FIRST SECTION

CASE OF VULAKH AND OTHERS v. RUSSIA

(Application no. 33468/03)

JUDGMENT

STRASBOURG

10 January 2012

FINAL

10/04/2012

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision .

In the case of Vulakh and Others v. Russia ,

The European Court of Human Rights (First Section), sitting as a Chamber composed of:

Nina Vajić, President, Anatoly Kovler, Peer Lorenzen, Mirjana Lazarova Trajkovska, Julia Laffranque, Linos-Alexandre Sicilianos, Erik Møse, judges, and Søren Nielsen, Section Registrar ,

Having deliberated in private on 6 December 2011,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 33468/03) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by four Russian nationals, Mr Eduard Iosifovich Vulakh, Ms Valentina Nikitichna Vulakh, Mr Sergey Vitalyevich Vulakh, and Ms Viktoriya Vitalyevna Vulakh (“the applicants”), on 30 September 2003.

2. The applicants were represented by Mr S. Trusov, a lawyer practising in Moscow. The Russian Government (“the Government”) were represented by Mr P. Laptev and Ms V. Milinchuk, former Representatives of the Russian Federation at the European Court of Human Rights.

3. The applicants alleged that the right to be presumed innocent had been violated in respect of their late relative Mr Vitaliy Vulakh, and that their own property rights had also been violated.

4. On 17 November 2006 the President of the First Section decided to give notice of the application to the Government. It was also decided to examine the merits of the application at the same time as its admissibility (former Article 29 § 3 of the Convention).

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicants are relatives of the late Mr Vitaliy Eduardovich Vulakh. The first two applicants are his father and mother, born in 1932 and 1939 respectively, and the third and fourth applicants are his children, born in 1985 and 1984 respectively. They lived in Kurganinsk in the Krasnodar Region.

A. Criminal proceedings involving Mr Vitaliy Vulakh

7. On 25 March 2002 Mr S., Mr N. and Mr K. were arrested on suspicion of membership of the gang. On learning of their arrest, Mr Vitaliy Vulakh shot dead his fiancée and committed suicide.

8. On 20 June 2002 the criminal prosecution of Mr Vitaliy Vulakh was discontinued as a result of his death.

9 . On 3 October 2002 the Krasnodar Regional Court convicted Mr S., Mr N. and Mr K. of serious criminal offences and sentenced them to lengthy terms of imprisonment. The judgment mentioned that Mr Vitaliy Vulakh had been the leader of a criminal enterprise and had told the defendants to murder his business competitor Mr G. It read, in particular, as follows:

“The person who had been the leader of the gang (V[italiy] Vulakh) in respect of whom the case was discontinued because of his death, had money at his disposal, he funded the gang and paid each gang member to commit crimes: he bought cars, paid for their maintenance, petrol and travel expenses...”

10. In these proceedings the victims Mr G., Mr F., Ms B. and Ms V. brought civil claims against the three defendants, seeking compensation for pecuniary and non-pecuniary damage. The Regional Court indicated that these claims should be examined in separate civil proceedings.

11. On 14 October 2002 the first applicant lodged an appeal to the Supreme Court of the Russian Federation. He submitted that the decision on the discontinuation of criminal proceedings against his son had never been notified to him or to his son’s counsel, and that counsel had not been allowed to study the file or plead his son’s innocence.

12 . On 6 November 2002 a judge of the Krasnodar Regional Court informed the first applicant that he had no right to lodge an appeal to the Supreme Court because he was not a party to the criminal case. The judge wrote to him that further appeals would also be rejected.

13. It appears that on 2 April 2003 the Supreme Court of the Russian Federation examined appeals by those convicted and upheld the judgment of 3 October 2002. A copy of this judgment was not made available to the Court.

B. Civil proceedings against the applicants

14 . On 5 March 2003 a notary public issued the four applicants with a certificate of succession on intestacy, according to which they inherited Mr Vitaliy Vulakh’s house.

