SECOND SECTION

DECISION

Application no. 59434/10 HaÅŸmet SENDAN and Kadriye SENDAN against Turkey

The European Court of Human Rights (Second Section), sitting on 27 August 2019 as a Committee composed of:

Valeriu Griţco, President, Egidijus Kūris, Darian Pavli, judges, and Hasan Bakırcı, Deputy Section Registrar ,

Having regard to the above application lodged on 7 September 2010,

Having regard to the observations submitted by the respondent Government

Having deliberated, decides as follows:

THE FACTS

1. The applicants, Mr HaÅŸmet Sendan and Ms Kadriye Sendan, are Turkish nationals, who were born in 1946 and 1959 respectively and live in Istanbul.

2. The Turkish Government (“the Government”) were represented by their Agent.

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

4. The applicants had accounts in an offshore bank affiliated with T ü rkiye İ mar Bankas ı T.A.Ş. (hereinafter “Imarbank”), a private bank. On an unspecified date their accounts were transferred to domestic accounts at Imarbank.

5 . By a decision dated 3 July 2003 (no. 1085), the Banking Regulation and Supervision Board ( Bankalar Düzenleme ve Denetleme Kurulu - hereinafter “the Board”) revoked Imarbank ’ s licence to conduct banking activities pursuant to section 14(3) of the Banking Activities Act (Law no. 4389). In its decision, the Board stated that Imarbank could not fulfil its liabilities and had failed to take the measures required, and that the continuation of its activities would threaten the rights of its depositors as well as the security and stability of the financial system. In line with that decision, the bank ’ s management and control was transferred to the Savings Deposit Insurance Fund ( Tasarruf Mevduatı Sigorta Fonu - hereinafter “the Fund”) under section 16(1) of the same Act.

6. On 16 December 2003 Law no. 5021 on certain actions to be taken regarding Imarbank entered into force, setting forth that Imarbank ’ s depositors would be reimbursed their savings deposits in line with the modalities which would be determined by the Council of Ministers. Section 1 of Law no. 5021 stipulated that certain accounts, including those that had been transferred to Imarbank from offshore banks within the month prior to the bank ’ s takeover by the State, would not be reimbursed (see paragraph 20 below).

7. By a decision of 3 January 2004 (no. 2003/6668) the Council of Ministers regulated the modalities of the reimbursement to be made to Imarbank ’ s depositors. Article 3(a)(1) of the decision set forth that offshore accounts were excluded from reimbursement (see paragraph 21 below).

8. In line with the decision of the Council of Ministers, the Fund started reimbursing the bank ’ s depositors by opening accounts in their names at Ziraat Bank, a State bank. The reimbursement was made on the condition that the depositors signed a document entitled “the certificate of relief and undertaking”. By signing such certificates, the depositors relieved the State authorities of all debt and relinquished any claim to a surplus in respect of the savings deposited with the bank and the interests accrued.

9. On 4 May 2005 the Turkish Constitutional Court annulled the clause in section 1 of Law no. 5021 pertaining to the exclusion of offshore accounts from reimbursement. Subsequently, on 8 July 2005 the Supreme Administrative Court annulled the corresponding clause in Article 3 (a)(1) of the Council of Ministers decision.

10. On 3 July 2006 the Council of Ministers made several amendments to its decision no. 2003/6668. In line with those amendments, persons whose accounts had been transferred from offshore banks would also benefit from the same reimbursement conditions as the other depositors. Accordingly, the main deposits and interests, which would be calculated on the basis of the methods set forth in the decision, would be paid to those concerned, on the condition that they signed the required certificate.

11. At the time of Imarbank ’ s transfer to the Fund, the applicants ’ savings deposits at the bank amounted to approximately 205 billion former Turkish liras (TRL).

12. On 23 February 2004 the applicants brought proceedings, requesting the annulment of the Council of Ministers decision no. 2003/6668 and claiming compensation of TRL 205 billion, together with interest to be calculated on the basis of the highest rate applied to bank accounts until the date of the bank ’ s transfer to the Fund. They requested that that amount be paid together with interest, which should be based on the advance rate and applied until the date of payment. The applicants also raised an unconstitutionality plea, arguing that section 1 of Law no. 5021, which constituted the basis of decision no. 2003/6668, was unlawful.

