PROCEDURE

1.  The case originated in an application (no. 59857/00) against the  lodged with the European Commission of Human Rights (“the Commission”) on 21 May 1998 under former Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Polish national, Mr Juliusz Bennich-Zalewski (“the applicant”).

2.  The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz of the Ministry of Foreign Affairs. The applicant was represented by Ms A. Zemke-Górecka, a lawyer practising in .

3.   The application was transmitted to the Court on 1 November 1998, when Protocol No. 11 to the Convention came into force (Article 5 § 2 of Protocol No. 11).

4.  The applicant alleged, in particular, that the length of administrative proceedings which he had instituted in 1991 was unreasonable and contrary to Article 6 of the Convention. He also complained under Article 1 of Protocol No. 1 of the Convention that he had been unable to obtain effective enjoyment of his property rights confirmed by a judicial decision given in 2001.

5.  On 28 November 2005 the President of the Section decided to give notice of the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it was decided to examine the merits of the application at the same time as its admissibility.

THE FACTS

I.	THE CIRCUMSTANCES OF THE CASE

6.  The applicant was born in 1966 and lives in .

1.  Administrative proceedings

(a)  Proceedings in which the applicant sought to have the expropriation decision declared null and void

7.  In 1945 a factory owned by the applicant’s legal predecessor was de facto taken over by the State in the context of a countrywide campaign of nationalisation of industry. It was subsequently run by a Stateowned enterprise.

8.  Pursuant to a decision given on 5 July 1966, the Ministry of Infrastructure stated that the factory and the land on which it was situated had become the property of the State under the provisions of the 1958 Act on Regulation of Legal Status of Properties Managed by the State.

9.  In 1991 the applicant’s mother lodged an application with the Ministry of Industry to have the expropriation decision declared null and void under Article 156 of the Code of Administrative Procedure.

10.  In March 1994 the applicant’s mother died. The applicant joined the proceedings as her legal successor.

11.  In 1996 the Ministry found that it lacked competence to deal with the case and referred it to the Ministry of Construction. In January 1997 the case was referred to the Ministry of Housing as the Ministry of Construction had ceased to exist. In October 1997 that Ministry forwarded the case file to the Ministry of Internal Affairs for a decision.

12.  On 27 October 1997 the applicant complained to the  about the failure of the administration to rule on his 1991 application.

13.  On 18 January 1997 the Minister of Internal Affairs declared that he was competent to deal with the case.

14.  On 22 January 1999 the , having examined the applicant’s complaint, ordered the Minister of Internal Affairs to issue a decision concerning the case within one month from the date of the service of its judgment.

15.  On 27 July 1999 the Minister of Internal Affairs, having gathered various documents concerning the legal status of the property, declared that the 1966 expropriation decision was null and void as it had been given in flagrant breach of the laws applicable to properties de facto taken over by the State.

16.  On an unspecified date before August 1999 the State-owned enterprise was transformed into an independent public company, Izolacja, the structure and functioning of which were governed by the provisions of the Commercial Code. The State however retained a minority shareholding in the company. In August 1999 the Izolacja company, which was running the factory as the legal successor of the former State-owned enterprise, requested that the case be reexamined. Subsequently, the Ministry summoned the parties to submit their further pleadings and documents.

17.  On 17 April 2000 the Minister, having re-examined the case, upheld its previous decision and declared that the expropriation decision was null and void.

18.  The public company in possession of the factory requested that the enforcement of this decision be stayed pending the outcome of the proceedings in which it had appealed against the decision of the Minister to the . On 12 September 2000 the  allowed this request. On 16 November 2000 the applicant’s request to have this decision set aside was dismissed by the same court.

19.  On 12 January 2001 the  upheld the decision of 17 April 2000.

(b)  Proceedings in which the applicant challenged the transfer of ownership from the State Treasury

20.  On 30 November 1992 the Kalisz Governor gave a decision to the effect that from 5 December of that year the ownership of the factory and the right of perpetual use of the land on which it was situated was to be vested in the Izolacja company. On an unspecified later date this hitherto Stateowned company changed its status and became an independent public company governed by the Commercial Code and in which the State was a minority shareholder (see also paragraph 16 above).

21.  In February 1997 the applicant instituted proceedings in which he sought to have that decision declared null and void.

22.  On 7 April 1997 the Kalisz Governor stayed those proceedings, pending the outcome of the administrative proceedings described above.

23.  The proceedings were resumed on 11 September 2000.

24.  On 17 October 2001 the President of the Office for Housing Matters declared that the 1992 decision was null and void. The company requested that the case be reexamined.

25.  On 11 January 2002 the President of the Office for Housing Matters, having reconsidered the case, upheld his earlier decision.

2. Events after the expropriation decision was declared null and void

(a)	Proceedings for repossession of the production hall

26.  In 1997 the applicant instituted civil proceedings before the , seeking recovery of possession of the production hall of the factory.

27.  On 19 February 1998 the court stayed the proceedings pending the outcome of the administrative case, holding that the outcome of the administrative proceedings in which the lawfulness of the 1966 decision was being examined (see paragraphs 7-19 above) was decisive for any decisions to be taken by a civil court. The applicant appealed. On 1 April 1998 his appeal was dismissed by the Łódź Court of Appeal. The proceedings were later resumed. At a hearing held on 24 October 2000 the court stayed the proceedings again. On 24 April 2001 the court resumed the proceedings. On 22 January 2002 the court, having regard to the parties’ concordant request, stayed the proceedings, with a view to the possibility that they might settle the case.

27.  On 19 February 1998 the court stayed the proceedings pending the outcome of the administrative case, holding that the outcome of the administrative proceedings in which the lawfulness of the 1966 decision was being examined (see paragraphs 7-19 above) was decisive for any decisions to be taken by a civil court. The applicant appealed. On 1 April 1998 his appeal was dismissed by the Łódź Court of Appeal. The proceedings were later resumed. At a hearing held on 24 October 2000 the court stayed the proceedings again. On 24 April 2001 the court resumed the proceedings. On 22 January 2002 the court, having regard to the parties’ concordant request, stayed the proceedings, with a view to the possibility that they might settle the case.

28.  On 1 September 2003 the applicant and other successors of the factory’s former owner submitted a settlement offer to the defendant company. The proceedings were resumed on 9 October 2003 at the defendant’s request.

28.  On 1 September 2003 the applicant and other successors of the factory’s former owner submitted a settlement offer to the defendant company. The proceedings were resumed on 9 October 2003 at the defendant’s request.

29.  On 7 July 2004 the court adopted a judgment by which it ordered the defendant company to clear the production hall and return it to the applicant. On 1 and 3 September 2004 respectively the defendant company and the applicant appealed against that judgment.

30.  On 22 December 2004 the Łódź Court of Appeal quashed the judgment and remitted the case. On 18 August 2005 the defendant company informed the court that on 10 August 2005 it had concluded an agreement with the applicant concerning the settlement of arrears in the payment of compensation for noncontractual use of the property for the period from May 2002 to August 2005. They had agreed that the defendant company would pay the applicant 177,040 Polish zlotys (PLN) in three instalments. In addition, the parties concluded a lease contract valid until 31 December 2007. As the applicant refused to withdraw his case in so far as it concerned the claim for repossession of the production hall, the proceedings were continued. They are currently pending.

(b)	The proceedings against the Izolacja company for payment

31.  On 10 February 2001 a lawyer representing nine legal successors of the former owner, including the applicant, called on the Izolacja company to pay PLN 18,000 per month for using their property without a contractual basis. On 13 November 2001 the applicant, together with six other legal successors, brought a civil action against the company in the Jarocin District Court, demanding payment for noncontractual use of the property in February 2001.

