AS TO THE ADMISSIBILITY OF
Application no. 45036/98
by Bosphorus Hava Yollari Turizm ve Ticaret AS
The European Court of Human Rights (Fourth Section), sitting on 13 September 2001 as a Chamber composed of
Mr G. Ress, President,
Mr I. Cabral Barreto,
Mr V. Butkevych,
Mrs N. Vajić,
Mr J. Hedigan,
Mr M. Pellonpää,
Mrs S. Botoucharova, judges,
and Mr V. Berger, Section Registrar,
Having regard to the above application lodged with the European Commission of Human Rights on 25 March 1997 and registered on 17 December 1998,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having regard to the parties’ oral submissions at the hearing on 13 September 2001,
Having deliberated, decides as follows:
The applicant, Bosphorus Hava Yollari Turizm ve Ticaret AS, is an airline charter company which was incorporated in Turkey in March 1992. Its directors and shareholders are Turkish. It was represented before the Court by Mr J. Doyle, a solicitor practising in Dublin, instructed by Mr Mustafa Illhameddin Özbay, the applicant’s managing director and owner of 96% of its share capital.
At an oral hearing on 13 September 2001 the applicant was further represented by Mr J. O’Reilly, Senior Counsel, and Mr T. Eicke, Counsel. The respondent Government were represented by Mr J. Kingston, Agent, Dr G. Hogan, Senior Counsel, Mr R. O’Hanlon, Counsel, and by Messrs E. Alkin and R. McKay, Advisers. The Turkish Government declined to exercise its right to intervene under Article 36 of the Convention.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
1. The lease between JAT and the applicant
Following a letter of intent dated 25 December 1991, the applicant leased, by agreement dated 17 April 1992, two Boeing 737-300 aircraft from Yugoslav Airlines (“JAT”), the national airline of the former Yugoslavia.
The agreement was a “dry lease without crew”. Accordingly, all of the crew would be the applicant’s employees and the applicant only would decide the destination of the aircraft. The lease was for a period of 48 months from the dates of delivery of the two aircraft (22 April and 6 May 1992). Ownership of the aircraft remained with JAT (Clause 10 of the lease) but the applicant had complete control of the day-to-day management of the aircraft and the option of purchasing the aircraft (if JAT chose to sell) within six months of the expiry of the lease (clause 20), a provision which facilitated the registration of the aircraft in Turkey. The applicant paid a lump sum of US$ 1,000,000 per aircraft on delivery and the monthly rental was US$ 150,000 per aircraft. Both parties were jointly responsible for the maintenance of the aircraft (clause 11) and JAT was responsible for compulsory, third party, war, passenger and cargo insurance (clause 12).
On 14 and 29 May 1992 the two aircraft were registered on the Turkish Civil Aviation Register (as being owned by JAT but operated by the applicant) and the applicant obtained its airline licence. The parties dispute whether Turkish law required a company to have two aircraft in operation to retain that licence.
2. Prior to the aircraft’s arrival in Ireland
Further to measures already taken by the United Nations (“UN”) against the Federal Republic of Yugoslavia (Serbia and Montenegro) – “FRY” –, on 30 May 1992 the UN Security Council adopted a Resolution (“UNSC Resolution”) imposing sanctions on the FRY (UNSC Resolution 757 (1992)). That resolution was implemented by the European Community (“EC”) by Council Regulation (“EC Regulation”) on 1 June 1992 (EC Regulation 1432/92). On 25 June 1992 the Irish Minister for Transport, Energy and Communications (“the Minister”) therefore adopted the European Communities (Prohibition of Trade with the Federal Republics of Serbia and Montenegro) Regulations 1992 (SI No. 157 of 1992).
On 16 November 1992 UNSC Resolution 787 (1992) was adopted. It provided for a further tightening of the economic embargo against the FRY, which resolution was implemented by EC Regulation 3534/92 of 7 December 1992.
In January 1993 the applicant began discussions with TEAM Aer Lingus (“TEAM”), an Irish aircraft maintenance company (wholly owned by the State) with a view to having maintenance work (“C-Check”) done on one of its leased aircraft. Memoranda dated 8 and 18 January 1993 show that TEAM had obtained answers from the applicant to certain questions which led TEAM to conclude that the applicant was not in breach of the sanctions’ regime. TEAM noted that the applicant was doing business with many reputable companies including Boeing, SABENA and SNECMA (a French aero-engine company).
In its letter dated 2 March 1993 to the Department of Transport, Energy and Communications (“the Department”), TEAM referred to previous discussions it had had with the Department, the business opportunity offered by the applicant and to the above-described TEAM memoranda of January 1993. It did not consider that the applicant posed a problem under the sanctions’ regime but it requested the Department’s view. On 3 March 1993 the Department forwarded this request to the Department of Foreign Affairs.
On 17 April 1993 UNSC Resolution 820 (1993) was adopted. It provided that all States should impound, inter alia, all aircraft in their territories “in which a majority or controlling interest is held by a person or undertaking in or operating” from the FRY. On 26 April 1993 UNSC Resolution 820 (1993) was implemented by EC Regulation 990/93.
On 5 May 1993 the Department of Foreign Affairs decided to refer the TEAM matter to the UN Sanctions Committee (“Sanctions Committee”). TEAM was asked by the Department to provide certain information, which was supplied on 12 May 1993. The Government submit that TEAM also forwarded information to the Department of Foreign Affairs on 17 and 18 May 1993, but the only relevant copy letter submitted of 18 May 1993 from TEAM contains a summary of information already provided by it and a request that the Sanctions Committee matter be expedited.
By letter of 6 May 1993 the Turkish Foreign Ministry indicated to the Turkish Ministry of Transport that it considered that the leased aircraft were not in breach of the sanctions’ provisions and requested flight clearance pending the Sanctions Committee decision. On 12 May 1993 the Turkish State sought the opinion of that Committee on the lease arrangements.
3. The impounding of the aircraft
On 17 May 1993 one of the applicant’s leased aircraft arrived in Dublin and a contract with TEAM was signed for the completion of a C-Check.
On 18 May 1993 the Irish Permanent Mission to the UN indicated by facsimile to the Department that informal advice from the Secretary to the Sanctions Committee was to the effect that there was no problem with TEAM carrying out the work and that it would not be in contravention of the sanctions’ regime. Nevertheless, an “informal opinion” from the UN Legal Office had been requested. On 19 May 1993 the Department explained this to TEAM by telephone. On 21 May 1993 TEAM received a copy of the facsimile from the Irish Permanent Mission of 18 May 1993. On the same date TEAM wrote to the Department explaining that it had interpreted the Department’s telephone call of 19 May 1993 as confirmation that a legal opinion had been received and that TEAM could go ahead with the work. TEAM had therefore begun work and it requested written confirmation of the legal opinion it understood had been received.
On 21 May 1993 the Sanctions Committee disagreed with the Turkish Government’s view that the aircraft could continue to operate, recalling UNSC Resolution 820 (1993). The Turkish Permanent Mission to the UN was informed of that opinion by letter dated 28 May 1993.
Also on 21 May 1993 the Irish Permanent Mission confirmed by facsimile to the Department of Foreign Affairs that the “informal legal advice” obtained was to the effect that TEAM should seek the approval of the Sanctions Committee before signing any contract with the applicant. It was recommended that TEAM submit an application to that Committee including certain details about the applicant’s lease and its transaction with TEAM. However, the Secretary to the Sanctions Committee had indicated that, if the applicant was to pay for the maintenance, it was unlikely that the Committee would have a problem with the transaction. The Committee had undertaken to answer any application within seven days. On 24 May 1993 the Department received a copy of that facsimile from the Irish Permanent Mission and sent a copy immediately to TEAM. By letter dated 26 May 1993 the Irish Permanent Mission provided the Sanctions Committee with the details it had requested and sought its “guidance and approval”.
On 28 May 1993 the C-Check was completed by TEAM and the applicant paid TEAM. The report of Dublin airport duty manager of that day noted that TEAM informed him that the Department had advised TEAM that it would be in breach of sanctions if the aircraft was allowed to leave. That report noted that the aircraft had been scheduled to depart during that shift and that the airport police had been advised. TEAM also informed the applicant company accordingly. The Government claim that the aircraft was, at that stage, held under Article 9 of EC Regulation 990/93.
By letters dated 29 May 1993 to the applicant, TEAM added that the opinion of the Sanctions Committee was awaited and it agreed to provide hangerage facilities on a care and maintenance basis. The applicant was to comply with all other contractual obligations.
4. Prior to judicial review proceedings
By memorandum dated 29 May 1993 the Turkish Embassy in Dublin requested, given its State’s commitment to the sanctions’ regime, the release of the aircraft to Turkey.
By letter dated 2 June 1993 the Irish Permanent Mission informed the Sanctions Committee that the maintenance work had, in fact, already been carried out, that the Government regretted its failure to abide by the procedure they had initiated and that they were taking the matter up with TEAM. The aircraft was, nevertheless, being detained pending the Committee’s decision and the Government asked the Committee’s advice as to what action to take in relation to the aircraft.