13. On 21 February 2006 the Supreme Administrative Court accepted the applicants ’ case. In view of the annulment of the impugned clauses in section 1 of Law no. 5021 and Article 3(a)(1) of the subsequent Council of Ministers decision, the domestic court found that the administration was liable to compensate the applicants ’ loss. It ruled that the Fund should pay the applicants 205,000 Turkish liras (TRY) plus legal interest to be calculated from the date the case had been brought.

14. On 19 October 2006 the General Assembly of the Administrative Proceedings Divisions of the Supreme Administrative Court ( Danıştay İdari Dava Daireleri Genel Kurulu - hereinafter “the General Assembly”) quashed the judgment. It held that following the amendments to the Council of Ministers decision no. 2003/6668, the applicants had the possibility to be reimbursed by the Fund. The appellate court stated that the Supreme Administrative Court should assess the case taking account of that new situation.

15. On 23 November 2006 the Fund deposited a total of TRY 231,000 in accounts opened in the names of the applicants at Ziraat Bank, comprising TRY 205,000 for their deposits at Imarbank and TRY 26,000 in interest. For the last three days before the bank ’ s transfer to the Fund, a rate of 38%, that is, the average interest rate applied by the five largest banks, had been applied to the accounts. From the date of the bank ’ s transfer until the maturity date of the applicants ’ accounts at Ziraat Bank, the interest rate applied had been based on the Consumer Price Index. The applicants signed the required certificate and obtained the sum.

16. In the meantime, on an unspecified date in 2007 the applicants initiated a separate set of proceedings before the Supreme Administrative Court, requesting the annulment of the clause pertaining to a waiver of their right to bring and pursue proceedings against State agencies with regard to their remaining claims. On 8 May 2009 the Supreme Administrative Court held that it would not rule on the matter as the impugned clause had already been annulled by a judgment it had rendered earlier in 2009.

17 . On 2 December 2009, with regard to the main case, the Supreme Administrative Court held that the subject matter had been resolved and that there was no need to deliver a judgment on the applicants ’ compensation claim, as the reimbursement made to them by the Fund had compensated their damages. It further dismissed the applicants ’ claims pertaining to the interest applied to the main amount.

18. The applicants appealed against the judgment, claiming once again that the reimbursement made had not covered their real loss, in particular because of the interest applied.

19. On 27 May 2010 the General Assembly upheld the judgment. The appellate court rejected the applicants ’ request for rectification on 24 February 2011.

20 . Section 1 and provisional section 1 of Law no. 5021 on certain actions to be taken regarding Imarbank, which entered into force on 16 December 2003, stipulated that the Fund would reimburse the depositors of the banks, which had been transferred to it, their savings deposits, in so far as those deposits were covered by the savings deposit insurance. The modalities of reimbursement, that is to say, the payments to be made in instalments depending on the deposited amounts, the interest rates which would be applied to these payments, as well as the issues regarding the certificates which would be requested from the depositors for reimbursement would be regulated by the Board.

The second paragraph of section 1, which was annulled by the Turkish Constitutional Court on 4 May 2005, set forth that no payment would be made for the accounts, which had been transferred from offshore banks to domestic branches of Imarbank within the month prior to the bank ’ s transfer to the Fund.

21 . The Council of Ministers decision of 3 January 2004 (no. 2003/6668) regulated the modalities of reimbursement in line with Law no. 5021. The decision set forth that the savings deposits in Imarbank would be paid to the depositors together with interest which would be calculated on the basis of the interest rates applied by the five largest banks and applied until 3 July 2003, the date the bank had been taken over by the State (Articles 6 and 9). The reimbursed amounts would be deposited with time deposit accounts opened in the names of the depositors and interest calculated on the basis of the Consumer Price Index would be applied to these amounts until their maturity date (Articles 7 and 8). The payment would be made to the depositors on the condition that they signed a “certificate of relief and undertaking”, whereby they would declare that they were paid all their receivables without any restriction on their use of their deposits and waived any claim they might have regarding the payments made. The decision also set forth that the claims regarding the amounts accrued until the date of the deposits ’ transfer to Ziraat Bank and the payments made in line with the modalities described in the decision would be directed at Imarbank, and in case of its bankruptcy, at its bankruptcy estate.