31.  On 10 February 2001 a lawyer representing nine legal successors of the former owner, including the applicant, called on the Izolacja company to pay PLN 18,000 per month for using their property without a contractual basis. On 13 November 2001 the applicant, together with six other legal successors, brought a civil action against the company in the Jarocin District Court, demanding payment for noncontractual use of the property in February 2001.

32.  On 12 February 2003 the Jarocin District Court gave judgment. It ordered the defendant company to pay PLN 11,025 plus default interest to the legal successors of the former owner in damages for the use of the property in February 2001. The court observed that the company had been in possession of the factory in bad faith at least since the judgment of the  given in January 2001 (see paragraph 19 above). This judgment was upheld on 25 June 2003 by the .

33.  Subsequently, the applicant brought civil actions in the Jarocin District Court, seeking compensation from the Izolacja company for noncontractual use of the property during the following periods: March and April 2001, May and June 2001, July and August 2001, and a number of further similar actions covering the period from May 2002 until March 2005.

34.  The Jarocin District Court joined his two first actions and allowed the applicant’s claim on 14 January 2004. Its judgment was upheld on 24 September 2004 by the .

35.  The parties concluded an outofcourt settlement in respect of the third action and the civil proceedings were discontinued. The remaining actions were joined and transferred to the Warsaw-Praga District Court, before which they are currently pending.

36.  On 14 October 2004 the applicant brought another civil action in the Jarocin District Court, seeking compensation for the company’s effective enjoyment of ownership from 6 May 1992 to 5 January 2001.

37.  On 20 December 2004 his action was dismissed. The court, bearing in mind the presumption of lawfulness of final administrative decisions, considered that in that period the defendant company had been holding the property in question as an independent possessor in good faith. Hence, it was not obliged to pay. This judgment was upheld by the  on 6 May 2005.

38.  On 17 April 2003 the applicant requested the Ministry of Internal Affairs to pay him damages for the period during which the Stateowned factory had been using his property. He relied on Article 160 of the Code of Administrative Procedure in connection with the decision of 17 April 2000 declaring the 1966 expropriation decision null and void.

39.  On 31 March 2004 the Minister for Infrastructure refused to grant compensation to the applicant and the other legal successors. He considered that they had not proved that they had sustained damage as a result of the 1966 expropriation decision, and that no link between the alleged damage and the decision had been shown.

40.  On 14 May 2004 the applicant brought a civil action in the Warsaw District Court against the State Treasury, seeking compensation for the damage resulting from the unlawful expropriation decision issued in 1966. He based his claim on Article 417 of the Civil Code. The applicant specified that the damage should be assessed as the difference in the value of the enterprise between 1945 and 2004. He also claimed one-quarter of the profits which the enterprise had made between 1945 and 2003.

41.  On 28 February 2005 the Warsaw-Śródmieście District Court dismissed the applicant’s action. It was of the view that the applicant had failed to show that he had suffered damage. It noted that it was open to him to bring a claim for repossession against the company. The only damage that could be examined was the alleged difference in the value of the property on the date when it had been taken over by the State Treasury and the date on which the unlawfulness of the expropriation decision had been recognised. However, it transpired from the evidence submitted by the applicant that the buildings on the property had been modernised by the company. Hence, the value of the property had in fact increased.

42.  On 11 April 2005 the judgment, together with its reasoning, was served on the applicant. The applicant did not appeal and on 26 April 2005 the judgment became final.

The factory remains in the possession of the Izolacja company and monthly rent for the lease is paid to the applicant.

II.  RELEVANT DOMESTIC LAW

A.	Administrative proceedings by which a final administrative decision can be challenged

43.  Under Polish law no provisions have been enacted allowing specifically for the redressing of wrongs committed in connection with expropriations effected in the context of agrarian reform. Therefore, no specific legal framework is available, enacted with the purpose of mitigating the effects of certain infringements of property rights.

44.  However, it is open to persons whose property was expropriated or their legal successors, to institute, under Article 156 of the Code of Administrative Procedure, administrative proceedings in order to claim that the expropriation decisions should be declared null and void as having been issued contrary to law. In particular, a final administrative decision can be declared null and void at any time if it was issued without a legal basis, or in flagrant violation of law.

45.  If the flaw that taints the challenged decision is of a substantive character, i.e. if the decision had been given without a legal basis or in flagrant violation of law, the administrative authority shall declare it null and void.

46.  Decisions flawed as a result of lesser procedural shortcomings, listed under items 1, 3, 4 and 7 of Article 156 § 1, such as those given by an authority which lacked competence to issue a decision in a given case, or in a case which had already been decided or addressed to a person not being a party to the proceedings, can only be declared null and void if less than ten years have elapsed from the date on which such decisions were given. In respect of such decisions it is only possible to declare that they were issued contrary to law; the decisions themselves remain valid.

47.  A decision to declare the old decision null and void, or a refusal to do so, may ultimately be appealed to the .

B.	Compensation proceedings for damage arising out of an unlawful administrative decision

48.  Article 160 of the Code of Administrative Procedure, as applicable at the material time, read in its relevant part:

"A person who has suffered a loss on account of the issuing of a decision in a manner contrary to Article 156 § 1 or on account of the annulment of such a decision shall have a claim for compensation for actual loss, unless he has been responsible for the circumstances mentioned in this provision."

49.  An administrative decision in respect of the compensation claim could be appealed against in a civil court.

C.	Length of administrative proceedings

1.	Before 30 June 1995

50.  Under Article 35 of the Code of Administrative Procedure of 1960, the administration was obliged to deal with cases without undue delay. Simple cases should be dealt without any delay. In cases requiring some enquiry a first-instance decision should be given in no more than one month. In particularly complex cases decisions should be taken within two months.

51.  If the decision had not been given within those time limits, a complaint under Article 37 of the Code could be filed with the higherinstance authority, which should fix an additional time limit, establish the persons responsible for the failure to deal with the case within the timelimits, and, if need be, arrange for preventive measures to be adopted in order to prevent further delays.

2.	From 30 June 1995 until 1 February 2004

52.  In 1995 the Supreme Administrative Court Act was adopted, which entered into force on 1 October 1995. It created further procedures in which a complaint about the administration’s failure to act could be raised.

53.  Under Article 17 of that Act, that court was competent to examine complaints about the administration’s inactivity in administrative proceedings in cases referred to in Article 16 of the Act.

54.  Pursuant to Article 26 of the Act, if a complaint about the inactivity of an administrative authority was well-founded, the court should oblige the competent authority to give a decision, or to carry out the factual act, or to confer or acknowledge an individual entitlement, right or obligation.

55.  On 1 January 2004 the Law on Administrative Courts came into force, which replaced the 1995 Act and established a two-tiered system of appeals against administrative decisions to administrative courts.

THE LAW

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

56.  The applicant alleged a violation of Article 6 § 1 of the Convention, arguing that the administrative proceedings in which he had sought to have the expropriation decision given in 1966 declared null and void had been excessively lengthy.

57.  The relevant provisions of Article 6 § 1 read:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal ...”

A.  Admissibility

58.  The Government submitted that after 1 October 1995, the date on which the Supreme Administrative Court Act 1995 had entered into force, the applicant could have lodged a complaint with that court about the failure of the ministries dealing with his case to give a decision. They averred that he had not availed himself of this remedy.

59.  The Court notes that on 27 October 1997 the applicant complained to the  about the failure of the administrative authorities to rule on his 1991 application. A relevant judgment was given by that court on 22 January 1999 (see paragraph 14 above).

60.  Therefore, the Court considers that the applicant has exhausted domestic remedies as required by Article 35 § 1 of the Convention.