On 3 June 1993 the Irish Government learned of the response of the Sanctions Committee to the Turkish Government and that the Chairman of the Committee had indicated that the Committee would likely favour impounding. The Committee would not meet until 8 June 1993.
On 4 June 1993 and pursuant to EC Regulation 990/93, the Minister adopted the European Communities (Prohibition of Trade with the Federal Republic of Yugoslavia (Serbia and Montenegro) Regulations 1993 (S.I. 144 of 1993).
By letter dated 8 June 1993 the Minister informed Dublin airport managers that he had authorised the impounding, until further notice, of the aircraft pursuant to S.I. 144 of 1993.
Shortly thereafter the applicant’s second aircraft was grounded in Istanbul although the parties disagree on why it was grounded.
By letter dated 14 June 1993 the Sanctions Committee informed the Irish Government of its findings at its meeting of 8 June 1993:
“... the provision of any services to an aircraft owned by an undertaking in the [FRY], except those specifically authorised in advance by the Committee ..., would not be in conformity with the requirements of the relevant Security Council resolutions. The members of the Committee also recalled the provisions of paragraph 24 of [UNSC Resolution 820 (1993)] regarding such aircraft, under which the aircraft in question should have already been impounded by the Irish authorities. The Committee, therefore, would be extremely grateful for being apprised of any action on behalf of Your Excellency’s Government to that effect.”
By letter dated 16 June 1993 to the Department, the applicant challenged the impoundment arguing that the purpose of EC Regulation 990/93 was not to deal with bare legal ownership but rather with operational control. That letter recorded that TEAM had confirmed to the applicant that the Government had cleared its completion of maintenance work.
By letter dated 18 June 1993 the Irish Permanent Mission informed the Sanctions Committee that the aircraft had been detained on 28 May 1993 and formally impounded on 8 June 1993.
On 24 June 1993 the Department responded to the applicant’s letter:
“The Minister is advised that the intention and effect of the UN Resolution as implemented through [EC Regulation 990/93] is to impose sanctions by impounding the types of commercial asset mentioned in Article 8, including aircraft, in any case where a person or undertaking in or operating from the [FRY] has any ownership interest of the kind mentioned. As this view of the scope and effect of the original Resolution has been confirmed by the [Sanctions Committee], the Minister does not feel entitled to apply [EC Regulation 990/93] in a manner which would depart from that approach. ... the aircraft must remain impounded. ... the Minister appreciates the difficulty that [the applicant] finds itself in and would be anxious to find any solution that was available to him under [EC Regulation 990/93] which would permit the release of the aircraft.”
By letter dated 5 July 1993 the Turkish Embassy in Dublin repeated its request for the release of the aircraft stating that the Turkish Government would ensure impoundment in accordance with the sanctions’ regime. The Embassy confirmed that the applicant’s second aircraft had been banned from operations in Turkey pursuant to the Sanctions Committee’s decision. By letter of 6 July 1993 the Irish Permanent Mission informed the Sanctions Committee of the Turkish Government’s request and indicated that the Irish Government would be favourably disposed to the request. On 4 August 1993 the Sanctions Committee ruled that the aircraft must remain in Ireland, since the relevant resolutions required the Irish State to withhold all services from the aircraft including services which would enable it to fly.
5. The first judicial review proceedings: the High Court
On 26 November 1993 the applicant was given leave to seek judicial review of the Minister’s decision to impound the aircraft. On 15 April 1994 the High Court struck out TEAM as a respondent in the proceedings: the applicant’s dispute with TEAM was considered to be a private law matter.
On 15 June 1994 the applicant’s managing director gave the following evidence to the High Court: the applicant was incorporated because of the growth in tourism and the recent changes in Turkish law allowing private airline companies. When the applicant company was incorporated in April 1992, it had the two leased JAT aircraft only. Once sanctions were put in place, the applicant, following the Turkish authorities’ advice, set the monthly rental payments due against the deposits already paid to JAT and thereafter arranged for the transfer of the rental payments to a blocked bank account supervised by the Turkish Central Bank. Other than the initial deposits, no payments had been made directly or indirectly to JAT and, since delivery of the aircraft, the applicant company had had no contact with JAT. Prior to the aircraft being impounded in Ireland, certain countries including Switzerland, Germany, the Netherlands, France, Italy, Austria and Spain had issued landing permits to the applicant and since April 1992 the aircraft had entered and left Austria, Germany and Switzerland. He first stated that the second aircraft had not been impounded in Turkey due to sanctions. He then confirmed that he did not wish to allow the second aircraft to fly in case it would be impounded elsewhere and he went on to claim that the Turkish Government had “banned the operations” of his company because Turkish aviation rules required a minimum of two aircraft to operate.
On 21 June 1994 Mr Justice Murphy delivered the judgment of the High Court. The key question was whether the Minister had been bound by Article 8 of EC Regulation 990/93 to impound the aircraft. He considered the Department’s letter of 24 June 1993 to the applicant to be the most helpful explanation of the Minister’s reasoning. He found that:
“... it is common case that the transaction between JAT and [the applicant] was entirely bona fide. There is no question of JAT having any interest direct or indirect in [the applicant] or in the management, supervision or direction of the business of that company. ...
It is, however, common case that [UNSC Resolutions] do not form part of Irish domestic law and, accordingly, would not of themselves justify the Minister in impounding the aircraft. The real significance of the [UNSC Resolutions], in so far as they relate to the present proceedings, is that [UNSC Resolution 820 (1993)] ... provided the genesis for Article 8 of [EC Regulation 990/93]. ...
Counsel for each party is in agreement with the general principle that the regulations in question should be interpreted purposively. That is to say that the Court should take a teleological or schematic approach to these regulations ... The words “controlling” and “majority” would be found ordinarily in the context of company law and even then might give rise to considerable problems in application. To apply those terms to physical possessions creates even greater difficulty. In my view, the degree or extent of the interest referred to in the article must have been intended to identify a situation in which the person in or operating from Yugoslavia could exercise a decision-making function in relation to the use on a day-to-day basis of the asset in question. Any other construction would seem to be both unreal and unjust. To impound an asset for the possession and enjoyment of which a wholly innocent party has paid a substantial sum of money simply because another party has a theoretical right to receive a nominal rent in respect thereof must be absurd. Surely the purpose of the Regulation is to deprive the guilty party of recourse to the aircraft, ... and which could itself be used to transport goods in breach of the embargo imposed by the regulations. In my opinion, the “interest” referred to in Article 8 is essentially the interest in possession or the right to enjoy control or regulate the use of the asset rather than income derived from it. If the concern of the regulation was to deprive Yugoslav nationals or undertakings of income, that could be done by other means as the present case has already demonstrated. As long as the position is that no citizen of [the FRY] has any use or control over the aircraft in question or the opportunity to receive any income derived from it, then it would seem to me that the regulations have achieved their purpose fully and the impounding of the aircraft would constitute a wholly unwarranted intervention in the business of [the applicant]. In my view, the majority and controlling interest in the aircraft in question is and was held by [the applicant] and by no other person. In the circumstances the Minister, whether or not a responsible authority at the relevant date, was not empowered to impound the aircraft.”
The High Court quashed the Minister’s decision to impound the aircraft, although the aircraft was at that stage the subject of an injunction obtained by SNECMA which restrained it from leaving the country (see 10 below).
6. The second judicial review proceedings: the High and Supreme Courts
On 30 June 1994 the Department wrote to the applicant to inform it that the Minister was considering the position of the aircraft under other provisions of EC Regulation 990/93 and under EC Regulation 1432/92:
“In particular, having regard to the information that has become available to the Minister concerning servicing of the aircraft in May of last year and the interest that has been claimed in respect of the aircraft and its insurance and maintenance received by him directly from [JAT], the Minister is obliged to consider whether the aircraft must be detailed by him as the competent authority for the purposes of the Regulations as an aircraft which has violated Article 1(e) [of EC Regulation 990/93].”
The letter went on to refer specifically to the joint responsibility between JAT and the applicant for maintenance and to the interest claimed by JAT in the aircraft so that the Minister felt that the provision of maintenance by TEAM may have constituted the provision of a non-financial service to an FRY entity in breach of those regulations. The applicant was requested to make representations as to why the aircraft should not be detained for those reasons. There is documentary evidence of a response dated 22 July 1994.
By letter dated 5 August 1994, the Minister detained the aircraft under Article 9 of EC Regulation 990/93 on suspicion that the provision of the C-Check maintenance and insurance might amount to non-financial services within the meaning of Article 1.1(e) of EC Regulation 990/93 and EC Regulation 1432/92. The concern related to the applicant’s access to the blocked bank account in Turkey and the manner in which the applicant used those funds (setting off the rental monies paid into it) to discharge JAT’s maintenance and insurance obligations under the lease.
On 23 September 1994 UNSC Resolution 943 (1994) was adopted. It relaxed the sanctions against the FRY for 100 days as peace negotiations had begun. The suspension did not affect aircraft already impounded on 23 September 1994. It was implemented by EC Regulation 2472/94 on 10 October 1994.
