SECOND SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 61651 /00 by RUSATOMMET Ltd against Russia

The European Court of Human Rights ( Second Section) , sitting on 14 September 2004 as a Chamber composed of:

Mr J.-P. Costa , President , Mr A.B. Baka , Mr L. Loucaides , Mr K. Jungwiert , Mr V. Butkevych , Mr M. Ugrekhelidze ,

Mr A. Kovler, judges , and Mrs Dollé , Section Registrar ,

Having regard to the above application lodged on 20 April 2000 ,

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 is a limited- liability company incorporated under the laws of Russia . It is represented before the Court by Mr A. Strokatov, a lawyer practising in Moscow . The respondent Government are represented by Mr P. Laptev, the Representative of Russia at the European Court of Human rights.

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

1. Public bonds of 1993 and 1996

On 14 May 1993 the Ministry of Finance (“Ministry”) issued public bonds ( ОВГВЗ ) denominated in United States ' dollars (USD). The bonds were split into issues with different maturity dates. For bonds of Issue no. 3 the maturity date was 14 May 1999 , for bonds of Issue no. 4— 14 May 2003 .

On 14 May 1996 the Ministry expanded the loan by issuing bonds of Issue no. 6 with a maturity date of 14 May 2006 .

2. Bond of Issue no. 3

(a) Substantive proceedings

On 14 May 1999 the Minister of Finance sent a letter to holders of bonds of Issue no. 3. He asked the m to refrain , during six months, from claiming the debt since the economic situation in the country was unfavourable.

On 2 July 1999 the applicant company bought from a third party a bond of Issue no. 3 with a face value of USD 100,000.

On 7 July 1999 the applicant company submitted the bond for liquidation, but no payment was made.

On 13 July 1999 the applicant company brought a civil action against the Government and the Ministry seeking to recover the debt. The action was accompanied with a court fee of 23,810 roubles (~ 961 euros). The applicant company requested the court to levy the fee on the Ministry if it would lose the case.

On 4 November 1999 the Moscow City Commercial Court (“City Court”) recovered USD 100,000 from the Ministry. The court dismissed the Ministry ' s argument that in 1999 there had been no budgetary financing for liquidation of the debt.

T he court relieved the Ministry from bearing the court fee because pursuant to the Law o n State F ees State bodies were exempt from pay ing court fees irrespective of whether the bodies act ed as plaintiffs or defendants.

On 29 November 1999 the Government issued Order no. 1306 pursuant to which bonds of Issue no. 3 were to be converted into new bonds with four- and eight-year maturity periods.

On 25 January 2000 the Appeal Collegium of the Moscow City Commercial Court (“Court of Appeal”) disallowed the appeal filed by the Ministry. On the same day the court issued a writ of execution.

On 16 March 2000 the Federal Commercial Court of the Moscow Circuit (“ Circuit Court”) allowed the cassation appeal filed by the Ministry. The court set aside the judgments of the two lower courts and dismissed the applicant company ' s case. In the court ' s opinion, the Government should not have been considered in default under the bonds because it had negotiated the matter with the bond holders and had converted the outstanding debt into new bonds, pursuant to Order no. 1306.

The court also ordered the applicant company to pay 47,620 roubles (~ 1.731 euros) of the court fees for the examination of the case at all three levels of jurisdiction.

A request for supervisory review lodged by the applicant company with the Supreme Commercial Court (“Supreme Court”) was rejected on 28 July 2000 .

On 14 August 2001 the President of the Supreme Court filed an application for supervisory review of all the decisions given in the case. He asked for them to be set aside and the case remit ted for fresh consideration. The President pointed out that the applicant company had not agreed to the conversion of the debt, and that the courts had failed to assess why the State had refused to liquidate the debt in time.

On 13 February 2002 the Presidium of the Supreme Court granted the application and remitted the case for a re-trial.