Before the Supreme Administrative Court ’ s decision of 8 July 2005 annulling the relevant provision (Article 3(a) (1)), the Council of Ministers decision excluded the accounts transferred to Imarbank from offshore banks from those which would be reimbursed.

COMPLAINT

22. Relying on Article 1 of Protocol No. 1 to the Convention, the applicants argued that their right to peaceful enjoyment of property had been violated on account of the modalities of the reimbursement made to them for their accounts at Imarbank.

THE LAW

23. The applicants complained under Article 1 of Protocol No. 1 to the Convention that their right to peaceful enjoyment of possessions had been violated in that the interest rate applied to the amount reimbursed to them by the Fund had not been calculated in accordance with the relevant legislation. In that connection, they claimed that they had been provided with an opportunity to benefit from the same reimbursement conditions as the other depositors only after the modifications made to decision no. 2003/6668 on 3 July 2006, which resulted in a delay in the reimbursement made to them. They further complained about the requirement imposed on them to sign a certificate to obtain the reimbursement and the Supreme Administrative Court ’ s dismissal of their case on account of their waiver of their claims, despite the fact that the clause pertaining to a waiver had been annulled.

24. The Government argued firstly that the applicants had failed to exhaust domestic remedies, as they had not brought an action against Imarbank ’ s bankruptcy estate, which, according to them would have been the effective remedy for their complaint as set forth in the Council of Ministers decision no. 2003/6668. In that connection, they provided the Court with several decisions of the Court of Cassation regarding actions lodged by Imarbank ’ s depositors against the bank ’ s bankruptcy estate, as a result of which the depositors had been awarded their claims to a surplus. The Government further argued that the application was incompatible ratione personae as the applicants lacked victim status in view of the payment made to them, and was incompatible ratione materiae as they had not had a legitimate expectation. Lastly, they submitted that the application was manifestly ill-founded as the applicants had been paid a total of TRY 231,000. Accordingly, the whole of their deposits were reimbursed to them together with TRY 26,000 in interest. In that connection, they noted that at the time of its transfer to the Fund, Imarbank ’ s assets had not covered its liabilities. Had the State not intervened, it would not have been possible for the applicants to obtain the payment of their deposits. The Government concluded accordingly that the interference had been made to protect the rights of the other right holders and the stability and reliability of the financial system, and that it had been proportionate to the aim pursued.

25. The Court does not consider it necessary to reach a conclusion regarding the exhaustion of domestic remedies or the compatibility of the application with Article 1 of Protocol No. 1 since the application is in any event inadmissible for the following reasons (see Çulha and Others v. Turkey (dec.), nos. 7023/07 and 22 others, 15 May 2018).

26. The Court refers first of all to its established case-law with regard to the structure of Article 1 of Protocol No. 1 and the three rules contained therein (see, among other authorities, Lekić v. Slovenia [GC], no. 36480/07, § 91, 11 December 2018). In the present case, it observes that Imarbank, whose liabilities exceeded its assets and whose management had failed to take the required measures (see paragraph 5 above) was taken over by the State as a measure to control the country ’ s banking sector. As a result, the applicants ’ accounts, together with all their deposits and accrued interests, were transferred to the Fund, which subsequently reimbursed them their savings deposits on the condition that they signed a certificate relieving State authorities of all debt. To that end, their savings deposits were blocked in accounts opened in their names in a State bank. The Court considers that that measure which limited the applicants ’ right to dispose of their funds amounted to a control of the use of property. It is therefore the second paragraph of Article 1 of Protocol No. 1 which is applicable in the present case (see Erdem and Egin-Erdem v. Turkey (dec.), nos. 28431/06 and 4 others, 17 November 2009).

27. It is well-established case-law that the second paragraph of Article 1 of Protocol No. 1 must be construed in the light of the principle laid down in the first sentence of the Article. Consequently, an interference must achieve a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual ’ s fundamental rights. The search for this balance is reflected in the structure of Article 1 as a whole, and therefore also in the second paragraph thereof: there must be a reasonable relationship of proportionality between the means employed and the aim pursued. In determining whether this requirement is met, the Court recognises that the State enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question (see, among other authorities, Chassagnou and Others v. France [GC], nos. 25088/94 and 2 others , § 75, ECHR 1999 ‑ III).

