Lexploria

EUROPEAN COMMISSION OF HUMAN RIGHTS

Application No. 13427/87

Stran Greek Refineries S.A.

and

Stratis Andreadis

against

Greece

REPORT OF THE COMMISSION

(adopted on 12 May 1993)

TABLE OF CONTENTS

Page

I. INTRODUCTION

(paras. 1 - 16). . . . . . . . . . . . . . . . . . . . .1

A. The Application

(paras. 2 - 4). . . . . . . . . . . . . . . . . . .1

B. The Proceedings

(paras. 5 - 11) . . . . . . . . . . . . . . . . . .1

C. The Present Report

(paras. 12 - 16). . . . . . . . . . . . . . . . . .2

II. ESTABLISHMENT OF THE FACTS

(paras. 17 - 45) . . . . . . . . . . . . . . . . . . . .4

A. The particular circumstances of the case

(paras. 17-41). . . . . . . . . . . . . . . . . . .4

B. Relevant domestic law and practice

(paras. 42-45). . . . . . . . . . . . . . . . . . .9

III. OPINION OF THE COMMISSION

(paras. 46 - 89) . . . . . . . . . . . . . . . . . . . 10

A. Complaints declared admissible

(para. 46). . . . . . . . . . . . . . . . . . . . 10

B. Points at issue

(para. 47). . . . . . . . . . . . . . . . . . . . 10

C.Fair trial by a tribunal

(paras. 48 - 66). . . . . . . . . . . . . . . . . 10

D. Length of the proceedings

(paras. 67-73). . . . . . . . . . . . . . . . . . 13

E. Peaceful enjoyment of possessions

(paras. 74-89). . . . . . . . . . . . . . . . . . 14

RECAPITULATION

(para. 88) . . . . . . . . . . . . . . . . . . . . . . 17

PARTIALLY DISSENTING OPINION OF MR. STEFAN TRECHSEL

AND SIR BASIL HALL. . . . . . . . . . . . . . . . . . . . . 18

CONCURRING OPINION OF MR. M.P. PELLONPÄÄ. . . . . . . . . . 19

APPENDIX I : HISTORY OF PROCEEDINGS . . . . . . . . . . 21

APPENDIX II : DECISION ON THE ADMISSIBILITY

OF THE APPLICATION . . . . . . . . . . . . 23

I. INTRODUCTION

1 The following is an outline of the case, as submitted to the

European Commission of Human Rights, and of the procedure before the

Commission.

A. The Application

2 The application was introduced by Mr. Stratis Andreadis, a Greek

citizen, and by the Stran Greek Refineries S.A., a company registered

in Greece wholly owned by the former and currently under liquidation.

The applicant Mr. Stratis Andreadis died in 1989. His son and heir,

Peter Andreadis, expressed the wish to maintain the application. The

applicants were represented before the Commission by Mr. Peter Martyr

of Norton Rose, Solicitors, London.

3 The application is directed against Greece. The respondent

Government were initially represented by their Agent,

Mr. Constantinos Economides, Head of the Special Legal Department of

the Ministry of Foreign Affairs. They are now represented by their

Agent, Mr. George Sgouritsas, President of the Legal Council of the

State (**miko *ymvouli* **n *ratons).

4 The case concerns domestic civil proceedings whereby the validity

of an arbitration award in favour of the applicants was challenged by

the Greek State and an interpretative law (Ermineitikos nomos) which

was enacted while the above proceedings were pending and which provided

that the award was invalid. It raises issues under Articles 6 para. 1

and 13 of the Convention and Article 1 of Protocol No 1.

B. The Proceedings

5 The application was introduced on 20 November 1987 and registered

on the same date. Between November 1988 and December 1989 the member

of the Commission appointed as Rapporteur requested the applicants to

submit further information and documents relating to the then pending

domestic proceedings. The applicants submitted the information on

25 January 1990.

6 On 2 April 1990 the Commission decided to bring the application

to the notice of the respondent Government and to invite them to submit

written observations on the admissibility and merits of the application

before 15 June 1990. After obtaining a prolongation of the above time

limit the Government submitted their observations on 30 June 1990. The

applicants submitted their observations in reply on 24 October 1990.

7 On 1 March 1991 the Commission decided to invite the Government

to submit further written observations on the admissibility and merits

of the application. The Government submitted such observations on

6 May 1991. The applicants' further observations in reply were

submitted on 13 June 1991.

8 On 4 July 1991 the Commission declared the application

admissible. The text of the decision on admissibility was sent to the

parties on 15 July 1991 and they were invited to submit further

evidence and additional observations on the merits of the application.

The respondent Government submitted further observations on the merits

on 10 September 1991. The applicants' further observations were

submitted on 27 September 1991. The applicants completed their

submissions on 3 December 1991.

9 On 10 September 1992 the Commission decided in accordance with

Rule 53 of its Rules of Procedure to obtain the parties' oral

submissions on certain issues arising in relation to the merits of the

case. At the hearing, which took place on 20 October 1992, the

respondent Government were represented by Mr. Fokion Georgakopoulos,

Member of the Legal Council of the State, Acting Agent of the

Government. The applicants were represented by Mr. Peter Martyr of

Norton Rose Solicitors, as representative, and by Mr. Michael Beloff

Q.C., Ms Tracy Forster, Solicitor, Professor K.D. Kerameus of the

University of Athens and Mr. George Alexopoulos, liquidator of the

applicant company, as Counsel.

10 At the hearing the Government requested the Commission to declare

the application inadmissible for non compliance with the requirement

of the exhaustion of domestic remedies in Article 26 of the Convention.

The Commission considered this request on the same day and found no

basis for the application of Article 29 of the Convention.