In March 1995 the applicant was given leave to take judicial review proceedings against the Minister’s decision of 5 August 1994 to impound the aircraft under Article 9 of EC Regulation 990/93.
On 22 January 1996 Mr Justice Barr of the High Court gave judgment. In concluding that that Minister’s action was invalid, he found:
“A consequence, of fundamental importance to [the applicant], of the Minister’s action in impounding the aircraft in May 1993 was that the Turkish authorities impounded the other similar aircraft included in the lease at Istanbul airport on the ground that under Turkish law an airline must have a minimum of two aircraft in operation to carry on its business. The second aircraft remains in detention in Turkey and is incurring a large total liability for continuing parking fees at the airport. [The applicant] has no other aircraft and has been put out of business as an air carrier. ... It has been specifically stated to the court by counsel on behalf of the Minister that he accepts that [the applicant] is an innocent party which is not in collusion with JAT. It is accepted that the tour operations business of [the applicant] has no connection with former Yugoslavia or with [JAT]”.
It was also noted by the High Court that almost all of the monies which had been paid into the frozen account by the applicant had by then been used up by the applicant (with the consent of the holding bank in Turkey) in order to pay for insurance on the aircraft, the C-Check maintenance and the other liabilities arising out of the detention of applicant’s aircraft. The High Court judge felt that it was not his role to decide whether there were good grounds for the Minister’s reasonable suspicion that there had been a breach of Article 1.1(e) of EC Regulation 990/93. He merely observed in that respect that, having regard to the previous High Court judgment in the matter, the Minister’s prospects of justifying such suspicions were bleak.
The High Court noted that the crucial question before it was the Minister’s delay in deciding to invoke Article 9 of EC Regulation 990/93 given the daily losses being incurred by the applicant and the applicant’s recognised status as an innocent party in the matter. It was noted that it was clear that the Minister had decided to invoke Article 9 only if he failed to retain the aircraft under Article 8 of the same Regulation and the court found this patently unfair to the applicant because of the inevitable further delay caused and the applicant’s consequent involvement in additional, unavoidable, substantial and expensive litigation. The Minister should have reviewed the application of all relevant parts of EC Regulation 990/93 at the same time and within a reasonable time from the date of the original impoundment in May 1993.
It concluded that the Minister had failed in his duty to the applicant to investigate and decide such matters within a reasonable period of time, to conduct the investigations in accordance with fair procedures and to have proper regard to the rights of the applicant, “an innocent party” because the Minister had been faced with a possible breach of Article 1.1(e) of Regulation 990/93 as early as May 1993 and because he did not raise any queries with the applicant regarding either the C-Check contract or the provision of aviation insurance in the 13 months prior to the judgment of the High Court of June 1994. The High Court found in the applicant’s favour and quashed the Minister’s decision to detain the aircraft.
The aircraft was then free to leave the State. However, on 7 February 1996 the Irish Government appealed to the Supreme Court and applied for a stay on the High Court’s order.
On 9 February 1996 the Supreme Court refused the Minister’s stay application. The overriding consideration in deciding to grant the stay or not was to find a balance which did not deny justice to either party. The court noted that the decision as to whether the services in question (maintenance and insurance) constituted non-financial services within the meaning of Article 1.1(e) of EC Regulation 990/93 had to be taken by the Minister and should have been capable of resolution within a matter of hours, days and, certainly, within a week. Instead, the matter had dragged on, the Minister had never taken a decision, Article 9 of EC Regulation 990/93 requiring a suspicion of the relevant breach only and it was noted that the relevant Regulations had already been suspended. The respective positions of the parties were also relevant to the stay request. Given the contrast between the Government’s potentially small losses (monies owed for the maintenance and parking in Dublin airport) and the applicant’s calamitous losses, the justice of the case was overwhelmingly in the latter’s favour.
The aircraft was therefore still free to leave Ireland. By letters dated 12 and 14 March 1996 the Department confirmed to the applicant, JAT and to TEAM that, in light of those High and Supreme Court judgments, the Minister considered that he no longer had any legal responsibility for the aircraft and had therefore terminated the maintenance and insurance contracts which had been retained by him thereon. In May 1996 the appeal on the merits in the second judicial review proceedings was allowed, the Supreme Court finding that the point had become a moot one as the applicant’s lease had by then expired.
7. The first judicial review proceedings : the ECJ
On 8 August 1994 the Government appealed the judgment of Mr Justice Murphy to the Supreme Court and requested an order referring the interpretation of Article 8 of EC Regulation 990/93 to the European Court of Justice (“ECJ”) pursuant to former Article 177 of the Treaty Establishing the European Community 1958 (“EC Treaty”).
By order dated 12 February 1995 the Supreme Court referred the following question to the ECJ and adjourned the proceedings before it:
“Is Article 8 of [EC Regulation 990/93] to be construed as applying to an aircraft which is owned by an undertaking the majority or controlling interest in which is held by [the FRY] where such aircraft has been leased by the owner for a term of four years from the 22 April 1992 to an undertaking the majority or controlling interest in which is not held by a person or undertaking in or operating from the said [FRY]?”
The agreed summary of the facts included in that order noted that:
“The Minister accepted in the High Court that there is no implication [the applicant] was involved in some scheme or sham to use a foreign flag and no suggestion has ever been made that [the applicant] is in any way seeking to break the UN sanctions.”
It was also recorded that there was no question of JAT having any interest in the applicant or in the day-to-day management of the applicant.
On 30 April 1996 Advocate General Jacobs (“AG”) delivered his opinion. Given the majority interest of JAT in the aircraft, it appeared that EC Regulation 990/93 applied to the aircraft. The question for the AG was whether there were compelling reasons to interpret the regulation in a way which departed from its wording. That regulation would have to be interpreted in light of the aims and text of the relevant UNSC Resolutions it implemented. While the precise aim of those resolutions might have been difficult to pinpoint, the AG was not convinced by the “narrow” interpretation of those resolutions of the High Court: he considered that the purpose of the resolutions might have gone beyond taking away an asset that might be used to breach the FRY trade embargo, and might have pursued the objectives of freezing FRY assets abroad or of ensuring that FRY persons or entities do not recover means of transport currently abroad (a consideration of particular application in the aircraft context). Neither did the text of the resolutions support the view of the High Court judge: there was no reason to suppose that “majority interest” referred to the interest of the entity which registered the aircraft as opposed to that of the entity which owned it. Since neither the aims nor the text of the Resolutions suggested that the Minister was mistaken, it was not necessary to consider the views of the Sanctions Committee, the views of which were not, in any event, binding. He found therefore no good reason to depart from the clear wording of Article 8 of EC Regulation 990/93.
As to the question of the respect shown in EC Regulation 990/93 for fundamental rights and proportionality, the AG pointed out that:
“It is well established that respect for fundamental rights forms part of the general principles of Community law, and that in ensuring respect for such rights, the [ECJ] takes account of the constitutional traditions of the Member States and of international agreements, notably [the Convention], which has a special significance in that respect.
Article F(2) of the Treaty on European Union ... gives Treaty expression to the [ECJ’s] case-law. ... In relation to the EC Treaty, it confirms and consolidates the [ECJ’s] case-law underlining the paramount importance of respect for fundamental rights.
Respect for fundamental rights is thus a condition of the lawfulness of Community acts – in this case, the Regulation. Fundamental rights must also, of course, be respected by Member States when they implement Community measures. All Member States are in any event parties to the [Convention], even though it does not have the status of domestic law in all of them. Although the Community itself is not a party to the Convention, and cannot become a party without amendment both of the Convention and of the Treaty, and although the Convention may not be formally binding upon the Community, nevertheless for practical purposes the Convention can be regarded as part of Community law and can be invoked as such both in the [ECJ] and in national courts where Community law is in issue. That is so particularly where, as in this case, it is the implementation of Community law by Member States which is in issue. Community law cannot release Member States from their obligations under the Convention.”
The AG noted that the right to peaceful enjoyment of property protected by the Convention and the right to pursue a commercial activity recognised as a fundamental right by the ECJ, had been invoked by the applicant company. Having considered the Sporrong and Lönnroth v. Sweden case of this Court (judgment of 23 September 1982, Series A no. 52), he defined the essential question as being whether the interference with the applicant’s possession of the aircraft was a proportionate measure in the light of the aims of general interest which EC Regulation 990/93 sought to achieve. He had regard to the application of this test in the AGOSI v. the United Kingdom case also of this Court (judgment of 24 October 1986, Series A no. 108) and in the Air Canada v. the United Kingdom case (judgment of 5 May 1995, Series A no. 316-A) and to a “similar approach” adopted by the ECJ in cases concerning the right to property or to pursue a commercial interest (Hauer v. Land Rhienland-Pfalz Case 44/79  ECR 3727, §§ 17-30 and Germany v. Council, Case C-280/93  ECR I-4973, § 78).