On 10 April 2002 the City Court ordered the Government to pay the applicant company USD 100,000. The court found as follows:

“Since commitments must be met ..., the delay in the redemption of the bond was the [Government ' s] fault... [L]ack of funds sufficient to meet the commitment— for which reason the funds were not allocated in the budget of 1999–2002 — does not absolve [the Government] from meeting the commitment ...”

On 5 August 2002 the Court of Appeal upheld the judgment in substance and specified that the debt should be paid by the Ministry.

On 28 October 2002 the Circuit Court disallowed the cassation appeal lodged by the Ministry.

(b) Enforcement proceedings

On 6 November 2002 the Ministry asked the City C ourt to stay the execution of the judgment until 1 January 2003 , given that there had been no relevant allocations in the State budget of 2002.

On 19 November 2002 the enforcement proceedings began.

On 16 December 2002 the City Court refused to delay the execution. It found that the Ministry had not proven that it did not have the funds necessary, or that the funds would be available after 1 January 2003 .

On 7 February 2003 the Ministry repeated its request to stay the execution of the judgment. It asked for a delay until 1 January 2004 , because there had been no relevant allocations in the State budget of 2003.

On 20 March 2003 the City Court refused to delay the execution for the same reasons as before.

On an unspecified date t he Ministry requested the Court of Appeal to clarify how its judgment of 5 August 2002 was to be enforced.

On 3 September 2003 the Court of Appeal stated that the judgment was to be enforced only once the applicant company had produced the bond.

The applicant company appealed against this decision. It claimed that nothing in the general conditions of the issue of the bonds suggested that the bonds should be physically submitted for liquidation to the Ministry. The applicant company argued that the judgment could be enforced on the basis of the writ of execution alone, and that it was only after the execution that the bond could be returned to its issuer.

On 25 November 2003 the Circuit Court disallowed the appeal.

On 2 December 2003 the applicant company submitted the bond to Vneshekonombank, the bank which, according to the general conditions of the issue of the bonds, was the paying agent of the Ministry. The bank refused to accept the bond because the judgment of 5 August 2002 and its clarifications in no way oblige d it to enforce the judgment.

On 18 February 2004 the applicant company submitted the bond to the Ministry.

3 . Bond of Issue no. 4

On 13 November 1998 the applicant company bought from a third party a bond of Issue no. 4 with a face value of USD 100,000.

Knowing from its previous experience with the bond of Issue no. 3 that the State would most likely not honour the debt, in July 1999 the applicant company submitted the bond of Issue no. 4 for early redemption.

As the Ministry had refused to accept the bond for payment, on 20 July 1999 the applicant company brought an action before the City Court.

On 15 September 1999 the City Court decided to hear the case in private as the Ministry intended to submit evidence containing commercial and State secrets.

On 29 October 1999 the City Court dismissed the applicant company ' s claim. It ruled that despite the delays in t he redemption of bonds of Issue no. 3, nothing suggested that bonds of Issue no. 4, not yet outstanding, would not be properly redeemed.

The applicant company ' s appeals were dismissed by the Court of Appeal on 21 December 1999 and by the Circuit Court on 17 February 2000 . The Circuit Court found, in particular, that the applicant company had bought the bond after the financial collapse of August 1998 and, therefore, could have and should have known that the Government might face financial difficulties.

4. Bond of Issue no. 6

On 13 November 1998 the applicant company bought from a third party a bond of Issue no. 6 with a face value of USD 100,000.

A fter the Ministry had refused to pay the debt ahead of time, on 16 September 1999 the applicant company brought an action against it.

On 14 October 1999 the City Court dismissed the action.

On 25 October 1999 the court refused the applicant company ' s request to amend the transcript of the hearing.

The applicant company ' s appeals were dismissed by the Court of Appeal on 11 January 2000 and by the Circuit Court on 17 February 2000 for the same reasons as in the case concerning Issue no. 4 .

COMPLAINTS

1. With regard to the bond of Issue no. 3, the applicant company complained under Article 1 of Protocol No. 1 that the State had not honoured the debt and had arbitrarily changed the rules of payment.