11 After declaring the case admissible, the Commission, acting in

accordance with Article 28 para. 1 (b) of the Convention, also placed

itself at the disposal of the parties with a view to securing a

friendly settlement. In the light of the parties' reaction, the

Commission now finds that there is no basis on which such a settlement

can be effected.

C. The Present Report

12 The present Report has been drawn up by the Commission in

pursuance of Article 31 para. 1 of the Convention and after

deliberations and votes in plenary session, the following members being

present:

MM. C.A. NØRGAARD, President

S. TRECHSEL

E. BUSUTTIL

G. JÖRUNDSSON

A.S. GÖZÜBÜYÜK

A. WEITZEL

J.-C. SOYER

H. DANELIUS

Sir Basil HALL

MM. F. MARTINEZ

C.L. ROZAKIS

Mrs. J. LIDDY

MM. L. LOUCAIDES

M.P. PELLONPÄÄ

13 The text of this Report was adopted on 12 May 1993 and is now

transmitted to the Committee of Ministers of the Council of Europe, in

accordance with Article 31 para. 2 of the Convention.

14 The purpose of the Report, pursuant to Article 31 of the

Convention, is:

i) to establish the facts, and

ii) to state an opinion as to whether the facts found disclose

a breach by the State concerned of its obligations under

the Convention.

15 A schedule setting out the history of the proceedings before the

Commission is attached hereto as Appendix I and the Commission's

decision on the admissibility of the application as Appendix II.

16 The full text of the parties' submissions, together with the

documents lodged as exhibits, are held in the archives of the

Commission.

II. ESTABLISHMENT OF THE FACTS

A. The particular circumstances of the case

17 By a contract concluded on 22 July 1972 between the Greek State

and Mr. Stratis Andreadis it was agreed that the latter would establish

an oil refinery to process crude oil in Megara, Greece. The contract

was to be carried out by Mr Andreadis' wholly owned company,

Stran Greek Refineries S.A., the establishment of which was

contemplated by the contract. Under the contract all rights and

obligations of Mr. Andreadis were automatically to be transferred to

the company upon its incorporation.

18 The Greek Government ratified the contract by legislative decree

L.D. 1211 published in the Official Gazette on 26 July 1972. Under

Article 21 of the contract the Greek State undertook to acquire, not

later than 31 December 1972, a plot of land in Megara for the building

of the refinery.

19 However, the Greek State failed to acquire the land and,

consequently, the applicant company was unable to proceed with the

project.

20 On 14 October 1977 the contract was formally terminated by a

decision of the democratically elected Government pursuant to Law

141/1975 concerning the termination of preferential contracts

(Haristikes simvaseis) entered into during the military regime in

Greece. This law, being enacted by special authorisation of the

constitutional legislator under Article 107 of the Constitution of

1975, has superior force (aiksimeni tipki simami) and takes precedence

over common legislation.

21 Prior to the discontinuation of the contract the company had

already incurred expenditure in connection with the project. In

particular, the company had incurred liabilities by entering into

agreements with Greek and foreign firms for the supply of services,

goods and materials and had arranged loans to finance the project. A

dispute arose between the company and the Greek State in which the

former brought an action dated 10 November 1978 before the Athens First

Instance Court (Polimeles Protodikeio) seeking reimbursement of the

expenses it had incurred.

22 The Greek State challenged the competence of this jurisdiction

arguing that the litigation should be referred to arbitration as

provided in the contract.

23 However, by its judgment of 29 September 1979 (judgment

No 13910/1979), the Athens First Instance Court rejected this argument,

inter alia, on the ground that the arbitration clause in the contract

had been annulled. As regards the merits of the claims, the court

rejected the State's argument that the termination of the contract was

the result of the company's shortcomings and ordered the parties, and

in particular the applicant company, to submit further evidence

relating to its claims.

24 On 12 June 1980 the Greek State referred the case to arbitration

according to Article 27 of the contract paragraphs 1 and 9 of which

read as follows:

"1. Any difference, dispute or disagreement arising between

the State and the concessionaire as

to the application of this Agreement and relative to the

implementation or interpretation of the terms and

conditions thereof and the extent of the rights and

obligations deriving therefrom shall be resolved

exclusively by arbitration by three arbitrators according

to the following procedure, no other arbitration agreement

being required.

9. The arbitration award shall be definite, final and

irrevocable, and shall constitute an enforceable instrument

requiring no further action for enforcement or any other

formality. It shall be liable to no regular or

extraordinary judicial remedy. The party failing to comply

with the provisions of the arbitration award shall be

obligated to make good any and all damages (damnum emergens

or lucrum cessans) caused to the other party."

25 On 17 June 1980 arbitration proceedings commenced in accordance

with the above clause at the initiative suit of the State. The latter

requested the Arbitration Court to declare that all claims for

compensation against the State brought by Stran in the action before

the First Instance Court were unfounded (action for a declaratory

award). The applicant company appeared before the Arbitration Court

arguing that this court had no jurisdiction in the case. The company

further refuted the State's submissions.

26 On 27 February 1984 the Court of Arbitration gave its award

concluding that it was competent and accepting a part of the State's

claims. The Court of Arbitration found in particular that the claims

of the company were well founded up to Drachmas 116,273,442, US$

16,054,165 and French Francs 614,627 and unfounded as far as they

exceeded these sums.

27 On 24 July 1984 the company applied to the First Instance Court

for an order for the return by the Greek State of a letter of

guarantee. By its judgment No 3113/1985 the court adjourned the

proceedings until a final judgment would be given on the company's

original action before the same court (see para. 23 above)

28 On 2 May 1985 the State challenged the decision of the Court of

Arbitration before the Athens First Instance Court requesting the

arbitration proceedings and the award to be declared null and void.