He considered that there had been a severe interference with the applicant’s interest in the lease but that, on the other hand, it was difficult to identify a stronger type of public interest than that of stopping a devastating civil war. While some property loss was inevitable for any sanctions required to be effective, if it had been demonstrated that the interference in question was wholly unreasonable in light of the aims sought to be achieved, then the ECJ would intervene. However, he felt that neither the initial decision to impound nor the continued retention of the aircraft could be regarded as unreasonable.
Whether or not the financial impact of the sanctions were as outlined by the applicant, a general measure of the kind in question could not be set aside simply because of the financial consequences which the measure may have in a particular case. Given the strength of the public interest involved, the proportionality principle would not be infringed by any such losses.
He concluded that the contested decision did not:
“... strike an unfair balance between the demands of the general interest and the requirements of the protection of the individual’s fundamental rights. That conclusion seems consistent with the case-law of [this Court] in general. Nor has [the applicant] suggested that there is any case-law under [the Convention] supporting its own conclusion.
The position seems to be no different if one refers to the fundamental rights as they result from “the constitutional traditions common to the Member States” referred to in the case-law of [the ECJ] and in Article F(2) of the Treaty on European Union. In the [above-cited Hauer case, the ECJ] pointed out ... , referring specifically to the German Grundgesetz, the Irish constitution and the Italian constitution, that the constitutional rules and practices of the Member States permit the legislature to control the use of private property in accordance with the general interest. Again it has not been suggested that there is any case-law supporting the view that the contested decision infringed fundamental rights. The decision of the Irish High Court was based, as we have seen, on different grounds.”
On 22 May 1996 the applicant’s lease of the aircraft expired.
By letter dated 19 July 1996 to JAT, TEAM pointed out that the aircraft was free to leave provided that debts owed to TEAM were discharged.
On 30 July 1996 the ECJ made its ruling, finding that EC Regulation 990/93 applied to the applicant’s situation. The Court noted that the file in the domestic proceedings showed that the transaction between the applicant and JAT had been entered into “in complete good faith” and was not intended to circumvent the sanctions against the FRY. It further observed that, in application of those sanctions, the applicant had paid the rental monies into a blocked bank account.
However, the Court could not accept the applicant’s first argument that the EC Regulation 990/93 did not apply because of the control on a daily basis of the aircraft by a non-FRY innocent party. Having considered the wording of EC Regulation 990/93, its context and aims (including the text and aims of the Security Council Resolutions it implemented), it found nothing to support the distinction made by the applicant. Indeed the use of day-to-day control as opposed to ownership as a criterion for applying the regulation would effectively jeopardise the effectiveness of the sanctions.
Secondly, the applicant argued that that application of EC Regulation 990/93 would infringe its right to peaceful enjoyment of his possessions and its freedom to pursue a commercial activity because it would destroy and obliterate the business of a wholly innocent party when the FRY owners had already been punished by blocked bank accounts. The ECJ found that:
“It is settled case-law that the fundamental rights invoked by [the applicant] are not absolute and their exercise may be subject to restrictions justified by objectives of general interest pursued by the Community [see the above-cited Hauer case, Case 5/88 Wachauf v Bundesamt fuer Ernaehrung und Forstwirtschaft  ECR 2609 and the above-cited Germany v Council case.)
Any measure imposing sanctions has, by definition, consequences which affect the right to property and the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions.
Moreover, the importance of the aims pursued by the regulation at issue is such as to justify negative consequences, even of a substantial nature, for some operators.
The provisions of [EC Regulation 990/93] contribute in particular to the implementation at Community level of the sanctions against the [FRY] adopted, and later strengthened, by several resolutions of the [UN] Security Council. The third recital in the preamble to [EC Regulation 990/93] states that "the prolonged direct and indirect activities of the [FRY] in, and with regard to, the Republic of Bosnia-Herzegovina are the main cause for the dramatic developments in the Republic of Bosnia-Herzegovina"; the fourth recital states that "a continuation of these activities will lead to further unacceptable loss of human life and material damage and to a further breach of international peace and security in the region"; and the seventh recital states that "the Bosnian Serb party has hitherto not accepted, in full, the peace plan of the International Conference on the Former Yugoslavia in spite of appeals thereto by the Security Council".
It is in the light of those circumstances that the aim pursued by the sanctions assumes a special importance, which is, in particular, in terms of [EC Regulation 990/93] and more especially the eighth recital in the preamble thereto, to dissuade the [FRY] from "further violating the integrity and security of the Republic of Bosnia-Herzegovina and to induce the Bosnian Serb party to co-operate in the restoration of peace in this Republic".
As compared with an objective of general interest so fundamental for the international community, which consists in putting an end to the state of war in the region and to the massive violations of human rights and humanitarian international law in the Republic of Bosnia-Herzegovina, the impounding of the aircraft in question, which is owned by an undertaking based in or operating from the [FRY], cannot be regarded as inappropriate or disproportionate.
Article 8 of [EC Regulation 990/93] applies to an aircraft which is owned by an undertaking based in or operating from the [FRY], even though the owner has leased it for four years to another undertaking, neither based in nor operating from [the FRY] and in which no person or undertaking based in or operating from [the FRY] has a majority or controlling interest.”
The applicant had referred to EC Regulation 2427/94 of 10 October 1994 in its observations to the ECJ and to the ironic consequence that JAT aircraft could by then operate and its own aircraft could not. The ECJ did not refer to that regulation or submission.
On 6 August 1996 the Minister re-instated the impounding of the aircraft under Article 8 of EC Regulation 990/93.
8. The first judicial review proceedings : the Supreme Court
On 29 November 1996 the Supreme Court delivered its judgment allowing the appeal of the Minister from the order of the High Court of 21 June 1994. It noted that the sole issue in the case was whether the Minister had been bound by Article 8 of EC Regulation 990/93 to impound the aircraft. Having noted the response of the ECJ that the Regulation applied to the aircraft, the Supreme Court confined itself to saying that it was bound by that decision and the appeal by the Minister was allowed.
9. The return to JAT of the aircraft
By letters dated 19 July 1996 Turkish Ministry of Transport notified its FRY counterpart that the de-registration of the two leased aircraft had stopped, and that they remained on the Turkish aviation register, pursuant to the order of the Ankara courts, pending resolution of the proceedings which had been initiated in Turkey by the applicant. Correspondence submitted by the applicant demonstrates that the continued place on that aviation register was notified to the FRY Ministry of Transport and to JAT (in July 1996) and to the Irish Aviation Authority (in November 1996). The latter were also informed that the applicant was taking steps to bring the aircraft back to Turkey. On 30 July 1997 the Irish Aviation Authority and TEAM were reminded of the aircraft’s continued registration in Turkey.
On 30 July 1997 the aircraft, following an agreement between JAT and the Government, was returned to JAT. The State waived some outstanding maintenance and parking costs. By letter dated 31 July 1997 the Irish Aviation Authority notified their Turkish counterparts of the removal and of the new FRY registration number of the aircraft. By letter of the same date, the latter protested the giving of flight clearance to the aircraft re-registered under the FRY aviation register while it had not been de-registered in Turkey. The Irish Aviation Authority responded on 15 August 1997 stating that the Department had decided that the aircraft be released.
10. Relevant related proceedings and decisions
(a) On 11 January 1993 the Office of Foreign Assets Control of the Treasury Department of the United States had granted a licence, expressly under the UN sanctions’ regime, for the applicant to receive, inter alia, spare and replacement parts, technical support and maintenance services directly from the manufacturer of the leased aircraft (Boeing) and from other companies in the United States. That licence was subsequently revoked (14 June 1993) once Ireland impounded one of the leased aircraft.
(b) Shortly after the aircraft was impounded in Ireland, SNECMA brought proceedings against JAT and the applicant regarding alleged debts concerning aero-engines supplied for the aircraft. On 12 March 1994 SNECMA obtained an injunction in the High Court prohibiting the applicant from removing the aircraft from the Irish jurisdiction. The trial took place between 17 January and 30 March 1995. On 11 April 1995 SNECMA’s injunction was lifted and SNECMA later discontinued their proceedings against the applicant in Ireland and in France.
(c) Once the aircraft had been impounded, the British Aviation Insurance Group, which insured the applicant’s aircraft, raised queries with the Sanctions’ Unit of the British Department of Trade and Industry regarding its insuring the applicant’s aircraft. By letter dated 2 July 1993 that Sanctions’ Unit confirmed that the UN embargo did not require a licence for a contract of insurance to cover the aircraft operated by the applicant because the aircraft was registered in Turkey, was chartered by a Turkish company and because the purpose was to insure the applicant and not, wholly or partly, JAT.
(d) A legal opinion dated 21 October 1996 and prepared by Turkish lawyers for the applicant recorded that the second aircraft had been detained in Istanbul by the Turkish Government given the “situation in Ireland”. It stated that the arbitration clause in the lease (in favour of the former Yugoslavia) was null and void and that, in compensation for the intervening circumstances, the applicant should get an extension of the lease. In 1999 the applicant took proceedings against JAT in Turkey for specific performance of the alleged non-performed portion of the lease and for compensation. A hearing date was fixed for March 2001 and it appears that those proceedings are pending.
