AS TO THE ADMISSIBILITY OF
Application no. 54268/00
by QUFAJ CO. SH.P.K.
The European Court of Human Rights (Third Section), sitting on 2 October 2003 as a Chamber composed of:
Mr G. Ress, President,
Mr I. Cabral Barreto,
Mr P. Kūris,
Mr B. Zupančič,
Mr J. Hedigan,
Mrs M. Tsatsa-Nikolovska,
Mr K. Traja, judges,
and Mr V. Berger, Section Registrar,
Having regard to the above application lodged on 26 July 1999,
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 company, “Qufaj Co. sh.p.k.”, is an Australian-Albanian joint venture, established by decision no. 5883 of the Tirana District Court on 20 July 1992, with the object of investing in the construction business.
It is acting before the Court through its Managing Director, Mr Avenir Ballvora, an Albanian citizen born in 1957, who now lives in Montauban (France).
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
The municipality of Tirana sold the applicant company 15,788 square metres of land in a residential area in Tirana by decision no. 165 dated 9 June 1992.
By decision no. 174 of 15 June 1992, the municipality granted the applicant company planning permission to build five hundred flats. A building permit was also required before the project could start, but the municipality failed to decide the matter for a considerable length of time, thus preventing the building works from getting under way.
After the municipality had refused to grant a building permit, the applicant company brought proceedings in the Tirana District Court seeking compensation (60,000,000 leks) for its loss. Its claim was dismissed by judgment no. 4064 of 23 June 1995.
On appeal, the Tirana Court of Appeal quashed the first-instance judgment and ordered the municipality to pay the applicant 60,000,000 leks (decision no. 1197 of 23 February 1996).
In the absence of an appeal by the municipality to the Court of Cassation, the Court of Appeal’s judgment became final and enforceable.
On 16 July 1996 the President of the Court of Cassation, in a document addressed to the municipality, stated that, after the entry into force of the new Code of Civil Procedure, he no longer had the right to initiate a supervisory review of the legality of lower court decisions.
On 16 July 1997 the applicant company requested the Tirana District Court to issue a warrant for the execution of the compensation award.
On 25 June 1998 the Tirana District Court rejected a request by the municipality to review the merits of decision no. 5492 of 20 December 1994, there being no basis in either law or fact for it to do so.
On 23 July 1997, in a document no. 704/gj dated 23 July 1997, the Enforcement Office notified the municipality that it should execute the Court of Appeal decision by paying the applicant company 60,000,000 leks. However, the municipality repeatedly refused to comply, arguing that it had no budget for the execution of judicial decisions.
At the same time, the Enforcement Office requested the Exchequer and Budget Department of the Ministry of Finance (the ultimate financial institution responsible for such payments) to comply with the decision by providing the necessary funding (Article 589, paragraph 2, of the Code of Civil Procedure).
By documents nos. 2018/3 of 19 September 1997, 2018/5 of 7 November 1997, and 4670 of 22 September 1999, the Ministry of Finance rejected the requests of the Enforcement Office, arguing that either Article 589 of the Code of Civil Procedure was not applicable, or that central funding was not possible under the State Budget Law. It added that the municipality should contact the “District of Tirana Branch of the Treasury”, specifying the fund from which the debt should be paid and the part of the municipality’s budget to which it should be allocated.
As the judgment was not executed, the applicant company brought proceedings in the Constitutional Court, claiming that local governmental institutions were obliged to guarantee the enforcement of final judicial decisions, not to impede them.
The Constitutional Court rejected the applicant’s complaint, stating that the “complaint [could] not be taken into consideration because the enforcement of court decisions is outside the jurisdiction of the Constitutional Court”.
B. Relevant domestic law
1. The Constitution
Article 42 § 2
“In the protection of his constitutional and legal rights, freedoms and interests, or in defending a criminal charge, everyone has the right to a fair and public hearing, within a reasonable time, by an independent and impartial court established by law.”
Article 142 § 3
“State bodies shall comply with judicial decisions.”
Article 63 § 3
“The People’s Advocate has the right to make recommendations and to propose measures when he finds violations of human rights and freedoms by the public authorities.”
2. Instruction no. 1 issued by the Ministry of Finance on 13 June 1997 pursuant to the Finance no.1 Act of 13 October 1997
“Payments deriving from judicial decisions relating to the normal activity of budgetary institutions shall be authorised by the Head of the Central Institution. At the same time, where the damage for which the State is liable is the consequence of public officers acting ultra vires or failing to act in accordance with his powers, the Head of the Central Institution shall take administrative measures and institute civil proceedings against them according to the degree of their responsibility.”
3. The Decision of the Council of Ministers no. 335 of 9 June 199
Paragraph 2 (e)
“The Ministry of Finance, through funds allocated to it in the annual budget, shall comply with judicial decisions directly related to the State’s budgetary obligations but not to the obligations of budgetary institutions. Such decisions shall include:
(e) Judicial decisions expressly determining the liability of the State for other reasons provided for by law.”