28. In cases of wide margin of appreciation the Court will respect the State authorities ’ judgment as to what is in the general interest unless that judgment is manifestly without reasonable foundation (see Benet Czech, spol. s r.o. v. the Czech Republic , no. 31555/05, § 36, 21 October 2010, and the cases cited therein).

29. The Court notes that in the present case the impugned interference, namely, the State authorities ’ reimbursement of the applicants ’ savings deposits without having applied the interest rate they had previously agreed upon with Imarbank, was made on the basis of Law no. 5021 as well as the subsequent decision no. 2003/6668 of the Council of Ministers, which set forth the modalities of reimbursement to be made to Imarbank ’ s depositors, and pursued the general interest of protecting financial stability.

30. As regards the proportionality of the interference, the Court considers that the modalities of the reimbursement made to Imarbank ’ s depositors by the Fund intended to ensure the fair management of the depositors ’ claims (see Erdem and Egin-Erdem , cited above) as the bank lacked financial resources to cover all of its debts (see, mutatis mutandis , Saggio v. Italy , no. 41879/98, § 35, 25 October 2001). Within that context, the applicants were reimbursed a total sum of TRY 231,000 corresponding to their deposits which amounted to TRL 205 billion at the time of Imarbank ’ s transfer to the Fund and an additional TRY 26,000 in interest, which was calculated partly on the basis of the average interest rate applied by the five largest banks, and partly on the basis of the Consumer Price Index. While it was true that there had been a certain delay in the payment made to the applicants due to the change in the regulations concerning the reimbursement of offshore accounts, the Court considers that any negative effects of inflation which might have been caused by that delay was offset by the payment of interest based on the Consumer Price Index. In that connection, the Court also notes that the applicants did not specify the total amount they would have had reimbursed had the State authorities applied the interest rates offered by Imarbank before its takeover, or give any other details regarding the alleged loss they had suffered as a result of the rates applied by the Fund.

31. The Court does not find the annulment of the waiver clause in the certificate signed by the applicants relevant, as the Supreme Administrative Court did not find their case to have been resolved on account of their waiver, but as it considered that the payment made to them had covered their damages (see paragraph 17 above). In that connection, the Court notes that according to the Council of Ministers decision no. 2003/6668, the applicants could still direct their claims to a surplus at Imarbank or its bankruptcy estate. However, the applicants did not initiate such an action either when they first learnt of the sum deposited with the accounts at Ziraat Bank or following the Supreme Administrative Court ’ s decision not to deliver a judgment in their case.

32. Lastly, the Court reiterates that States cannot be held directly responsible for the debts of private companies or the faults committed by their managers (see Kotov v. Russia [GC], no. 54522/00, § 116, 3 April 2012). Moreover, by depositing their money with a private bank, the applicants assumed certain risks, including those related to mismanagement and even fraud (ibid.). It also considers that in the present case there were no additional factors requiring the State to bear any civil liability for Imarbank ’ s lack of resources (see Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the former Yugoslav Republic of Macedonia [GC], no. 60642/08, § 115, ECHR 2014; see also Anokhin v. Russia (dec.), no. 25867/02, 31 May 2007 for the factors to be taken into consideration in order to establish such liability).

33. In view of the above and having regard to the need to strike a fair balance between the general interest of the community and the property rights of the applicants, and of all those in the same situation with them, the Court considers that the means chosen by the domestic authorities in reimbursing Imarbank ’ s depositors were suited to achieving the general interest pursued (see, mutatis mutandis , Trajkovski v. the former Yugoslav Republic of Macedonia (dec.), no. 53320/99, ECHR 2002 IV, and Molnar Gabor v. Serbia , no. 22762/05 , § 50, 8 December 2009 ). It finds accordingly that the applicants cannot be said to have suffered an individual and excessive burden.

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

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 19 September 2019 .

Hasan Bakırcı Valeriu Griţco Deputy Registrar President