THIRD SECTION

DECISION

Application no. 6234/08 VEGRAD DD against Serbia

The European Court of Human Rights (Third Section), sitting on 4 June 2019 as a Chamber composed of:

Vincent A. De Gaetano, President ,

Georgios A. Serghides ,

Helen Keller,

Branko Lubarda,

Alena Poláčková ,

María Elósegui ,

Erik Wennerström , judges,

and Stephen Phillips, Section Registrar ,

Having regard to the above application lodged on 19 December 2007,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant company,

Having deliberated, decides as follows:

THE FACTS

1. The applicant company, Vegrad DD, is a Slovenian company with its seat in Velenje . It was initially represented before the Court by Mr M. Tešić , a lawyer practising in Niš , Serbia, and subsequently by Ms M. Menard, a lawyer practising in Ljubljana, Slovenia.

2. The Serbian Government (“the Government”) were initially represented by their former Agents, Ms V. Rodić , who was ultimately substituted by their current Agent, Ms N. Plavšić .

3. The Slovenian Government informed the Court by a letter of 12 December 2014 that they did not wish to exercise their right to intervene in the proceedings under Article 36 § 1 of the Convention and Rule 44 of the Rules of Court.

A. The circumstances of the case

4. Prior to the dissolution of the Socialist Federal Republic of Yugoslavia (“the SFRY”), the applicant company, Vegrad DD, was a socially-owned company based in Slovenia, with a business unit ( Begrad ) in Belgrade, Serbia.

5. On 15 August 1991, after the Slovenian and Croatian declarations of independence, the Serbian Government issued a decree prohibiting companies or other legal entities with their seats in other republics of the former SFRY from undertaking any transactions involving assets (including immovable property) located in Serbia (see paragraph 15 below).

6. Under decrees issued by the Serbian Government on 19 February 1992 and 31 May 2001 (respectively, “the 1992 Decree” and “the 2001 Decree”), business units located in Serbia of companies from Bosnia and Herzegovina, Slovenia and Croatia were to be organised as companies in “social ownership” (see paragraphs 15-17 below). Pursuant to those decrees, the companies thus established were to be prohibited from disposing ( otuđiti ) of their assets without the approval of the Serbian Government. In accordance with the said decrees, the applicant company ’ s former business unit, Begrad , was organised as a Serbian company in social ownership.

7. By a decision of the Belgrade Commercial Court ( Trgovinski sud ) of 7 June 2001, insolvency proceedings were opened against Begrad .

8 . On 11 October 2003 the applicant company lodged a civil claim with the Belgrade Commercial Court. In its claim the applicant company argued that it had been deprived of its property (that is to say Begrad ) as a result of specific legislation enacted in Serbia. It cited Annex G to the Agreement on Succession Issues (see paragraphs 19-21 below) and argued that under that agreement its property rights should be recognised , protected and reinstated. The applicant company sought, inter alia , ( i ) a judicial declaration to the effect that it remained the sole owner of specified movable and immovable assets, and (ii) the exclusion of those assets from the insolvency proceedings.

9 . On 26 January 2006 the Belgrade Commercial Court suspended the proceedings. It referred to Articles 4 and 7 of Annex G to the Agreement on Succession Issues and stated that the successor States had intended to conclude bilateral agreements with a view to stipulating the appropriate procedures and bodies to be entrusted with the processing of claims such as the plaintiff ’ s. It explained that the entire matter needed to be regulated between Serbia and Slovenia by means of a bilateral treaty. Only after proceedings regulated by the bilateral agreements had been concluded and real estate claims dismissed would it be for the courts of law to adjudicate on the matter. The court pointed out that the Agreement on Succession Issues did not per se exclude the jurisdiction of the national courts; enforceability was, however, conditional upon the completion of proceedings that would be envisaged by the bilateral treaty. The court deemed the conclusion of the treaty and the completion of the procedure regulated by it to constitute a preliminary legal issue and therefore grounds for suspending the proceedings in question. The applicant company appealed.

10 . On 24 October 2006 the High Commercial Court ( Viši Trgovinski sud ) dismissed the applicant company ’ s appeal and upheld the Belgrade Commercial Court ’ s decision. Among the other reasons that it gave, it agreed with the first-instance court that the conclusion of a bilateral treaty and the implementation of procedural rules constituted a preliminary legal issue on which depended the further actions on the part of the court concerning the applicant company ’ s claim.

11. On 31 May 2007 the Supreme Court refused on technical grounds the applicant company ’ s request for the protection of legality ( zahtev za zaštitu zakonitosti ) concerning the impugned suspension. The applicant company received a copy of the Supreme Court ’ s decision in July 2007.