By its decision No 5526/1985 the Athens First Instance Court dismissed

the State's action having found, by a majority, that the decision

whereby the contract was annulled did not affect the validity of the

arbitration clause.

29 On 4 November 1986 the Athens Court of Appeal (Efeteio) confirmed

the above decision (judgment No 9336/1986).

30 On 15 December 1986 the State appealed to the Court of Cassation

(Areios Pagos).

31 On 17 December 1986 the applicant company withdrew its original

court action which was still pending before the Athens First Instance

Court and requested the proceedings for the return of the letter of

guarantee (cf. para. 27 above) to continue. Having regard to the

State's appeal before the Court of Cassation, the Athens First Instance

Court adjourned the examination of the case until the final judgment

of the Court of Cassation.

32 Before the Court of Cassation a hearing was originally scheduled

to take place on 4 May 1987 but it was subsequently adjourned to

1 June 1987.

33 On 25 May 1987 the Parliament enacted Law 1701/1987 by

publication in the Official Gazette. The principal stated object of

this law was to expropriate the assets in certain oil companies and to

provide for compensation. Moreover, Article 12 of Law 1701/1987

provides as follows:

"1. The true and lawful meaning of the provisions of

Article 2 para. 1 of Statute 141/1975 concerning the

termination of contracts entered into between 21 April 1967

and 24 July 1974 is that, upon the termination of these

contracts, all their terms, conditions and clauses

including the arbitration clause, are ipso facto repealed

and the arbitration tribunal no longer has jurisdiction.

2. Arbitration awards and/or decisions referred to in

paragraph 1 are no longer valid or enforceable.

3. Any principal or ancillary claims against the Greek

State, expressed either in foreign or local currency, which

arise out of any of the contracts statutorily sanctioned

entered into between 21 April 1967 and 24 July 1974 and

terminated pursuant to Law No. 141/1975, are now

extinguished by prescription.

4. Any court proceedings at whatever level pending at the

time of the enactment of this statute, in respect of claims

referred to in the paragraph above, are cancelled."

34 On 10 July 1987 the First Chamber of the Court of Cassation gave

its judgment No. 1387/1987 declaring, inter alia, that the provisions

in Article 12 of Law 1701/1987 were unconstitutional. The Chamber noted

in particular the following:

"The (provisions of the Constitution) afford superior force

to Law 141/1975 and also prohibit any subsequent amendment

or supplementation or even authentic interpretation of that

law by the ordinary legislator. The purpose of such

superior force and of the constitutional provision for a

'law to be issued once only within three months after the

Constitution enters into force' is to establish legislative

stability and international confidence in investments in

Greece. This opinion is based on the only possible meaning

of the reference to '... a law to be issued once only ...'

and in the ease with which that condition could be breached

if amendments or supplementations or authentic

interpretations were permitted of the law which has been

issued."

The Chamber referred the matter to the Plenary Court of

Cassation.

35 The Plenary Court of Cassation held a hearing on

25 February 1988. In its judgment No 4/1989 of 16 March 1989 the Court

of Cassation found that the interpretative provision of Article 12

para. 1 of Law 1701/1987 was not unconstitutional per se for the

following reasons:

" provides for the enactment of a law,

'... to be issued once ...', which - as to its nature -

carries a superior force in the sense that it may not be

amended or changed by a common law (...). However, the

prohibition of amending or changing the content of laws

carrying a superior force does not also mean the exclusion

of the interpretation of such laws. Their special nature

does grant to such laws a precedence over common laws, but

it does not also exclude their interpretation,... when this

is dictated by the necessity of circumstances. This is so

because interpretation does not change the content of a law

being interpreted, but reveals its original meaning and

resolves the differences that arose from its application or

that may arise in the future. The need for (such

interpretation) will be finally judged by the Court, which

has a duty to check whether the law being interpreted has

actually created a doubt as to its meaning justifying the

legislative intervention.

(...)

Therefore, in principle, the interpretation of Law 141/1975

is not contrary to the Constitution on the mere premise

that such Law carries a superior force. However, the

issues arise on the one hand, whether there was a need for

interpretation in this specific case and on the other hand,

whether or not the other non-interpretative provisions of

that law are contrary to the Constitution.

As noted hereinabove, the wording of Article 2, paragraph 5

of Law 141/1975 is unclear and this creates a doubt as to

whether -following the termination of the agreement- the

arbitration clause retains its force. In the present case

the doubt originally arose when the interested parties

resorted to the civil court and subsequently (following the

issuance of a preliminary judgment by the First Instance

Court) when that action was abandoned and the parties

resorted to arbitration. Diametrically opposite views were

then presented and were also expressed in the arbitration

award issued. However, irrespective of the doubts which

arose in this case, the matter relates to the acceptance or

non-acceptance of the doctrine of the independence of an

arbitration clause and the extent of such independence.

The issue has long created a serious difference of opinions

in international case-law ..., the result being that in

certain countries the principle of the survival of the

arbitration clause prevails ..., while in other countries

the prevailing view is that the termination of an agreement

also leads to the cancellation of the arbitration clause

and to the consequent reference of all disputes to the

ordinary courts, and yet in other countries the principle

prevails that the separation of the arbitration agreement

from the contract applies only to disputes of a certain

nature.

Therefore, there was a need to interpret Law 141/1975. The

interpretation resolved the matter, as concerns the Greek

State, by ruling in favour of the cancellation of the

arbitration clause after the termination of the agreements

which were concluded during the dictatorship period, as

well as of the termination of any jurisdiction of the court

of arbitration. The need for such action by the legislator

is not ruled out by the fact that the legislative

intervention emerged ... five days before the hearing of

the case before the First Chamber of this Court following

an adjournment, because the instant case served as the

occasion for settling an already existent issue.