61.  It follows that the Government’s preliminary objection must be dismissed. The Court notes that this complaint is not manifestly illfounded within the meaning of Article 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B.  Merits

1.  Period to be taken into consideration

62.  The Court notes that the proceedings began in 1991 and ended on 12 January 2001, when the  gave its judgment (see paragraph 19 above). They therefore lasted ten years, of which seven years and eight months fall within the Court’s temporal jurisdiction,  having recognised the right of individual petition as from 1 May 1993. Given its jurisdiction ratione temporis, the Court can only consider the period which has elapsed since 1 May 1993, although it will have regard to the stage reached in the proceedings on that date (see, among other authorities, Zwierzyński v. Poland, no. 30210/96, § 123, ECHR 2000-XI).

2.  Reasonableness of the length of the proceedings

63.  The Government argued that the case had been complex as to both the facts and the law; that what had been at stake for the applicant had been of a purely pecuniary character; and that the authorities had shown appropriate diligence when dealing with the case.  The applicant disagreed.

64.  The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII, and Beller v. Poland, no. 51837/99, § 67, 1 February 2005).

65.  The Court has frequently found violations of Article 6 § 1 of the Convention in cases raising issues similar to the one in the present case (see Frydlender, cited above).

66.  Having examined all the material submitted to it, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case. The Court further notes that the proceedings, instituted on an unspecified date in 1991, remained practically dormant from 1991 to 1997, when the applicant availed himself of the procedure provided for by the Code of Administrative Procedure and complained to the Supreme Administrative Court about the failure of the administration to rule on his application. That court, by its judgment of 22 January 1999, obliged the administrative authorities to give a decision within two months. This judgment was not complied with as the relevant administrative decision was ultimately given on 27 July 1999.

67.  Having regard to its caselaw on the subject, the Court considers that in the instant case the length of the proceedings was excessive and failed to meet the “reasonable time” requirement.

68.  There has accordingly been a breach of Article 6 § 1.

II.	OTHER ALLEGED VIOLATIONS OF ARTICLE 6 § 1 OF THE CONVENTION

69.  The applicant further complained that he had been deprived of the right of access to a court in that in 1998 the civil court had stayed the civil proceedings in which he had sought recovery of possession of the factory pending the outcome of the administrative case.

70.  The Court is of the view that the fact that the civil court stayed the proceedings pending the outcome of the administrative case, which was aimed at the determination of the ownership of the property and was therefore of crucial relevance to the outcome of the civil case, does not amount to a breach of the right of access to a court. It further observes that the civil proceedings were resumed after the  had given its judgment on 12 January 2001.

71.  It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

III.  ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

72.  The applicant complained that despite the fact that in 2001 he had obtained a judgment by which the expropriation decision had been declared null and void, the State had not taken sufficient steps to enable him to obtain effective enjoyment of his property rights in respect of the property concerned. He relied on Article 1 of Protocol No. 1 to the Convention, which reads:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

A.  Admissibility

1. Incompatibility ratione temporis with the provisions of the Convention

73.  The Government submitted that the alleged violation of the applicant’s property rights had originated in the decisions given in 1966 and 1992. The application was therefore incompatible ratione temporis with the provisions of the Convention because the alleged violation had taken place before 10 October 1994, the date on which  had ratified Protocol No. 1 to the Convention. The applicant disagreed.

74.  The Court’s jurisdiction ratione temporis covers only the period after the date of ratification of the Convention or its Protocols by the respondent State. From the ratification date onwards, all the State’s alleged acts and omissions must conform to the Convention or its Protocols and subsequent facts fall within the Court’s jurisdiction even where they are merely extensions of an already existing situation (see, for example, Almeida Garrett, Mascarenhas Falcão and Others v. Portugal, nos. 29813/96 and 30229/96, § 43, ECHR 2000-I). Accordingly, the Court is competent to examine the facts of the present case as to their compatibility with the Convention only in so far as they occurred after 10 October 1994, the date of ratification of Protocol No. 1 by . It may, however, have regard to the facts prior to ratification inasmuch as they could be considered to have created a situation extending beyond that date or may be relevant for the understanding of facts occurring after that date (see HuttenCzapska v. Poland [GC], no. 35014/97, §§ 147-153, ECHR 2006-...).

75.  The Court further observes that the applicant’s complaint is not directed against the 1966 expropriation decision as such, nor against the 1992 decision to transfer the ownership from the State Treasury to the Izolacja company. It rather relates to the applicant’s alleged difficulties in obtaining practical recognition of the legal effects of the decision of 1999, confirmed in 2001 by the , that the expropriation had been unlawful. The Government’s plea of inadmissibility on the ground of lack of jurisdiction ratione temporis must accordingly be dismissed.

2. Incompatibility ratione personae with the provisions of the Convention

76.  The Government submitted that the applicant could not claim to be a victim of a breach of the Convention since he had already obtained satisfaction within the domestic system. He had obtained full redress for any delay in having the possession of the property restored to him by the Izolacja company. Under the lease contract which he had concluded with that company, he had recovered independent possession of the property on 1 September 2005 and had agreed to grant dependent possession to the Izolacja company. Additionally, he had obtained compensation for the period after January 2001 during which he had been deprived of the use of his property.

The applicant disagreed.

77.  The Court considers that the Government’s objection is closely linked to the substance of the applicant’s complaint under Article 1 of Protocol No. 1 to the Convention. Its examination should therefore be joined to the merits of the case.

3. Exhaustion of domestic remedies

3. Exhaustion of domestic remedies

78.  The Government argued that the applicant had failed to exhaust the relevant domestic remedies. He had not brought a civil action against the Izolacja company for repossession of the entire property. He had only sought repossession in respect of the production hall. The applicant had not brought an action for compensation in respect of the period starting from 1 April 2005. He had never sought reimbursement from the company of the taxes due for the real estate. He had not instituted proceedings to have the ownership entry in the relevant land register updated, following the judgment of January 2001, as the applicable laws obliged him to do. Likewise, the applicant had failed to appeal against the judgment of 28 February 2005 dismissing his action for compensation against the State Treasury for damage allegedly sustained between 1945 and 2003 (see paragraph 42 above). It was also open to him to claim compensation from the State Treasury under Article 417 of the Civil Code for the alleged damage, if any, caused to him by the fact that he had not been able to recover possession of his property after January 2001.

As to the administrative remedies, the applicant had failed to institute proceedings under Article 160 of the Code of Administrative Procedure as applicable at the material time, which made it possible to seek compensation for damage caused by the administrative decision which had subsequently been declared null and void.

79.  The applicant disagreed. He submitted that the legal avenues indicated by the Government had been timeconsuming, costly and had not offered any guarantee that all his claims arising from the unlawful expropriation would be satisfied. As a result, the burden of ensuring that the legal effects of the expropriation decision were eradicated in practice had fallen entirely on the applicant.

80.  The Court notes that insofar as the applicant complains about the fact that he did not receive compensation from the State Treasury for the period during which the Stateowned company had been using his property, he failed to appeal against the judgment of the Warsaw-Sródmieście District Court of 28 February 2005 (see paragraphs 38-42 above). It has not been argued or shown that under the applicable domestic law an appeal would not have offered reasonable prospects of success. However, in the circumstances of the applicant’s case the Court considers that it does not have to decide on this issue at this stage for the following reasons.

The essence of the applicant’s grievance is the failure of the domestic legal system to secure his enjoyment of his rights which were ultimately vindicated by the ’s judgment of 12 January 2001. Whether that contention is borne out by the facts is a question to be resolved on the merits, taking into account the means of redress available to the applicant, the scope of the State’s obligations in this context and the response given at the domestic level to the applicant’s use of remedies. These matters are more appropriately addressed in an overall analysis. Accordingly, and as with the Government’s challenge to the applicant’s victim status, the issues raised by their non-exhaustion arguments should be joined to the merits of the case.

