehouses serving such buildings”.

30. Section 10b of the ALA, introduced in 1992, provides that former owners are not entitled to the restoration of their property rights but are to receive compensation in cases where the land formerly owned by them “has been built upon or a complex of construction works (мероприятия) which does not permit the restoration of property has been put in place”.

31. In addition, section 10(7) of the ALA, also introduced in 1992, provides that former owners whose plots of land became part of an urban territory after collectivisation are entitled to the restoration of their property rights, save where third parties have lawfully constructed buildings on the land.

32. Section 24 of the ALA (which has been amended on numerous occasions, but any modifications since 1995 have been minor) provides that the State retains ownership of land which is set aside for use by scientific or educational bodies, by detention facilities, plant nurseries, sites for seed production or similar (subsection 2); or by the Ministry of the Interior or of Defence for purposes related to defence and national security (subsection 3); or which forms part of the territory of a natural or archaeological park (subsection 4).

33. Where third parties have competing claims to the same plot of land, it is the well-established practice of the national courts to re-examine administrative and judicial decisions for restitution in subsequent judicial proceedings concerning ownership rights. This is considered permissible in order to allow third parties affected by the restitution proceedings to protect their interests by raising their arguments against the restitution in separate civil proceedings.

B. Res judicata

34. The provisions concerning the res judicata effect of court judgments are summarised in the Court’s judgment in the case of Kehaya and Others v. Bulgaria (nos. 47797/99 and 68698/01, §§ 34-55, 12 January 2006).

35. In particular, Article 220 § 1 of the Code of Civil Procedure of 1952, in force at the relevant time, provided that judgments of civil courts were binding on the parties, their successors, the courts and all other State bodies. In judicial administrative proceedings, courts’ judgments setting aside an administrative decision and deciding the disputed matter on the merits were binding on the parties and constituted res judicata in respect of the rights and obligations that had formed the subject matter of the proceedings.

C. Municipalities under Bulgarian law

36. Municipalities are legal entities entitled under Bulgarian law, who exercise various property rights and have independent budgets. Currently, this is reflected in Articles 17 § 4 and 136 § 3 of the 1991 Constitution and is further reiterated in section 14 of the Local Self-Government and Local Administration Act. The approach has been confirmed by the adoption of separate legislation on State and municipal properties (the State Property Act and the Municipal Property Act) in 1996.

THE LAW

I. THE GOVERNMENT’S PRELIMINARY OBJECTION

37. The Government argued that the application was inadmissible as it had not complied with the six-month rule under Article 35 § 1 of the Convention. Noting that the final decision at the domestic level concerning the applicants’ claims for restitution had been given on 30 March 2005, they pointed out that the application had been received at the Court more than six months after that, on 7 October 2005. In response, the applicants stated that the application form had been posted by them on 29 September 2005.

38. According to the Court’s well-established case-law and the applicable rules, the date of introduction of an application for the purposes of Article 35 § 1 of the Convention is the date on which the first communication from the applicant was posted, not the date on which it was received at the Court (see Korkmaz v. Turkey (dec.), no. 42589/98, 5 September 2002; Kipritçi v. Turkey, no. 14294/04, § 18, 3 June 2008; Peruško v. Croatia, no. 36998/09, § 35, 15 January 2013; and Brežec v. Croatia, no. 7177/10, § 29, 18 July 2013). A different approach can only be justified in special circumstances (see Florică v. Romania (dec.), no. 49781/99, 29 June 2004, and Bulinwar OOD and Hrusanov v. Bulgaria, no. 66455/01, §§ 30-32, 12 April 2007), which the Court does not observe in the case at hand. Accordingly, the Court is satisfied that the present application was posted on 29 September 2005 and that the six-month rule provided for by Article 35 § 1 of the Convention has been complied with. The Government’s preliminary objection is thus to be dismissed.

II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

39. The applicants complained under Article 6 § 1 of the Convention that in rejecting their rei vindicatio claim the national courts had failed to take into account the Sozopol land commission’s decision of 20 October 1997 and the Burgas District Court’s judgment of 26 July 1999. The applicants considered that this had violated the principles of legal certainty and respect for the res judicata effect of final judgments. They argued that the findings of the domestic courts in the rei vindicatio proceedings had been arbitrary.