15. On an unspecified date Mr G., Mr F., Ms B., Ms V. and a private company sued the four applicants and the Kurganinskiy dairy factory, of which Mr Vitaliy Vulakh had been a minority shareholder, for pecuniary and non-pecuniary damages.

16 . On 4 September 2003 the Kurganinskiy District Court of the Krasnodar Region found against the applicants and the dairy factory, finding as follows:

“According to Article 42 of the Code of Criminal Procedure of the Russian Federation, the victim shall be compensated for the pecuniary damage caused by the crime, as well as for the costs incurred during the pre-trial investigation and trial...

According to Article 1064 of the Civil Code of the Russian Federation, damage inflicted on the person or property of an individual... shall be reimbursed in full by the person who inflicted the damage.

According to the judgment of the Krasnodar Regional Court of 3 October 2002 and the judgment of the Supreme Court of 2 April 2003, Mr V[italiy] Vulakh had organised an armed group (gang) composed of Mr S., Mr N. and Mr K. who had committed, under his leadership, serious crimes: the murder of the head of the Kurganinskiy District Council Mr V. and repeated attempts to murder the director general of [a] private company, Mr G.

According to Resolution no. 1 of the Plenary Supreme Court of the USSR of [unreadable] March 1979, entitled ‘On the case-law on application of provisions for compensation for pecuniary damage caused by crime’, those who cause damage through their criminal activities shall be jointly liable for that damage. Thus, Mr V[italiy] Vulakh, Mr K., Mr S., and Mr N. are jointly liable for the damage caused by their crimes.

According to Article 323 of the Civil Code, in cases of joint liability the creditor may claim satisfaction of debt, in full or in part, either from all the debtors or from each debtor individually.

Mr V[italiy] Vulakh should have borne liability for the pecuniary and non-pecuniary damage caused by the crimes, but he committed suicide during the pre-trial investigation.

The defendants Mr E. Vulakh, Ms V. Vulakh, Mr S. Vulakh and Ms V. Vulakh are heirs to Mr V[italiy] Vulakh after his death. According to Article 1175 of the Civil Code, heirs who have accepted an inheritance shall be jointly liable for the testator’s debts. Each heir is liable in proportion with the share of the inheritance he received.

Article 1152 of the Civil Code provides that the heir accepting a part of an inheritance is presumed to have accepted the entire inheritance, whatever its form or location... On 5 March 2003 [the four applicants] were issued with an inheritance certificate... in respect of the house.

According to Article 1176 of the Civil Code, the estate of a co-owner of a private company includes that co-owner’s part in the charter capital of the company. According to the audit report of 7 July 2003, the real value of Mr V[italiy] Vulakh’s part corresponds to 37.49% of the value of the net assets of the Kurganinskiy dairy factory, which amounts to 18,705,260 Russian roubles (RUB).

For that reason, the defendants who have accepted a part of Mr V[italiy] Vulakh’s estate in inheritance must be considered to have accepted his part in the charter capital of the Kurganinskiy dairy factory.

It follows that compensation in respect of pecuniary and non-pecuniary damage must be recovered from the Kurganinskiy dairy factory whose charter capital comprises a part of the estate inherited by [the applicants]...”

The District Court awarded 33% of Mr Vitaliy Vulakh’s share in the dairy factory to Mr G.’s company, 19.3% to Mr G., and 25.7% to Ms B., and ordered immediate enforcement of the judgment.

17. On 14 September 2003 the applicants lodged a statement of appeal. They submitted that that Mr Vitaliy Vulakh had not been found guilty by a court of law and should be presumed innocent. In the absence of a guilty verdict on Mr Vitaliy Vulakh there were no grounds to impose joint liability on his heirs. A civil claim should have been brought against him, and the court should have examined the matter of procedural succession. Furthermore, the dairy factory could not be held liable for the debts of its owners.

