FIRST SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 25867/02 by Sergey Danilovich ANOKHIN against Russia

The European Court of Human Rights ( First Section), sitting on 31 May 2007 as a Chamber composed of:

Mr C.L. Rozakis , President, Mr L. Loucaides , Mr A. Kovler , Mr K. Hajiyev , Mr D. Spielmann , Mr S.E. Jebens , Mr G. Malinverni , judges, and Mr S. Nielsen , Section Registrar ,

Having regard to the above application lodged on 10 June 2002,

Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together.

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

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Sergey Danilovich Anokhin , is a Russian national who was born in 1949 and lives in the town of Krasnyy Sulin of the Rostov Region . The Russian Government were represented by Mr P. Laptev, Representative of the Russian Federation before the European Court of Human Rights.

A. The circumstances of the case

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

1. The background of the case

The applicant is a former employee of various coal mines of OAO Rostovugol , a joint-stock limited liability company.

It was established as a result of restructuring of one of the major Soviet coal producers in the early 1990s.

In 1993 a number of production units were incorporated under the private law rules as a joint-stock company with limited liability. According to the Government, the federal and regional authorities owned stakes in the company of 66.9 and 20 per cent respectively. It appears that the remaining stock was held by private shareholders, including the company ’ s employees.

It appears that in the late 1990s the company ran into trouble and subsequently experienced difficulties in managing its debt, the greater part of which represented salary arrears owed to the company ’ s numerous employees.

In 2001-2002, having faced social tensions in the respective region, the federal authority intervened by adopting a special programme according to which OAO was to be liquidated, its assets auctioned and the company ’ s debt financed, in part, by the authorities.

In 2001-2002, shortly after his dismissal, the applicant brought five court actions against his former employer claiming salary arrears and unpaid social benefits.

2. The first set of proceedings and the related enforcement proceedings

By a judgment of 17 September 2001 the Justice of the Peace of the 4 th circuit of the town of Novoshakhtinsk of the Rostov Region recovered the applicant ’ s unpaid salary totalling 10,513 Russian roubles (RUR) from the defendant company for the period between July to December 2000 and January 2001. The judgment came into force on 28 September 2001 .

According to the Government, the money owed to the applicant was transferred to his bank account in full on 30 January 2002, which is slightly over four months after the judgment of 17 September 2001 had been given.

3. The second set of proceedings and the related enforcement proceedings

On 19 September 2001 the Krasnosulinsk Town Court of the Rostov Region ordered the defendant company to pay the applicant work-related sickness benefits of RUR 30,627.96. This judgment came into force on 28 September 2001.

The Government submitted that the judgment at issue had been executed in full by bank transfer dated 22 December 2003, which is two years, two months and twenty-four days after the judgment of 19 September 2001 became enforceable.

4. The third set of proceedings and the related enforcement proceedings

By a judgment of 12 November 2001 the Novoshakhtinsk Town Court of the Rostov Region ordered the defendant company to pay the applicant non-pecuniary damages of RUR 5,000 for the delays in payment of the salary. This judgment became enforceable on 14 February 2 002.

According to the Government, this judgment was enforced in full by bank transfer to the applicant ’ s account on 20 December 2002. The transfer was made ten months and five days after the judgment in question became enforceable.

5. The fourth set of court proceedings

By a judgment of 18 April 2002 the Justice of the Peace of the 4th circuit of the town of Novoshakhtinsk of the Rostov Region ordered the defendant to pay the applicant a compensation of RUR 2,838.51 for delays in payment of his salary between 2000 and 2001. The judgment became enforceable on 29 April 2002.

The Government submitted that the execution writ in respect of the judgment of 18 April 2002 had been accepted by the winding-up committee of the company and joined to the list of the company ’ s priority 2 creditors. It would be complied with after the additional sale of the company ’ s assets and after the debts towards the priority 1 creditors had been honoured.

