SECOND SECTION

DECISION

Application no . 30253/06 Fahrettin KÖKSAL against Turkey

The European Court of Human Rights (Second Section), sitting on 26 November 2013 as a Chamber composed of:

Guido Raimondi , President , Işıl Karakaş , Peer Lorenzen , András Sajó , Nebojša Vučinić , Paulo Pinto de Albuquerque , Egidijus Kūris , judges , and Stanley Naismith , Sectio n Registrar ,

Having regard to the above application lodged on 17 July 2006 ,

Having deliberated, decides as follows:

THE FACTS

1. The applicant, Mr Fahrettin Köksal , is a Turkish national, who was born in 1934 and lives in Ankara .

A. The circumstances of the case

2. The facts of the case, as submitted by the applicant, may be summarised as follows.

1. Main c ompensation proceedings

3. In 1989 the applicant brought an action for compensation against a privately-owned bank, namely the Yap ı Kredi Bankas ı A. Ş ., on account of the latter ’ s default on a contractual obl igation under a loan agreement.

4. On 16 March 1993 the Istanbul Commercial Court ordered the payment of 120,000,000 Turkish liras (TRL [1] ) to the applicant, plus interest at the rediscount rate running from the date the action was brought , which was the highest rate of interest available in commercial disputes , as compensation. The Court of Cassation quashed this judgment.

5. On an unspecified date, the Istanbul Commercial Court ordered the payment of TRL 151,560,400 to the applicant, together with interest at the rediscount rate running from the same date.

6. Following the upholding of this judgment by the Court of Cassation, on 22 April 1996 the bank paid the applicant TRL 728,990,000 .

2. First additional action for compensation

7. Relying on Article 105 of the Code of Obligations in force at the material time (“the former Code of Obligations”), on 28 May 1996 the applicant brought an additional action for compensation (“ munzam zararın tazmini davası ”) before the 8th Chamber of the Istanbul Commercial Court. He claimed TRL 2,200,000,000, with interest at the rediscount rate for the further loss he had suffered on account of the significant disparity between the interest applied to the judgment debt and the high inflation rate (case no. 1996/610). While bringing this action, the applicant reserved his right to increase his claim in due course.

8. On 9 October 1997 the applicant brought an additional action ( ek dava ) before the 4 th Chamber of the Istanbul Commercial Court to increase his previous claim in relation to the same dispute, and requested TRL 13,000 ,000,000 as compensation, with interest at the rediscount rate (case no. 1997/1080).

9. On an unspecified date the two c ases were merged under case no. 1996/610 before the 8 th Chamber of the Istanbul Commercial Court.

10. On 18 December 1997 the 8 th Chamber of the Istanbul Commercial Court granted the applicant ’ s request and ordered the payment of a total amount of TRL 15,200,000,000 to the applicant, with in terest at the rediscount rate running from the respective dates on which the two action s were brought.

11. On 18 November 1999 the Court of Cassation quashed this judgment. It held that the amount awarded had been calculated with sole regard to the fixed-term bank deposit rates, whereas other parameters such as the annual inflation rate, the impact of inflation on retail prices , interest rates on state bonds and currency exchange rates should have also been taken into consideration in the calculations.

12. On 24 March 2000 the Court of Cassation dismissed the applicant ’ s rectification request.

13. Following the Court of Cassation ’ s decision, the 8th Chamber of the Istanbul Commercial Court appointed a committee of experts to recalculate the applicant ’ s additional loss arising from the high inflation rate . Based on the various parameters indicated in the Court of Cassation decision, the committee of experts assessed that the compensation awarded to the applicant in the main proceedings, that is TRL 151,560,400, would be worth TRL 6,588,880,958 on 22 April 1996, as opposed to the TRL 728,990,000 he had received.

14. Subtracting the amount already paid to the applicant from the total loss assessed by the experts, on 16 November 2000 the Istanbul Commercial Court awarded the applicant TRL 5,859,890,958, with interest at the rediscount ra te running from the respective dates on which the two action s were brought.

15. On 15 February 2001 the Court of Cassation upheld the first ‑ instance court ’ s judgment.

16. On 20 March 2001 the applicant was paid TRL 22,652,183,000, together with interest at the rediscount rate .

3. Second additional action for compensation

17. On 21 March 2001 the applicant brought another additional action for compensation under Article 105 of the former Code of Obligations before the Istanbul Commercial Court, arguing that the amount he received on 20 March 2001 did not reflect the real value of the additional compensation award made to him (TRL 5,859,890,958) as of the date of payment, and requested the payment of an additional TRL 25,000,000,000.