81.  In conclusion, the Court notes that this complaint is not manifestly illfounded within the meaning of Article 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

81.  In conclusion, the Court notes that this complaint is not manifestly illfounded within the meaning of Article 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B.  Merits

1.	The parties’ submissions

82.  The Government submitted that the relevant administrative decisions and the judgment of the  in the applicant’s case did not impose any obligations on the public authorities, such as an obligation to physically deliver the property to the owners. The only, albeit essential, result of the administrative decision adopted by the Minister for Internal Affairs on 17 April 2000, which was later upheld by the , had been to declare that the expropriation decision was null and void. This decision had had a declaratory character. It had not imposed on the State any obligations to take any practical steps in respect of the property concerned. Nor had it lent itself to any active enforcement measures to be taken under the provisions governing administrative enforcement procedure (“the 1966 Act”). This Act applied only to measures aiming to ensure implementation of public-law obligations by way of concrete steps to be pursued by the administrative authorities.

83.  The Government further submitted that on no occasion had the public authorities refused to comply with the judgment of 12 January 2001. Following this judgment, the administrative decision declaring the expropriation null and void had become final and had produced immediate effects on the civil rights and obligations of the persons concerned. In particular, the applicant and other legal successors had regained the unchallenged ownership of the property. By the same token, the State Treasury and the defendant company had lost their ownership. Since then the applicant’s legal title to the property had been recognised by all domestic authorities. The courts, in their civil judgments concerning various cases brought by the applicant after 12 January 2001 in connection with the property, had accepted his ownership as a given.

83.  The Government further submitted that on no occasion had the public authorities refused to comply with the judgment of 12 January 2001. Following this judgment, the administrative decision declaring the expropriation null and void had become final and had produced immediate effects on the civil rights and obligations of the persons concerned. In particular, the applicant and other legal successors had regained the unchallenged ownership of the property. By the same token, the State Treasury and the defendant company had lost their ownership. Since then the applicant’s legal title to the property had been recognised by all domestic authorities. The courts, in their civil judgments concerning various cases brought by the applicant after 12 January 2001 in connection with the property, had accepted his ownership as a given.

84.  On the strength of this judgment all third parties had been obliged to respect his ownership and not interfere with it. The rights and obligations stemming from the applicant’s ownership had clearly been of a civil character and the civil courts had had jurisdiction to resolve any disputes arising in connection with their exercise. No legal provision had reserved the competence to deal with such disputes to the administrative authorities.

85.  The State Treasury, which under the 1966 decision had been regarded as the owner until 2001, had not been a party to the civil-law disputes between the applicant and Izolacja company. From August 1999 at the latest Izolacja, a public company, had been a legal entity separate from the State Treasury and the latter had not been liable in respect of any obligations contracted by the former. The State Treasury had not had in this connection any legal means at its disposal to influence the outcome of the civil proceedings between the applicant and the company. The State Treasury had possessed shares in the company, but as it was a minority shareholder, even its indirect influence on the company’s organs, through the normal voting mechanisms applicable to public companies, had not offered any certainty of success.

86.  The applicant stressed that as a result of the judgment of January 2001 the expropriation decision had ultimately become null and void. However, no administrative procedure had been available for ensuring compliance with that judgment. The judgment should have automatically restored physical possession of the factory to the applicant. Notwithstanding, it had fallen entirely to the applicant to pursue legal remedies capable of improving his situation and to ensure that possession of the factory was indeed restored to him. This had made it necessary for him to bear considerable legal costs, if only in court fees. Such an obligation had imposed on the applicant a considerable burden from which he should have been released by the active efforts of the public authorities, not by his own efforts.

87.  The applicant further stressed that in 1992 the authorities had issued a decision to transfer the ownership from the State Treasury to the company, even though they had been aware that the administrative proceedings in which he had sought to have the legal title to the property restored to him were already pending. This was contrary to the principle that in administrative proceedings the State should act in such a way as to strengthen the citizen’s confidence in the fairness of such proceedings.

2.	The Court’s assessment

a. 	General principles

88.  The Court first reiterates that Article 1 of Protocol No. 1 contains three distinct rules. They have been described thus (in James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, pp. 2930, § 37; see also,  31524/96, § 51, ECHR 2000-VI):

“The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest ... The three rules are not, however, ‘distinct’ in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule.”

b. Whether there was a possession

89.  The Court points out that the concept of “possessions” in Article 1 of Protocol No. 1 has an autonomous meaning (see Beyeler v. Italy [GC], no. 33202/96, § 100, ECHR 2000-I). Consequently, the issue that needs to be examined first is whether the circumstances of the case, considered as a whole, conferred on the applicant a substantive interest protected by Article 1 of Protocol No. 1.

90.  In this connection, the Court notes that the applicant’s complaint is focused on the inability to enjoy what he perceives as his rights protected by Article 1 of Protocol No. 1. This inability has resulted from the fact that after the judgment of the  given on 12 January 2001, he had to take further proceedings in order to be able to effectively enjoy his rights originating in this judgment (see paragraph 86 above).

The Court notes that the  declared the expropriation decision null and void. Under the provisions of the Polish law such a decision gives rise, on the part of former owners or their legal successors, to a right to have the property restored to him or her, or, failing that, to a right to compensation. Hence, the decision to set aside the final expropriation decision had consequences for the applicant which should be regarded as conferring on him a proprietary interest falling within the ambit of possessions within the meaning of Article 1 of Protocol No. 1 to the Convention.

c. Compliance with the requirements of Article 1 of Protocol No. 1 to the Convention

91.  The Court reiterates that by virtue of Article 1 of the Convention, each Contracting Party “shall secure to everyone within [its] jurisdiction the rights and freedoms defined in ... [the] Convention”. The obligation to secure the effective exercise of the rights defined in that instrument may result in positive obligations for the State (see, among other authorities, X and Y v. Netherlands, judgment of 26 March 1985, Series A no. 91, p. 11, §§ 22-23). In such circumstances, the State cannot simply remain passive and “there is ... no room to distinguish between acts and omissions” (see, mutatis mutandis, Airey v. Ireland, judgment of 9 October 1979, Series A no. 32, p. 14, § 25).

92.  As regards the right guaranteed by Article 1 of Protocol No. 1, such positive obligations may entail certain measures necessary to protect the right to property (see, among other authorities and mutatis mutandis, López Ostra v. Spain, judgment of 9 December 1994, Series A no. 303-C, p. 55, § 55), even in cases involving litigation between private individuals or companies (see Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83, ECHR 2007... and Sovtransavto Holding v. , no. 48553/99, § 96, ECHR 2002-VII).

93. The Court observes that the applicant’s complaint does not relate to a simple failure on the part of the State to conduct enforcement proceedings in respect of a final judicial decision given against it in the applicant’s favour (in respect of which obligation, see Prodan v. Moldova, no. 49806/99, ECHR 2004III (extracts) and Lupacescu and Others v. Moldova, nos. 3417/02, 5994/02, 28365/02, 5742/03, 8693/03, 31976/03, 13681/03, and 32759/03, 21 March 2006). Rather, it is tantamount to saying that it was left to him to take such measures as would have made it possible for him to fully enjoy the economic advantages arising out of his rights originating in the judgment of the  given in 2001.

The Court notes that the property in question, a factory, was not held by any public authority either when the judgment of the Supreme Administrative Court was given in 2001, or at any later time (contrast Zwierzyński v. Poland, cited above, § 67, ECHR 2001VI). It was held by the Izolacja company, the legal successor of the former Stateowned enterprise which had previously owned and run the factory. Even if the State retained a minority of the shares in the company, it nevertheless enjoyed, as pointed out by the Government (see paragraph 85 above), complete operational and financial autonomy and was governed by the provisions of the Commercial Code (see paragraphs 16 and 28 above).