(e) Pursuant to the arbitration clause in the lease agreement, the Belgrade Chamber of Commerce conducted an arbitration at which both parties were represented. In 1998 an order was made in favour of JAT which was not discharged by the applicant. JAT then applied to the courts in Ankara for execution of the arbitration order and in March 2000 the applicant filed its objections and defence. It appears that these proceedings are also pending.
(f) By letter dated 26 February 2001 the Turkish Ministry of Transport confirmed to the applicant that its second aircraft had not been impounded pursuant to UNSC Resolution 820 (1993) but had been “withheld from flight”.
B. Relevant domestic and international law and practice
1. Relevant provisions of international instruments
Article 1(3) of the Charter of the United Nations (“UN”) provides that one of the purposes of the organisation is:
“... to achieve international co-operation ... in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language and religion.”
Article 55 of the Charter provides that:
“the United Nations shall promote: ...
(c) universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language or religion.”
Former Article 177 (now Article 234 further to the Treaty of Amsterdam 1999) of the Treaty Establishing the European Community 1958 (“EC Treaty”) provides as follows:
“The Court of Justice shall have jurisdiction to give preliminary rulings concerning:
(b) the validity and interpretation of acts of the institutions of the Community and of the ECB; ...
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.”
Former Article 189 (now Article 249) of the EC Treaty provides:
“In order to carry out their task and in accordance with the provisions of this Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or deliver opinions.
A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States. ...”
Article 6(2) (formerly Article F(2)) of Title 1 of the Treaty on European Union 1992) provides that:
“The Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law.”
2. The Irish Constitution
Article 29 of the Irish Constitution, in so far as relevant, reads as follows:
“1. Ireland affirms its devotion to the ideal of peace and friendly co-operation amongst nations founded on international justice and morality. ...
4.7. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities, or prevents laws enacted, acts done or measures adopted by the European Union or by the Communities or by institutions thereof, or by bodies competent under the Treaties establishing the Communities, from having the force of law in the State.”
3. The early sanctions’ measures
From 1991 onwards the international community began to adopt a series of measures designed to address the armed conflicts and human rights violations taking place in the former Yugoslavia, which measures included a sanctions’ regime against the Federal Republic of Yugoslavia (Serbia and Montenegro) – “FRY”.
On 25 September 1991 the UN Security Council adopted a Resolution (“UNSC Resolution”) in which it expressed its concern at the fighting in the former Yugoslavia (UNSC Resolution 713 (1991)). The Security Council:
“Decides, under Chapter VII of the Charter of the United Nations, that all States shall, for the purposes of establishing peace and stability in Yugoslavia, immediately implement a general and complete embargo on all deliveries of weapons and military equipment to Yugoslavia until the Council decides otherwise following consultation between the Secretary-General and the Government of Yugoslavia;”
UNSC Resolution 724 (1991), adopted on 15 December 1991, established a Sanctions Committee charged with the implementation of UNSC Resolution 713 (1991).
4. The relevant economic sanctions against the FRY
(a) By UNSC Resolution 757 (1992) dated 30 May 1992 the UN Security Council made the following decisions:
“5. Decides that all States shall not make available to the authorities in the [FRY] or to any commercial, industrial or public utility undertaking in the [FRY], any funds, or any other financial or economic resources and shall prevent their nationals and any person within their territories from removing from their territories or otherwise making available to those authorities or to any such undertaking any such funds or resources and from remitting any other funds to persons or bodies within the [FRY], except payments exclusively for strictly medical or humanitarian purposes and foodstuffs; ...
7. Decides that all States shall:
(a) Deny any permission to any aircraft to take off from, land in or over-fly their territory if it is destined to land in or has taken off from the territory of the [FRY], unless the particular flight has been approved, for humanitarian or other purposes consistent with the relevant resolutions of the Council, by the [Sanctions Committee];
(b) Prohibit, by their nationals or from their territory, the provision of engineering or maintenance servicing of aircraft registered in the [FRY] or operated by or on behalf of entities in the [FRY] or components for such aircraft, the certification of airworthiness for such aircraft, and the payment of new claims against existing insurance contracts and the provision of new direct insurance for such aircraft; ...
9. Decides that all States, and the authorities in the [FRY], shall take the necessary measures to ensure that no claim shall lie at the instance of the authorities in the [FRY], or of any person or body in [FRY], or of any person claiming through or for the benefit of any such person or body, in connection with any contract or other transaction where its performance was affected by reason of the measures imposed by this resolution and related resolutions;”
UNSC Resolution 757 (1992) was implemented by a European Community (“EC”) Council Regulation (“EC Regulation”) on 1 June 1992 (EC Regulation 1432/92). That regulation provided, inter alia, that:
“As from 31 May 1992, the following shall be prohibited: ...
(d) the provision of non-financial services whose object it is, directly or indirectly, to promote the economy of the Republics of Serbia and Montenegro, ...”
The European Communities (Prohibition of Trade with the Republics of Serbia and Montenegro) Regulations 1992 (SI No. 157 of 1992) made it an offence from 25 June 1992 to act in breach of EC Regulation 1432/92.
(b) On 16 November 1992 UNSC Resolution 787 (1992) was adopted. That resolution tightened further the economic sanctions against the FRY. It prohibited the trans-shipment of crude oil, petroleum products, coal, energy-related equipment, iron, steel, other metals, chemical rubber, tyres, vehicles, aircraft and motors of all types unless specifically authorised. Any vessel in which a majority or controlling interest was held by a person or undertaking in or operating from the FRY was to be considered, for the purposes of implementation of the relevant resolutions of the Security Council, a vessel of the FRY regardless of the flag under which the vessel sailed. This UNSC Resolution was implemented by EC Regulation 3534/92 of 7 December 1992.
(c) On 17 April 1993 UNSC Resolution 820 (1993) was adopted. It provided, inter alia, as follows:
“24. Decides that all States shall impound all vessels, freight vehicles, rolling stock and aircraft in their territories in which a majority or controlling interest is held by a person or undertaking in or operating from the [FRY] and that these vessels, freight vehicles, rolling stock or aircraft may be forfeited to the seizing State upon a determination that they have been in violation of resolutions ... 713 (1991), 757 (1992), 787 (1992) or the present resolution;”
On 26 April 1993 this resolution was implemented by EC Regulation 990/93 which entered into force on 28 April 1993. Articles 1.1(e), 8-10 of that regulation provide as follows:
“1. As and from 26 April 1993, the following shall be prohibited: ...
(e) the provision of non-financial services to any person or body for purposes of any business carried out in the Republics of Serbia and Montenegro.”
8. All vessels, freight vehicles, rolling stock and aircraft in which a majority or controlling interest is held by a person or undertaking in or operating from the [FRY] shall be impounded by the competent authorities of the Member States.
Expenses of impounding vessels, freight vehicles, rolling stock and aircraft may be charged to their owners.
9. All vessels, freight vehicles, rolling stock, aircraft and cargoes suspected of having violated, or being in violation of [EC Regulation 1432/92] or this Regulation shall be detained by the competent authorities of the Member States pending investigations.
10. Each Member State shall determine the sanctions to be imposed where the provisions of this Decision are infringed.
Where it has been ascertained that vessels, freight vehicles, rolling stock, aircraft and cargoes have violated this Regulation, they may be forfeited to the Member State whose competent authorities have impounded or detained them.”
Pursuant to EC Regulation 990/93, the European Communities (Prohibition of Trade with the Federal Republic of Yugoslavia (Serbia and Montenegro)) Regulations 1993 (SI 144 of 1993) was adopted in Ireland as and from 4 June 1993. It provides, in so far as relevant, as follows:
“3. A person shall not contravene a provision of [EC Regulation 990/93].
4. A person who, on or after the 4th day of June, 1993, contravenes Regulation 3 of these Regulations shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,000 or to imprisonment for a term not exceeding 12 months or to both.
5. The Minister for Transport, Energy and Communications shall be the competent authority for the purpose of Articles 8 and 9 of the [EC Regulation 990/93] except in so far as the said Article 8 relates to vessels and the said Article 9 relates to cargoes.
6. (1) The powers conferred on the Minister for Transport, Energy and Communications by Articles 8 and 9 of the [EC Regulation 990/93] as the competent authority for the purposes of those Articles may be exercised by—
(a) members of the Garda Síochána,
(b) officers of customs and excise,
(c) Airport Police, Fire Services Officers of Aer Rianta, ... ,
(d) Officers of the Minister for Transport, Energy and Communications duly authorised in writing by the Minister for Transport, Energy and Communications in that behalf.
(3) A person shall not obstruct or interfere with a person specified in subparagraph (a), (b) or (c) of paragraph (1) of this Regulation, or a person authorised as aforesaid, in the exercise by him of any power aforesaid.
(4) A person who, on or after the 4th day of June, 1993, contravenes subparagraph (3) of this Regulation shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500 or to imprisonment for a term not exceeding 3 months or to both.