6. The fifth set of court proceedings

On 31 May 2002 the Justice of the Peace of the 1st circuit of the town of Novoshakhtinsk of the Rostov Region awarded the applicant damages for being kept out of his money through the delays in payment of his salary for the period between August and September 1999, ordering the defendant company to pay RUR 29,850.98. The judgment came into force on 11 June 2002 .

The Government submitted that the applicant had received a copy of the writ in respect of this judgment from the registry of the first-instance court on 14 June 2002, but had not sent it to the company until three years later. As a result, the writ was received on 5 May 2005. The winding-up committee was still waiting for the applicant to submit a second copy of the writ and a copy of the judgment of 31 May 2002. Upon receipt of the said documents, the applicant ’ s claim would be recorded in the list of the company ’ s priority 2 creditors.

7. Enforcement proceedings in respect of the respondent company

On 6 December 2001 the bailiffs of the town of Shakhty seized the assets of OAO Rostovugol ; of which the estimated value was RUR 709,000,000.

By letters of 18 March and 24 April 2002 the Deputy Governor of the Rostov Region in charge of fuel, energy and natural resources informed the applicant that OAO Rostovugol was an unprofitable company, that the question of its restructuring had been long debated by the authorities at various levels, that on 31 January 2002 the Federal Interdepartmental Commission on the Socio-Economic Problems of Coil-Producing Industries adopted a plan under which the company was to be wound-up, that on 12 March 2002 the meeting of OAO Rostovugol shareholders had adopted that decision, that the debts of OAO Rostovugol would be honoured through the sale of its assets and also with the financial assistance of the authorities and that the existing salary debts would be honoured during the year 2002.

By letter of 13 May 2002 the State Institution Sotsugol , a State agency set up to solve problems arising out of restructuring of the coal-mining industry, informed the applicant that his previous complaints about the prolonged failure to execute the judgments had been forwarded to OAO Rostovugol and that the president of its winding - up committee had been asked to repay the debts as soon as possible.

B. Rele vant domestic law

1. Limited liability of shareholders

Section 2 of the Joint-Stock Companies Act (Law no. 208-FZ of 26 December 1995) provides, among other things, that a joint-stock company is a commercial organisation whose capital is divided into a definite number of shares of stock certifying the rights and obligations of the members (shareholders) vis-à-vis the company. Shareholders are not liable for obligations of the company and bear the risk of losses associated with its activity only to the extent of the value of the shares owned by them.

2. Rights of bankruptcy creditors in winding-up proceedings

Under the Insolvency Act (Law no. 27-FZ of 6 October 2002) bankruptcy creditors are creditors of monetary obligations, except for authorised bodies, citizens to whom a debtor is liable for harm to life or health or for moral harm or to whom royalties are owed under copyright contracts, and stakeholders of the debtor in so far as the liabilities in respect of such participation are concerned. They are among the parties to a bankruptcy case and may complain to the court about action or failure to act breaching their rights.

3. Decree of the Federal Government of 20 December 2002 No. 1810 ‑ P

By virtue of the above decree, the Ministry of Energy was to finance the debt of OAO Rostovugol in so far as the salary debts and related social payments prior to the decision to wind up the company were concerned.

4. The State institution Sotsugol

The State institution Sotsugol was established by Decree of the Federal Government of 20 November 1997 as a principal coordinator of the programmes of local development introduced to solve social problems arising out of restructuring of the coal-mining industry.

COMPLAINTS

The applicant complained that he was unable to recover the money awarded to him by the domestic courts .

THE LAW

The applicant was dissatisfied with the respondent ’ s failure to pay the judgment debts in his favour. These complaints fall to be examined under Article 6 of the Convention and Article 1 of Protocol No. 1, which, in so far as relevant, provide as follows:

Article 6 § 1

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

Article 1 of Protocol No. 1

“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. The parties ’ submissions

The Government argued that the Russian Federation , as the majority shareholder of OAO Rostovugol , was not responsible for its debts. In any event, the State had undertaken some steps aimed at solving the problems of OAO Rostovugol , including financial assistance. They further argued that most of the sums awarded in the applicant ’ s case had been paid in full and in good time and that any delays had been justified by the need to sell the respondent company ’ s assets to meet its debts.