40. In so far as relevant, Article 6 § 1 reads:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

A. Arguments of the parties

41. The Government considered that there had been no violation of Article 6 § 1, because the two sets of judicial proceedings had unfolded between different parties - the restitution proceedings which had resulted in the judgment of 26 July 1999 between the applicants and the Sozopol land commission, and the subsequent rei vindicatio proceedings between the applicants and the Stara Zagora municipality. The Stara Zagora municipality, which had not participated in the restitution proceedings, had not been bound by the judgment of 26 July 1999, and had only had a chance to defend its rights in the rei vindicatio proceedings. The Government were of the view that the courts in the rei vindicatio proceedings had been bound to examine whether the applicants were entitled to restitution “in actual boundaries” in order to afford the required protection of the municipality’s rights and ensure the fairness of those proceedings.

42. The applicants disagreed. They pointed out that the facts relied on by the courts which had dismissed their rei vindicatio claim, namely the inclusion of the land in the summer camp and the construction works on it, had not been new, but had already existed and been known to the Burgas District Court when it had delivered its judgment of 26 July 1999. The applicants argued, in addition, that both the land commission and the Stara Zagora municipality were emanations of the public authorities and that, moreover, the municipality had to be considered a successor of the State in respect of its rights to the plot claimed by the applicants. Accordingly, the municipality had to be considered bound by the judgment of 26 July 1999. In support of their position, the applicants relied on the Court’s findings in the case of Kehaya and Others (cited above).

B. The Court’s assessment

1. Admissibility

43. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3(a) of the Convention or inadmissible on any other ground. It must therefore be declared admissible.

2. Merits

44. The Court reiterates that the right to a fair hearing under Article 6 § 1 of the Convention, interpreted in the light of the principles of the rule of law and legal certainty, encompasses the requirement that where the courts have finally determined a dispute between given parties, their ruling should not be called into question (see Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999-VII). The principle of legal certainty and respect for the res judicata effect of final judgments requires that no party should be entitled to seek review of a final and binding judgment merely for the purpose of obtaining a rehearing and a fresh determination of the case (see Ryabykh v. Russia, no. 52854/99, § 52, ECHR 2003-IX, and Sivova and Koleva, cited above, § 66).

45. In all legal systems the res judicata effect of judgments has limitations ad personam and ad rem (see Kehaya and Others, cited above, § 66; Sivova and Koleva, cited above, § 71; and Esertas v. Lithuania, no. 50208/06, § 22, 31 May 2012).

46. As concerns the case at hand, the Court observes at the outset that the judgment of 26 July 1999 did not concern the judicial review of an initial refusal by the land commission to order restitution, but the review of its subsequent decision aiming to reverse an earlier restitution decision (see paragraph 9 above).

47. The Court notes, in addition, that in that same judgment the Burgas District Court took note of the fact that the land claimed by the applicants was occupied by the Stara Zagora municipality. Noting that the municipality did not participate in the proceedings, it indicated clearly that any disputes between the applicants and that potentially affected third party were subject to subsequent determination in adversarial proceedings with that party’s participation (see paragraph 12 above). In its final decision in the rei vindicatio proceedings, the Supreme Court of Cassation also noted that the applicants had been aware of these circumstances (see paragraph 26 above).

48. The applicants did not contest that fact, but claimed that in declaring them the owners of the land in question, the court judgment of 26 July 1999 had a final erga omnes effect, and that the outcome of the separate rei vindicatio proceedings had been contrary to the principle of res judicata protected by Article 6 § 1 of the Convention. In order to determine whether this outcome was in compliance with the requirements of Article 6 § 1, the Court has to examine the two aspects of that principle referred to in paragraph 45 above (ad personam and ad rem).

49. As concerns the ad personam aspect, the Court notes that under domestic law at the relevant time, decisions of the land commissions and judgments such as the one of 26 July 1999 were adopted in ex parte proceedings and were binding on the parties to these proceedings (see paragraphs 34-35 above). In the instant case those parties were the applicants and the Sozopol land commission, whereas the Stara Zagora municipality was a party only to the subsequent rei vindicatio proceedings instituted by the applicants.