12. By 28 September 2007 the assets in question had been sold as part of the insolvency proceedings.

13. On 1 November 2010 Begrad was liquidated and deleted from the relevant public registers.

B. Relevant Serbian domestic law and practice

14 . Under Article 194 § 4 of the Constitution of the Republic of Serbia, ratified international agreements and general rules of international law form part of the legal order in Serbia. A similar provision was included in the Constitution of the Federal Republic of Yugoslavia of 27 April 1992, which had been in force before the Constitution of the Republic of Serbia was adopted .

15 . The relevant provision contained in the government decree of 15 August 1991 (see paragraph 5 above) prohibiting transactions with, and the taking over of, assets of certain legal entities present on the territory of Serbia ( Uredba o privremenoj zabrani raspolaganja određenim nepokretnostima , pokretnim stvarima i pravima , Official Gazette of Serbia no. 49/1991, with subsequent amendments), reads as follows:

Section 1

“It is temporarily forbidden to dispose of immovable and movable assets and claims that are located in the Republic of Serbia and whose owners or users are legal persons with their seats in republics outside the Federal Republic of Yugoslavia.

It is temporarily forbidden to dispose of immovable and movable assets and claims that are located in the Republic of Serbia and whose owners or users are natural persons resident in republics outside the Federal Republic of Yugoslavia and who are citizens of those republics.

For the purposes of this Decree, ‘ disposal ’ consists of the sale, trading, gifting, lease, mortgaging and all other forms of disposal or change in ownership, and the physical removal, of assets from the territory of the Republic of Serbia.”

16. The relevant provision of the 1992 decree ( Uredba o organizovanju delova preduzeća čije je sedište na teritoriji Republike Bosne i Hercegovine , Republike Hrvatske i Republike Slovenije ) reads as follows:

Section 2

“Business units of companies and other legal entities with their seats in Bosnia and Herzegovina, Slovenia and Croatia [a business unit] are obliged to be organised as socially-owned companies ...”

17 . The relevant provision of the 2001 decree ( Uredba o zaštiti imovine delova preduzeća čije je sedište na teritoriji bivših republika SFRJ , Official Gazette of Serbia, no. 31/2001, and subsequent amendments) reads as follows:

Section 2

“Upon a decision [taken by] its employees ... [a business unit] will be organised as a socially-owned company or merged with another socially-owned company ...”

18 . In decision no. Pž . 6029/2004 of 29 December 2004 the Belgrade High Commercial Court held as follows:

“It is the opinion of this court that Articles 4 and 7 of Annex G point to the intention of the Contracting Parties – the successor States – to conclude bilateral agreements with a view to regulating the procedure for deciding claims and stipulating those State organs that are to decide on the ... claims, applying the provisions of the Agreement, and to decide on property claims in respect of movable and immovable assets. Only upon the conclusion of the procedure established by the bilateral agreement before the relevant State organs set up by the [bilateral] agreement, in the event that claims are contested, will the court decide on them. Therefore, the mentioned provisions of the Agreement do not exclude a court ’ s jurisdiction in respect of property-based claims but, in the chamber ’ s view, this jurisdiction is conditional on the prior proceedings [being held] before State bodies set up by bilateral treaties [in a manner that is] in line with the procedure set up by the said treaties, in accordance with Article 4 of Annex G. Consequently, the conclusion of a bilateral treaty and the completion of the proceedings set up by it ... are preliminary procedural issues, and the further actions of the court depend on their being resolved ...”

C. Relevant international law and practice

19 . The Agreement on Succession Issues was the result of nearly ten years of negotiations. It was signed on 29 June 2001 and entered into force between Bosnia and Herzegovina, Croatia, Serbia and Montenegro (later succeeded by Serbia), Slovenia and the then former Yugoslav Republic of Macedonia on 2 June 2004.

20 . The relevant Articles of the Succession Agreement between the successor States to the SFRY, which Serbia ratified on 1 July 2002, read as follows:

Article 4

“(1) A Joint Standing Committee of senior representatives of each successor State, who may be assisted by experts, is hereby established.

(2) This Committee shall have as its principal tasks the monitoring of the effective implementation of this Agreement and serving as a forum [for the discussion of] issues arising in the course of its implementation. The Committee may, where necessary, make appropriate recommendations to the governments of the successor States. ...

Article 5

(1) Differences which may arise over the interpretation and application of this Agreement shall, in the first place, be resolved by discussions among the States concerned.

(2) If the differences cannot be resolved by such discussions within one month of the first ... discussion, the States concerned shall either:

(a) refer the matter to an independent person of their choice, with a view to obtaining a speedy and authoritative resolution of the matter, which shall be respected and which may, as appropriate, indicate specific time-limits for actions to be taken; or

(b) refer the matter to the Joint Standing Committee established by Article 4 of this Agreement for resolution.

