Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 13427/87

by S. and A.

against Greece

The European Commission of Human Rights sitting in private

on 4 July 1991, the following members being present:

MM. C.A. NØRGAARD, President

J.A. FROWEIN

S. TRECHSEL

F. ERMACORA

E. BUSUTTIL

G. JÖRUNDSSON

A.S. GÖZÜBÜYÜK

A. WEITZEL

H.G. SCHERMERS

H. DANELIUS

Mrs. G. H. THUNE

Sir Basil HALL

MM. F. MARTINEZ RUIZ

C.L. ROZAKIS

Mrs. J. LIDDY

MM. L. LOUCAIDES

J.-C. GEUS

M.P. PELLONPÄÄ

B. MARXER

Mr. H.C. KRÜGER, Secretary to the Commission

Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 20 November

1987 by S. and A. against Greece and registered on 20 November 1987

under file No. 13427/87;

Having regard to the observations of the respondent Government

of 30 June 1990 and to the applicants' observations in reply submitted

on 22 October 1990;

Having regard to the Government's additional observations of 6

May 1991 and the applicants' additional observations in reply

submitted on 13 June 1991;

Having regard to the report provided for in Rule 47 of the

Rules of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The application was initially introduced by Mr. A. and by S.,

a company registered in Greece wholly owned by the former and

currently under liquidation. The applicant Mr. A. died in 1989. His

son and heir expressed the wish to maintain the application. The

applicants are represented before the Commission by Mr. P. Martyr,

solicitor in London.

The facts of the case as submitted by the parties can be

summarised as follows.

By a contract concluded on 22 July 1972 between the Greek

State and Mr. A. 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 A.'s wholly owned company, S., the establishment

of which was contemplated by the contract. Under the contract all

rights and obligations of Mr. A. were automatically to be transferred

to S. upon its incorporation. 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. However, the Greek

State failed to acquire the land and consequently Stran was unable to

proceed with the project.

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 contracts entered into during

the military regime in Greece.

Prior to the discontinuation of the contract S. had already

incurred expenditure in connection with the project. S. 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 S. and the Greek

State in which S. brought an action dated 10 November 1978 before the

Athens First Instance Court seeking reimbursement of the expenses it

had incurred. These proceedings were subsequently discontinued and

the case was referred to arbitration according to Article 27 of the

contract which provided for disputes between the State and S. arising

out of the contract to be resolved by arbitration. It was moreover

expressly provided by Article 27.9 of the contract:

"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 measures, nor

shall it be subject to cancellation or suspension by action

before regular courts of justice. 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."

On 17 June 1980 arbitration proceedings commenced in

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

sought that the Arbitration Court declares that all claims for

compensation against the State brought by S. in the action before the

First Instance Court were unfounded (action for a declaratory award).

On 27 February 1984 the Court of Arbitration published its

award accepting a part of the State's claims. The Court of

Arbitration found that the claims by S. 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 the above sums.

On 2 May 1985 the State challenged the award before the

Athens First Instance Court seeking that the award be declared null

and void. By its decision No. 5526/1985 the Athens First Instance

Court dismissed the State's action. On 4 November 1986 the Athens

Court of Appeal confirmed the above decision. On 15 December 1986 the

State appealed to the Court of Cassation. A hearing was originally

scheduled to take place before that court on 4 May 1987 but was

subsequently adjourned to 1 June 1987.

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 the Law

1701/1987 provides as follows:

"1. The true and lawful meaning of the provisions of Article 2

para. 1 of Statute No. 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 of paragraph 1 are no

longer valid or enforceable.

3. Any principal or ancillary claim 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 proclaimed to be prescribed.

4. Any court proceedings at whatever level pending at the time of

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

paragraph above, are cancelled."

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 referred the matter to the Plenary Court of Cassation.

The Plenary Court of Cassation held a hearing on

25 February 1988. It gave its judgment No. 4/1989 on 16 March 1989

declaring that the provisions in Article 12 of Law 1701/1987 were not

unconstitutional per se. However, the application of Article 12

para. 4 to the present case constituted a "clear intervention in

and an encroachment on the competence of the Courts" and was therefore

contrary to the constitutionally secured principle of the separation

of powers. The matter was accordingly remitted back to the First

Chamber of the Supreme Court for an examination of the State's appeal.

A hearing before the First Chamber of the Court of Cassation

took place on 12 February 1990. The Court gave its judment on

11 April 1990. It quashed the challenged judgment of the Court of

Appeal and declared the arbitration award null and void.

COMPLAINTS

1. The applicants complain that they have not been entitled to a

fair hearing in the determination of their civil rights to

compensation. They note that they joined 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 resulted in further failure for them. 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 the Law 1701/1987

constitutes an unfair and calculated attempt to interfere with and

encroach upon the powers of the judiciary.

The applicants also observe 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 does not remedy the situation

they complain of. The sole effect of that judgment is that the

proceedings have not been cancelled. However, the applicability of

paras. 1 to 3 of Article 12 of Law 1701/1987 in fact puts an end to the

litigation since under these provisions the arbitration award is no

longer valid or enforceable and their claims are prescribed.

The applicants consider that this constitutes an infringement

of the rule of law and a violation of Article 6 para. 1 and Article 13

of the Convention.