50. The Court further observes that it is not contested that Bulgarian law treated municipalities as separate legal entities for the purposes of acquisition and exercise of various property rights, as well as of participation in civil proceedings for the protection of those rights, already at the time of the exchange of plots between the Stara Zagora and the Sozopol municipalities (see paragraph 36 above). The situation in the present case is thus clearly distinct from the one observed in the case of Decheva and Others v. Bulgaria (no. 43071/06, 26 June 2012), where two different emanations of the local public authorities, namely the mayor and the municipality council of Kotel, were considered by the domestic courts as independent from each other and it was found that each of them was not bound by decisions concerning the other.

51. In these circumstances the Court is not convinced that the judgment of 26 July 1999 was to be considered, as argued by the applicants, binding on all. It thus does not find that the authorities’ approach encroached upon the ad personam aspect of the principle of legal certainty.

52. The Court must also examine whether in the circumstances of the case the authorities called into question an issue finally determined by a court (the ad rem aspect of the principle of legal certainty).

53. The applicants maintained that at the time of the restitution decisions in their favour the Stara Zagora municipality had not acquired the right to ownership of the plot, and that in so far as it had done so in 2000 (see paragraph 15 above) it was to be considered only a successor of the State, which was, for its part, bound by the judgment of 26 July 1999. In this regard the Court notes that the domestic courts in the rei vindicatio proceedings did not examine the question whether, and if so when, the municipality had acquired ownership rights, finding the question irrelevant. The Court notes that according to the domestic law, the defendant party in rei vindicatio proceedings can protect its interests not only where it claims to be the owner of the property claimed, but also in regard of various property rights, such as the right to build or, as in the present case, the right to use the property for various purposes.

54. In this regard the Court notes that some of the objections as to whether the land in question met the conditions for restitution, as raised by the Stara Zagora municipality in the rei vindicatio proceedings, had been examined neither by the land commission, in its decision of 20 October 1997 in favour of the applicants, nor by the Burgas District Court in the subsequent proceedings brought by the applicants against the land commission (see paragraphs 7 and 12 above). The judgment of 26 July 1999 confirmed that in the absence of evidence as to whether the Stara Zagora municipality had acquired ownership to the land in issue, or that the construction works on the plot had been lawful, the land met the conditions for restitution in kind.

55. In the judicial proceedings which ended with the judgment of 26 July 1999 the Burgas District Court did not examine the question raised subsequently in the rei vindicatio proceedings: whether the requirements set out in section 10b of the ALA had been complied with, namely whether a “complex of construction works” had been put in place on the plot, which could bar restitution in “actual boundaries” and entitle the applicants to seek compensation instead. The argument that section 10b of the ALA barred restitution in kind was for the first time raised by the Stara Zagora municipality in the rei vindicatio proceedings. The initial failure of the lower courts to take it into consideration was one of the reasons for which the Supreme Court of Cassation quashed the Burgas Regional Court’s judgment of 1 November 2000 and remitted the case (see paragraph 22 above).

56. After it examined the argument, the Burgas Regional Court found that the summer camp occupying the applicants’ plot did represent a “complex of construction works” within the meaning of section 10b of the ALA, with buildings, paths and other infrastructure, and concluded that the restitution of the applicants’ plot “in actual boundaries” was not permitted by law. The Supreme Court of Cassation upheld this conclusion (see paragraphs 24-26 above).

57. The Court cannot conclude on the basis of the above that the national courts examined the same matter in the restitution and the rei vindicatio proceedings. In this regard the present case is to be distinguished from the case of Kehaya and Others (cited above), relied on by the applicants, which clearly concerned a re-examination of the same matter in the second set of proceedings as in the first one, namely whether prior to the expropriation the applicants’ ancestor had been the owner of the land claimed by them (see §§ 16-18 and 21-25 of that judgment).

58. Accordingly, the Court cannot conclude that the approach of the national courts in the present case failed to respect the principle of legal certainty enshrined in Article 6 § 1 of the Convention.

59. It follows that there has been no breach of that provision.

III. ALLEGED VIOLATIONS OF ARTICLE 1 OF PROTOCOL No. 1

60. The applicants complained under Article 1 of Protocol No. 1 and Article 13 of the Convention that they had been deprived of property they had acquired by virtue of the Sozopol land commission’s decision of 20 October 1997 and the Burgas District Court’s judgment of 26 July 1999. Relying on Articles 6 § 1 and 13 of the Convention, they further complained that the restitution procedure, taken in its entirety, had continued for an unreasonably lengthy period of time.

