FIFTH SECTION

DECISION

Application no. 4306/09 Eyyub Hamid oglu TAHIROV against Azerbaijan

The European Court of Human Rights (Fifth Section), sitting on 17 June 2021 as a Committee composed of:

Lado Chanturia , President, Lətif Hüseynov , Mattias Guyomar , judges, and Martina Keller, Deputy Section Registrar ,

Having regard to the above application lodged on 5 January 2009,

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

1 . The applicant, Mr Eyyub Hamid oglu Tahirov , is an Azerbaijani national, who was born in 1967 and lives in Baku. He was represented before the Court by Mr R. Zulfugarov and Mr F. Mammadov, lawyers based in Azerbaijan.

2 . The Azerbaijani Government (“the Government”) were represented by their Agent, Mr Ç. Əsgərov .

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

4 . Following the decision of 15 October 2001 of the Management Board of Gabala District Cooperative Society (“the GDCS”, a voluntary union of private individuals; a legal person with an independent balance), its Chairman, F.S. and the applicant concluded a sale and purchase contract on the same date whereby a department store owned by the GDCS was sold to the applicant for 35,600,000 old Azerbaijani manats (AZM) (equivalent to 7,120 new Azerbaijani manats (AZN), which was approximately equivalent to 8,320 euros (EUR) at the material time).

5 . A defect report drawn up on 16 October 2001 with the participation of the applicant, several members of the GDCS and a specialist, estimated the physical deformation of the building at 20 to 25%. The valuation report of the same date which was signed by several persons, including the applicant and the Deputy Chairman of the GDCS, set the depreciation rate of the building at 85% having regard to the fact that the building was not in use and had not been renovated since 1995. As a result, while the actual price of the building in 2001 was estimated to be around AZM 234,000,000 (AZN 46,800, equivalent to approximately EUR 54,690), considering the depreciation rate, it was reduced to AZM 35,600,000.

6 . In November 2001 an engineer examined the building during its handover and stated that the building was in good condition.

7 . On 1 January 2002 F.S. issued a receipt to the applicant confirming that he had paid the purchase price in full under the contract of 15 October 2001. It appears that the applicant was using the purchased property for business purposes as a wedding venue.

8 . According to the applicant, he was unable to register his ownership right to the property because the sale and purchase contract had not been certified by a notary. For this reason, in 2005 he contacted M.M., the new Chairman of the Management Board of the GDCS, who then asked the Azerbaijani Central Cooperatives Union (“the ACCU”) for its consent to the decision of 15 October 2001. Following the ACCU ’ s consent, on 25 February 2005, the applicant concluded a new sale and purchase contract with M.M. at the public notary. For unknown reasons, the property was still indicated as a department store in the contract.

9 . On 14, 17 and 29 May 2007 the Gabala District Executive Authority (“the GDEA”) sent letters to the applicant informing him that, since the department store had not been used for a long time and was not in compliance with the modern construction norms, it would be necessary to demolish the building in the framework of the planned replacement of old, badly maintained buildings with new ones in accordance with Presidential order no. 1044 of 14 October 2005, and asked the applicant to remove his belongings from the store.

10 . In June 2007 the GDCS brought proceedings against the applicant and F.S., mainly asking the court to quash the decision of 15 October 2001 and to declare the contract of 25 February 2005 a fictitious transaction.

11 . According to the applicant, while the proceedings were still pending before the court, representatives of the GDEA demolished his property.

12 . On 24 September 2007 the first-instance court quashed the decision of 15 October 2001 and declared the contract of 25 February 2005 null and void finding that: ( i ) the contract was signed on 15 October 2001 while the valuation of the property was done one day later; (ii) the ACCU ’ s consent had not been obtained before the sale in 2001; (iii) the contract of 15 October 2001 had not been approved by a notary and was therefore invalid; (iv) no sums had been transferred either to the GDCS ’ s or the ACCU ’ s account; and (v) the contract of 25 February 2005 was a fictitious transaction effected only for appearances. It also decided that the store should be returned to the GDCS.

13 . The applicant lodged an appeal arguing that he had purchased the store in 2001, paid the full price in several instalments to the GDCS ’ s account, and registered the sale at the public notary in 2005.

14 . On 21 February 2008 the appellate court upheld the first-instance court ’ s judgment reiterating its reasoning. In addition, as to the contract of 15 October 2001, it noted that contrary to the defect report where the physical wear and tear of the building was determined to be 20-25%, the valuation report set it at 85% without any serious technical substantiation. Also, during the handover of the building, the engineer had stated that it was in good condition. The court thus concluded that the parties had unlawfully agreed in advance on a significantly lower price for the property. It also found that none of the members of the valuation commission had been qualified for such a task and that representatives of the seller and the buyer, who had a vested interest in the valuation of the property, had been part of that commission. Lastly, the court held that the ACCU ’ s consent was not necessary when signing the contract in 2001, because the store was not a shared property of the GDCS and the ACCU at that time. However, it concluded that this alone could not be a ground for quashing the first ‑ instance court ’ s judgment.

15 . According to the applicant, in his appeals before the appellate and cassation courts and some other requests presented during the above proceedings, he complained about the destruction of his property, but the domestic courts failed to address this issue. The applicant has not provided the Court with any copies of his appeals or requests.

16 . By a final decision of 15 July 2008 the Supreme Court upheld the appellate court ’ s judgment reiterating the same reasoning.

17 . According to the applicant, the judge of a first-instance court refused to accept his separately-lodged compensation claim (not specified against whom) based on the fact that his property rights had already been annulled. He has not provided a copy of this claim either.