(3) Disputes that may arise in practice over the interpretation of the terms used in this Agreement or in any subsequent agreement called for in the implementation of the annexes to this Agreement may, additionally, be referred at the initiative of any State concerned for a binding expert resolution, to be conducted by a single expert (who shall not be a national of any party to this Agreement), to be appointed by agreement between the parties in dispute or, in the absence of agreement, by the President of the Court of Conciliation and Arbitration within the OSCE. The expert shall resolve all questions of procedure, after consulting the parties seeking such an expert solution if the expert considers it appropriate to do so, with the firm intention of securing a speedy and effective resolution of the dispute.

(4) The procedure provided in paragraph (3) of this Article shall be strictly limited to the interpretation of terms used in the agreements in question and shall in no circumstances permit the expert to determine the practical application of any of those agreements. In particular, the procedure referred to shall not apply to:

(a) The Appendix to this Agreement;

(b) Articles 1, 3 and 4 of Annex B;

(c) Articles 4 and 5(1) of Annex C;

(d) Article 6 of Annex D.

(5) Nothing in the preceding paragraphs of this Article shall affect the rights or obligations of the Parties to the present Agreement under any provision in force binding them with regard to the settlement of disputes.

Article 6

The Annexes to this Agreement and the Appendices to the Agreement and Annexes are an integral part of the Agreement.

Article 7

This Agreement, together with any subsequent agreements called for in the implementation of the Annexes to this Agreement, finally settles the mutual rights and obligations of the successor States in respect of succession issues covered by this Agreement. The fact that it does not deal with certain other non-succession matters is without prejudice to the rights and obligations of the States Parties to this Agreement in relation to those other matters.

Article 8

Each successor State, on the basis of reciprocity, shall take the necessary measures under its internal law to ensure that the provisions of this Agreement are recognised and effective in its courts, administrative tribunals and agencies, and that the other successor States and their nationals have access to those courts, tribunals and agencies to secure the implementation of this Agreement.

Article 9

This Agreement shall be implemented by the successor States in good faith, in conformity with the Charter of the United Nations and in accordance with international law.”

21 . The relevant Articles of Annex G to the Succession Agreement read as follows:

ANNEX G

PRIVATE PROPERTY AND ACQUIRED RIGHTS

Article 1

“Private property and the acquired rights of citizens and other legal persons of the SFRY shall be protected by successor States, in accordance with the provisions of this Annex.

Article 2

(1) (a) The rights to movable and immovable property located in a successor State and to which citizens or other legal persons of the SFRY were entitled on 31 December 1990 shall be recognised , and protected and restored, by that State in accordance with established standards and norms of international law and irrespective of the nationality, citizenship, residence or domicile of those persons. This shall include persons who, after 31 December 1990, acquired citizenship of or established domicile or residence in a State other than a successor State. Persons unable to realise such rights shall be entitled to compensation, in accordance with civil and international legal principles.

(b) Any purported transfer of rights to movable or immovable property made after 31 December 1990 and concluded under duress or contrary to sub-paragraph (a) of this Article shall be null and void. ...

Article 4

The successor States shall take such action as may be required by general principles of law and is otherwise appropriate to ensure the effective application of the principles set out in this Annex, such as concluding bilateral agreements and notifying their courts and other competent authorities. ...”

22 . At the meetings of the Joint Standing Committee established under Article 4 of the Succession Agreement (see paragraph 20 above) held on 17 ‑ 18 September 2009, it transpired that there was no consensus between the successor States as to the direct applicability of Annex G to the Agreement. Accordingly, the committee adopted recommendations concerning, inter alia , the said annex. The committee noted that the application of the provisions of Annex G was not efficient enough, and recommended that the interested successor States conclude bilateral agreements for the purpose of the efficient implementation of those provisions. It also advised them to refrain from enacting any legislation or undertaking any steps contrary to the provisions of Annex G, and to adopt, should they deem it necessary, measures intended to enable the effective application of the standards set by Annex G.

COMPLAINTS

23. The applicant company complained under Article 6 of the Convention of being denied access to a court in the determination of its civil claim, as well as the length of its suspended civil suit. Under Article 13 of the Convention it complained of having had no effective domestic remedy at its disposal in respect of the impugned suspension.

THE LAW

A. Complaint under Article 6 § 1 of the Convention

24 . The applicant company complained that its right to access to court had been infringed and of the length of the civil proceedings. It argued that under Serbian domestic law and international law it had the right to have its claims adjudicated within a reasonable time. It relied on Annex G of the Succession Agreement, which in its view explicitly guaranteed its right to access to a court.