94.  The Court observes that the status of the company has a bearing on the nature of the State’s obligations under Article 1 of Protocol No. 1. In particular, having regard to the institutional and operational independence of the Izolacja company from the State, the latter must be taken to be absolved from responsibility under the Convention for that company’s acts and omissions. For the Court, the State’s obligation in the circumstances of this case is confined to ensuring an effective enforcement of the decision declaring the expropriation null and void, by having in place a legal framework making it possible for the applicant to recover possession of his property and to settle claims arising between him and the private-law entity, the Izolacja company, which was in possession of the property at the time of the impugned decision (see, mutatis mutandis, Sovtransavto Holding v. Ukraine, cited above, § 96).

95.  In this context, the Court acknowledges that difficult legal issues may arise in connection with legal proceedings pursued in order to remedy infringements of the right to the peaceful enjoyment of possessions committed in the past by the communist authorities (Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, ECHR 2005VI, mutatis mutandis).

96.  It observes that in the situation concerned in the present case, after a Stateowned enterprise had been running the factory for a long period of time and incurring expenditure to maintain it, a complex legal situation involving reciprocal claims arose between the applicant as the former owner and the Izolacja company which is the legal successor of this enterprise. The Court notes that under domestic law, it was open to the applicant to have recourse to various types of proceedings in order to have the 2001 judgment implemented in practice and, in particular, to have these complex claims and counterclaims determined by the courts. The applicant had recourse to them, firstly by instituting several sets of proceedings in which he sought damages from the enterprise for the use of the property after the expropriation decision had been declared null and void in 2001. The courts ruled in his favour in two of these sets of proceedings and awarded damages to him. The Court further notes that the applicant also successfully instituted proceedings in which he sought to have possession of the factory returned to him. Furthermore, it was open to him to claim damages for the period during which the State Treasury had been using his property. The first-instance court dismissed his claim. It was open to the applicant to lodge an appeal, but he failed to do so (see paragraphs 38- 42 above).

It is further to be observed that there was no impediment under domestic law to the negotiation of private contractual arrangements between the applicant and the Izolacja company regarding the lease of the property to the latter. In fact such a contract was successfully concluded between the parties (see paragraph 30 above).

97.  Hence, the domestic law provided an effective framework of a judicial character by which the applicant could seek to have the economic value of his rights arising out of the ’s judgment of 12 January 2001 recognised in practice.

98.  Having regard to the circumstances of the case seen as a whole, the Court is of the view that the State has not failed to comply with its obligation to secure to the applicant the effective enjoyment of his rights guaranteed by Article 1 of Protocol No. 1 to the Convention. On that account, the Court finds that it unnecessary to rule on the Government’s preliminary objections relating to victim status and nonexhaustion of domestic remedies (see paragraph 80 above, in fine)

Therefore, there has been no violation of Article 1 of that provision.

IV.  OTHER ALLEGED VIOLATIONS OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

99.  The applicant complained that the length of the proceedings in which he had sought to have the expropriation decision declared null and void amounted to a breach of Article 1 of Protocol No. 1.

100.  The applicant complained that he could not seek compensation for the damage he had suffered as a result of the protracted length of the restitution proceedings.

101.  The Court notes that this complaint is linked to the one examined above and must therefore likewise be declared admissible.

102.  The Court considers that this complaint under Article 1 of Protocol No. 1 complaint does not give rise to any issue separate from the one which has already been examined under Article 6 of the Convention (see, for example, Zanghì v. Italy, judgment of 19 February 1991, Series A no. 194C, § 23, and Di Pede v. Italy, judgment of 26 September 1996, Reports of Judgments and Decisions 1996IV, p. 17, § 35).

V.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

103.  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

104.  The applicant claimed 50,000 Polish zlotys (PLN) in respect of the pecuniary and nonpecuniary damage resulting from the breach of Article 6 § 1 of the Convention. He further claimed PLN 271,800 for pecuniary damage and PLN 40,000 for nonpecuniary damage in connection with the breach of Article 1 of Protocol No. 1 to the Convention.

105.  The Government contested the claim for pecuniary damage as being exorbitant.

106.  The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore dismisses this claim. On the other hand, it awards the applicant 3,500 euros (EUR) in respect of the nonpecuniary damage sustained in connection with the violation of the right to a hearing within a reasonable time.

B.  Costs and expenses

107.  The applicant also claimed EUR 3,400, referring to relevant invoices he submitted, for the costs and expenses incurred before the Court.

108.  The Government did not express an opinion on the matter.

109.  According to the Court’s caselaw, an applicant is entitled to reimbursement of his costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and were reasonable as to quantum. In the present case, regard being had to the information in its possession and the above criteria, the Court awards the applicant’s claim in full.

C.  Default interest

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

FOR THESE REASONS, THE COURT UNANIMOUSLY

1.	Joins to the merits the Government’s preliminary objections concerning non-exhaustion of domestic remedies and the applicant’s victim status in respect of the complaint under Article 1 of Protocol No. 1 to the Convention and dismisses the remaining objection;

2.  Declares the complaints concerning the excessive length of administrative proceedings and the alleged failure to secure the applicant’s right to the peaceful enjoyment of his possessions as confirmed by the judgment of the Supreme Administrative Court of 12 January 2001 admissible, and the remainder of the application inadmissible;

3.  Holds that there has been a violation of Article 6 § 1 of the Convention;

4.  Holds that there has been no violation of Article 1 of Protocol No. 1 of the Convention and finds that it is not necessary to rule on the Government’s above-mentioned preliminary objections;

5.	Holds that there is no need to examine separately the complaint concerning the length of the proceedings under Article 1 of Protocol No. 1 to the Convention;

6.  Holds

(a)  that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 3,500 (three thousand five hundred euros) in respect of non-pecuniary damage and EUR 3,400 (three thousand four hundred euros) in respect of costs and expenses, to be converted into Polish zlotys at the rate applicable at the date of settlement, plus any tax that may be chargeable;

(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;

7.  Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 22 April 2008, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.


PROCEDURE

1.  The case originated in an application (no. 34616/02) against the  lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Russian nationals, Ms Lyudmila Vitalyevna Bezrukova (“the first applicant”) and Ms Irina Sergeyevna Bezrukova (“the second applicant”), on 9 September 2002. The first and second applicants are together referred to as “the applicants”.

2.  The applicant was represented by Mr V. Shakhlarov, a lawyer practising in . The Russian Government (“the Government”) were represented by Mr P. Laptev and Mr G. Matyushkin, the successive Representatives of the  at the European Court of Human Rights.

3.  The applicants alleged, in particular, that the final and enforceable domestic judgment in their favour had not been enforced in a timely manner and that the time-limit for appealing against that judgment had been extended, thus allowing its subsequent quashing.

4.  On 15 September 2005 the application was communicated to the Government. It was also decided to consider the admissibility and merits of the case together.

5.  On 24 November 2009, in view of the developments in the case, the Government was invited to submit additional observations pursuant to Rule 54 § 2 (c) of the Rules of Court. The applicants submitted their observations in reply.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

6.  The first applicant was born in 1950. The second applicant is the first applicant’s daughter, born in 1976. They live in .

A.  The applicants’ lawsuit against the SBS-AGRO Bank

7.   In July and August 1998 the applicants made various monetary deposits with the  branch of the SBS-Agro Bank (“СБС-Агро”). In September 1998, during a financial crisis in  and rapid currency devaluation, they requested the bank to refund the capital with interest, but the bank refused. On 4 August 1999 the Zheleznodorozhniy District Court of Voronezh (“the District Court”) allowed the applicants’ claim against the bank. The first and second applicant were awarded 24,490 and 32,931  dollars (USD) respectively.