18. On 18 September 2003 the Krasnodar Regional Court examined the appeal and upheld the judgment, endorsing the District Court’s approach and rejecting the applicants’ arguments in the following terms:

“Although the prosecution of Mr V[italiy] Vulakh was discontinued in connection with his death, on 3 October 2002 Mr S., Mr N. and Mr K. were convicted and the conviction entered into legal effect. According to the judgment, Mr V[italiy] Vulakh had been the leader of an armed group (gang) which had committed, under his leadership, serious crimes: the murder of the head of the Kurganinskiy District Council, Mr V., and repeated attempts to murder the director general Mr G. This means that the conviction established that Mr V[italiy] Vulakh’s had been responsible for causing pecuniary and non-pecuniary damage to the plaintiffs.”

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. The RSFSR Code of Criminal Procedure (in force at the material time)

19. Criminal proceedings must be discontinued against a deceased person except where a continuation of the proceedings is necessary for his or her rehabilitation or for the reopening of the case in respect of others on account of newly discovered circumstances (Article 5 § 8).

B. The Civil Code of the Russian Federation

20 . The Civil Code provides as follows:

Article 87. General provisions on private companies

“1. A private company is a company founded by one or more persons; its charter capital is divided into parts described in its articles of association. Participants of a private company are not liable for its debts...”

Article 93. Transfer of shares in a private company to another person

“6. Shares in the charter capital of a private company are transferred to the heirs of the company’s participants... unless the articles of association provide that such a transfer requires the consent of the other participants...”

Article 1064. General grounds giving rise to liability for damages

“1. Damage inflicted on the person or property of an individual... shall be reimbursed in full by the person who inflicted the damage...

2. The person who inflicted the damage shall be liable for it unless he proves that the damage was inflicted through no fault of his...”

C. The Code of Civil Procedure of the Russian Federation

21. The factual circumstances established by the final judicial decision in an earlier case, are binding on the court (Article 61 § 2). The final judicial decision in a criminal case concerning a particular person is binding on the court examining the civil-law consequences of that person’s actions only to the extent that the criminal court determined whether or not such actions had been committed and whether or not they had been committed by that person (Article 61 § 4).

D. Case-law

22 . On 13 June 2002 the Presidium of the Moscow City Court quashed the criminal judgment against three co-defendants in so far as it concerned the alleged participation of two other persons in the crimes. The Presidium held (decision reported in Bulletin of the Supreme Court , no. 9, 2003):

“In breach of Article 314 of the RSFSR Code of Criminal Procedure, the [trial] court erroneously declared Mr B. and Mr E. to have been accomplices to the crime. It follows from the case materials that, by the investigator’s decision of 16 July 1998, the case against them had been severed into separate proceedings in connection with Mr E.’s grave illness and the failure to locate Mr B. A reference to them in the text of the judgment, describing them as persons who had been complicit in the criminal offences committed by the convicts, is not justified because... the merits of the criminal case against them have not been examined by a court of law.”

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 2 OF THE CONVENTION

23. The applicants complained under Article 6 §§ 2 and 3 (c) of the Convention that the findings of the domestic courts had breached Mr Vitaliy Vulakh’s presumption of innocence. The Court considers that this complaint falls to be examined under Article 6 § 2, which reads as follows:

“Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.”

A. Admissibility

25. As regards the question of exhaustion of the domestic remedies, the Court observes that the first applicant had attempted to lodge an appeal against the decision by which the proceedings concerning Mr Vitaliy Vulakh had been discontinued. However, that appeal had been rejected, on the ground that the first applicant had had no standing in the proceedings (see paragraph 12 above). The Government did not explain what newly discovered circumstances could have warranted a reconsideration of that decision. Accordingly, their objection must be dismissed.

27. The applicants in the instant case are the father, mother, son and daughter of the late Mr Vitaliy Vulakh, who was allegedly declared guilty after his death in criminal and civil proceedings. The applicants therefore may have a non-pecuniary interest in clearing the name of the deceased from the stigma of that declaration, as well as a pecuniary interest in their capacity as the deceased’s heirs (see below for a detailed examination of the latter aspect from the standpoint of Article 1 of Protocol No. 1).

B. Merits

1. Submissions by the parties

29. The Government submitted that the criminal case could not have been comprehensively examined if the reference to the individual who had managed the criminal enterprise had been omitted. Such an omission would have made impossible the determination of the roles which each member of the gang had played. In the Government’s view, this reference did not amount to a breach of the presumption of innocence.