7. Where an offence under Regulation 4 or 6 of these Regulations is committed by a body corporate and is proved to have been so committed with the consent, connivance or approval of or to have been attributable to any neglect on the part of any person, being a director, manager, secretary or other officer of the body corporate or a person who was purporting to act in any such capacity, that person as well as the body corporate, shall be guilty of an offence and shall be liable to be proceeded against and punished as if he were guilty of the first-mentioned offence.”
5. Lifting the sanctions’ regime
(a) UNSC Resolution 943 (1994) was adopted on 23 September 1994 and, in so far as relevant, reads as follows:
“(i) the restrictions imposed by paragraph 7 of [UNSC Resolution 757 (1992)], paragraph 24 of [UNSC Resolution 820 (1993)] with regard to aircraft which are not impounded at the date of adoption of this resolution, ... shall be suspended for an initial period of 100 days from the day following the receipt ... of a report from the Secretary-General.”
This resolution was implemented by EC Regulation 2472/94 of 10 October 1994, Article 5 of which suspended the operation of Article 8 of EC Regulation 990/93 “with regard to aircraft ... which had not been impounded at 23 September 1994”.
(b) The suspension of UNSC Resolution 820 (1993) was extended further by periods of 100 days on numerous occasions in 1995, and these resolutions were each implemented by EC Regulations.
(c) UNSC Resolution 820 (1993) was suspended indefinitely in 1995 by UNSC Resolution 1022 (1995). It was implemented by EC Regulation 2815/95 of 4 December 1995 which provided, inter alia, as follows:
“1. [EC Regulation 990/93] is hereby suspended with regard to the [FRY].
2. As long as [EC Regulation 990/93] remains suspended, all assets previously impounded pursuant to that Regulation may be released by Member States in accordance with the law, provided that any such assets that are subject to any claims, liens, judgments, or encumbrances, or which are the assets of any person, partnership, corporation or other entity found or deemed to be insolvent under the law or the accounting principles prevailing in the relevant Member State, shall remain impounded until released in accordance with the applicable law.”
(d) UNSC Resolution 820 (1993) was finally suspended and that suspension implemented by EC Regulation 462/96 from 27 February 1996. That regulation provides, in so far as relevant, as follows:
“As long as [inter alia, EC Regulation 990/93] remain suspended, all funds and assets previously frozen or impounded pursuant to those Regulations may be released by Member States in accordance with law, provided that any such funds or assets that are subject to any claims, liens, judgments or encumbrances, ... shall remain frozen or impounded until released in accordance with the applicable law.”
Secondary legislation has not been adopted in Ireland as regards these resolutions and regulations suspending the sanctions’ regime.
The applicant complains under Article 1 of Protocol No. 1 that the impounding of the leased aircraft in Ireland was a disproportionate interference with its peaceful enjoyment of its possessions.
The applicant complains under Article 1 of Protocol No. 1 about the impounding of its leased aircraft in Ireland. That Article reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A. Article 1 of the Convention
The Government maintain that the State cannot be held responsible, within the meaning of Article 1 of the Convention, for actions carried out by it in the furtherance of its obligations under EC Regulation 990/93. Article 1 reads as follows:
“The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this Convention.”
While certain EC Regulations may require secondary legislation in order to have effect, the Government point out that EC Regulation 990/93 was clearly self-executing. Its text imposed mandatory duties on the State from the date of its entry into force and was directly effective from the point of view of EC law (Case 230/79 Eridania  ECR 2749) and domestic law (Meagher v. the Minister for Agriculture and Food  1 IR 329 and Maher v. the Minister for Agriculture and Food, judgment of the Supreme Court, 30 March 2001), to the extent that a domestic constitutional challenge to such EC provisions was excluded by Article 29.4.7 of the Irish Constitution. The State was therefore simply acting as agent of the EC and, indirectly, of the UN, and the domestic implementing secondary legislation (S.I. 144 of 1993) added nothing to the State’s existing legal responsibilities. In the same way, Ireland was bound by Article 5 of EC Regulation 2472/94 adopted in October 1994 and which excluded the applicant from the relaxation of the sanctions’ regime.
The Government argue that the Convention should be interpreted where possible so as to allow States to comply with international obligations (Article 1(c) of the Statute of the Council of Europe and Waite and Kennedy v. Germany [GC], no. 26083/94, § 72, ECHR 1999-I). They submit that it is not contrary to the Convention for States to join international organisations once those bodies provide human rights’ protection equivalent to that of the Convention (no. 13258/87, (“M & Co”), Dec. 9.2.90, DR 64, p. 138, the above-cited Waite and Kennedy judgment and the Matthews v. the United Kingdom [GC], no. 24833/94, ECHR 1999-I).
That the EC provides such “equivalent human rights’ protection” is demonstrated by, inter alia, Article 6(2) of Title 1 of the Treaty on European Union 1992 and by the AG’s opinion and the ECJ’s ruling in the present case. That the UN provides equivalent protection is demonstrated by Articles 1(3) and 55 of its Charter, the Universal Declaration of Human Rights of 1948 and the International Covenants on Civil and Political Rights and on Economic and Social and Cultural Rights of 1966.
The Government conclude that in so far as the applicant maintains that the Irish State is responsible for its actions in furtherance of EC Regulation 990/93, that complaint is incompatible ratione materiae with the provisions of the Convention. In so far as it complains about acts of, inter alia, the EC, its complaints are incompatible ratione personae with the provisions of the Convention: international organisations have their own separate legal personality and the Court has no jurisdiction to hear complaints directed against such an organisation or its competent organs.
The applicant accepts that the Convention does not per se exclude the transfer of competence by a Contracting State to an international organisation so long “equivalent human rights’ protection” is maintained. However, it is not challenging the acts, omissions or legal provisions of an international organisation, but rather the application of those legal provisions by the Irish State. The Convention organs have already considered on the merits the implementation by a Contracting State of EC law and the applicant considers that it is in the same situation (the above-cited Matthews judgment, the Van der Hurk v. the Netherlands judgment of 19 April 1994, Series A no. 288, Pafitis and Others v. Greece judgment of 26 February 1998, Reports of Judgments and Decisions 1998-I, and the Hornsby v. Greece judgment of 19 March 1997, Reports 1997-II, application no. 14570/89, Procola v. Luxembourg, decision of 1 July 1993, unpublished, and application no. 11930/86, B. v. the United Kingdom, decision of 8 July 1986, unpublished).
More specifically, State responsibility in this case arose, according to the applicant, from the State’s “residual human rights discretion” exercised through the adoption of S.I. 144 of 1993 without which EC Regulation 990/93 had no independent application in Irish law. That responsibility continued even after the ECJ ruling, a ruling which required application by the Supreme Court.
The State therefore retained, in the manner in which it applied its EC obligations, a certain human rights’ discretion and liberty to act accordingly. In adopting S.I. 144 of 1993 and applying the ECJ ruling, the State was entitled to determine how the duty in the regulation and ruling was to be exercised, neither dictating to the State the precise manner of its implementation. That implementation could have included more Convention-consistent measures such as compensation. Accordingly, the State’s responsibility under the Convention arises from the manner in which it chose to implement the relevant regulation and ruling.
The applicant considers that it is supported in this assertion by EC law (the above-cited Eridania case), by certain academic commentators (“Judicial Protection in the EC” by Professsor H. Schermers, at § 253, and “Human Rights in the European Union: the Role of the Court of Justice” Advocate-General Jacobs (2001) Volume 26 ELR 331) and by domestic case-law (the above-cited Maher case, at pp. 50-51).
The Court must therefore consider whether the impugned acts can be considered to fall within the jurisdiction of the Irish State within the meaning of Article 1 of the Convention, when that State claims that it was obliged to act in furtherance of a directly effective and obligatory EC Regulation.
However the Court is of the view that it does not have sufficient information to enable it to make a ruling. Furthermore, the issues are so closely bound up with the merits of the case that it is inappropriate to determine them at the present stage of the proceedings (Ilascu and Others v. Moldova and the Russian Federation, (dec.) no. 48787/99, 4 July 2001, as yet unpublished).
B. Article 35 § 1 of the Convention
1. Exhaustion of domestic remedies
The Government submit that the applicant failed to exhaust all domestic remedies, arguing that it could have brought private law proceedings against TEAM in contract and/or tort in respect of the alleged free-passage assurances TEAM had given to it. The applicant could also have brought a constitutional action for compensation for the loss suffered as a result of the lawful impounding of the aircraft.
The applicant considers that the Government have not demonstrated that the remedies suggested were accessible, were capable of providing redress or offered reasonable prospects of success. In any event, the applicant submits that it did not have to pursue a further legal remedy which would have been directed to the same end as, and would not have offered any better chances of success than, proceedings already pursued by it.