8.  The bailiffs started enforcement proceedings on 22 August 2000. Meanwhile, the bank became insolvent. On 10 July 2001 the enforcement proceedings were discontinued. The judgment of 4 August 1999 remained unenforced.

B.  The applicants’ lawsuit against the ARKO and the Central Bank

9.  On 16 August and 15 September 1999 the Central Bank of  (“the Central Bank”) declared a moratorium until 17 November 1999 on the execution of all creditors’ demands against the SBS-Agro Bank (“the bank”). The moratorium was later prolonged. On 16 November 1999 the management of the bank was taken over temporarily by the “Agency on Restructuring of Lending Agencies” (“ARKO”), set up by the State in accordance with the Law on Restructuring of Lending Agencies.

10.  On 9 November 2001 the applicants sued the Central Bank and the ARKO for damages on the ground that the bank remained under the ARKO’s effective control since 16 November 1999. The District Court held a hearing in the applicants’ case on 5 December 2001. The ARKO filed written observations but was not represented at the hearing. The Central Bank did not file observations, nor was it represented at the hearing. In its judgment delivered on the same date the District Court noted that the bank was being managed by the ARKO at the material time and found the latter responsible for the bank’s obligations, including its debt owed to the applicants. It held that the ARKO was to pay the first and second applicants USD 24,490 and USD 32,931 respectively.

11.  The  (“the ”) allowed the ARKO’s appeal on 12 March 2002 and set aside the District Court’s judgment of 5 December 2001.

12.  Following another remittal, on 20 December 2004 the District Court again found for the applicants, in terms similar to those of its judgment of 5 December 2001. The applicants were awarded the same amounts, payable by the ARKO. The judgment also held that the ARKO had to pay an amount of USD 20,841.68 to another plaintiff, Mr Kravchenko. The judgment specified that it was subject to appeal before the  within ten days.

13.  The ARKO lodged an appeal against the judgment of 20 December 2004. The Central Bank joined the appellate proceedings. On 25 February 2005 the ARKO was closed.

14.  On 19 July 2005 the  heard the ARKO’s appeal against the District Court’s judgment of 20 December 2004. The representative of the Central Bank took part in the hearing as a codefendant. The  observed that the ARKO had been closed and discontinued the appellate proceedings. The District Court’s judgment of 20 December 2004 in the applicants’ favour accordingly became binding and enforceable.

15.  On 2 August 2005 the District Court issued a writ of execution in respect of its judgment of 20 December 2004, which had acquired legal force on 19 July 2005.

16.  On 6 December 2005 the Central Bank lodged an appeal with the  against the judgment of 20 December 2004. They also requested that the ten-day time-limit for appeal be extended on the ground that they had been deprived of the opportunity to have the lawfulness of the judgment of 20 December 2004 reviewed by the .

17.  On 2 March 2006 the  extended the time-limit for appeal as requested by the Central Bank. It noted that the Central Bank “had joined” the ARKO’s appeal against the judgment of 20 December 2004 which had been dismissed without being considered on its merits. The  concluded that the Central Bank had been deprived of its statutory right to appeal against the judgment of 20 December 2004.

18.  On 9 March 2006 the  considered the Central Bank’s appeal against the District Court’s judgment of 20 December 2004. It heard the same representative of the Central Bank who took part in the hearing held by the same court on 19 July 2005 to consider the ARKO’s appeal which was then joined by the Central Bank. The court observed that both the ARKO and the Central Bank were co-defendants in the case and that the ARKO had been closed. The  concluded that its earlier decision of 19 July 2005 was based on an incorrect application of the relevant legal provisions, set aside the judgment of 20 December 2004 in the applicants’ favour and discontinued the proceedings.

C.  The Court’s judgment in the case of Kravchenko and subsequent developments

19.  On 2 April 2009 the European Court of Human Rights delivered a judgment in respect of Mr Kravchenko (Kravchenko v. Russia, no. 34615/02, 2 April 2009), who was at a certain stage the applicants’ coplaintiff in the domestic proceedings (see paragraph 12 above). In February 2002 he had obtained a separate judgment awarding him an amount of 30,919.40 Russian roubles (RUB), payable by the ARKO (see Kravchenko, cited above, §§ 44-49). The Court found a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 in that the  had quashed in May 2002 the binding and enforceable judgment in Mr Kravchenko’s favour by way of supervisory review.

20.  Following the Court’s judgment of 2 April 2009, the applicants lodged an application for review of the ’s judgment of 9 March 2006, relying on Articles 392-394 of the Code of Civil Procedure. On 15 June 2011 the Presidium of the  dismissed their application.

II.  RELEVANT DOMESTIC LAW

21.  Under the Russian Code of Civil Procedure (“the CCP”), a competent court may extend an expired time-limit for procedural actions, such as lodging an appeal, if the court finds that a party has a valid excuse for failure to comply with that time-limit (Article 112).

22.  An appellate court shall set aside the judgments and discontinue the proceedings if a legal entity which is a party to the proceedings has been liquidated (Article 365 in conjunction with Article 220 of the CCP).

23.  A final judgement in a case may be reviewed, inter alia, on the ground that the European Court of Human Rights found a violation of the Convention on account of the domestic judicial proceedings or decisions taken in that case (Article 392 of the CCP). Articles 393-394 set out a procedure for reopening of domestic judicial proceedings in any such case.

24.  The ARKO was a State corporation (Article 28 of the Law No. 144FZ of 8 July 1999 on Restructuring of Lending Agencies), that is, a non-commercial organisation established by the Russian State in order to exercise certain social, administrative or other socially beneficial functions (Article 7.1 of the Law No. 7-FZ of 12 January 1996 on NonCommercial Organisations, as amended by the Law No. 144-FZ of 8 July 1999).

THE LAW

I.   ALLEGED VIOLATION OF THE CONVENTION ON ACCOUNT OF THE NON-ENFORCEMENT AND QUASHING OF THE JUDGMENT OF 20 DECEMBER 2004

25.  The applicants complained under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 of the unjustified extension of the timelimit for appeal which led to the quashing of the binding and enforceable judgment of 20 December 2004 in their favour. They also complained under the same provisions of the authorities’ failure to enforce that judgment in a timely manner. The respective provisions, in so far as relevant, read as follows:

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

Every natural or legal person is entitled to the peaceful enjoyment of his possessions”

A.  The parties’ submissions

26.  The Government contended that the relevant procedure had fully complied with the requirements of both Article 6 § 1 of the Convention and Article 1 of Protocol No. 1. They emphasised that the Central Bank had duly joined the appeal initially lodged by the ARKO. The closing of the ARKO, in the Government’s submission, should have, under the applicable procedural rules, led to the setting aside of the District Court’s judgment and the discontinuation of the proceedings as a whole and not simply the discontinuation of the appellate proceedings effectively leading to the District Court’s judgment against a now non-existent ARKO acquiring binding force.

27.  In their additional observations, the Government extensively relied on the Court’s decision in the Shestakov case (Shestakov v. Russia (dec.), no. 48757/99, 18 June 2002), arguing that the applicants’ situation as creditors of the SBS-Agro Bank was very similar and their complaints should likewise be declared ill-founded. They insisted inter alia that the State was unable to pay the SBS-Agro bank’s debts to its creditors in the context of the acute financial crisis starting from August 1998. The Government concluded that the District Court’s judgment of 20 December 2004 in the applicants’ favour had been flawed and rightly quashed on appeal. The applicants’ complaints under the Convention should, therefore, be rejected as should have been those brought by other applicants in two previous cases (Kravchenko, cited above, and Margushin v. Russia, no. 11989/03, 1 April 2010). They emphasised, finally, that the domestic judgment at issue in the present case was quashed by way of ordinary appeal and not through supervisory review as in Kravchenko and Margushin.