30. As regards the civil proceedings, the Government indicated that the judgments of 4 and 18 September 2003 had proven Mr Vitaliy Vulakh “guilty in accordance with the law”. His guilt had been established in the Regional Court judgment of 3 October 2002 in respect of other members of the gang, from which it transpired that Mr Vitaliy Vulakh had substantial funds at his disposal, that he had been the gang leader, had funded the gang and also paid to have crimes committed by gang members. There had therefore been a causal link between the criminal actions of Mr Vitaliy Vulakh and the pecuniary and non-pecuniary damage caused to the plaintiffs in the civil proceedings.

31. The applicants pointed out that Mr Vitaliy Vulakh had not been charged with any criminal offence or convicted by a court of law. Accordingly, his guilt could not have been established “in accordance with the law”, as the Government argued. The Regional Court judgment of 3 October 2002 had concerned others, rather than Mr Vitaliy Vulakh. In the applicants’ view, a declaration that a deceased person was guilty was unacceptable in a State respecting the rule of law.

2. The Court’s assessment

34. The Court reiterates that it is a fundamental rule of criminal law that criminal liability does not survive the person who committed the criminal act (see A.P., M.P. and T.P. v. Switzerland , 29 August 1997, Reports of Judgments and Decisions 1997 ‑ V, §§ 46 and 48, and E.L . , R.L. and J.O.-L. v. Switzerland , 29 August 1997, Reports 1997 ‑ V, §§ 51 and 53). However, in the criminal proceedings against Mr Vitaliy Vulakh’s co-defendants, the Krasnodar Regional Court expressed the view that Mr Vitaliy Vulakh had “organised the gang”, that he had “had money at his disposal”, and that he had “funded the gang and paid each member to commit the crimes” (see paragraph 9 above). Those statements were not limited to describing a “state of suspicion” against Mr Vitaliy Vulakh; they stated as an established fact, without any qualification or reservation, that he had been the leader of a criminal syndicate and that he had coordinated and funded the criminal activities of that syndicate.

35. The wording used in the subsequent civil proceedings concerning the victims’ claims for pecuniary and non-pecuniary damage was even more explicit. Not only did the Kurganinskiy District Court repeat, by reference to the criminal judgment, that Mr Vitaliy Vulakh had “been the leader of an armed group (gang)” but it went much further and specified that the gang had “committed, under his leadership, serious crimes”, including murder and attempted murder (see paragraph 16 above). The District Court’s pronouncements were reproduced verbatim in the judgment of the Krasnodar Regional Court.

37. There has therefore been a violation of Article 6 § 2 of the Convention.

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1

38. The applicants complained that their rights to a fair trial and to the peaceful enjoyment of property had been violated by the domestic courts’ decisions holding them financially liable for the crimes allegedly committed by Mr Vitaliy Vulakh. The Court considers that this complaint falls to be examined under Article 1 of Protocol No. 1, 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.”

A. Admissibility

39. The Court considers that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B. Merits

1. Submissions by the parties

40. The Government claimed that there was no violation of Article 1 of Protocol No. 1 because the applicants had been deprived of their inherited possessions in the public interest and on lawful grounds. Pursuant to Article 1175 § 1 of the Civil Code, the heirs who had accepted the estate were jointly liable for the debts of the testator.

41. The applicants contended that Article 1175 of the Civil Code was not applicable in the instant case because late Mr Vitaliy Vulakh had not contracted any debts. The plaintiffs’ claim had only concerned the damage allegedly caused to them by the actions of Mr Vitaliy Vulakh. However, his liability for that damage had never been proven or established.

2. The Court’s assessment

42. Article 1 of Protocol No. 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, recognises that the Contracting States are entitled, inter alia , to control the use of property in accordance with the general interest. The three rules are not, however, 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 (see Broniowski v. Poland [GC], no. 31443/96, § 134, ECHR 2004 ‑ V).