Given the above, it cannot be considered that the action of

the legislator to proceed to an interpretation constitutes

an intervention in and encroachment on the competence of

the ordinary courts in this specific dispute. In view of

the above, the provision of Article 12, para. 1 of Law

1701/1987 does not overstep the limits which have been set

by the Constitution."

36 As regards para. 2 of Article 12, the Court of Cassation found

that this provision was not unconstitutional since it essentially

supplemented the provision of para. 1 aiming at "rendering powerless

any arbitration awards which may have been issued after the termination

of the contracts and which would not have been issued if the true

meaning of Law 141/1975 had been clarified in time".

37 The Court of Cassation refused to examine the constitutionality

of para. 3, since this provision was not applicable in the litigation

before it.

38 Finally, the Court of Cassation found that the application of

Article 12 para. 4 to the present case constituted an "intervention in

and an encroachment on the competence of the courts" since the

enactment of this provision just prior to the hearing of the cassation

appeal was aiming at excluding the judicial investigation of the

validity of the challenged award. It was therefore contrary to the

constitutionally secured principle of the separation of powers.

39 The matter was accordingly remitted back to the First Chamber of

the Court of Cassation for an examination of the State's appeal.

40 A hearing before the First Chamber of the Court of Cassation took

place on 12 February 1990.

41 The Court gave its judgment on 11 April 1990. It quashed the

challenged judgment of the Court of Appeal and declared the arbitration

award null and void pursuant to the provisions of Article 12 of

Law 1701/1987.

B. Relevant domestic law and practice

42 Article 26 of the Constitution (Separation of Powers)

"1. Legislative power shall be vested in Parliament and the

President of the Republic.

2. Executive power shall be vested in the President of the

Republic and the Government.

3. Judicial power shall be vested in the courts of law, the

decisions of which shall be executed in the name of the

Greek People."

43 Article 77 of the Constitution (Authentic Interpretation)

"1. The authentic interpretation of the laws shall rest

with the legislative power.

2. A law which is not truly interpretative shall enter

into force as of its publication."

44 Article 93 para.4 (Control of constitutionality of laws)

"The Courts shall be bound not to apply laws, the contents

of which are contrary to the Constitution."

45 Article 107 of the Constitution and Law 141/1975

Following the restoration of democracy in Greece in 1974, the

legislator decided the revocation of various administrative acts issued

during the 7-year military regime which concerned capital investments.

This was deemed necessary since by such acts the military regime had

granted benefits to various investors which were regarded as excessive

or preferential and inconsistent with the general public interest.

Article 107 para. 2 of the Constitution of 1975 provided that "a law

which will be issued once only within three months from the date of

entry into force of the Constitution, shall determine the terms and the

procedure for the revision or termination of ... the contracts

concluded from 21 April 1967 to 23 July 1974 concerning foreign

investments...".

Law 141/1975 was issued for this purpose and provided, inter

alia, that the termination of such contracts could take place by a

unilateral decision of the Ministerial Economic Committee. Article 2

para. 5 of Law 141/1975 reads, in as far as relevant, as follows:

"Following the termination of the contract ... the

privileges and the special arrangements ... cease and the

enterprise or the investment is subject to the common

legislation concerning ordinary enterprises and

investments..."

III. OPINION OF THE COMMISSION

A. Complaints declared admissible

46 The Commission has declared admissible the following complaints

by the applicants:

a) that as a result of the enactment and the application of

Law 1701/1987 in their case they have not been entitled to a fair

hearing in the determination of their civil rights to compensation ;

b) that their case has not been determined within a reasonable

time ;

c) that as a result, on the one hand, of the provisions of

Article 12 of Law 1701/1987 and, on the other hand, of the lengthy and

dilatory proceedings instituted by the Greek State they are deprived

of their property rights which have been recognised by the arbitration

award.

B. Points at issue

47 The following points are at issue in the present application:

- whether there has been a violation of the applicants' right to

a fair hearing by a tribunal under Article 6 para. 1 (Art. 6-1) of the

Convention;

- whether the length of the proceedings exceeded the "reasonable

time" referred to in Article 6 para. 1 (Art. 6-1) of the Convention;

- whether there has been a violation of the applicants' right to

peaceful enjoyment of their possessions under Article 1 of

Protocol No 1 (P1-1) to the Convention.

C. Fair trial by a tribunal

48 The applicants allege a violation of their right to a fair

hearing in the determination of their civil right to compensation under

Article 6 para. 1 (Art. 6-1) of the Convention which, insofar as

relevant, reads as follows:

"In the determination of his civil rights and obligations

..., everyone is entitled to a fair ... hearing within a

reasonable time by an independent and impartial tribunal

established by law."

49 The applicants submit that they participated in the arbitration

proceedings in reliance upon the good faith of the State which called

for and took part in these proceedings. On the contrary the State,

having failed in the arbitration proceedings, embarked upon a series

of dilatory appeals which failed.

50 The applicants observe that Law 1701/1987 was enacted five days

before the hearing in their case before the Court of Cassation. They

find that the purpose of this Law was to bar the applicants from having

their claims resulting from the discontinuation of the contract

determined. In this respect they submit that Article 12 of

Law 1701/1987 constitutes an unfair and calculated attempt to interfere

with and encroach upon the powers of the judiciary.

51 The applicants submit that the judgment of the Plenary of the

Court of Cassation by declaring Article 12 para. 4 of Law 1701/1987

inapplicable to their case did not remedy the situation. The sole

effect of that judgment was that the domestic proceedings were not

cancelled. However, the applicability of paras. 1 to 3 of Article 12

of Law 1701/1987 in fact put an end to the litigation since under these

provisions the arbitration award is no longer valid or enforceable and

their claims are extinguished by prescription.

The applicants consider that this constitutes an infringement

of the rule of law.

