FIRST SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 13338/03 by AO “URALMASH” against Russia

The European Court of Human Rights (First Section) , sitting on 4 September 2003 as a Chamber composed of

Mr C.L. Rozakis , President ,

Mr P. Lorenzen , Mr G. Bonello , Mrs F. Tulkens , Mr E. Levits , Mrs S. Botoucharova , Mr A. Kovler , judges , and Mr S. Niels en , Deputy Section Registrar ,

Having regard to the above application lodged on 10 April 2003,

Having deliberated, decides as follows:

THE FACTS

The applicant is a public company “The Urals Factory of Heavy Engineering” ( Открытое акционерное общество «Уральский завод тяжелого машиностроения» , AO “ Uralmash ” or “the applicant company”) located in Yekaterinburg. The applicant company is represented before the Court by Ms I. Krivykh , the head of its legal department.

A. The circumstances of the case

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

Pursuant to decisions of the Sverdlovsk Regional Committee for Management of the State Property of 6 and 25 November 1992, the applicant company was privatised and the assets of the serial devices engineering plant ( Завод серийных машин , “the Plant”) were included, among others, in the applicant company’s charter capital.

On 9 December 1994 the applicant company made an offer to the Government to return the Plant into state ownership in exchange for a certain number of the applicant company’s shares. On 6 September 1995 the Government accepted the offer and the terms and conditions of the exchange were developed at a meeting on 17 October 1995.

On 11 June 1996 the applicant company and the Government signed an agreement on the transfer of the Plant to the State for consideration. On the same day the applicant company transferred the Plant to the State Committee for Management of the State Property of the Russian Federation, acting on behalf of the Government.

On 3 October 1997 the applicant company invited the Government to pay the stipulated consideration for the Plant. On 19 January and 2 February 1998 the Ministry of Finance of the Russian Federation and the Government acknowledged the outstanding debt and offered to pledge the respective amount in the next year’s State budget. However, on 27 November and 29 December 2000 the Ministry of Finance of the Russian Federation refused to pay the applicant company with reference to the absence of supporting documentation.

On 2 February 2001 the applicant company lodged a civil action against the Government and the Ministry of Finance with the Moscow Commercial Court ( Арбитражный суд г. Москвы ). The applicant company sought to recover the outstanding payment for the transferred Plant.

On 23 May 2001 the Moscow Commercial Court dismissed the applicant company’s action. The court held that the Plant had been unlawfully privatised and, therefore, it could not be legitimately transferred back into state ownership for consideration.

On 13 June 2001 the applicant company brought an appeal ( апелляционная жалоба ) against the judgment of 23 May 2001. It argued, inter alia , that the privatisation had been lawful and subsequently approved by a Government resolution.

On 17 August 2001 the Appeal Instance of the Moscow Commercial Court ( апелляционная инстанция Арбитражного суда г. Москвы ) granted the applicant company’s action and awarded it RUR 204,363,814.33 to be paid by the Ministry of Finance on behalf of the Russian Federation.

On 11 and 17 September 2001 the Ministry of Finance and the Ministry for State Property brought cassation appeals ( кассационные жалобы ) against the judgment of 17 August 2001.

On 24 October 2001 the Federal Commercial Court of the Moscow Circuit ( Федеральный арбитражный суд Московского округа ) granted the cassation appeals, quashed the judgment of 17 August and restored the judgment of 23 May 2001.

The applicant company sent several applications for supervisory review ( заявление о принесении протеста в порядке надзора ) . These applications were refused by letters of the deputy President of the Supreme Commercial Court of the Russian Federation of 27 April and 13 June 2002 and a letter of the President of the Supreme Commercial Court of the Russian Federation of 31 October 2002.

On 9 January 2003 the applicant company lodged an application for supervisory review under the new procedure, in force as of 1 January 2003.

On 31 January 2003 the application for supervisory review was dismissed. The applicant company was advised that, under the new procedure, no new applications on the same subject were permissible.

B. Relevant domestic law

On 1 September 2002 the new Code on Commercial Procedure of the Russian Federation ( Арбитражный процессуальный кодекс РФ ) entered into force, with the exception of Chapter 36 of the Code “Proceedings for the review of courts’ decisions by way of supervision” (“ Производство по пересмотру судебных актов в порядке надзора ”) which became effective as of 1 January 2003. Chapter 36 established a new procedure for the supervisory review of courts’ decisions that have already entered into legal force.

According to a general rule in Article 292 § 3 of the Code on Commercial Procedure, the application for supervisory review can be filed with the Supreme Commercial Court of the Russian Federation within three months after the contested decision entered into legal force, provided that all other remedies have been exhausted.