18. The committee of experts appointed by the first-instance court to determine the applicant ’ s loss declared that the relative value of the additional compensation awarded to the applicant as of its discharge date, that is 20 March 2001, was TRL 93,271,807,234. Subtracting the payment that had already been made to the applicant from this amount, the experts assessed the applicant ’ s loss at TRL 70,120,886,234 (approximately 76,930 euros (EUR) as of 20 March 2001) .

19. Following the service of the expert report o n the parties, the applicant increased his claim from the bank to TRL 70,120,886,234.

20. On 31 March 2003 the Istanbul Commercial Court awarded the applicant ’ s claim for additional loss in full, plus interest at the rediscount rate running from the date the action was brought .

21. On 4 November 2003 the Court of Cassation quashed the first-instance court ’ s judgment. According to the Court of Cassation, the rationale of the mechanism provided under Article 105 of the former Code of Obligations was to hold a debtor in default responsible for any additional losses arising from the delayed discharge of a debt that could not be absorbed by the default interest, unless the debtor proved that he or she was at no fault for the delayed payment. In other words, the debtor was only liable to meet any additional losses arising from the delayed discharge of the principal debt; Article 105 of the former Code of Obligations imposed no further obligations on a debtor who duly paid the principal debt together with the additional losses incurred by the creditor.

22. On 26 March 2004 the Court of Cassation rejected the applicant ’ s rectification request.

23. Following the reasoning of the Court of Cassation, on 12 December 2004 the Istanbul Commercial Court rejected the applicant ’ s reques t for additional compensation, holding that the additional loss arising from the principal debt had already been remedied.

24. The applicant subsequently sought to appeal against the judgment of the Istanbul Commercial Court, arguing that there were no limitations on the scope and application of Article 105 of the former Code of Obligations as a pplied by the Court of Cassation.

25. On 6 February 2006 the Court of Cassation upheld the judgment of the first-instance court.

B. Relevant domestic law

26. Article 105 of the former Code of Obligations, which has been maintained in identical terms in Article 122 of the new Code of Obligations that came into force on 1 July 2012 , provides as follows:

“Where the loss sustained by the creditor exceeds the interest due for delay , it is for the debtor to make good the loss , unless [the debtor] can show that no fault can be attributed to him .

If the additional loss can be assessed immediately , the court may determine the amount of this loss when delivering its decision on the merits.”

27. In practice, the loss for which compensation may be claimed under this provision is the loss caused by the lapse of time between the date the debt is due and the date it is paid on account of inflation (see Aka v. Turkey , judgment of 23 September 1998, Reports of Judgments and Decisions 1998 ‑ VI, § 19).

COMPLAINTS

28. The applicant complained , without invoking any particular provisions of the Convention, that the erroneous interpretation by the domestic courts in relation to Article 105 of the former Code of Obligations, in total disregard of his losses arising from the high inflation and exacerbated by lengthy judicial proceedings, had violated his right to a fair trial as well as his property rights .

THE LAW

29. The Court considers that the thrust of the applicant ’ s grievances concerns the alleged loss he suffered on account of the depreciation of the real value of a court-ordered claim by the time of its discharge due to inflation. It is therefore appropriate to examine the se complaints from the standpoint of Article 1 of P rotocol No. 1 to the Convention alone.

30. The Court notes at the outset that the applicant ’ s right to obtain a certain amount of compensation from the debtor bank, together with interest, was confirmed by a final and enforceable judgment on 15 February 2001. Shortly after the judgment the applicant received the amount awarded, together with some interest. The question now remains whether the applicant ’ s remaining claim to additional compensation, arising from the depreciation of the judgment debt, amounted to a “possession” within the meaning of the first sentence of Article 1 of Protocol No. 1 (see Kopecký v. Slovakia [GC], no. 44912/98, § § 42-61 , ECHR 2004 ‑ IX ). The Court does not, however, consider i t necessary to reach a conclusion on this point, since the application is inadmissible in any case for the reasons given below.

31. The Court notes in this connection that the loss alleged to have been incurred by the applicant arises from a relationship of a contractual nature with a privately-owned bank, and as such, is not a direct product of an exercise of State authority. While Article 1 of Protocol No. 1 is essentially concerned with preventing unwarranted State interference with property rights, in certain situations the effective enjoyment of the rights guaranteed by that provision may entail the adoption of positive measures, even in cases involving litigation between private individuals or companies ( Shesti Mai Engineering OOD and Others v. Bulgaria , no. 17854/04 , § 79, 20 September 2011 ).