The applicant disagreed with the Government ’ s arguments and referred to the letter of the State institution Sotsugol dated 13 May 2002, contending that it proved that the State assumed responsibility for payments. He also argued that the State had failed properly to supervise the company ’ s management and that it therefore should be held responsible for the company ’ s debts.

B. The Court ’ s assessment

At the outset the Court observes that where an applicant complains about the inability to enforce a court award in his or her favour the extent of the State ’ s obligations under Article 6 and Article 1 of Protocol No. 1 varies depending on whether the debtor is the High Contracting Party within the meaning of Article 34 of the Convention or a private person. In the former case, the Court ’ s case-law usually insists on the State complying with the respective court decision both fully and timeously (see, for example, Burdov v. Russia , no. 59498/00, § § 33-42 , ECHR 2002 ‑ III ) . When the debtor is a private actor, the position is different since the State is not, as a general rule, directly liable for debts of private actors and its obligations under these Convention provisions are limited to providing the necessary assistance to the creditor in the enforcement of the respective court awards, for example, through a bailiff service or bankruptcy procedures (see, for example, Shestakov v. Russia ( dec .), no. 48757/99, 18 June 2002; Krivonogova v. Russia ( dec .), no. 74694/01, 1 April 2004; and Kesyan v. Russia , no. 36496/02, 19 October 2006 ). Thus, when the authorities are obliged to act in order to enforce a judgment and they fail to do so, their inactivity may, in certain circumstances, engage the State ’ s responsibility on the ground of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 (see Scollo v. Italy , judgment of 28 Septem ber 1995, Series A no. 315-C, § 44, and Fuklev v. Ukraine , no. 71186/01, § 84 , 7 June 2005 ). The Court ’ s task in such cases is to examine whether measures applied by the authorities were adequate and sufficient and whether they acted diligently in order to assist a creditor in execution of a judgment (see Fociac v. Romania , no. 2577/02, § 70 , 3 February 2005 , and Fuklev , cited above , § 84).

Since the applicant argued that the State should be held directly responsible for the debts of the respondent company, a private law entity controlled and partly owned by the Russian authorities at the federal and regional level holding 66.9 and 20 per cent of its shares respectively , the first issue to be examined is whether the debts of the respondent company are owed by the Russian Federation as the High Contracting Party within the meaning of Article 34 of the Convention.

In this respect, the Court notes that under domestic law the respondent company is incorporated as a joint-stock limited liability entity with separate legal personality, has the ability to own assets that are distinct from the property of its shareholders and has delegated management. Thus, t he State, like any other shareholder, is only liable for debts of the company in the amount invested in the company ’ s shares and the Court finds nothing in the case file or in the applicant ’ s submissions to suggest, at least as regards the period after 5 May 1998 – the date of the Convention ’ s entry into force in respect of Russia – that the State was directly responsible for the company ’ s financial difficulties, siphoned the corporate funds to the detriment of the company and its stakeholders, failed to maintain an arm ’ s-length relationship with the company or otherwise abused the corporate form (see, by contrast, Sharenok and Others v. Ukraine , no. 35087/02, 22 February 2005; Mykhaylenky and Others v. Ukraine , nos. 35091/02 and following, 30 November 2004; and Lisyanskiy v. Ukraine , no. 17899/02, 4 April 2006 ). The Court also finds the applicant ’ s allegation that the State failed to supervise the company ’ s management vague and unspecific as there is no indication that the company ’ s financial difficulties resulted from poor management of the company rather than from the overall effect of unfavourable conditions in the coal-mining industry and the market.