The Law on the Introduction of the Code on Commercial Procedure of the Russian Federation of 24 July 2002 ( Федеральный закон «О введении в действие Арбитражного процессуального кодекса РФ» № 96-ФЗ ) provided that, in respect of courts’ decisions made before 1 January 2003, the period for filing an application for supervisory review of such decisions will be calculated from 1 January 2003.

COMPLAINTS

1. The applicant company complains under Article 1 of Protocol No. 1 to the Convention about a violation of its property rights as a result of the domestic courts’ decisions.

2. The applicant company complains under Article 6 § 1 of the Convention about a violation of the legal certainty principle in that on 24 October 2001 the Federal Commercial Court of the Moscow Circuit quashed the judgment of the Appeal Instance of the Moscow Commercial Court, which had already entered into legal force.

THE LAW

1. The applicant company complains about a violation of its property rights as a result of a Government refusal to pay compensation for a plant transferred by the applicant company into the state ownership, upheld by the domestic courts. The applicant company invokes Article 1 of Protocol No. 1, which provides in the relevant part 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 Court considers it appropriate first to determine whether the applicant company has complied with the admissibility requirements defined in Article 35 § 1 of the Convention, which provides:

“The Court may only deal with the matter after all domestic remedies have been exhausted, according to the generally recognised rules of international law, and within a period of six months from the date on which the final decision was taken.”

The Court notes that the Federal Commercial Court of the Moscow Circuit took its decision on 24 October 2001. Under the then existing procedure the applicant company did not have any remedies that would have allowed it to successfully challenge the decision of 24 October 2001. In accordance with the Court’s established case-law, the pursuit of the supervisory-review procedure, which the applicant company undertook at that time, cannot be considered an effective remedy for the purposes of Article 35 § 1 of the Convention, the decision on whether to open such proceedings being based on the exercise of discretionary powers (see Tumilovich v. Russia (dec.), no. 47033/99, 22 June 1999).

The Court notes that following the entry into force of the relevant chapter of the new Code on Commercial Procedure on 1 January 2003, pursuant to the law on the introduction of the Code, an application for supervisory review could be filed between 1 January and 1 April 2003 in respect of any decision that had entered into force before 1 January 2003, and the applicant company has availed itself of this opportunity. The Court must therefore determine whether this new avenue of appeal gave rise to a fresh “final decision” within the meaning of Article 35 § 1 of the Convention, which could in turn set in motion a further period of six months for introduction of the application.

The Court recalls that inherent to the Convention are the notions of legal certainty and the rule of law (see, e.g., Marckx v. Belgium , judgment of 13 June 1979, Series A no. 31, § 58; Stran Greek Refineries and Stratis Andreadis v. Greece , judgment of 9 December 1994, Series A no. 301 ‑ B, § 49). The decision in the applicant company’s case was res judicata , no effective remedies against it existed at the time when it was made and it was only by virtue of the introduction of the new transitional remedy that it was able to challenge that decision. In such circumstances, the applicant company’s recourse to this newly available remedy to challenge proceedings which had been brought to an end by a final decision must be seen as akin to a request to re-open those proceedings by means of the extraordinary transitional remedy (see, mutatis mutandis , Kozak v. Ukraine (dec.), no. 21291/02, 17 December 2002). However, the Court recalls in this connection that the Convention does not guarantee a right to re-open proceedings in a particular case ( see, inter alia , X. v. Austria, no. 7761/77, Commission decision of 8 May 1978, Decisions and Reports (DR) 14 , pp. 171, 174; Jose Maria Ruiz Mateos and Others v. Spain , no. 24469/94, Commission decision of 2 December 1994, DR 79, p. 141 ); nor is an applicant normally required to avail himself of an extraordinary remedy for the purpose of the exhaustion rule under Article 35 § 1 (see Kiiskinen v. Finland ( dec .), no. 26323/95, ECHR 1999-V).

It follows that the decision of 31 January 2003 of the Supreme Commercial Court of the Russian Federation refusing the applicant company’s application for supervisory review was not a “final decision”, within the meaning of the Article 35 § 1 of the Convention, and it cannot bring the application within the six-months time-limit laid down in that provision. The decision of the Federal Commercial Court of the Moscow Circuit of 24 October 2001 must, therefore, be considered the “final” decision at the domestic level. Since that decision was rendered more than six months before the date of introduction of the application with the Court (10 April 2003), it follows that this complaint has been introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

2. The applicant company complains also under Article 6 § 1 of the Convention that the decision of the Federal Commercial Court of the Moscow Circuit to quash an earlier judgment that had already entered into legal force violated the principle of legal certainty.

The Court notes that the alleged violation took place on 24 October 2001 when the Federal Commercial Court of the Moscow Circuit delivered its decision and the applicant company became aware of it. Having regard to the above reasoning it follows that this complaint is introduced out of time and must be rejected as well in accordance with Article 35 §§ 1 and 4 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

Søren Nielsen Christos Rozakis              Deputy Registrar President