52 The Government argue that an action by the legislator involving

an authentic interpretation of Law 141/1975 was necessary in order to

settle the controversies as to the meaning of the provisions of this

Law. It was not, therefore, an interference with the applicants' case

before the courts.

53 The Government submit that the abolition of the arbitration

clause in the contract was an obvious consequence of Law 141/1975.

However, a dispute arose as to the real will of the legislator, which

dispute was expressed in the legal writings of distinguished lawyers

and in the contradictory decisions of the courts. The parties to the

present litigation alternatively supported different opinions and

views. It was a matter of principle for the legislator to make clear

that his will was to eliminate from the economic and public life the

consequences of the military regime and not to tolerate the exercise

of rights or privileges acquired in non-democratic political

situations.

54 The Government further note that the exercise by the legislator

of his right to interpret a law is expressly provided by the

Constitution. The exercise of this right is controlled by the courts

which are bound not to apply a law which is unconstitutional. In the

present case the constitutionality of the provisions of Law 1701/1987

was challenged before the Plenary of the Court of Cassation and this

court found the provisions of Article 12 paras. 1 and 2 to be in

conformity with the Constitution, while at the same time it declared

para. 4 unconstitutional. Consequently, contrary to the applicants'

allegations, the decision as to the validity of the arbitration clause

and award was not taken by the legislator but by the Court of

Cassation.

55 The Commission first observes that the issue which was under

litigation before the domestic courts was the validity of the

arbitration award given in the applicants' favour. The question raised

under Article 6 para. 1 (Art. 6-1) of the Convention is whether the

matter was decided by an independent and impartial court after a fair

hearing. This provision does not only require that the parties'

arguments are heard by the courts in adversarial proceedings. It also

guarantees the principle of equality of arms and requires that the

matter under litigation is decided by the courts on the basis of the

relevant existing legislation and without any interference by any of

the parties or by any other State authority.

56 The Commission notes that the constitutionality of the

provisions complained of was debated before and decided by the Plenary

of the Court of Cassation after both parties had been heard. The

proceedings were not cancelled and the litigation ended by a judgment

of the First Chamber of the Court of Cassation.

57 However, the Commission also observes that the issue as to the

validity of the award, which was the subject matter of the litigation,

was expressly addressed by the legislator while the proceedings were

pending. By interpreting the existing law in favour of the invalidity

of the arbitration clause and by providing that the award was null and

void Article 12 paras. 1 and 2 of Law 1701/1987 left no room for a

decision by the court and in reality determined the outcome of the

proceedings.

58 The Commission notes the Government's argument that such a

legislative intervention was necessary, since not only the parties to

this case but also the courts, individual judges and distinguished

lawyers had expressed differing opinions on the disputed point.

59 The Commission cannot however follow this approach. The fact that

contradictory or differing views are expressed is rather common in

court litigations. Courts are often required, in the exercise of their

judicial functions, to clarify the will of the legislator by

interpreting the laws. Moreover, the Government have been unable to

present a single case, other than that of the applicants, to which the

challenged provisions have been applied.

60 The Commission finds no sufficient explanation for the fact that

this interpretative legislative action was not taken until 1987, i.e.

12 years after the enactment of Law 141/1975 and 9 years after the

commencement of the litigation, at a moment when the proceedings were

reaching their end.

61 It observes, furthermore, that no explanation was given for the

apparent inconsistency between the State's position in 1979, when it

called for arbitration, and action taken in 1987, when the legislator

intervened in favour of the invalidity of the arbitration clause and

proceedings.

62 To sum up, the Commission finds nothing to support the submission

that the legislative intervention was necessary at the time it

occurred.

63 In this respect the Commission recalls the following remarks in

the Golder judgment (Eur. Court H.R., Golder judgment of

21 February 1975, Series A no. 18, p. 17, paras. 34-35):

"One reason why the signatory Governments decided to 'take the

first steps for the collective enforcement of certain of the

Rights stated in the Universal Declaration' was their profound

belief in the rule of law. It seems both natural and in

conformity with the principle of good faith (Article 31 para. 1

of the Vienna Convention) to bear in mind this widely

proclaimedconsideration when interpreting the terms of Article 6

para. 1 (Art. 6-1) according to their context and in the light

of the object and purpose of the Convention.

This is all the more so since the Statute of the Council of

Europe, an organisation of which each of the States Parties to

the Convention is a Member (Article 66 of the Convention), refers

in two places to the rule of law; first in the Preamble, where

the signatory Governments affirm their devotion to this

principle, and secondly in Article 3 which provides that 'every

Member of the Council of Europe must accept the principle of the

rule of law ...

The principle whereby a civil claim must be capable of being

submitted to a judge ranks as one of the universally 'recognised'

fundamental principles of law; the same is true of the principle

of international law which forbids the denial of justice.

Article 6 para. 1 (Art. 6-1) must be read in the light of these

principles."

64 In the Commission's view where a court is dealing with a dispute

between an individual and the State over civil rights and obligations,

the legislator must not take action with a view to resolving that

particular pending dispute. Were Article 6 para. 1 (Art. 6-1) to permit

such action, a Contracting State could, without acting in breach of

that text, prevent its courts from exercising in practice their

jurisdiction to determine civil actions brought against the State. Such

assumption, indissociable from a danger of arbitrary power, would have

serious consequences which are incompatible with the rule of law.

65 The Commission finds therefore that by enacting and applying

Article 12 paras. 1 and 2 of Law 1701/1987 in the applicants' case the

Greek authorities denied the applicants the right to have their civil

rights and obligations determined after a fair hearing by a tribunal.

Conclusion

66 The Commission finds, unanimously, that there has been a

violation of Article 6 para. 1 (Art. 6-1) as regards the applicants'

right to a fair hearing by a tribunal.