32. Accordingly, even where an interference with the right to peaceful enjoyment of possessions arises from a dispute between private persons, a positive obligation arises for the State to ensure in its domestic legal system that property rights are sufficiently protected by law and that adequate remedies are provided whereby the victim of an interference can seek to vindicate his or her rights, including, where appropriate, by claiming damages in respect of any loss sustained (see Blumberga v. Latvia , no. 70930/01, § 67, 14 October 2008 ). The State may, therefore, be required to put in place an appropriate legal mechanism allowing the aggrieved party to assert its rights effectively through judicial procedures that offer the necessary procedural guarantees ( Kotov v. Russia [GC], no. 54522/00 , § 114 , 3 April 2012 ).

33. In the instant case, the applicant does not contest the availability of a judicial mechanism to submit his claims against the bank, which allowed their contractual dispute to be adjudicated effectively and fairly in full respect of procedural guarantees. This mechanism moreover resulted in an award of compensation for his damages, together with the highest interest available in such disputes , which was as high as 70 % at some point during the relevant period but nevertheless remained below the annual inflation rate (fluctuating between 55-85 %). The respondent State may, therefore, be considered to have discharged its principal obligations in this connection.

34. Moreover, although the protection under Article 1 of Protocol No. 1 does not impose a general obligation on States to prevent loss of value of a private claim as a result of market factors (see Todorov v. Bulgaria ( dec. ), no. 65850/01, 13 May 2008), the respondent State introduced a further safeguard under Article 105 of the former Code of Obligations to protect creditors against the effects of inflation, where the interest awarded failed to cover the additional loss arising from the depreciation of the money. Accordingly, after receiving payment for the judgment debt, the applicant was able to bring a further action for additional compensation to recover his supplementary losses arising from the disparity between the available interest and inflation rates. On the basis of the assessments of court ‑ appointed experts, the outcome of which he did not challenge, the applicant was thus awarded further compensation for his supplementary losses as of the date of the payment of the principal debt (i.e. 22 April 1996), again with the highest level of interest available in the circumstances.

35. When, however, the applicant brought a subsequent action under Article 105 on the ground that the value of the additional compensation had also eroded by the time it was paid, the Court of Cassation took a decision declaring that the statutory remedy in question was available only in relation to losses arising directly out of the delayed discharge of the principal debt, which was the judgment debt in the instant case, and once those losses had been recognised and granted, this remedy could not be reinvoked to recover any further damages.

36. Leaving aside the question of whether the applicant could be expected, for the purposes of the six months rule ( Prystavska v. Ukraine ( dec. ), no. 21287/02, 17 December 2002), to apply directly to the Strasbourg Court without seeking compensation under Article 105 of the former Code of Obligations for a second time, the Court considers that the application should be declared inadmissible for the reasons stated below.

37. Firstly, while it acknowledges that the particular interpretation of Article 105 of the former Code of Obligations by the Court of Cassation deprived the applicant of the opportunity to recover his remaining losses in full and thus left him to bear partially the consequences of inflation, the Court reiterates that it has limited power to review domestic courts ’ interpretation of the domestic law. I t is primarily for the national courts to resolve problems of interpretation of domestic legislation , and the Court will not question their interpretation, save in the event of evident arbitrariness ( Stoilkovska v. “the former Yugoslav Republic of Macedonia” , no. 29784/07, § 41, 18 July 2013 ). The Court considers that there is nothing in the instant case from which it can conclude that the Court of Cassation interpreted and applied the legal provision in question manifestly erroneously or so as to reach an arbitrary conclusion (see, mutatis mutandis , Beyeler v. Italy [GC], no. 33202/96, § 108 , ECHR 2000 ‑ I ). There is, furthermore, no evidence before the Court to suggest that the Court of Cassation ’ s reasoning contradicted a settled jurisprudence regarding the scope and application of Article 105 of the former Code of Obligations.

38. Secondly, taking into account the legal mechanisms put in place by the respondent State to enable a creditor to effectively vindicate his claims in a private dispute, including by awarding a relatively high level of interest on delayed payments and providing a remedy to offset any remaining losses due to high inflation, and bearing in mind the absence of an obligation under Article 1 of Protocol No. 1 to apply an inflation-proofed default interest rate to private claims (see O.N. v. Bulgaria ( dec. ), no. 35221/97, 6 April 2000; and Grozeva v. Bulgaria ( dec. ), no. 52788/99, 3 November 2005), the additional loss incurred by the applicant in the instant case cannot be considered to engage the responsibility of the State under Article 1 of Protocol No. 1 to the Convention.

In these circumstances, the Court finds that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with paragraph 4 of this provision.

For these reasons, the Court unanimously

Declares the application inadmissible.

Stanley Naismith Guido Raimondi Registrar President

[1] 1. On 1 January 2005 the Turkish lira (TRY) entered into circulation, replacing the former Turkish lira (TRL). TRY 1 = TRL 1,000,000.