43. The “possession” at issue in the present case was a minority share in a dairy factory which the applicants inherited from the late Mr Vitaliy Vulakh by way of succession on intestacy (see paragraph 14 above). Their status as heirs in respect of that property was upheld by the District and Regional Court’s judgments of 4 and 18 September 2003 respectively. By the same judgments, the courts ordered a transfer of the applicants’ share in the factory to the individual plaintiffs as a compensation for pecuniary and non-pecuniary damage caused by Mr Vitaliy Vulakh’s criminal activities.

45. The Court reiterates that even in cases involving litigation between individuals or companies, Article 1 of Protocol No. 1 may entail certain measures necessary to protect the right of property. This means, in particular, that the States are under an obligation to afford judicial procedures that offer the necessary procedural guarantees and therefore enable the domestic courts and tribunals to adjudicate effectively and fairly any disputes between private persons (see Sovtransavto Holding v. Ukraine , no. 48553/99, § 96, ECHR 2002 ‑ VII). In other words, the State must 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 rights (see Blumberga v. Latvia , no. 70930/01, § 67, 14 October 2008).

46. The Court observes at the outset that, by contrast with the situation obtaining in certain previous cases (see, for instance, Denisova and Moiseyeva v. Russia , no. 16903/03, 1 April 2010; Phillips v. the United Kingdom , no. 41087/98, § 52, ECHR 2001-VII; and Raimondo v. Italy , 22 February 1994, Series A no. 281 ‑ A), the present case does not contain any facts or evidence which could lead the Court to conclude that it concerned confiscation of money or assets obtained through illegal activities or paid for with the proceeds of crime. It has never been claimed that Mr Vitaliy Vulakh’s share in the dairy factory was obtained fraudulently or purchased with the proceeds of any criminal activities. The cause of action in those civil proceedings was a delictual claim against the applicants arising out of the wrongful conduct of their deceased relative, which had allegedly caused financial prejudice to the plaintiffs.

48. Article 1064 of the Russian Civil Code (cited in paragraph 20 above) governed distribution of the burden of proof in compensation proceedings. It was incumbent on the claimant to show that he or she suffered legal injury which was the consequence of wrongful conduct on the part of the alleged perpetrator. The perpetrator could only be relieved from liability if he or she was able to demonstrate the absence of his or her fault, that is that he or she did not act intentionally or negligently or that there was no causal link between the impugned conduct and the injury.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

51. Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

52. The applicants claimed 5,832,000 euros (EUR) in respect of pecuniary damage, representing the estimated value of the dairy factory and other assets, as well as the estimated loss of profit. They further claimed EUR 21,550 for each applicant in respect of non-pecuniary damage. They did not make a claim for costs or expenses.

53. The Government submitted that the applicants’ claims had been unreasonable and unsubstantiated.

55. As to non-pecuniary damage, the Court reiterates its constant position that an applicant cannot be required to furnish any proof of non-pecuniary damage he or she has sustained (see , among many others, Antipenkov v. Russia , no. 33470/03, § 82, 15 October 2009; Pshenichnyy v. Russia , no. 30422/03, § 35, 14 February 2008; Garabayev v. Russia , no. 38411/02, § 113, ECHR 2007 ‑ VII (extracts); and Gridin v. Russia , no. 4171/04, § 20, 1 June 2006). It further considers that the applicants must have suffered anxiety and frustration on account of the authorities’ declaration that their late relative was guilty and the loss of their possessions in the civil proceedings. Making its assessment on an equitable basis, the Court awards each applicant EUR 4,000 in respect of non-pecuniary damage, plus any tax that may be chargeable on it.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1. Declares the application admissible;

2. Holds that there has been a violation of Article 6 § 2 of the Convention;

3. Holds that there has been a violation of Article 1 of Protocol No. 1;

4. Holds

(a) that the respondent State is to pay each applicant, within three months of the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 4,000 (four thousand euros) in respect of non-pecuniary damage, plus any tax that may be chargeable, to be converted into Russian roubles at the rate applicable on the date of settlement;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

5. Dismisses the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 10 January 2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Søren Nielsen Nina Vajić Registrar President