D. Length of the proceedings

67 The applicants further complain that their case was not

determined within a reasonable time as required by Article 6 para. 1

(Art. 6-1) of the Convention.

68 According to the consistent case-law of the Court and the

Commission, the reasonableness of the length of proceedings falling

within the scope of Article 6 para. 1 (Art. 6-1) of the Convention must

be assessed in the light of the circumstances of each case and having

regard in particular to the following criteria: the complexity of the

case, the conduct of the parties and that of the competent authorities

(cf., for example, Eur. Court H.R., Vernillo judgment of

20 February 1991, Series A no 198, p. 12, para. 30).

69 As regards the proceedings which the applicants instituted before

the First Instance Court of Athens on 10 November 1978, the Commission

notes that these proceedings are still pending. It recalls that the

period for which it is competent began on 20 November 1985, when Greece

recognised the Commission's competence to receive individual

applications. However, in assessing the reasonableness of the

proceedings account must be taken of the state of the proceedings on

the above-mentioned date (cf. Eur.Court H.R., Foti and Others judgment

of 10 December 1982, Series A no 56, pp. 18-19, para. 53) The

Commission observes that these proceedings were in practice

discontinued when the case was referred to arbitration. Moreover, on

17 December 1986 the applicants declared that they wished to withdraw

these proceedings and since that date they have taken no further

procedural steps.

70 In view of the above elements the Commission finds that the

length of these proceedings is essentially due to the fact that the

applicants were no longer interested in their continuation.

71 The Commission further notes that it is competent ratione

temporis to examine the reasonableness of the length of the proceedings

concerning the validity of the arbitration award but not the

arbitration proceedings as such. It recalls in this respect that the

arbitration proceedings as such ended before 20 November 1985, when

recognition by Greece of the right of individual petition took effect.

72 The proceedings concerning the validity of the arbitration award

commenced on 2 May 1985 and terminated on 11 April 1990. They lasted

nearly 5 years. The first instance and appeal proceedings lasted 18

months. The total length of the cassation proceedings is more than 3

years but during this period the Court of Cassation gave three

judgments in the case. Having regard to the complexity of the issues

dealt with by the Court of Cassation, the Commission finds that the

length of these proceedings can still be considered as reasonable.

Conclusion

73 The Commission concludes, by 12 votes to 2, that there has been

no violation of Article 6 para. 1 (Art. 6-1) of the Convention as

regards the length of the proceedings.

E. Peaceful enjoyment of possessions

74 The applicants complain that as a result, on the one hand, of the

lengthy and dilatory proceedings and, on the other hand, of the

provisions of Article 12 of Law 1701/1987 they have been deprived of

their property rights recognised by the arbitral award. They invoke

Article 1 of Protocol No 1 (P1-1) to the Convention which reads as

follows:

"Every natural or legal person is entitled to the peaceful

enjoyment of his possessions. No one shall be deprived of

his possessions except in the public interest and subject

to the conditions provided for by law and by the general

principles of international law.

The preceding provisions shall not, however, in any way

impair the right of a State to enforce such laws as it

deems necessary to control the use of property in

accordance with the general interest or to secure the

payment of taxes or other contributions or penalties."

75 The applicants submit that the arbitral award, although of a

declaratory nature, represents a financial asset and a "possession"

within the meaning of Article 1 of Protocol No 1 (P1-1). As a result

of the entry into force of Law 1701/1987 this award was annulled and

all their claims were extinguished by prescription.

76 The Government submit that the arbitral award was based on a very

precarious legal ground and was finally invalidated. The applicants

were aware of the precarious nature of the award since they knew and

had themselves pleaded for the incompetence of the arbitration court.

Nevertheless, the applicants did not take any steps to accelerate the

proceedings before the ordinary courts in order to avoid any

disadvantages which might result from a possible nullity of the

arbitration proceedings.

77 The Government further observe that the prescription of the

applicants' claims is a necessary limitation in the exercise of their

rights. As the applicants' claims resulted from a preferential contract

prejudicial to the public interest, prescription of the claims after

10 years cannot be considered unreasonable.

78 The Commission recalls that a claim can constitute a

"possession", within the meaning of Article 1 of Protocol No 1 (P1-1),

provided that it is sufficiently established (cf. No 7742/76,

Dec. 4.7.78, D.R. 14 p. 146; No 7775/77, Dec. 5.10.78, D.R. 15 p. 143).

In the present case it is true that no final decision was given in the

proceedings before the ordinary courts as regards the applicant

company's claims. It is also true that the declaratory arbitral award

recognising the existence of a debt of the State to the company was

annulled as a result of Article 12 paras. 1 and 2 of Law 1701/1987.

However, in order to examine whether the applicants had a "possession"

affected by Law 1701/1987 account must be taken of the situation as

regards their rights before the enactment of this law.

79 The Commission recalls in this respect that the existence of a

debt of the Greek State to the applicant company was in principle

recognised by judgment No 13910/1979 of the First Instance Court of

Athens. The company's claims were also regarded as established in the

arbitral award given in 1984. What was at stake in the subsequent

proceedings was not the very existence of the debt but the precise

extent of the State's obligation and the competence of the arbitration

court. Moreover, the Government do not deny the very existence of the

a debt but submit that the applicants did not choose the proper

procedural way for the recovery of their expenses.

80 The Commission finds therefore that the applicants' claims

constituted "possessions" within the meaning of Article 1 of

Protocol No 1 (P1-1) to the Convention prior to the enactment of

Law 1701/1987.