61. The Court is of the view that these complaints are most appropriately examined under Article 1 of Protocol No. 1 alone, 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

62. The Court notes that these complaints are not manifestly ill-founded within the meaning of Article 35 § 3(a) of the Convention or inadmissible on any other ground. They must therefore be declared admissible.

B. Merits

1. Arguments of the parties

63. The Government agreed with the applicants that, in respect of 879 square metres of the plot in question, the judgment of 26 July 1999 conferred to the applicants rights which fell under the protection of Article 1 of Protocol No. 1, and that, due to the courts’ conclusions in the subsequent rei vindicatio proceedings, the applicants were deprived of these rights. However, the Government argued that this deprivation of rights had been in accordance with the law and had been justified, given that the rei vindicatio proceedings had sought to ensure the protection in adversarial proceedings of parties whose interests had been affected by the decision in the restitution proceedings, and to achieve a fair balance between these and the public interest. The initial decision favourable to the applicants had not taken into account the provision of section 10b of the ALA, which barred restitution, and had therefore been reached in breach of law. Moreover, it had been established that the buildings on the land had existed prior to the entry in force of the ALA, which showed that the land had served important public interests and had not been agricultural.

64. As to the remainder of the land, relying on the Court’s findings in the case of Lyubomir Popov (cited above), the Government considered that the land commission’s decision of 20 October 1997 did not confer to the applicants any stable right to property and that the legitimate expectation which had arisen for it could also be satisfied through an award of compensation, as provided for under the ALA. The Government pointed out that the applicants had not sought the compensation they had been entitled to.

65. The applicants contested the Government’s arguments. They were of the view that the land commission’s decision of 20 October 1997 and the Burgas District Court’s judgment of 26 July 1999 had given rise to a right to property for them in respect of the entire plot of 1,219 square metres, and that they had been deprived of that property in an arbitrary manner and in breach of the law. As to the 879 square metres in issue - the subject matter of the judgment of 26 July 1999 - the applicants reiterated their argument that the courts in the rei vindicatio proceedings had breached the principle of legal certainty. In respect of the remainder of the land, the applicants argued that the land commission’s decision of 20 October 1997 was a stable administrative act and that it was unacceptable to allow the authorities to deprive it of legal effect.

66. The applicants argued in addition that the domestic courts’ approach had unjustifiably favoured the interests of the Stara Zagora municipality, as opposed to their own interests. The applicants considered that they had acted in good faith and that the restitution in kind of their property was in the public interest.

67. The applicants stated that they had refused to apply for the compensation provided for under the ALA on the ground that it would have been inadequate. Reiterating that they had been deprived of their property, they considered that any fair compensation had to reflect the current market value of the land. Moreover, they were of the view that the rules concerning the determination of compensation due under the ALA were unclear and open to abuse.

68. Lastly, the applicants argued that the unreasonable length of the restitution procedure in their case had led to an unjustified interference with their rights under Article 1 of Protocol No. 1.

2. The Court’s assessment

69. In the case of Kopecký v. Slovakia ([GC], no. 44912/98, § 35, ECHR 2004-IX), the Court set out the following principles in respect of restitution of expropriated property (citations omitted):

“(a) Deprivation of ownership or of another right in rem is in principle an instantaneous act and does not produce a continuing situation of ‘deprivation of a right’.

(b) Article 1 of Protocol No. 1 does not guarantee the right to acquire property.

(c) 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. ‘Possessions’ can be either ‘existing possessions’ or assets, including claims, in respect of which the applicant can argue that he or she has at least a ‘legitimate expectation’ of obtaining effective enjoyment of a property right. By way of contrast, the hope of recognition of a property right which it has been impossible to exercise effectively cannot be considered a ‘possession’ within the meaning of Article 1 of Protocol No. 1, nor can a conditional claim which lapses as a result of the non-fulfilment of the condition.

(d) Article 1 of Protocol No. 1 cannot be interpreted as imposing any general obligation on the Contracting States to restore property which was transferred to them before they ratified the Convention. Nor does Article 1 of Protocol No. 1 impose any restrictions on the Contracting States’ freedom to determine the scope of property restitution and to choose the conditions under which they agree to restore property rights of former owners.