2. The applicant company also complained under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 that the judgment of 10 April 2002 had not been enforced.

3. The applicant company further complained under Article 17 of the Convention that the defendant—the Ministry — had not been obliged by the courts of the two lower instances (who had found in the applicant company ' s favour) to pay the court fees. However, when the judgments had been quashed on cassation, the applicant company had been ordered to pay the fees at all three instances, despite having been successful at two of them and not having initiated the second or third itself.

4. The applicant company complained under Article 6 § 1 of the Convention that the proceedings had been adjourned a number of times on the Ministry ' s request.

5. The applicant company complained under Article 11 of the Convention that the State had interfered with its business activity.

6. The applicant company complained under Article 13 of the Convention that the domestic courts had arbitrarily interpreted national law.

7 . With regard to the bonds of Issues nos. 4 and 6, the applicant company complained under Article 1 of Protocol No. 1 that the Ministry of Finance had refused to redeem the bonds despite its default on Issue no. 3.

8 . The applicant company complained under Article 6 § 1 of the Convention that the proceedings concerning the bond of Issue no. 4 had lasted too long and that the court had heard the case in private.

9 . Lastly, the applicant company complained under Article 6 § 1 of the Convention that the proceedings concerning the bond of Issue no. 6 had lasted too long and that the court had rejected its comments on the transcript of the hearing.

THE LAW

1. The applicant company complained under Article 1 of Protocol No. 1 about the State ' s refusal to redeem the bond of Issue no. 3. Article 1 of Protocol No. 1 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.”

The Government submitted that the complaint was premature. They claimed that the application for supervisory review of 14 August 2001 was a measure by which the possible breach of the applicant company ' s Convention rights would be remedied .

The applicant company did not accept this view. It argued, first, that the supervisory review was not an effective remedy. Secondly, the application for supervisory review lodged by the President of the Supreme Court was no more than the President ' s personal opinion on the case since he could recall it at any moment. Furthermore, the applicant company earlier requested the President of the Supreme Court to initiate the supervisory review, and the President had always refused. It was not until the Government had been notified of the proceedings in Strasbourg , that the President changed his mind on the matter. His intervention was not so much evidence of the State ' s sincere intention to provide redress , as a hasty attempt to create some ground for the inadmissibility of the complaint. Lastly, the application for supervisory review contained a number of errors of fact and law.

The Court notes that the proceedings in the Russian courts progressed simultaneously with the proceedings in Strasbourg . Several judgments have been given after the application for supervisory review of 14 August 2001 . For this reason, the parties ' arguments are now of only limited relevance, and the Court must assess the situation as it currently stands.

The Court recalls that , pursuant to Article 34 of the Convention , it may “receive applications from any ... non-governmental organisation ... claiming to be the victim of a violation ... of the rights set forth in the Convention...”

In this connection the Court reiterates that an applicant may lose his status as a “victim” of a Convention breach where the national authorities acknowledge, either expressly or in substance, and then afford redress for, the breach (see Amuur v. France , judgment of 25 June 1996, Series A no. 65, § 36).

The Court notes that in the end the applicant company ' s claims arising from the bond of Issue no. 3 have been satisfied by the judgment of the City Court of 10 April 2002 .

The City Court unequivocally stated that the Government should have honoured the debt, and that there had been no legitimate grounds for putting off the redemption of the bond. The Court finds that the national authorities have thereby expressly acknowledged the breach of the Conv ention alleged by the applicant company.

The judgment of the City Court entitled the applicant company to recover from the State the money due under the bond. This judgment became final and was submitted for execution. The Court finds that by doing so the national authorities have also afforded redress for the breach alleged.

Therefore, the applicant company has lost its status as a “victim” of the Convention violation .

It follows that this complaint is incompatible ratione personae with the provisions of the Convention w ithin the meaning of Article 35 § 3 and must be rejecte d in accordance with Article 35 § 4.