The Court recalls that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention is based on the assumption that the domestic system provides an effective remedy in respect of the alleged breach. The burden of proof is on the Government claiming non-exhaustion to satisfy the Court that an effective remedy was available in theory and in practice at the relevant time; that is to say, that the remedy was accessible, capable of providing redress in respect of the applicant’s complaint and offered reasonable prospects of success (V. v. the United Kingdom [GC], no. 24888/94, ECHR 1999-IX, § 57). The rule of exhaustion set forth in Article 35 § 1 of the Convention must be applied “with some degree of flexibility and without excessive formalism”; it is sufficient that the complaints intended to be made subsequently in Strasbourg should have been raised, “at least in substance” (Civet v. France [GC], no. 29340/95, ECHR 1999-VI, § 41). Moreover, the Court’s case-law provides that it is in the first place for the applicant to select which legal remedy to pursue: where there is a choice of remedies available to the applicant to obtain redress for an alleged violation of the Convention, Article 35 of the Convention must be applied in a manner corresponding to the reality of the applicant’s situation in order to guarantee effective protection of the rights and freedoms in the Convention (Airey v. Ireland judgment of 7 October 1979, Series A no. 32, p. 12, § 23, and Hilal v. the United Kingdom (dec.), no. 45276/99, 8 February 2000, unpublished).
The Court considers that the applicant’s choice of judicial review proceedings in respect of both of the Minister’s decisions was reasonable, not least because of the applicant’s initial successes (twice before the High Court and once before the Supreme Court). Similarly, it would not be reasonable to require the applicant to have taken further proceedings while those judicial review proceedings were favourably progressing.
As to whether it should have pursued the contract and tort actions to which the Government refer after the judicial review proceedings, the Court does not consider that the Government’s submissions demonstrate that those remedies offered any real prospects of success. It is further noted that any such legal action would have commenced after lengthy and expensive judicial review proceedings, over three years after the aircraft had been initially impounded and at a time when its lease had already expired. As to the constitutional remedy suggested, the Government themselves submit that the detention of the aircraft was immune from challenge on constitutional grounds being an act done in pursuance of an EC obligation within the meaning of Article 29.4.7 of the Constitution. The Court does not therefore consider that the applicant was obliged to take the further proceedings to which the Government refer: they would be directed to essentially the same end as, and it is not demonstrated that they would have had better chances of success than, the prior judicial review proceedings already reasonably pursued by the applicant (Crémieux v. France judgment of 25 February 1993, Series A no. 256-B, § 30, and A. v. France judgment of 23 November 1993, Series A no. 277-B, § 32).
The application cannot, therefore, be declared inadmissible on grounds of a failure to exhaust domestic remedies within the meaning of Article 35 § 1 of the Convention.
2. The six-month time-limit
The Government also argue that the final decision, for the purposes of Article 35 § 1 of the Convention, was 30 July 1996 when the ECJ ruled on the reference made to it by the Irish Supreme Court under former Article 177 of the EC Treaty. The applicant maintains that it is clear from the text of former Article 177 and from the established jurisprudence of the ECJ (including Case 6/64, Costa v. E.N.E.L.  ECR 585, Case 16/65 Firma G. Schwarze v. Einfuhr-und Vorratsstelle für Getreide und Futtermittel  ECR 877, and Case 83/78 Pigs Marketing Board v. Redmond  ECR 2347) that the response of the ECJ to an Article 177 reference constitutes a ruling on a question of law rather than a judgment applying legal provisions to the specific facts of a case.
The Court agrees that the text of former Article 177 and the jurisprudence of the ECJ opened to it by the parties demonstrate that the findings of the ECJ, following a reference under former Article 177 of the EC Treaty, constitute a ruling on the correct interpretation of the provisions of EC law to which Article 177 refers, a ruling subsequently to be applied by the referring domestic court to the facts of the specific case before it. It further notes that the Government have not referred to any domestic jurisprudence which would indicate that the domestic courts understand their role in the Article 177 process any differently.
The Court therefore considers that the final decision, for the purposes of Article 35 § 1, was the judgment of the Supreme Court of 29 November 1996 which applied the ECJ’s ruling to the facts of the present case. Accordingly, the subsequent introduction of the application on 25 March 1997 was within the six-month time-limit set down by Article 35 § 1 of the Convention.
C. Article 35 § 3 of the Convention
The Government further argue that the case should be declared inadmissible pursuant to 35 § 3 as an abuse of the right of petition given the applicant’s lack of bona fides. They did not dispute its bona fides during the domestic proceedings because the issue was not relevant to the interpretation of EC Regulation 990/93. However, they consider that it is relevant to the Convention proceedings, both in this context and on the merits of the complaint.
The Government contest the bona fides of the applicant in two respects.
In the first place, they suggest that the applicant misled this Court by omitting certain facts (about, inter alia, proceedings issued against JAT and any contemplated against the Turkish authorities) and by submitting that the second leased aircraft was detained in Turkey once the first aircraft was impounded in Ireland because of Turkish aviation rules requiring airlines to have a minimum of two operating aircraft. In this latter respect, they refer to the differing reasons given in evidence by the managing director of the applicant to the High Court in June 1994 as to why the second aircraft had been grounded, to the fact that the applicant did not take advantage of the presence before that court of an expert witness on Turkish law to prove as a matter of fact this question of Turkish law and to a recently obtained affidavit on the relevant Turkish aviation rules which conflicts with the applicant’s version of those rules.
Secondly, they submit that the lease was designed to allow the parties to it to avoid the sanctions’ regime. In this respect, they maintain that the applicant company was founded to take over from JAT certain routes between Turkey and Germany used by Turkish migrant workers. JAT also benefited: it retained ownership of the aircraft (the buy option was subject to its consent) and the package may have been designed to allow the blocked account funds to discharge JAT’s financial responsibilities under the lease, thereby allowing JAT to benefit, albeit indirectly, during the sanctions’ regime. Moreover, at best the applicant’s behaviour amounted to a conscious business choice to conclude a high-risk agreement in a developing sanctions’ environment, a view consistent with lease terms which were highly favourable to the applicant.
The applicant asserts its bona fides. There was no connection between its establishment and the sanctions’ regime, but its incorporation responded to the growing Turkish tourism industry and favourable changes in Turkish civil aviation rules. On incorporation, the applicant sought to establish its own routes and there was no agreement to take over JAT routes. The lease agreement was an arms-length agreement, the subject of skilled negotiation on the applicant’s behalf and the industry sources relied upon by the Government have not been identified by them.
It also maintains that the Government cannot now dispute its bona fides when it did not take the opportunity before the High Court on two occasions to present written and oral evidence to support its factual contentions and to allow the applicant to test that evidence. In fact, they did the opposite: they expressly accepted the applicant’s bona fides. Should this Court now decide to open the question of the applicant’s bona fides, fairness would require the Court to take evidence or, failing that, to proceed on the basis of the facts as established by the domestic courts.
The applicant also finds unconvincing the Government’s explanation as to why it did not raise this bona fides issue domestically. It was clear that Mr Justice Murphy’s judgment was to a large extent motivated by the innocent position of the applicant party. It is unreasonable for the Government to maintain that it was still not pertinent to tackle that subject during the appeal that followed and especially during the subsequent proceedings relating to Article 9 of the EC Regulation 990/90, when the applicant’s bona fides was arguably even more relevant. In the latter case, not only did the Government not dispute the applicant’s good faith, but Mr Justice Barr found that the Minister’s Counsel had expressly accepted that the applicant was an innocent party which was not in collusion with JAT. Indeed the summary of facts, submitted to the ECJ with the Article 177 reference and agreed between the parties’ counsel, accepted unequivocally that there was no implication that the applicant was involved in some scheme to avoid the sanctions’ regime.
In sum, the applicant points to the clear statements as to its bona fides by the High Court, by the Supreme Court, in the agreed summary of facts submitted to the ECJ, by the Advocate-General and by the ECJ, and submits that the Court should reject the Government’s application to dismiss the case on the grounds that it is an abuse of the right of petition.
The Court notes that the parties raise, in the context of their submissions on the merits of the complaint under Article 1 of Protocol No. 1, the same bona fides issues as under Article 35 § 3 of the Convention. The Court is of the view that these issues are so closely bound up with the merits of the complaint under Article 1 of Protocol No. 1 that it is inappropriate to determine them at the present stage of the proceedings. It therefore joins this issue to the merits of the application.
The Court would clarify one matter in respect of the applicant’s complaint at this point. The applicant refers to a number of facts which it considers show that it was treated in an arbitrary and discriminatory manner. At § 36 of its application and while recounting the facts of the case, the applicant noted that TEAM had not been pursued under the sanctions’ regime whereas it had been. At § 42 of its written observations the applicant referred to the allegedly discriminatory manner of applying the sanctions’ regime (since its aircraft was the only one ever impounded) as a factor adding to the disproportionate nature of the interference with its property rights.
It was only during the applicant’s oral submissions that reference was made to a complaint of a discriminatory difference in treatment under Article 14 of the Convention and even then it was referred to by the applicant’s Counsel as “a possible question the Court might consider”. Even if a complaint under Article 14 was thereby introduced on 13 September 2001, this would have been clearly more than six months after the final decision in this case (29 November 1996). Accordingly, the Court has considered these discrimination submissions in the context in which they were initially raised namely, under Article 1 of Protocol No. 1.