In particular, the Contracting States enjoy a wide margin of appreciation with regard to the exclusion of certain categories of former owners from such entitlement. Where categories of owners are excluded in this way, their claims for restitution cannot provide the basis for a ‘legitimate expectation’ attracting the protection of Article 1 of Protocol No. 1.

On the other hand, once a Contracting State, having ratified the Convention including Protocol No. 1, enacts legislation providing for the full or partial restoration of property confiscated under a previous regime, such legislation may be regarded as generating a new property right protected by Article 1 of Protocol No. 1 for persons satisfying the requirements for entitlement. The same may apply in respect of arrangements for restitution or compensation established under pre-ratification legislation, if such legislation remained in force after the Contracting State’s ratification of Protocol No. 1.”

70. Further, the Court has held that where the proprietary interest is in the nature of a claim, it may be regarded as an ‘asset’ only where it has a sufficient basis in national law, for example, where there is settled case-law of the domestic courts confirming it (see Kopecký, cited above, § 52, and Maria Atanasiu and Others v. Romania, nos. 30767/05 and 33800/06, § 137, 12 October 2010).

71. In assessing compliance with Article 1 of Protocol No. 1, the Court must make an overall examination of the various interests in issue, bearing in mind that the Convention is intended to safeguard rights that are “practical and effective”. It must look behind appearances and investigate the realities of the situation complained of, including the conduct of the parties, the means employed by the State and their implementation (see Broniowski v. Poland [GC], no. 31443/96, § 151, ECHR 2004-V; and also Sivova and Koleva, cited above, § 97).

72. The Court has accepted that in situations such as the one in the present case, involving a wide-reaching legislative scheme with significant economic impact, the national authorities must have considerable discretion in selecting the measures to secure respect for property rights or to regulate ownership relations. Balancing the rights at stake, as well as the gains and losses of the different persons affected by the process of transforming the State’s economy and legal system, is an exceptionally difficult exercise. In such circumstances, in the nature of things, a wide margin of appreciation should be accorded to the respondent State (see Broniowski, § 182; Maria Atanasiu and Others, §§ 171-172; and Sivova and Koleva, §§ 97-98, all cited above).

73. Turning to the circumstances of the present case, the Court notes that the Sozopol agricultural land commission, in its decision of 20 October 1997, and the Burgas District Court, in the judgment of 26 July 1999 which quashed a subsequent decision of the same commission, confirmed that the applicants were entitled to the restitution of the plot in its “actual boundaries”. However, these decisions, which were of a declaratory nature only, remained unenforced and the applicants never assumed actual possession.

74. In a number of judgments and decisions concerning restitution of agricultural land in Bulgaria the Court has observed that, under the national law, administrative decisions determining claimants’ rights to restitution under the ALA are given in ex parte proceedings before the land commission and can be challenged either directly or indirectly by another person claiming property rights over the same land (see Sivova and Koleva, § 74, and Lyubomir Popov; § 117, both cited above; Nedelcheva and Others v. Bulgaria, no. 5516/05, § 56, 28 May 2013; and Kupenova and Others v. Bulgaria (dec.), no. 12664/05, § 30, 7 May 2013). These decisions were not considered final and binding, giving rise to a right to possession of a certain asset until affected third parties have had a chance to defend their interests. As already discussed above (see also Sivova and Koleva, cited above, § 104), third parties claiming rights to the same land could defend their rights in subsequent proceedings even where the right to restitution had been recognised by the courts in judicial-review proceedings, as in the present case.

75. In the case, as noted by the Supreme Court of Cassation (see paragraph 26 above), the applicants must have been aware from the outset of the Stara Zagora municipality’s competing claims to the land because it was in possession of that land and using it.

76. In view of the above, the Court considers that the applicants could not have legitimately expected the decision of 20 October 1997 and the judgment of 26 July 1999 to definitively determine their restitution rights and give rise to right to property for them (see Nedelcheva and Others, § 60, and Kupenova and Others, § 34, both cited above).

77. The Court notes further that under national law, given that restitution in kind was found to be impossible, the applicants’ legitimate expectation to restitution could alternatively have been satisfied through the award of compensation and it was the applicants’ choice not to seek compensation after the end of the rei vindicatio proceedings (see paragraph 27 above).