2. The applicant company next complained, under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1, that the judgment of 10 April 2002 had not been enforced. Article 6 § 1 of the Convention, in so far as relevant, reads as follows:

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

The Government averred that this complaint was manifestly ill-founded. They claimed that , pursuant to the clarification of the manner of execution given on 3 September 2003 , the judgment could only be enforced if the applicant company had physically delivered the bond to the Ministry. Since the applicant company had not done so, it was itself responsible for delays in the execution of the judgment .

The applicant company contested the Government ' s statement. It contended that it did deliver the bond first to Vneshekonombank , as required by the general conditions of issue, and later to the Ministry itself. However, the judgment was still not enforced. In the applicant company ' s opinion, the controversy about the manner of the execution of the judgment was but a tactical move used by the Ministry to delay the return of the debt.

The Court reiterates that a delay in the execution of a judgment may be justified in particular circumstances, but the delay may not be such as to impair the essence of the right protected under Article 6 § 1. Furthermore, the impossibility for the applicant to obtain the execution of a judgment in his favour constitutes an interference with his right to the peaceful enjoyment of his possessions, as set out in the first sentence of the first paragraph of Article 1 of Protocol No. 1 (see Burdov v. Russia , judgment of 7 May 2002, Reports of Judgments and Decisions 2002-III, §§ 35, 40).

The Court notes that the enforcement proceedings began on 19 November 2002 . To date they have lasted 1 year and 6 months. It was not until the decision of the Circuit Court of 25 November 2003 that the applicant was required physically to submit the bond to receive the judgment debt. The applicant submitted the bond to the Ministry on 18 February 2004 , i.e. 2 months and 23 days later. In the Court ' s opinion this del ay, even if wholly attributable to the applicant company, is insignificant if compared to the overall length of the enforcement.

The Court considers, in the light of the parties ' submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

3. Next, the applicant company complained under Article 17 of the Convention about the unfair distribution of court fees. Article 17 reads as follows:

“Nothing in [the] Convention may be interpreted as implying for any State, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth herein or at their limitation to a greater extent than is provided for in the Convention.”

The Government claimed that this complaint was premature because the application for supervisory review of 14 August 2001 resumed the proceedings on the domestic level.

The applicant company claim ed that the supervisory review did not make the complaint premature.

The parties submitted no observations on the merits of the complaint.

The Court does not need to decide whether the complaint is premature because it is in any event manifestly ill-founded for the following reasons.

First, no issue arises under Article 17 proper. Requiring the applicant company to pay the court fees for the Ministry ' s unsuccessful appeal is not as such aimed at the destruction of any Convention rights.

Secondly, the Convention does not expressly establish any rules concerning court fees. The provision which is most pertinent to the complaint is Article 6 § 1 of the Convention to the extent that it guarantee s unfettered access to a court .

However, if looked at from the point of view of th is Article, the complaint would raise no issue either.

T he applicant company does not allege that it had no access to the commercial courts , for example because of prohibitively high court fees . It is rather concerned that the distribution of the court fees at the close of the proceedings was unfair in so far as it did not take into account which party had lodged the appeals and whether the appeals had been successful.

But the notion of “ fair hearing ” mainly presupposes procedural equality between parties in pleading their causes before a court. It does not relate to the distribution of legal costs. It is not the Court ' s task to substitute itself for the competent Russian authorities in determining the most appropriate policy for levying legal costs in connection with court proceedings (see , mutatis mutandis , Tolstoy Miloslavsky v. the United Kingdom , judgment of 13 July 1995, Series A no. 316-B, § 59). Nothing suggests that the distribution of the fees adopted by the Russian court disadvantaged the applicant company in laying out its substantive arguments before the judge.

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

4. Lastly, the Court has examined the remainder of the applicant company ' s complaints as submitted by it.

However, having regard to all material s in its possession, the Court finds that these complaints do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application must be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

For these reasons , the Court unanimously

Declares admissible, without prejudging the merits, the applicant company ' s complaint that the judgment of 10 April 2002 has not been executed ;

Declares inadmissible the remainder of the application.

S. Dollé J.-P.Costa Registrar President