AS TO THE ADMISSIBILITY OF
Application no. 23055/03
by Sayyad BAYRAMOV
The European Court of Human Rights (First Section), sitting on 14 February 2006 as a Chamber composed of:
Mr C.L. Rozakis, President,
Mr L. Loucaides,
Mrs F. Tulkens,
Mrs E. Steiner,
Mr K. Hajiyev,
Mr D. Spielmann,
Mr S.E. Jebens, judges,
and Mr S. Nielsen, Section Registrar,
Having regard to the above application lodged on 5 July 2003,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
The applicant, Mr Sayyad Bayramov, is an Azerbaijani national who was born in 1956 and lives in Baku. He was represented before the Court by Mr N. Abdullayev, a lawyer practising in Baku. The respondent Government was represented by Mr C. Asgarov, Agent of the Republic of Azerbaijan before the Court.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
The applicant was an executive director of the Qayğı Small Enterprise (hereinafter the “Company”), a commercial legal entity with its headquarters in Baku. According to the Company’s articles of incorporation, its sole founder and owner was the Nizami Qayğı Association. The latter was a non-profit public association aimed at providing social and other public-benefit assistance to the population. The applicant was appointed as the Company’s director pursuant to a decision of the Nizami Qayğı Association, the sole shareholder in the Company.
By an order of 7 December 1994, issued by the Baku City Executive Authority (Bakı şəhəri İcra Hakimiyyəti; hereinafter “BCEA”), the Company was provided with a plot of land for construction of an office building. By 1997, the Company had started the construction work on the site. However, on an unspecified date in 1997, BCEA repealed its order of 7 December 1994 and ordered the demolition of the Company’s building.
The Company filed a lawsuit against BCEA, seeking compensation for damages. The Company was represented by the applicant, in his capacity of the Company’s director, and by N.I., the Company’s deputy director. By a judgment of 11 November 1997, the Economic Court held that, as a result of the building’s demolition by BCEA, the Company sustained financial damages in the amount of 70,061,250 Azerbaijani Manats (AZM). The court ordered BCEA to compensate the Company for these damages.
No appeal was filed against the judgment and it entered into legal force. On 2 December 1997 the Economic Court issued a writ of execution of the judgment. Following BCEA’s failure to pay the compensation, on 18 December 1998 another writ of execution was issued.
However, instead of compensating the Company in accordance with the judgment, it appears that, on 15 December 1999, BCEA provided it with another plot of land for construction of a new building. On this ground, BCEA filed an appeal with the President of the Supreme Court, asking to reopen the case due to the “discovery of new facts” and to reconsider the judgment of 11 November 1997.
By a letter of 31 May 2001, the President of the Supreme Court rejected BCEA’s request. The President explained that the case could be reopened due to the discovery of new facts only if such new facts had existed at the time of examination of the case by the first-instance court, but were unknown to the court at that time. However, since the new plot of land was transferred to the Company in 1999, after the judgment of 11 November 1997 had entered into force, it could not be considered as a basis for reopening of the proceedings. Moreover, the Supreme Court’s President noted that the transfer of the new plot to the Company could not be considered as a substitute for compensation for the Company’s financial damages sustained as a result of the demolition of its first office building in 1997.
Following BCEA’s continuous failure to execute the judgment, on 28 August 2001 the Local Economic Court No. 1 (1 saylı Yerli İqtisad Məhkəməsi) issued a special order, directing the Prosecutor’s Office to bring BCEA’s responsible officials under criminal liability for non-execution of the valid court judgment. On 24 November 2001 the Sabail District Prosecutor’s Office refused to institute criminal proceedings against BCEA officials, holding that there was no documentary evidence showing that the writ of execution had ever been presented directly to BCEA.
On 23 July 2002 the Local Economic Court No. 1 issued a new writ of execution which was sent to BCEA through the Sabail District Bailiffs’ Office (Səbail rayon Məhkəmə Nəzarətçiləri və Məhkəmə İcraçıları şöbəsi; hereinafter the “Bailiffs’ Office”).
On 2 May 2003 BCEA notified the Bailiffs’ Office that it was impossible to comply with the judgment of 11 November 1997, because BCEA did not have sufficient funds allocated from the state budget for the purpose of compensating the Company.
On 9 February 2004 the Bailiffs’ Office informed BCEA and the applicant, in his capacity of the Company’s director, that the enforcement proceedings were still pending and insisted that BCEA execute the judgment. On 3 April 2004 BCEA notified the applicant that the issue of the compensation was referred to the Ministry of Finance’s Main Finance Administration of Baku. On 15 April 2004 the Ministry of Finance informed the applicant that the issue was further referred to the Legal Department of the Ministry of Finance.
Upon a petition by the Bailiffs’ Office, on 21 April 2004 the Sabail District Court imposed an administrative fine on BCEA in the amount of AZM 825,000 for failure to comply with the judgment of 11 November 1997.
The applicant, in the meantime, wrote letters to the President, Constitutional Court and BCEA, complaining about the continuing non-execution. In reply, he was again informed that the matter was under consideration by the Ministry of Finance.
On 16 July 2004 the Bailiffs’ Office informed the applicant that, despite all of the efforts to ensure the enforcement of the judgment in accordance with the law, BCEA consistently failed to comply with the judgment.