25. Article 6 § 1, in so far as relevant, provides:

“In the determination of his civil rights and obligations ... everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”

26. The Government submitted that the applicant company ’ s complaints were inadmissible on various grounds. Notably, they contended that the application was incompatible with the Convention ratione temporis and ratione personae . The Government did not expressly dispute the applicability of Article 6 to the proceedings in question. They did, however, deny the applicability of Article 13 on the grounds that the applicant company did not have an arguable claim. Additionally, the Government submitted that the application was manifestly ill-founded.

27. The Court does not have to address all issues raised by the parties, since this complaint is in any event inadmissible on the following grounds.

28. The Court reiterates that for Article 6 § 1 in its “civil” limb to be applicable, there must be a dispute (“contestation” in the French text) over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law, irrespective of whether that right is protected under the Convention. The dispute must be genuine and serious; it may relate not only to the actual existence of a right but also to its scope and the manner of its exercise; and, lastly, the result of the proceedings must be directly decisive for the right in question, mere tenuous connections or remote consequences not being sufficient to bring Article 6 § 1 into play (see, among many other authorities, Bochan v. Ukraine (no. 2) [GC], no. 22251/08 , § 42, ECHR 2015 ).

29. In order to decide whether the “right” in question really has a basis in domestic law, the starting-point must be the provisions of the relevant domestic law and their interpretation by the domestic courts (see Al- Dulimi and Montana Management Inc. v. Switzerland [GC], no. 5809/08 , § 97, 21 June 2016).

30. The Court observes that the “civil rights and obligations” at stake in the present case are constituted by the applicant company ’ s claim to have property rights returned. This is reflected, inter alia , in the scope and aim of the applicant company ’ s civil action whereby it sought court rulings declaring that it was the owner of certain property that in the applicant company ’ s view had belonged to it prior to the dissolution of the SFRY (see paragraph 8 above). In this connection, the Court reiterates that the Convention imposes no specific obligation on the Contracting States to provide redress for wrongs or damage caused prior to their ratification of the Convention (see Kopecký v. Slovakia [GC], no. 44912/98, § 38, ECHR 2004 ‑ IX).

31. However, it is the view of the applicant company that the protection of its property rights is explicitly guaranteed by an international treaty ratified by the respondent State (see paragraphs 19 - 22 and 24 above). Under the Serbian Constitution, ratified international agreements form part of the domestic legal order (see paragraph 14 above). The Court must therefore proceed to examine this issue (see Naït -Liman v. Switzerland [GC], no. 51357/07, § 108, 15 March 2018) .

32. The Court notes that in the applicant company ’ s case the domestic courts found that the Succession Agreement – in particular Annex G thereof – required the adoption of measures to facilitate its implementation (see paragraphs 9 and 10 above). This interpretation is generally in line with that adopted by the Belgrade High Commercial Court in 2004, according to which the Succession Agreement was not an instrument suitable for direct application as it required implementing measures in the form of legislation or bilateral agreements (see paragraph 18 above). The Court moreover observes that a similar position has been taken by the Joint Standing Committee (see paragraph 22 above).

33. Similarly, within the context of the applicability of Article 1 of Protocol No. 1 to the Convention, the Court, in the case of Mladost Turist a.d. v. Croatia (( dec. ), no. 73035/14, §§ 57-58, 30 January 2018), noted that since the respondent State had not yet concluded any bilateral agreements or adopted any implementing legislation to give effect to Article 2 of Annex G to the Succession Agreement, the applicant company ’ s claim did not have a sufficient basis in national law or under international agreements that were part of the national legal order as to be regarded as an “asset” and therefore a “possession” attracting the guarantees of Article 1 of Protocol No. 1. The Court therefore concluded that the application was inadmissible for being incompatible ratione materiae .

34. It follows that to the extent that this complaint concerns the applicants ’ right of access to a court and the length of the suspended proceedings, and even though the domestic proceedings have not ended (see paragraph 9 above), the applicant company has not satisfactorily established that it had, even on arguable grounds, a right under domestic law to claim the return of its property. Accordingly, the complaint under Article 6 of the Convention is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected, in accordance with Article 35 § 4.

B. Complaint under Article 13 of the Convention

35. The applicant company also complained that it had no effective remedy in respect of the courts suspending the proceedings.

36. Article 13 provides:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

37. The Court reiterates that Article 13 does not apply in the absence of an arguable claim (see Maurice v. France [GC], no. 11810/03, § 106, ECHR 2005 ‑ IX ). As it has found above that the complaint under Article 6 is incompatible ratione materiae , there is no such claim and it follows that Article 13 is not applicable.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 27 June 2019 .

Stephen Phillips Vincent A. De Gaetano Registrar President