4. The Commercial Register and Companies Registration Act (Law no.7667/93)
Re-registration of previously registered commercial companies
“Commercial companies registered before the entry into force of this Act whose registered particulars and forms do not comply herewith shall re-register no later than six months after the entry into force of this Act. Any such company that fails to request the re-registration or to present the requisite documents shall be automatically unregistered from that date on. They may apply for a three-month extension of time in which to comply with this obligation. Re-registered companies shall retain all the rights they enjoyed before re-registration.”
5. The People’s Advocate Act (Law no. 8454, of 4.2.1999)
Persons and Acts outside the Jurisdiction of the People’s Advocate
“The following shall also be outside the jurisdiction of the People’s Advocate:
(a) statutes and other legal acts; (b) military orders to the Armed Forces; (c) court decisions.
Without prejudice to item (c) of this Article, the People’s Advocate shall accept complaints, requests or notifications of human-rights violations arising from the administration of the judiciary and judicial procedures. The investigations of the People’s Advocate shall not infringe the independence of the judiciary in deciding cases.”
1. The applicant company complains under Article 6 § 1 of the Convention that the authorities’ failure to comply with the final judicial decision in its case has hindered the effective enforcement of its rights and thus rendered the requirement of a fair hearing meaningless.
2. The applicant also complains, under Article 13 of the Convention, of the lack of an effective remedy under domestic law to challenge that failure. In that connection, the applicant refers to the decision of the Constitutional Court, which declined to consider its appeal, holding that it had no jurisdiction to do so.
3. The applicant, lastly, argues that Article 14 of the Convention, read in conjunction with Article 6 § 1 of the Convention, has been violated by the Albanian authorities, in that it was treated differently to other creditors in similar cases without justification.
The applicant company complains under Articles 6 § 1, 13 and 14 of the Convention of the authorities’ refusal to execute the judgment of the Tirana Court of Appeal of 23 February 1996. It states that, as a result, it had no effective domestic remedy allowing it to assert its rights.
The relevant part of Article 6 § 1 provides:
“1. In the determination of his civil rights and obligations ... everyone is entitled to a fair hearing ... by a[n] tribunal ... .”
Article 13 states:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
Article 14 provides as follows:
“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
1. a) As regards Article 6 § 1 of the Convention, the Government raise two preliminary objections:
i) The Government contend that the company has not exhausted domestic remedies. They argue that the applicant has failed to raise the issue with the People’s Advocate Office (Ombudsperson) or, in accordance with Law no. 8812 of 17 May 2001, with the Enforcement Office. The Government submit that the law provides that, in the event of failure to comply with a judicial decision, the Enforcement Office shall impose a fine of 50,000 leks (350 Euro) on the judgment debtor. Accordingly, the applicant has failed to exhaust this new remedy.
The company challenges the effectiveness of each of the two remedies referred to by the Government. As regards a claim before the People’s Advocate’s Office (Ombudsperson), it argues that it could not provide an effective remedy within the meaning of the Convention. It further argues that the Enforcement Office’s power to impose a fine on the judgment debtor cannot achieve the applicant’s principal objective, which is the execution of the judgment of the Tirana Court of Appeal.
Consequently, the applicant submitted that the Government’s statements were unsubstantiated.
The Court reiterates that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention obliges applicants to use the remedies that are normally available and sufficient in the domestic legal system to enable them to obtain redress for the breaches alleged. The existence of the remedies must be sufficiently certain, in practice as well as in theory, failing which they will lack the requisite accessibility and effectiveness. Article 35 § 1 also requires that the complaints intended to be brought subsequently before the Court should have been made to the appropriate domestic body, at least in substance and in compliance with the formal requirements laid down in domestic law, but not that recourse should be had to remedies which are inadequate or ineffective (see Aksoy v. Turkey, no. 21987/93, §§ 51-52, ECHR 1996-VI, and Akdivar and Others v. Turkey, no. 21893/93, §§ 65-67, ECHR 1996-IV).
As regards the possibility of applying to the Ombudsperson, the Court observes that, while being an authority independent from the executive, the Ombudsperson cannot take enforceable decisions vis-à-vis governmental authorities (Law no. 8454 of 4 February 1999). An application to the Ombudsperson cannot therefore be regarded as a remedy satisfying the requirements of Article 35 § 1.
The Court reiterates that Article 35 § 1 of the Convention requires the exhaustion of domestic remedies, but there is no obligation under this provision to have recourse to remedies which are inadequate (see Valasinas v. Lithuania, no. 44558/98, 14.3.2000 (dec.)). In the Valasinas case the Court found that a petition to the Ombudsperson did not constitute an effective remedy within the meaning of Article 35 § 1 (ibid.).
As regards the appeal to the Enforcement Office in accordance with Law no. 8812 of 17 May 2001, the Court notes that the applicant complained about the refusal of the executive authorities to comply with the orders of the courts and the bailiffs. Therefore, such an appeal would not have enabled the applicant company to have the judgment in its favour executed. Furthermore, the Court notes that the applicant company obtained an execution warrant in respect of the judgment of 23 February 1996, in accordance with the requirements of domestic civil procedure, but the bailiffs were unable to enforce it. Consequently, the Court concludes that such an action would have been ineffective.