78. In those circumstances, the Court cannot accept that the applicants have been deprived of their possessions, and that there has been a breach of Article 1 of Protocol No. 1 in that respect.

79. At the same time, the Court notes that the applicants’ legitimate expectation to restitution arose for the first time with the Sozopol land commission’s decision of 20 October 1997 (see paragraph 7 above). After that the applicants were involved in two sets of judicial proceedings, first the restitution proceedings before the Burgas District Court and then the rei vindicatio proceedings against the Stara Zagora municipality, with the aim of obtaining a determination of the scope of that expectation, namely, as was eventually found to be the case, that they were not entitled to restitution in kind and could seek compensation in lieu thereof. All those proceedings ended on 30 March 2005 (see paragraph 26 above).

80. The Court notes that it has found violations of Article 1 of Protocol No. 1 in numerous cases against Bulgaria on the ground of lengthy delays in the procedures for restitution of agricultural land which affected the applicants’ legitimate expectations of restitution or compensation (see Lyubomir Popov, Sivova and Koleva, and Nedelcheva and Others, all cited above; as well as Naydenov v. Bulgaria, no. 17353/03, 26 November 2009; Mutishev and Others v. Bulgaria, no. 18967/03, 3 December 2009; Vasilev and Doycheva v. Bulgaria, no. 14966/04, 31 May 2012; Petkova and Others v. Bulgaria [Committee], nos. 19130/04, 17694/05 and 27777/06, 25 September 2012; and Ivanov v. Bulgaria [Committee], no. 19988/06, 11 December 2012). In the case of Vasilev and Doycheva (see § 69 of the judgment) the Court concluded that the problem was recurrent and expressed the view that the Bulgarian authorities should provide for clear time-limits for the adoption and enforcement of administrative decisions necessary for the completion of the process of restitution of agricultural land.

81. As mentioned above, in the present case the applicants’ legitimate expectation of restitution arose on 20 October 1997. Even though there do not appear to have been any particular periods of inactivity, the Court notes that the delays after that resulted from the approach adopted in the domestic law, under which third parties such as the Stara Zagora municipality were not allowed to take part in restitution proceedings and thus have their competing claims to the same land examined. Instead of that, the domestic law provided for such issues to be resolved in separate proceedings (see paragraph 33 above). The Court has already criticised this approach for prolonging the restitution process and placing individuals in situations such as the applicants’ in a state of lengthy uncertainty (see Sivova and Koleva, §§ 115-16, and Nedelcheva and Others, §§ 78-82, both cited above). While acknowledging that States should be accorded a wide margin of appreciation in regulating important social and economic reforms such as the ones introduced in Bulgaria after the fall of communism (see paragraph 72 above), the Court reiterates that States nevertheless remain bound to organise their judicial and administrative systems in such a way so as to guarantee the rights provided for under the Convention (see Sivova and Koleva, cited above, § 116). In the case at hand, by requiring that the applicants participate in two procedures, first a restitution procedure and then rei vindicatio judicial proceedings aimed at specifying the rights recognised in the restitution procedure, the authorities unjustifiably delayed the effective exercise of the applicants’ restitution rights.

82. In view of the above considerations, the Court concludes that there has been a violation of Article 1 of Protocol No. 1 as a result of the lengthy delays in the procedures for restitution, which affected the applicants’ legitimate expectations in that regard.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

83. 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. Damage

84. In respect of pecuniary damage, the applicants claimed, firstly, the current market value of their plot. In this connection they relied on the cases of Kehaya and Others v. Bulgaria ((just satisfaction), nos. 47797/99 and 68698/01, 14 June 2007), Brumărescu v. Romania ((just satisfaction) [GC], no. 28342/95, ECHR 2001-I), and Papamichalopoulos and Others v. Greece ((Article 50), 31 October 1995, Series A no. 330-B), where the Court did in fact award the market value of the properties claimed in respect of pecuniary damage. The applicants submitted a valuation report prepared by an expert appointed by them which assessed the market value of the plot in issue at 187,328 euros (EUR). Accordingly, they claimed that amount under this head.