2. The applicants also submit that their case has not been

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

of the Convention. They note that their case is pending before Greek

Courts since 10 November 1978.

3. Finally 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 the Law 1701/1987 they are deprived of

their property rights which have been recognised by the arbitration award.

They invoke Article 1 of Protocol No. 1 to the Convention.

PROCEEDINGS BEFORE THE COMMISSION

The application was introduced on 20 November 1987 and

registered on the same date.

Between November 1988 and December 1989 the Secretary to the

Commission requested the applicants to submit further information and

documents relating to the then pending domestic proceedings. The

applicants submitted the information requested on 25 January 1990.

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.

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.THE LAW

The applicants complain that they have not been entitled to a

fair hearing in the determination of their civil right to

compensation, since the issues which were pending before the domestic

courts were determined by the legislator and not by the judiciary.

They also complain of the length of the proceedings and of being

arbitrarily deprived of their established claims to compensation.

They invoke Articles 6 para. 1 and 13 (Art. 6-1, 13) of the Convention

and Article 1 of Protocol No. 1 (P1-1).

The respondent Government first submit that the application is

incompatible ratione temporis with the provisions of the Convention.

They recall that the declaration by Greece under Article 25 para. 1

(Art. 25-1) of the Convention, recognises the Commission's competence

to examine individual applications against Greece only insofar as

these refer to matters occurring after 20 November 1985. The

Government observe in this respect that the litigation between the

applicants and the Greek State originated in 1977, that is before 20

November 1985.

Moreover, the Government submit that the applicants could have

challenged the decision terminating the contract before the Council of

State (Symvoulio tis Epikrateias). Having failed to pursue this

remedy they have not complied with the requirements as to the

exhaustion of domestic remedies in accordance with Article 26

(Art. 26) of the Convention.

The Government finally argue that an action by the legislator

involving an authentic interpretation of the 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.

The applicants submit that their complaints relate to matters

which occurred or at least continued after 20 November 1985.

Furthermore, the applicants admit that proceedings as to the

legality of the termination of the contract could have been instituted

before the Council of State. Nevertheless, by instituting such

proceedings no damages could be claimed. In the applicants' view this

remedy was not, therefore, an effective one. As to the merits of

their complaints, they essentially refer to their initial submissions.

The Commission examined the parties' submissions. It finds

the following:

I. As regards the Commission's competence ratione temporis.

The Commission observes that the applicants complain first of

the passing on 25 May 1987 of the Law 1701/1987 and of the decisions

given by the Court of Cassation on 25 February 1988 and 11 April 1990

implementing this law. It notes that these matters have occurred after

20 November 1985 and are therefore, within its competence ratione

temporis.

As regards the complaints relating to the length of the

proceedings referred to in the application the Commission observes

that the overall litigation ended after 20 November 1985. Therefore,

this matter cannot be regarded as falling outside the Commission's

competence ratione temporis.

The Commission does not overlook in this respect the fact that

questions arise as to what are the exact periods it is competent

either to examine as such or to take into consideration when assessing

the reasonableness of the length of the proceedings under Article 6

para. 1 (Art. 6-1) of the Convention (cf. Eur. Court H.R., Foti and others

judgment of 10.12.82, Series A no. 56 pp. 18-19, para. 53). The same

question may arise with regard to the applicants' complaint that due

to the allegedly lengthy proceedings their right under Article 1 of

Protocol No. 1 to peaceful enjoyment of their possessions has been

infringed. The Commission finds, nevertheless, that these questions

raise complex issues of fact and law which are closely linked to the

merits of the application and are not to be determined at the stage of

admissibility.

Consequently, the Commission finds that the application cannot

be regarded as falling outside the Commission's competence ratione

temporis.

II. As to the exhaustion of domestic remedies.

The Commission recalls that the basis of the rule of

exhaustion of domestic remedies is that before proceedings are brought

in an international judicial organ, the State made answerable must

have an opportunity of redressing the alleged damage by domestic

means. In this respect the remedies which are to be taken into

account are these which are capable of providing an effective and

sufficient means of redressing the wrongs which are the subject of the

international claim (cf. No. 5964/72, Dec. 29.9.75, D.R. 3 p. 57; Nos.

13092/87 and 13984/88, Dec. 5.6.90).

The Commission finds that the Government failed to show in

what way the possibility for the applicants to institute

administrative proceedings in 1977 against the act terminating the

contract could have redressed in any way any of the wrongs which are

the subject matter of the application, i.e. the entry into force and

the implementation of law 1701/1987 in the applicants' case and the

length of the proceedings.

It follows that the Government's objection as to the

exhaustion of domestic remedies must be rejected.

III. As regards the merits of the application.

The Commission examined the parties' submissions and

arguments. It finds that the application raises complex issues of

fact and law and that it cannot be regarded as manifestly ill-founded

within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

The application must therefore be declared admissible, no

other ground for declaring it inadmissible having been established.

For these reasons, the Commission unanimously

DECLARES THE APPLICATION ADMISSIBLE,

without prejudging the merits.

Secretary to the Commission President of the Commission

(H.C. KRÜGER) (C.A. NØRGAARD)

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S., A. v. GREECE

S., A. v. GREECE