As regards the applicant ’ s references to the letter of the State institution Sotsugol dated 13 May 2002 and, more generally, to the attempts of the authorities to assist the winding-up committee in managing the company ’ s debt, the Court considers that nothing in the Convention prevents the State from assuming responsibility for debts of a private company fully or only in part or providing other types of financial, social or administrative assistance. However, the case file contains no indication that the State promised to repay the company ’ s debt entirely or in part and then failed to respect the undertakings or that the manner in which the State undertook to assist the company was unfair or grossly unreasonable. As can be seen from Decree No. 1810-P of 20 December 2002, referred to by the respondent Government, the State undertook to provide financial assistance to OAO Rostovugol only as regards the salary debts and related social payments prior to the decision to wind up the company. The Court notes that the domestic courts made five awards against OAO Rostovugol in the applicant ’ s favour. Three out of five, the judgments dated 17 and 19 September and 12 November 2001, concerned the salary arrears and related payments and the remaining two, the judgments of 18 April and 31 May 2002, concerned compensation for inflationary losses arising from delays in payment of the salary. The Court finds that by the decree of 20 December 2002 the Government accepted its responsibility for the respondent company ’ s debts as regards the former three judgments. The Court notes that the judgment of 17 September 2001 was enforced by the debtor within four months and that of 12 November 2001 in ten months and five days. Since the judgments were executed in full and the delays were not unreasonably long, the Court finds that no Convention issues arise in respect of these awards. As regards the judgment of 19 September 2001, the Government assumed responsibility for payment on 20 December 2002 and the judgment was executed in full on 22 December 2003, one year and two days later. The Court notes that the State was not initially responsible for the company ’ s debts, that it voluntarily undertook certain steps aimed at provision of financial assistance to OAO Rostovugol and that proper administration of this assistance required some additional administrative and logistical efforts by the authorities. In view of these circumstances and having regard to the Convention case-law (see, for example, Grishchenko v. Russia ( dec .), no. 75907/01, 8 July 2004; Presnyakov v. Russia ( dec .), no. 41145/02, 10 November 2005; and Kolotkov v. Russia ( dec .), no. 41146/02, 9 March 2006), the Court concludes that the delay of one year and two days cannot be said to have interfered with the applicant ’ s rights in a manner incompatible with Article 6 of the Convention or Article 1 of Protocol No. 1. As regards the remaining two judgments, dated 18 April and 31 May 2002 respectively, the Court finds that they represented the debts of the respondent company which were not directly imputable to the State and the scope of the State ’ s obligations under the Convention was limited to assisting the applicant in enforcement of these awards in his favour.

The next issue to be determined is whether, on the facts of the case, the measures applied by the authorities in respect of these two judgments were adequate and sufficient and whether they acted diligently in order to assist a creditor in execution of a judgment (see Fociac and Fuklev , both cited above). The Court notes that the applicant does not complain about any specific failures on the part of the winding-up committee or the court but rather is generally dissatisfied with the delays and the lack of payment. It has not been alleged that the committee, the court or the bailiffs, through action or inaction, attempted to divert or strip the company ’ s cash or assets in breach of the creditors ’ rights, that the State interfered with the enforcement proceedings (see, by contrast, Shestakov and Lisyanskiy , both cited above ) or that the State ’ s financial assistance was used in an improper or unlawful manner. In addition, the Court notes that the applicant has still not fulfilled the winding-up committee ’ s request to submit a second copy of the writ and a copy of the judgment of 31 May 2002. Finally, he failed to bring any proceedings against the winding-up committee or the court in connection with his complaints. In these circumstances the Court does not find that the respondent State has failed in any of its obligations in respect of the enforcement of these judgments.

It follows that th e application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Cou rt unanimously

Decides to discontinue the application of Article 29 § 3 of the Convention ;

D eclares the application inadmissible.

Søren Nielsen Christos Rozakis Registrar President