81 Article 1 of Protocol No 1 (P1-1) comprises three distinct rules:

the first rule, set out in the first sentence of the first paragraph,

is of a general nature and enunciates the principle of the peaceful

enjoyment of property; the second rule, contained in the second

sentence of the first paragraph, covers deprivation of possessions and

subjects it to certain conditions; the third rule, stated in the second

paragraph, is concerned, amongst other things, with a right of the

State to control the use of property (Eur. Court H.R., Sporrong and

Lönnroth judgment of 23 September 1982, Series A no. 52, p. 24,

para. 61). These rules are not "distinct" in the sense of being

unconnected: the second and third rules are concerned with particular

instances of interference with the right to peaceful enjoyment of

property and should therefore be construed in the light of the general

principle enunciated in the first rule (Eur. Court H.R., James and

others judgment of 21 February 1986, Series A no. 98, p. 30, para. 37

in fine).

82 The Commission notes that according to Article 12 para. 2 of

Law 1701/1987 the arbitration award was declared null and void and its

enforcement excluded. Moreover, Article 12 para. 3 of the same law

provides that the applicants' claims are now extinguished by

prescription. It follows that the applicants can no longer recover the

State's debt on the basis of the arbitral award and that they are also

prevented from continuing or instituting proceedings for this purpose.

83 In the Commission's view the combined effect of the provisions

in paras. 2 and 3 of Article 12 of Law 1701/1987 amounts to an

interference with the applicants' right to peaceful enjoyment of their

possessions. In order to be compatible with Article 1 of Protocol No 1

(P1-1), this interference must "achieve a 'fair balance' between the

demands of the general interest of the community and the requirements

of the protection of individual fundamental rights" (cf. above-

mentioned Sporrong and Lönnroth judgment, p. 26, para. 69). In

addition, there must be a reasonable relationship of proportionality

between the means employed and the aim pursued (above-mentioned James

and Others judgment, p. 34, para. 50).

84 Having regard to the Contracting States' wide margin of

appreciation as regards the existence of a public interest justifying

interferences with individual rights guaranteed by Article 1 of

Protocol No 1 (P1-1) (cf. Eur.Court H.R., Mellacher and Others judgment

of 19 December 1989, Series A No 169, p. 26, para. 45) the Commission

accepts that there may have been some justification for the abolition

of arbitral awards based on arbitration clauses which the Greek State

regarded as privileges conceded by the military regime in Greece and

for the prescription of claims based on preferential agreements

contracted by that regime. The Government have indeed argued that these

measures showed the State's will to eliminate the economical

consequences of the dictatorship.

85 In this respect the Commission notes first that the applicants'

claims aimed at recovering their expenses incurred with a view to the

performance of the contract and not at obtaining any compensation for

loss of profits from the agreement.

86 Moreover, the Commission has had regard to the fact that the

proceedings before the arbitration court commenced at the initiative

of the State, after the applicants had lodged their civil action with

the ordinary courts. When the arbitration court found in favour of the

applicants, it was again the State that challenged the validity of the

arbitral award before the ordinary courts, which conduct, in the

Commission's view, appears as venire contra factum proprium. Finally,

the invalidity of the arbitration clause resulted from a legislative

intervention which occurred 13 years after the restoration of democracy

and the rule of law in Greece and which has been found above to be in

breach of Article 6 (Art. 6) of the Convention while prior to this

intervention both the arbitration and the ordinary courts had found

this clause to be valid.

87 In these circumstances, the Commission finds that the applicants

cannot be blamed either for having participated in the arbitration

proceedings instituted by the State or for having prolonged the

litigation.

88 Having regard to the nature and origin of the applicants' claims

and to their conduct as parties in the litigation the Commission finds

that, even assuming that the provisions of Article 12 paras. 2 and 3

were in the public interest, their effects on the applicants'

fundamental rights were disproportionate to the legitimate aims

eventually pursued by the provisions complained of. The interference

complained of can therefore not be justified under Article 1 of

Protocol No 1 (P1-1).

Conclusion

89 The Commission concludes, unanimously, that there has been a

violation of Article 1 of Protocol No 1 (P1-1) to the Convention.

RECAPITULATION

90 The Commission concludes,

- unanimously, that there has been a violation of Article 6

para. 1 (Art. 6-1) as regards the applicants' right to a fair hearing

by a tribunal (para. 66) ;

- by 12 votes to 2, that there has been no violation of Article 6

para. 1 (Art. 6-1) of the Convention, as regards the length of the

proceedings (para. 73) ;

- unanimously, that there has been a violation of Article 1 of

Protocol No 1 (P1-1) to the Convention (para. 89).

Secretary to the Commission President of the Commission

(H.C. KRÜGER) (C.A. NØRGAARD)

(Or. English)

PARTIALLY DISSENTING OPINION OF MR. STEFAN TRECHSEL

AND SIR BASIL HALL

We are not in agreement with the majority of the Commission that

there has been no violation of Article 6 para. 1 in relation to the

length of proceedings in this case. The situation on 20 November 1985,

when the Declaration of Greece under Article 25 took effect, was that

the Government were challenging the validity of the arbitration award.

The Government were contending that the arbitration award was invalid

notwithstanding that they had referred the dispute to arbitration

themselves.

Both the Athens first instance court and the court of appeal

rejected the Government's contention, the proceedings at two instances

taking 18 months (of which just under twelve months elapsed after the

Greek Declaration under Article 25).

On 15 December 1986 the Government appealed to the Court of

cassation. The final decision of the Court of cassation was the

judgment of its First Chamber on 11 April 1990 - more than three years

later.

The majority of the Commission conclude that the complexity of

the issues justified the time taken. We do not agree that the issues

were so complex as to justify the delay. The issue was in our view a

simple point of law which it had not taken long for the courts of first

and second instance to resolve. The time taken appears to have resulted

in part from the structural arrangements of the Court of cassation

which resulted in reference from the First Chamber to the Plenary Court

and back again. It was in part a result of the need to consider new

legislation, law 1901/1987 taking effect while the appeal in cassation

was pending. Those are matters of State responsibility.