18 . Article 144.1 of the Code stipulates that all contracts concerning the disposal of immovable property entered in the State register shall be certified by a public notary.

19 . Under Article 157.2, the owner is entitled to claim back his property from unlawful possession of another person.

20 . According to Article 335.1, as in force at the material time, the non ‑ compliance with the required notary form of an agreement resulted in its invalidity.

21 . Article 340.1 provides that a fictitious transaction is concluded only for the sake of appearances without the intent to create corresponding legal consequences.

22 . Article 402 of the Code provides that under a preliminary contract the parties undertake to conclude the main contract at a future date for the transfer of the property. The preliminary contract should indicate the period during which the main contract is to be concluded. In the case of absence of such an indication, the main contract must be signed within one year following the conclusion of the preliminary contract.

23 . Article 12 of the Law provides that a physical person or a founder, owner, shareholder or official of a legal person who has proprietary interest in the property to be valuated cannot carry out its valuation.

COMPLAINTS

24 . Relying on Article 1 of Protocol No. 1 to the Convention, the applicant complained that the domestic courts had declared the sale and purchase contract null and void under the instructions of the GDEA and that the latter had unlawfully demolished his property.

25 . The applicant complained under Article 6 of the Convention that his right to a reasoned judgment had been breached and that his applications and requests concerning the destruction of his property and his separately lodged claim for damages had either not been accepted by the courts or, where they had been accepted, no decisions had been taken in their respect.

26 . The applicant complained under Article 13 of the Convention that he did not have an effective remedy for protection of his property rights.

THE LAW

27 . The applicant complained, under Article 6 and Article 1 of Protocol No. 1, that the domestic courts had declared the sale and purchase contract null and void under the instructions of the GDEA and that their decisions in that respect had not been reasoned. He further complained about destruction of his property. The Court, being master of the characterisation to be given in law to the facts of the case, will examine the complaints solely under Article 1 of Protocol No. 1, the first paragraph of which provides 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.”

28 . The applicant contested the domestic courts ’ finding that the contract of 25 February 2005 was a fictitious transaction. In particular, he argued that he had concluded a preliminary contract in 2001, followed by the main contract in 2005, as established under Article 402 of the Civil Code.

29 . The applicant argued that the proceedings in the present case were of a formal nature. He alleged that his property had been destroyed while the proceedings were pending before the domestic courts.

30 . Referring to the findings of the domestic courts, the Government pointed out that the sale and purchase contract had been concluded in gross violation of domestic law.

31 . The Government further argued that the interference had been lawful and pursued a legitimate aim to protect the interest of others, namely the interests of the GDCS ’ s members, and that in the particular circumstances of the case, the applicant cannot be said to have borne an individual and excessive burden as a result of the termination of his property rights.

32 . The Government did not make any submissions concerning the alleged destruction of the applicant ’ s property.

33 . The Court notes at the outset that the proceedings in the present case concern a civil-law dispute between private parties. The relevant principles emerging from the Court ’ s case-law in such cases are summarised in Anheuser-Busch Inc. v. Portugal ([GC], no. 73049/01, § 83, ECHR 2007 ‑ I), and, in more detail, in Zagrebačka banka d.d. v. Croatia (no. 39544/05 , § § 250-51, 12 December 2013) .

34 . Accordingly, the Court ’ s task in such cases is to assess whether the domestic courts ’ decisions were in accordance with domestic law and, if so, whether they were arbitrary or manifestly unreasonable (see Malayevy v. Russia [Committee] , no. 35635/14, § 28, 18 July 2017, and Acar and others v. Turkey ( dec. ) , no. 26878/07 and 32446/07, § 31, 12 December 2017).

35 . In the present case, the domestic courts found that the sale and purchase contract had been concluded in breach of the provisions of domestic law. The applicant, assisted by a lawyer, was able to present his arguments at three levels of jurisdiction. The domestic courts gave reasons for their decisions and nothing in the case file suggests that those decisions were arbitrary or manifestly unreasonable, or that their decisions had been somehow unlawfully influenced by the GDEA, as argued by the applicant.

36 . In his submissions to the Court, the applicant argued for the first time that the contract of 15 October 2001 was a preliminary contract followed by the main contract of 25 February 2005 in accordance with Article 402 of the Civil Code.

37 . It appears from the case file that this argument was never raised before the domestic courts. In any event, having regard to the text of the above two contracts, the Court observes that there is no indication as to them being preliminary and main contracts as argued by the applicant. In addition, under Article 402 of the Civil Code, in the absence of a specific indication in the preliminary contract, the main contract had to be concluded within one year upon the conclusion of the preliminary contract, which was clearly not the case here.

38 . As to the applicant ’ s submissions concerning the alleged destruction of the property, the Court observes that the applicant has never initiated any proceedings before the domestic courts against the GDEA, who allegedly destroyed his property. With regard to the applicant ’ s arguments that his complaints about the alleged destruction of his property and his claim for damages had not been examined by the domestic courts, the Court notes that he had failed to provide any documentary evidence in support of these allegations.

39 . In view of the above, the Court finds that the applicant ’ s complaints under this provision are manifestly ill-founded within the meaning of Article 35 §§ 3 (a) and 4 of the Convention.

40 . The applicant complained that he did not have an effective remedy for protection of his property rights under Article 13 of the Convention, which read as follows:

“Everyone whose rights and freedoms as set forth in this 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.”

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 8 July 2021 .

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Martina Keller Lado Chanturia Deputy Registrar President