28.  The applicants disagreed with the Government’s interpretation of the Court’s decision in Shestakov. They argued that the situation of the latter applicant was quite different and so was the domestic judgment delivered in his favour. They insisted that the Court’s position in Kravchenko should be followed in the present case and regretted that the  had failed to grant their application for review following the Kravchenko judgment.

B.  The Court’s assessment

1.  Admissibility

29.  The Court considers that the complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. Nor is it inadmissible on any other grounds. It must therefore be declared admissible.

2.  Merits

30.  At the outset, the Court will distinguish the Convention issue at stake in the present case from that raised in the Shestakov case relied upon by the Government. While the original facts relating to the SBS-Agro Bank’s failure to pay back the applicants’ deposits during the financial crisis of 1998 were similar, the issue brought by the applicants before the Court in the present case is different. In Shestakov the central issue was the State’s failure to discharge its positive obligations to assist in enforcement of a domestic judgment in the applicant’s favour against a private debtor. In the present case the applicants complained of a breach of the legal certainty requirement on account of the quashing of the final judgment in their favour a long time after the expiry of the statutory time-limit for appeal.

31.  The Court reiterates that the principles insisting that a final judicial decision must not be called into question and should be enforced represent two aspects of the same general concept, namely the right to a court (see Kondrashov and Others v. Russia, nos. 2068/03 et al., § 27, 8 January 2009). This does not mean, however, that those respective issues are identical or necessarily overlapping. Indeed, the Court’s finding that the State has done what it could and should to assist in enforcement of a final judgment in favour of one creditor as in Shestakov (cited above), did not lead it to conclude that the quashing of another final judgment in favour of another creditor by way of supervisory review complied with the legal certainty requirement (see Kravchenko, cited above). The Court observes that the issue raised by the present case is similar to the latter as the applicants’ reliance on a final judgment was allegedly frustrated by its quashing, which they found to be abusive. This issue must be considered by the Court on its merits and cannot be discarded on account of the findings made in the context of the enforcement proceedings in the Shestakov case.

32.  The right to a fair hearing before a tribunal as guaranteed by Article 6 § 1 of the Convention must be interpreted in the light of the Preamble to the Convention, which declares, among other things, the rule of law to be part of the common heritage of the Contracting States. One of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, inter alia, that where the courts have finally determined an issue, their ruling should not be called into question (see Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999VII). A departure from that principle is justified only when made necessary by circumstances of a substantial and compelling character, such as correction of fundamental defects or miscarriage of justice (see, among numerous authorities, Ryabykh v. Russia, no. 52854/99, § 52, ECHR 2003-IX, and Margushin, cited above, § 31).

33.  In previous cases against  the Court has upheld the principle of legal certainty in so far as legal procedures of supervisory review (see Ryabykh, cited above) and reconsideration owing to newly discovered circumstances (see Pravednaya v. Russia, no. 69529/01, 18 November 2004) were concerned. Furthermore, the Court has considered it appropriate to follow the same logic when this fundamental principle was undermined through other procedural mechanisms, such as the extension of the time-limit for an appeal. Thus, the Court found a violation of Article 6 in a case against Ukraine as the time-limit for an appeal was extended after a considerable lapse of time without any need for correction of serious judicial errors, but merely for the purpose of a rehearing and a fresh decision of the case (see Ponomaryov v. Ukraine, no. 3236/03, §§ 4142, 3 April 2008).

34.  The Court has no doubt that it is reasonable to provide for a possibility of extending procedural time-limits, including the time-limits for lodging an appeal, and notes that the legal systems of the States parties contain special provisions to that effect. While the extension of the timelimit for an appeal remains primarily within the domestic courts’ discretion, they should, in the Court’s view, verify whether the reasons for any such extension justify the interference with the principle of res judicata, especially when the domestic legislation does not limit the courts’ discretion either on the length or the grounds for the renewal of the time-limits (ibid., § 41).

35.  The Court notes that Russian law does not contain any prohibitive limit in this respect (see paragraph 18 above). In these circumstances, an allegation of abusive extension of the time-limit for an appeal against a final judgment calls for close supervision by the Court. Its task is thus to assess the particular circumstances of the case at hand and the manner in which the pertinent domestic regulations were actually applied (see Ashingdane v. the United Kingdom, 28 May 1985, § 57, Series A no. 93).

36.  Furthermore, the Court considers that, as in the case of quashing by way of supervisory review, a successful litigant’s legitimate reliance on res judicata may be frustrated in a very similar manner by waiving the timelimits for appeal (see, mutatis mutandis, Kulkov and Others v. Russia, nos. 25114/03 et al., § 27, 8 January 2009). Such departures from the principle of legal certainty are justified only when made necessary by circumstances of a substantial and compelling character (see Salov v. Ukraine, no. 65518/01, § 93, ECHR 2005-VIII; Protsenko v. Russia, no. 13151/04, § 26, 31 July 2008; and Kravchenko v. Russia, cited above, § 45). In particular, legal certainty can be set aside not for the sake of legal purism but in order to rectify “an error of fundamental importance to the judicial system” (Sutyazhnik v. Russia, no. 8269/02, § 38, 23 July 2009).

37.  Turning to the circumstances of the present case, the Court observes at the outset that the District Court’s judgment of 20 December 2004 in the applicants’ favour became final on 19 July 2005 following the ’s decision to discontinue the appeal proceedings (see paragraph 14 above). However, on 2 March 2006 the  granted the Central Bank’s application for extension of the statutory timelimit for appeal and on 9 March 2006 quashed the judgment (see paragraphs 17 and 18 above).

38.  The Court observes that the Central Bank had previously “joined” the appeal lodged by the defendant ARKO against the District Court’s judgment of 20 December 2004 in the applicants’ favour and that the representative of the Central Bank had attended the appellate hearing of 19 July 2005. However, there is no indication that the Central Bank’s representative raised at that time any objection against the ’s decision to discontinue the appellate proceedings on the ground that the ARKO had been closed. It was only four months later that the Central Bank came back to the same court and challenged the final judgment of 20 December 2004. The Court finds no explanation for this behaviour, noting especially that the Central Bank was constantly involved in the proceedings as a co-defendant (see, mutatis mutandis, Margushin, cited above, § 34).

39.  Moreover, the Court notes that the  granted the request for extension of the time-limit by reference to the Central Bank’s initial intention to “join” the appeal lodged by the ARKO and the ensuing failure to lodge its own appeal against the judgment within the statutory timelimit. The Government on their part argued that the ’s decision to discontinue the appeal proceedings should never have led to the upholding of the judgment of 20 December 2004 in the applicants’ favour as the respondent agency had been closed by the time of the appeal hearing (see paragraph 26 above). However, even assuming that the ’s judgment contained an error, the Court does not discern in the above explanations any circumstance of substantial and compelling character which would justify the ’s extension of the timelimit for appeal and the subsequent quashing of the final judgment in the applicants’ favour.

40.  First, the Court does not find that the procedural reasons referred to by the  and by the Government were of a fundamental nature. It considers it unfair that possible procedural errors by the Central Bank or the  itself were corrected solely to the applicants’ detriment a long time after the judgment in their favour became final.

41.  Second, the mere fact that the judicial award was payable by the ARKO which was later closed, does not necessarily relieve the State of its responsibility to enforce that judgment, given both the ARKO’s status as a State corporation (see paragraph 24 above) and the role of co-defendant played by the Central Bank in the proceedings at issue. The Court notes in this connection that the applicants consistently directed their action against both the ARKO and the Central Bank in view of the latter’s implication in the matters concerned and that the  consistently associated the Central Bank to the proceedings as a co-defendant. At the same time, the domestic courts have never clarified the Central Bank’s responsibility, either direct or subsidiary, in respect of the applicants’ grievances. This issue became crucial after the closing of the ARKO on 25 February 2005 but still remained unresolved by the .