85. The applicants also claimed another EUR 66,275, representing the market rent, plus interest, which they could have received for the plot had they been renting it out from August 1999 to March 2011, and had it continued to be used as a summer camp.

86. In respect of non-pecuniary damage, the applicants claimed EUR 20,000 each, on account of the anguish and frustration they had suffered.

87. The Government contested the above claims, considering them exaggerated. They further pointed out that the applicants had themselves passed up the opportunity to receive compensation in lieu of restitution.

88. The Court observes that it has only found a violation of Article 1 of Protocol No. 1 in respect of the delays in the restitution process. It does not see a causal link between that violation and the applicants’ claim in respect of the market value of the plot of land, and accordingly dismisses that claim (see, mutatis mutandis, Sivova and Koleva, § 124, and Nedelcheva and Others, § 91, both cited above). Moreover, it points out that the applicants were entitled to compensation in lieu of restitution (see paragraph 27 above). The Court is unable to accept the applicants’ claim to receive in compensation for the delays in the procedure the equivalent of the market rent for the plot, given, in particular, that the violation found in the case did not concern any defined right of the applicants to receive specific property (see Lyubomir Popov, cited above, § 138). However, the applicants must have suffered inconveniences and uncertainty as a result of the delays in the restitution process. Ruling on an equitable basis, and taking into account the amounts awarded in similar cases, the Court awards each of the applicants EUR 2,500, to cover any pecuniary and non-pecuniary damage caused by the delays in the restitution procedure.

B. Costs and expenses

89. The applicants also claimed EUR 3,911 for the work performed by their representatives before the Court, Mr M. Ekimdzhiev and Ms K. Boncheva. They submitted a time sheet in support of this claim. They also claimed EUR 226 for postage, translation and office expenses. They requested that the above amounts, less EUR 500 already paid by them to Mr Ekimdzhiev and Ms Boncheva, be transferred directly into the bank account of Mr Ekimdzhiev.

90. The applicants claimed another 800 Bulgarian levs (BGN), the equivalent of EUR 409, in respect of the expert report submitted in support of their claim for pecuniary damage (see paragraph 83 above). They submitted the relevant receipt.

91. Lastly, the applicants claimed BGN 1,140, the equivalent of EUR 583, for court fees and other expenses incurred in relation to the domestic rei vindicatio proceedings. They submitted the necessary receipts.

92. The Government contested the above claims, considering them exaggerated and only partially substantiated.

93. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum.

94. The Court observes that in the present case it has found a violation of Article 1 of Protocol No. 1 only in respect of the delays in the restitution procedure. Noting that this is a repetitive complaint (see paragraph 79 above), the Court finds it reasonable to award EUR 1,000 for the legal work performed by the applicants’ representatives and any other expenses incurred by them. As requested by the applicants, EUR 500 of this sum is to be paid to the applicants themselves, and the remainder, also amounting to EUR 500, is to be transferred directly to the bank account of Mr Ekimdzhiev.

95. On the other hand, the Court sees no reason to award the remaining expenses claimed by the applicants, which are not related to the nature of the violations established in the case.

C. Default interest

96. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1. Declares the application admissible;

2. Holds that there has been no violation of Article 6 § 1 of the Convention;

3. Holds that there has been a violation of Article 1 of Protocol No. 1 in respect of the delays in the restitution procedure;

4. Holds

(a) that the respondent State is to pay the applicants, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts, to be converted into Bulgarian levs at the rate applicable at the date of settlement:

(i) EUR 2,500 (two thousand five hundred euros) to each of the applicants, plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage;

(ii) EUR 1,000 (one thousand euros), plus any tax that may be chargeable to the applicants, in respect of costs and expenses, EUR 500 (five hundred euros) of which is to be transferred directly to the bank account of the applicants’ legal representative, Mr Ekimdzhiev;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

5. Dismisses the remainder of the applicants’ claims for just satisfaction.

Done in English, and notified in writing on 17 June 2014, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Françoise Elens-Passos Ineta Ziemele
Registrar President

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You are here: BAILII >> Databases >> European Court of Human Rights >> KARAIVANOVA AND MILEVA v. BULGARIA - 37857/05 - Chamber Judgment [2014] ECHR 629 (17 June 2014) URL: http://www.bailii.org/eu/cases/ECHR/2014/629.html Cite as: [2014] ECHR 629