A. The Government’s submissions
The Government do not dispute that there has been an interference with the applicant’s property rights. Although in its oral submissions it defined the interference as a control on the use of property, they were prepared to accept in their written submissions that it was a temporary deprivation of a possession as an essential element of the control of its use. As to the legal basis for the interference, this was at all times Articles 8 and/or 9 of EC Regulation 990/93 and, in this respect, they refer to their submissions detailed above in the context of State responsibility and Article 1 of the Convention. They emphasise that the State was simply acting out of obligation and without discretion to apply EC Regulation 990/93, and the ECJ later confirmed its view as to the applicability of that regulation.
However, the Government contend that the interference was justified for the reasons set out by the ECJ, an assessment that the Court should decline to review unless it is perverse, which they argue it clearly is not. The Government would emphasise the following matters.
They point out that the aim of the interference was undeniably a fundamentally important public interest: an effective sanctions’ regime was a necessary and minimal action in the pursuit of the end to a hugely destructive conflict in the former Yugoslavia, a war which engendered mass violations of human rights and humanitarian law. The Government do not believe that the Court could find that a State failed to respect an applicant’s property rights when it was preventing the avoidance of a sanctions’ regime, or at least, preventing the breach of international rules aimed at the protection of such fundamental rights of others as to the right to life and freedom from genocide and torture. Given that public interest, the test is therefore whether the interference was preferable or advisable, as opposed to whether it was necessary in a democratic society and, further, the State is accorded a broad margin of appreciation (Handyside v. the United Kingdom judgment of 7 December 1976, Series A no. 24, and James and Others v. the United Kingdom judgment of 21 February 1986, Series A no. 98).
In addition, the Government dispute the applicant’s bona fides, a matter they consider must count against the applicant in the overall assessment of proportionality, and they refer to their submissions under Article 35 § 3 detailed above.
In any event, even if the applicant is bona fide, that would not render the interference disproportionate. The above-cited AGOSI and Air Canada cases demonstrate that what is important is that the proprietor had a reasonable opportunity to make its case as to its innocence before the relevant decision-making bodies. The applicant had that chance in conditions at least as favourable as in the Air Canada and the AGOSI cases. Indeed, the domestic courts and the ECJ all worked from the basis that the applicant was an innocent party. In addition, if the applicant’s submissions as to the importance of its innocence in the overall assessment is accepted, then the effective operation of any sanctions’ regime would be rendered impossible because, by its nature, such a regime will affect innocent people.
Moreover, they dispute the financial loss the applicant attributes to the impoundment. In the first place, the applicant could have, but did not, stop paying rental to JAT, the impounding of the aircraft being an act of force majeure and/or frustration of the contract. Secondly, the Irish State had incurred significant expense (not detailed) in holding the aircraft, which it did not charge to the applicant. Thirdly, they dispute that Turkish aviation rules required two operational aircraft to maintain the airline licence and they refer to their submissions under Article 35 § 3 above in this respect. Fourthly, in any event, if the applicant attempted to fly the second aircraft, it would most likely have been impounded under the sanctions’ regime and possibly by Turkey: the applicant’s managing director gave evidence to the High Court in June 1994 that he had not moved the second aircraft for fear of it being impounded. While the Turkish Government may have initially considered the second aircraft not to fall within the scope of the sanctions’ regime, further to the receipt of the Sanctions Committee’s opinion on 28 May 1993, they stated in writing that they would comply with sanctions.
Furthermore, and as regards the allegation that TEAM had spoken of State clearance for the C-Check, they point out that it is not responsible for the actions of TEAM. It was a wholly owned State company but it operated as an independent commercial concern. The Minister was obliged to again impound the aircraft on 5 August 1994 in the light of the information which had emerged from the first judicial review and the SNECMA proceedings. As to the retention of the aircraft after October 1994, it is true that the EC had by then relaxed the sanctions’ regime and that that suspension of the regime did not apply to the applicant’s aircraft. However, that distinction, between aircraft found to have flown in violation of the sanctions regime and those which did not, was a legitimate one given the public interest sought to be achieved.
Finally, the Government point out that the aircraft would have been detained independently of the sanctions’ regime as a result of the SNECMA injunction between 12 March 1994 and 11 April 1995. There were also periods during which the aircraft was subject neither to impoundment or an injunction, during which periods the applicant did not remove the aircraft.
In sum, the Government maintain that the balance struck between the conflicting interests was consistent with the requirements of Article 1 of Protocol No. 1 and the only one acceptable in an international community founded on fundamental human rights and the rule of law.
B. The applicant’s submissions
The applicant considers that the actions of the State amounted to a deprivation of its possessions. Unlike in the above-cited Air Canada case, the aircraft was not returned to it and it lost all benefit from its leasehold interest in the aircraft for the period of detention. As to the lawfulness of the interference, the applicant repeats its submissions under Article 1 above: there was no lawful basis for the impounding of the aircraft until the adoption of S.I. 144 of 1993 on 4 June 1993 because EC Regulation 990/93 required implementing legislation in Ireland prior to it being effective.
It maintains that the impounding of its aircraft was a completely disproportionate interference with the property rights of a bona fide party. Its burden was excessive in that it alone suffered under this sanctions’ regime, its business was destroyed and no compensation was ever received.
In particular, the applicant stresses its bona fides and refers to its submissions detailed above in the context of Article 35 § 3. It adds that it was in a worse position than the applicants in the above-cited AGOSI and Air Canada cases: its bona fides, while accepted, was simply not relevant to the matters considered by the domestic courts.
In addition, the applicant emphasises its catastrophic losses as a result of the impounding of the aircraft in Ireland. In the first place, it lost the benefit of almost three years of a four-year lease, while incurring many of the expenses of that lease. It was further obliged to make expensive arrangements to ensure the return of stranded passengers in 1993. In addition, it claims that the second aircraft was detained in Turkey as a direct result of the impoundment in Ireland because of Turkish aviation rules requiring an airline company to operate at least two aircraft to retain its airline licence. As a result, its airline business was destroyed. Against the background of such loss to an innocent party, the applicant argues that the lack of compensation means that it clearly bore an excessive burden, compensation being a necessary element in striking a fair balance between the competing interests involved (Chassagnou and Others v. France [GC], nos. 25088/94, 28331/95 and 28443/95, ECHR 1999-III).
Furthermore, the applicant considers that certain differences in treatment serve to underline the excessive burden borne by it within the meaning of Article 1 of Protocol No. 1. In the first place, it reiterates that its aircraft was the only one impounded under this sanctions’ regime. Secondly, it points to the distinction made by EC Regulation 2472/94 in October 1994 which meant that thereafter JAT aircraft could circulate but its aircraft remained impounded. It argues that this was demonstrably unjust given that the underlying motivation for the initial impounding of the aircraft no longer pertained. It referred to EC Regulation 2472/94 in its observations to the ECJ, but the ECJ did not comment. The applicant did not take proceedings in Ireland to have the aircraft released after October 1994 as it was “punch drunk” with litigation: SNECMA and a company called Société Nationale Detude had sued JAT and the applicant’s leased aircraft was caught in the middle of that litigation. It also was fighting the impoundment. Thirdly, according to the Government’s own argument, TEAM provided a service in breach of the sanctions’ regime but it was never pursued or sanctioned in any way. Fourthly, even when the sanctions ended the State returned the aircraft not to the possessor from whom it had been taken, but directly to JAT.
Moreover, the applicant considers the confused and delayed actions of TEAM and the State prior to the arrival of its aircraft in Ireland contributed to its losses. The State delayed significantly in responding to TEAM’s question as to the appropriate nature of its collaboration with the applicant. The applicant had already provided TEAM with sufficient information to pursue that query in January 1993, and the Department and TEAM had discussed this question already prior to 2 March 1993. Yet a formal application was not made to the Sanctions Committee until 26 May 1993, by which time its aircraft was in Dublin on the basis of assurances of State clearance, and the C-Check was almost completed. Whatever instructions were given by the Department, TEAM (a wholly owned State company) had encouraged the applicant with assurances of State clearance and TEAM’s letter of 21 May 1993 makes it clear that TEAM was of the view that it had been advised by the State that it could go ahead with the maintenance work.
Finally, the applicant does not believe that the SNECMA injunction is as relevant as the Government claim: if that injunction had been lifted in July and August 1994 when the aircraft was no longer impounded, the State would have simply re-impounded the aircraft. It also disagrees that it could have moved the aircraft after 9 February 1996: the Minister was still pursuing all legal avenues to vindicate its initial impounding of the aircraft, would have stopped any attempt to leave and, indeed, the aircraft was re-impounded in August 1996 immediately after the ECJ delivered its ruling.
C. The Court’s decision
The Court considers that this complaint raises complex and serious issues under Article 1 of Protocol No. 1 which require determination on the merits. It follows that they cannot be dismissed as manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring the complaints inadmissible has been established.
For these reasons, the Court unanimously
Declares the application admissible, without prejudging the merits of the case.
Vincent Berger Georg ress
BOSPHORUS AIRWAYS v. IRELAND DECISION
BOSPHORUS AIRWAYS v. IRELAND DECISION