Finally, on 12 January 2005 the judgment was executed and BCEA transferred AZM 70,061,250 to the Company’s bank account.
B. Relevant domestic law
Article 69.2 of the Code of Civil Procedure provides that legal entities can be represented before courts by their bodies, acting within the scope of powers conferred on them by law, regulations or articles of incorporation of the legal entity, or by representatives acting on the basis of a power of attorney.
The applicant complained that the authorities’ failure to execute the judgment of 11 November 1997 in a timely manner violated his right to a fair trial under Article 6 of the Convention and constituted an interference with his property rights under Article 1 of Protocol No. 1 to the Convention.
The applicant complained under Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention about the failure to execute the judgment of 11 November 1997 in a timely manner. Article 6 provides as follows:
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by [a] ... tribunal...”
Article 1 of Protocol No. 1 to the Convention provides 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.”
The Government noted that the applicant, as the Company’s director, had not been a victim of the violations alleged. The applicant was an employee of the company and was not its owner. Thus, the applicant was not a “victim” of the alleged violations, because the non-execution of the judgment in the Company’s favour did not directly affect the applicant’s rights. Moreover, the Government noted that, in any event, the alleged violations had been remedied on the domestic level, because the judgment was executed on 12 January 2005.
The applicant acknowledged that the Company had been founded solely by the Nizami Qayğı Association, that it was an independent legal entity having a separate legal personality and that it was competent to act as a plaintiff or respondent in courts. However, the applicant argued that the infringement of the Company’s rights directly affected his personal rights, because he was the Company’s director and because he was a member of the Nizami Qayğı Association, the Company’s parent organisation. The applicant further argued that, because the judgment of 11 November 1997 was executed with more than a seven-year delay, the value of the compensation paid to the Company was significantly diminished due to inflation.
The Court recalls that the term “victim” in Article 34 of the Convention denotes the person directly affected by the act or omission which is at issue (see e.g. Eckle v. Germany, judgment of 15 July 1982, Series A no. 51, § 66). The Court further recalls that disregarding a company’s legal personality as regards the question of being a “victim” will be justified in exceptional circumstances, in particular where it is clearly established that it is impossible for the company to apply to the Court through the organs set up under its articles of incorporation (see Agrotexim and Others v. Greece, judgment of 24 October 1995, Series A no. 330-A, § 66; Camberrow MM5 AD v. Bulgaria (dec.), no. 50357/99, 1 April 2004; Capital Bank AD v. Bulgaria (dec.), no. 49429/99, 9 September 2004).
The Court observes that, at the time of lodging the present application, the applicant was the executive director of the Company, competent to act on its behalf in court proceedings. The Court further observes that, although the applicant acted on the Company’s behalf as one of its representatives in the domestic court, it was the Company who was the party to the domestic proceedings, rather than the applicant himself. The judgment of 11 November 1997 was delivered in favour of the Company and the non-execution of that judgment has only directly affected the rights of the Company (compare with Amat-G Ltd and Mebaghishvili v. Georgia, no. 2507/03, § 33, ECHR 2005-...). However, having thoroughly examined the applicant’s submissions, the Court finds that it does not transpire from these submissions that the applicant had an intention to lodge the present application on behalf of the Company. On the contrary, the applicant lodged the application solely in his own name, complained about violations of his personal rights as a director of the Company and, in reply to the Government’s objection, persisted that he personally was the victim of the alleged violations (compare with Nosov v. Russia (dec.), no. 30877/02, 20 October 2005; J.W. v. Poland, no. 27917/95, Commission decision of 11 September 1997, Decisions and Reports 90, p. 69).
Accordingly, insofar as the application has been lodged by the applicant in his own name, it remains to be seen whether the applicant himself can claim to be a “victim” of the alleged violations. To this effect, the Court reiterates that the sole owner of a company can claim to be a “victim” within the meaning of Article 34 of the Convention insofar as the impugned measures taken with regard to his company are concerned (see Nosov, cited above; Ankarcrona v. Sweden (dec.), no. 35178/97, ECHR 2000-VI). On the other hand, the executive director of or a minority shareholder in a company cannot claim to be a “victim” of a violation of the Convention, having lodged an application in his own name rather than on behalf of the company, whereas the company and not the applicant was a party to the domestic proceedings at issue (see J.W., cited above).
Having regard to the Company’s articles of incorporation, the Court observes that the Company was founded as a 100% subsidiary of the Nizami Qayğı Association and it appears that the latter owned all of the shares in the Company at the time of the events in question. At no time has the applicant owned any shares in the Company, and this fact is not disputed by the parties. As to the applicant’s argument that he was a member of the Nizami Qayğı Association, which was the Company’s parent organisation and sole shareholder, the Court observes that, contrary to its subsidiary (the Company), the Nizami Qayğı Association itself was a non-profit organisation and, thus, none of its members could be identified as “shareholders” having any financial interest in this entity. Accordingly, the applicant cannot be identified as a holder of any shares in the Company either directly or indirectly through its parent organisation.
Accordingly, the applicant cannot claim to be a “victim” of the alleged violations within the meaning of Article 34 of the Convention. It follows that this application is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
For these reasons, the Court unanimously
Declares the application inadmissible.
Søren Nielsen Christos Rozakis
BAYRAMOV v. AZERBAIJAN DECISION
BAYRAMOV v. AZERBAIJAN DECISION