In our view the determination of the applicants' civil rights in

relation to the arbitration award was not made within a reasonable

time, and there was a violation of Article 6 para. 1.

In other respects we are in agreement with the conclusions of the

Commission.

(Or. English)

CONCURRING OPINION OF Mr. M.P. PELLONPÄÄ

I agree with the report in so far as concerns Article 6 of the

Convention. I also fully agree with the finding of a violation

concerning what I regard as the main issue in the present case, i.e.

Article 1 of Protocol No. 1. While the majority, however, limits itself

to finding an "interference" with the right guaranteed in the first

sentence of Article 1, I would characterize this interference as a

"deprivation" of possessions within the meaning of the second sentence

of that Article.

As stated in para. 78 of the report, a sufficiently established

claim can constitute a "possession". According to the majority it

appears to be a combination of the arbitral award of 1984 and the debt

of the Greek State to the applicant company, recognised "in principle"

(para. 79 of the report) by the judgment No. 13910/1979 of the First

Instance Court of Athens, that constitutes the claim in question.

I have certain doubts about the relevance of the "non-definitive"

judgment of 1979. The judgment did not explicitly establish any

liability of the Greek State, although I agree that the acceptance of

such a liability may be inferred from the Court's decision.

Nevertheless, the fact remains that the proceedings so far have not led

even to a final first instance judgment, not to speak about a judgment

confirmed in appeal and cassation proceedings. The mere existence of

pending proceedings with a "non-definitive" first instance judgment

recognizing indirectly the liability of the Greek State hardly

constitutes a claim to be regarded as possessions. While one possibly

could see here an element of possessions, to be taken into account with

other elements, I do not, for reasons given below, find it necessary

to take a final stand on the issue.

I leave the above question open, because in my view the applicant

company had an "established claim" based on the declaratory arbitral

award of 27 February 1984. This award created a property interest which

can and must be regarded as a possession within the meaning of

Article 1 of the Protocol. An arbitral award is, according to Greek

law, final and binding and, as a rule, immediately enforceable.

Although the situation concerning the enforceability of "declaratory

awards" appears to be somewhat unclear, the award in question in any

case confirmed the liability of the Greek State in amounts defined in

a detailed manner in Drachmas, US Dollars and French Francs (see report

para. 26). This award was only subject to challenge by way of setting-

aside proceedings on limited grounds. A challenge action brought by the

Greek State was dismissed by the decision of the Athens First Instance

Court which held, in conformity with widely accepted principles of

arbitration law, that the decision whereby the underlying contract had

been annulled did not affect the validity of the arbitration clause

contained therein. This decision was confirmed on appeal by the Athens

Court of Appeal on 4 November 1986. The Law 1701/1987 intervened just

before the challenge action was to be heard before the final instance,

i.e. the Court of Cassation, and after the Judge Rapporteur had given

his opinion proposing the dismissal of the State's action.

Although the Court of Cassation did not have an opportunity to

express itself on the validity of the arbitral award before the

legislative intervention, my conclusion is that by the time of that

intervention a claim enjoying the protection of Article 1 of

Protocol No. 1 had been created in favour of the applicant company.

I agree with the report that the combined effect of paras. 2 and

3 of Article 12 of Law 1701/1987 amounted to an interference with the

applicants' property rights (see para. 83). I, however, would go a step

further. In my view the interpretative law did not just interfere with

the applicants' right to peaceful enjoyment of their possessions but

in an unequivocal manner took away the claim which had been created by

the arbitral award. Therefore the events in my opinion should be

characterized as a "deprivation" of possessions within the meaning of

the second sentence of Article 1 of the Protocol. This conclusion is

not affected by the fact that some proceedings concerning the

underlying contractual relationships are still, at least in theory,

pending before Greek courts. They cannot change the decisions whereby

the arbitral award was annulled, although they might have impact as

regards the compensation due for the deprivation in question.

As far as the requirements of the public interest behind and the

proportionality of the measure are concerned, the considerations put

forward by the Commission in paras. 84-88 of the report apply mutatis

mutandis also when the interference is seen as a deprivation of

possessions.

My above conclusion concerning a violation does not amount to any

opinion as to the justification of the termination of the contract

itself.

APPENDIX I

HISTORY OF PROCEEDINGS

Date Item

_________________________________________________________________

20.11.1987 Introduction and registration of

the application

25.01.1990 Submission of further information

by the applicants

Examination of Admissibility

02.04.1990 Commission's decision to give

notice of application to the

respondent Government and to

invite the parties to submit

written observations

30.06.1990 Government's observations

24.10.1990 Applicant's observations in reply

01.03.1991 Commission's decision to invite the

Government to submit further

observations merits

06.05.1991 Government's further observations

13.6.1991 Applicants' further observations in

reply

04.07.1991 Commission's decision to declare

the application admissible

Examination of the Merits

15.07.1991 Parties invited to submit further

information and observations

on the merits of the application

10.09.1991 Government's observations on the

merits

27.09.1991 Applicants' observations on the merits

03.12.1991 Applicants supplement their

submissions

07.12.1991 Consideration of state of proceedings

04.04.1992 Consideration of state of proceedings

10.09.1992 Commission's decision to hold a

hearing on the merits of the

application

20.12.1992 Hearing on the merits

13.02.1993 Consideration of state of proceedings

04.05.1993 Commission's deliberations on merits,

and on text of its Article 31 Report.

Final votes taken.

12.05.1993 Adoption of Report

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STRAN GREEK REFINERIES S.A. AND ANDREADIS v. GREECE

STRAN GREEK REFINERIES S.A. AND ANDREADIS v. GREECE

LEXI