42.  In this context the Court considers that the applicants could reasonably rely on the final judgment in their favour and expect that the judgment debt would be honoured even after the closing of the ARKO. This attitude is also in line with the Court’s constant view that the closure of a respondent State organ does not, in principle, absolve the State of the obligation to pay its debts under a binding and enforceable judgment, especially taking into account that changing needs force the State to make frequent changes in its organisational structure, including by forming new organs and closing old ones (mutatis mutandis, Nikitina v. Russia, no. 47486/07, § 19, 15 July 2010). The Court cannot, therefore, accept the argument that the closure of the ARKO constituted in itself a circumstance justifying the departure from the principle of legal certainty in the applicants’ case.

43.  Finally, as regards the Government’s argument concerning the objective obstacles to payment of the Bank’s debts in the context of a largescale financial crisis, the Court does not put it into question that a comprehensive solution for repayment of debts to the creditors was needed. However, this could not prevent the applicants from bringing their claims to domestic courts and it was open to the authorities including the Central Bank to defend their position in court proceedings before the judgment became final and enforceable. As to the need to correct judicial errors and to ensure a uniform application of the domestic law, the Court considers that these must not be achieved at any cost and notably with disregard for the applicants’ legitimate reliance on res judicata. The authorities must strike a fair balance between the interests of the applicants and the need to ensure the proper administration of justice (see Nikitin v. , no. 50178/99, § 59, ECHR 2004VIII, and Kulkov and Others, cited above, § 27).

44.  In view of the foregoing, the Court concludes that by extending the time-limit for the Central Bank’s appeal against the District Court’s judgment of 20 December 2004 the Regional Court infringed the principle of legal certainty and the applicants’ right to court under Article 6 § 1 of the Convention.

45.  Turning to Article 1 of Protocol No. 1, the Court reiterates that a judgment debt may be regarded as a “possession” for the purposes of that provision and that setting such a judgment aside in violation of Article 6 may also constitute an interference with the judgment beneficiary’s right to the peaceful enjoyment of his possession (see Ryabykh, cited above, § 61). As the Court has already found that the applicants were arbitrarily deprived of their right to court (see paragraph 44 above), it follows that there has also been a violation of Article 1 of Protocol No. 1 in that respect (see Margushin, cited above, § 40).

46.  To sum up, the Court concludes that the extension of the time-limit for an appeal against the final judgment in the applicants’ favour and the subsequent quashing of that judgment by the  violated Article 6 § 1 of the Convention and Article 1 of Protocol No. 1.

47.  Having regard to that finding, the Court does not find it necessary to examine separately the issue of non-enforcement of the judgment of 20 December 2004 by the authorities (see Boris Vasilyev v. Russia, no. 30671/03, §§ 41-42, 15 February 2007; Sobelin and Others v. Russia, nos. 30672/03 et al., §§ 67-68, 3 May 2007; Kulkov and Others, cited above, § 35; and Kazakevich and 9 other “Army Pensioners” cases v. Russia, nos. 14290/03 et al., § 32, 14 January 2010).

II.  ALLEGED VIOLATION OF THE CONVENTION ON ACCOUNT OF THE NON-ENFORCEMENT OF THE JUDGMENT OF 4 AUGUST 1999

48.  The applicants complained under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 that there had been no full and timely enforcement of the District Court’s judgment of 4 August 1999.

49.  The Court observes that the judgment in issue was rendered in the applicants’ favour against a commercial bank which was declared insolvent and that the enforcement proceedings were discontinued on 10 July 2001. The application was lodged with the Court on 9 September 2002, that is more than six months after those events. The complaint is therefore inadmissible pursuant to Article 35 § 4 of the Convention.

III.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

50.  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

51.  The applicants claimed repayment of the judgment debts they had legitimately expected to receive before the judgment in their favour was quashed, i.e. the amounts of 24,490  dollars (USD) and USD 32,931 respectively. They further claimed 583,548.24 Russian roubles (RUB) and RUB 784,680.56 respectively representing interest on the judgment debts (lucrum cessans) for the period from 5 December 2001 to 29 July 2011. They also claimed 5,000 euros (EUR) each for nonpecuniary damage.

52.  The Government submitted that the applicants’ claims were excessive and ill-founded. They contested the method of calculation of interest on the judgment debts, including the rate applied by the applicants and the period of time for which interest was due. As regards non-pecuniary damage, the Government argued that in any event the Court should not grant more than EUR 2,000, an amount awarded in the Kravchenko case.

53.  The Court notes that in the present case it has found a violation of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 in that the final judgment in the applicants’ favour had been quashed in breach of the legal certainty requirement and that the applicants had not been able to receive the judicial awards as a result of the quashing of that judgment. The most appropriate form of redress in respect of a violation of Article 6 is to ensure that the applicant is put, as far as possible, in the position he would have been had the requirements of Article 6 not been disregarded (see Piersack v. Belgium (Article 50), judgment of 26 October 1984, Series A no. 85, p. 16, § 12, and, mutatis mutandis, Gençel v. Turkey, no. 53431/99, § 27, 23 October 2003). The Court finds that in the present case this principle applies as well, having regard to the nature of the violations found (see Kravchenko, cited above, § 56). The Court therefore considers it appropriate to award the applicants the amounts which they would have received, had the final judgment of 20 December 2004 not been quashed, i.e. USD 24,490 and USD 32,931 respectively.

54.  As to the claim concerning interest on the judgment debts, the Court, like the Government, has doubts as to the method of calculation used by the applicants. They did not provide sufficient factual elements to substantiate their approach. The Court further notes that the depreciation of the judgment debt over the relevant period was limited since the awards were made in the  currency which was not affected by inflation at the same rate as the Russian national currency. In these circumstances the Court dismisses the applicants’ claim for interest.

55.  The Court further considers that the applicants must have suffered distress and frustration resulting from the quashing of the final judgment in breach of the legal certainty requirement. Making its assessment on an equitable basis, as required by Article 41 of the Convention, the Court awards EUR 2,000 to each applicant in respect of non-pecuniary damage, plus any tax that may be chargeable on those amounts.

B.  Costs and expenses

56.  The applicants claimed RUB 35,000 for legal costs and attached the lawyer’s bill in support of their claims. The Government did not dispute the amount paid to the lawyer and considered that it could be granted, should the Court find a violation of the Convention. The Court therefore awards the applicants EUR 880 for costs and expenses.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1.  Declares the complaints concerning the quashing of the judgment of 20 December 2004 in the applicants’ favour after the extension of the time-limit for appeal and the nonenforcement of that judgment admissible and the remainder of the application inadmissible;

2.  Holds that there has been a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 on account of the quashing of the judgment in the applicants’ favour;

3.  Holds that it is not necessary to examine separately the issue of nonenforcement of that judgment;

4.  Holds 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:

(a)  the awards made by the domestic court in the applicants’ favour, that is USD 24,490 (twenty-four thousand four hundred and ninety United States dollars) to the first applicant and USD 32,931 (thirty-two thousand nine hundred and thirty-one  dollars) to the second applicant in respect of pecuniary damage;

(b)  EUR 2,000 (two thousand euros) to each applicant in respect of nonpecuniary damage, to be converted into Russian roubles at the rate applicable at the date of the settlement, plus any tax that may be chargeable to the applicants on that amount;

(c)  EUR 880 (eight hundred and eighty euros) jointly to both applicants in respect of costs and expenses, to be converted into Russian roubles at the rate applicable at the date of the settlement, plus any tax that may be chargeable on that amount;

(d)  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’ claim for just satisfaction.

Done in English, and notified in writing on 10 May 2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.