The Court finds that the remedies referred to by the Government were either unavailable or inadequate to secure redress for the alleged breaches. Consequently, this preliminary objection must be dismissed.
ii) The Government contend that the applicant company is not the company that is entitled to execute the relevant judgment. Qufaj Co. sh.p.k., the claimant in the proceedings before the national authorities, was registered as a commercial company on 2 July 1992, following a decision of the Tirana District Court, and was formed by Mr Qufaj, Chairman, and Mr Ballvora, its Managing Director and Legal Representative.
Furthermore, pursuant to the Commercial Companies Act (Law no. 7638/92) and the Commercial Register and Companies Registration Act (Law no. 7667/93), commercial companies were required to re-register, within six months of 1 January 1993, failing which their registration would lapse.
In the instant case, according to the registration office document produced by the Government, Qufaj Co. sh.p.k did not re-register. Consequently, the Government claim that its registration has automatically lapsed.
As indicated in decision no. 17369/97 of the Tirana District Court, the company was not officially re-registered until 1997. According to that decision, the management of the Qufaj Co. sh.p.k. company is composed of Mr Ballvora, Chairman and Managing Director, and by Mr Qufaj, Partner.
According to the Government, the “new” Qufaj Co sh.p.k, the applicant before the Court, is not the same company as that which was a party to the national proceedings, not only because the company did not officially exist between 1993 and 1997, when it was re-registered, but also because of the new composition of its management.
In the light of the foregoing, the Government argue that the Managing Director of the company has no authority to represent a company which is no longer registered, before either the Albanian authorities or the Court. Consequently, as the “old” company ceased to exist in 1993, the applicant company has no standing as a “victim”, as required by Article 34 § 3 of the Convention.
The applicant rejects that argument. It claims that the Tirana Court of Appeal rejected that objection. Furthermore the legislation referred to by the Government applies to companies that have failed to comply with the registration formalities, not to the applicant company. Accordingly, its registration had not lapsed, as the Government maintained. In addition, the re-registration of 1997 was a consequence of the reorganisation of the company following a change in its financial circumstances.
Consequently, the applicant argues that the Government’s second preliminary objection is unsubstantiated as well.
The Court reiterates that the violations alleged by the applicant company concern the failure to comply with the judgment of 23 February 1996. The Albanian authorities delivered that decision after the laws mentioned by the Government came into force. In that connection, the Court considers that the Government’s primary objection relating to the applicant’s lack of standing as a victim is irrelevant, because the material facts occurred before the obligation to re-register came into force. Consequently, the applicant is a “victim”, within the meaning of Article 34 of the Convention.
Moreover, as Mr Ballvora was and remains the Manager Director of “both” companies, his capacity to act as the legal representative of both companies is indisputable.
Consequently, the Court considers that the above objection must likewise be dismissed.
b) On the merits, the applicant claims that the authorities’ refusal to comply with the judgment of the Tirana Court of Appeal of 23 February 1996 has hindered the effective enforcement of its rights, and thus rendered the requirement of Article 6 § 1 meaningless.
The Government observe that the final judgment was not complied with as a result of objective circumstances, such as a lack of funds and confusion over the roles of the respective Albanian authorities. Furthermore, in view of the legislative and political chaos, and the economic and social situation in Albania, compliance with the judgment was quite impossible. Moreover, the State budget was and remains insufficient to fulfil all the demands made on it in respect of salaries, health-care, education and infrastructure.
Having regard to the applicant’s complaints and the Government’s observations, the Court finds that serious questions of fact and law arise, the determination of which should depend on an examination of the merits. This part of the application cannot be regarded as manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other grounds for declaring it inadmissible have been established.
2. The applicant company further argues that it had no effective remedy before a national authority for the failure to enforce the judgment of 23 February 1996. In its view, there has, accordingly, been a violation of Article 13 of the Convention. In this context, it refers to the Constitutional Court’s decision declining jurisdiction to hear its appeal.
The Government maintain that under the case-law of the Albanian Constitutional Court, the requirement of a “fair trial”, within the meaning of Article 131/f of the Albanian Constitution, does not extend to the execution of the decision.
The Court considers that Article 6 § 1 of the Convention takes precedence as the lex specialis for the issues of non-enforcement of judgments, so that it is unnecessary to examine the issue under Article 13 separately (see Jasiuniene v. Lithuania, no. 41510/98, § 32, 6 March 2003).
3. The applicant, lastly, maintains that the Albanian authorities have breached Article 14, read in conjunction with Article 6 § 1, of the Convention, in so far as the failure to comply with the judgment of the Tirana Court of Appeal was a consequence of its members’ political opinions. It maintains that the Albanian authorities preferred other creditors of a different political or social background.
The Court finds that the applicant company has failed to substantiate its allegation that it was discriminated against as a private creditor in comparison with other creditors.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court unanimously
Declares admissible, without prejudging the merits, the applicant company’s complaint concerning Article 6 § 1 of the Convention;
Declares the remainder of the application inadmissible.
Vincent Berger Georg Ress
QUFAJ CO. SH.P.K. v. ALBANIA DECISION
QUFAJ CO. SH.P.K. v. ALBANIA DECISION