SECOND SECTION

DECISION

Application no. 48027/10 LE BRIDGE CORPORATION LTD S.R.L . against the Republic of Moldova

The European Court of Human Rights (Second Section ), sitting on 27 March 2018 as a Committee composed of:

Ledi Bianku , President, Nebojša Vučinić , Jon Fridrik Kjølbro , judges, and Hasan Bakırcı, Deputy Section Registrar ,

Having regard to the above application lodged on 27 July 2009,

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

Having deliberated, decides as follows:

THE FACTS

1. The applicant, Le Bridge Corporation LTD S.R.L., is a company incorporated in the Republic of Moldova, whose sole shareholder and chief executive officer is Mr Franck Charles Arif , a French national. It is represented before the Court by Mr I. Păduraru , a lawyer practising in Chişinău .

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

I. THE CIRCUMSTANCES OF THE CASE

A. The background of the case

3. In April 2008 the Government of Moldova decided to create a network of duty free shops and organised a tender for the right to build and run such shops at five border crossing points. On 20 May 2008 the applicant company was declared the winner of the tender by the Ministry of Economy. Subsequently the applicant company concluded an agreement with the Customs Department, obtained the necessary licences and, by the autumn of 2009, finished building four of the five duty free shops. By December 2009 three shops became operational.

B. The proceedings before the domestic courts

4. On 31 December 2009 a company D., which was one of the three participants in the tender, initiated proceedings before the Chişinău Economic Court against the Ministry of Economy, the applicant company and the Customs Department, seeking the annulment of the decision of the Ministry of Economy concerning the results of the tender and of the subsequent agreement between the applicant company and the Customs Department. Company D. argued that according to the law no tender should have been organised and that, in any event, the applicant company had not been eligible to participate in the tender in view of its lack of requisite experience of five years in the field of duty free commerce, as required in the tender conditions. The plaintiff also indicated that it was the only company which had the requisite experience and requested as an interim measure the stay of the realisation of the results of the tender.

5. The applicant company and the other defendants submitted in their defence, inter alia , that the action was inadmissible because the defendant sought the annulment of an administrative act of the Government which could be challenged only in accordance with the Law on Administrative Courts ( Legea Contenciosului Administrativ ) within thirty days and only before the Court of Appeal. On the merits of the case, the applicant company argued that it had five years ’ experience in the field of import ‑ export commerce.

6. On 28 May 2010 the Chişinău Economic Court accepted company D. ’ s arguments and allowed its action. The court dismissed the applicant company ’ s defence concerning the applicability of the Law on Administrative Courts to the case, finding that the general rules of the Civil Procedure Code were applicable.

7. The applicant company appealed and argued, inter alia , that the case fell to be examined under the Law on Administrative Courts with the consequence that the action was time-barred and that in any event company D. ’ s action was unmeritorious.

8. On 7 April 2010 the Economic Court of Appeal upheld the judgment of the first instance court after making several minor textual amendments to it and adding to its operative part an order according to which company D. was announced as the winner of the tender.

9. The applicant company lodged an appeal on points of law with the Supreme Court of Justice, making similar contentions as in the appeal. It also complained that the Economic Court of Appeal had announced company D. as the winner of the tender without there being such claims in the original court action. The applicant also complained that the first two instances had violated its rights guaranteed by Article 1 of Protocol No. 1 to the Convention.

10. On 24 November 2010 the Supreme Court of Justice dismissed the applicant company ’ s appeal on points of law without giving any new reasons. As the lower courts, the Supreme Court upheld the plaintiff ’ s point of view that the five years ’ experience referred to duty free commerce and not to other more general fields of commerce such as import-export commerce.

C. The proceedings before the Arbitral Tribunal of the International Centre for the Settlement of Investment Disputes (“ICSID”)

11. In July 2012, the applicant company ’ s sole shareholder, Mr Franck Charles Arif , introduced an action before the ICSID Arbitral Tribunal on the basis of the 1997 bilateral agreement between the Governments of the Republic of Moldova and France concerning the reciprocal promotion and protection of investments.

12. In his action Mr Arif relied on the same factual circumstances as in the present application and on some factual developments which followed the introduction of the present application before the Court. Among the detailed complaints made by Mr Arif were the complaints communicated by the Court to the respondent Government in the present case. Mr Arif claimed that the Republic of Moldova was responsible for breaching the 1997 Moldovan ‑ French agreement concerning the reciprocal promotion and protection of investments. He sought compensation from the Government of the Republic of Moldova for the lost investment, loss of future profit and non-pecuniary damage.

13. The Moldovan Government argued inter alia that Mr Arif had no standing as it was Le Bridge and not him which was a party to the domestic proceedings. To this argument, Mr Arif objected:

“... there is no need for Mr Arif to have been denied justice personally, as alleged by the Respondent. Rather, it is sufficient for a denial of justice to have taken place which deprived Mr Arif of his investment which, in turn, constituted a breach by Moldova of its obligation to accord fair and equitable treatment to Claimant ’ s investments.”

14. The ICSID Arbitral Tribunal found that Mr Arif had standing and in a judgment dated 8 April 2013 dismissed the majority of the complaints raised by Mr Arif , including those which were communicated to the Moldovan Government by the Court in the present case. It found inter alia that, in spite of the proceedings in which the applicant company was involved, it was nevertheless able to open and operate four duty free shops at border crossing points.

15. The Arbitral Tribunal gave detailed answers to the complaints which the applicant company raised in the Strasbourg proceedings. Thus, in respect of the applicant ’ s complaint about the lack of competence of the Economic Court to examine the case, the Arbitral Tribunal stated the following:

“The Tribunal has studied the different legal provisions. It has learned from Prof. Belei ’ s expert report that many of the changes in procedural law and particularly in administrative law are of very recent origin and new for the Moldovan legal system. It has also looked at the July 1, 2008 Agreement and the lease contracts with the local customs offices. It realises that in both cases one party to the agreements is a public authority and that the object is the use of public land, as provided in the definition of Article 2 of the Law on Administrative Disputes. The Tribunal is, however, equally conscious of the fact that the Agreement and the lease contracts contain to a large extent provisions which are not alien to lease contracts under private law. The Tribunal is not sure whether they are “for the advantage of public power prerogatives”, as stipulated in the same Article 2.

On the other hand, the Tribunal has noticed that Article 29 of the Moldovan Code of Civil Procedure established jurisdiction of the “economic judiciary instances” over disputes arising, among others, from land-related relationships and, under certain circumstances, from administrative acts, necessarily involving the administration.

In other words, the Tribunal is confronted with a complex question of Moldovan procedural law which has been answered differently and contradictorily by the judiciary and by learned experts on the Moldovan law. Both interpretations are based on arguments and on the words and objectives of the law. The Tribunal is not in a position and has no competence to take sides in this controversy. If it tried, it would indeed sit as a court of appeal over decisions of the Moldovan judiciary.

The Tribunal ’ s role is limited to determine whether the judiciary has denied justice by applying procedures that are so void of reason that they breathe bad faith. The Tribunal has not found such type of conduct.”

16. As to the applicant ’ s argument concerning the failure by the domestic courts to apply the thirty days ’ time limit, the Arbitral Tribunal stated the following:

“The Tribunal has studied Article 17 of the Law on Administrative Disputes. The normal deadline for a claim is 30 days. It starts to run when the applicant is informed of the act. The Supreme Court found:

“The applications for taking part in the tender were collected and kept confidentially by the authority in charge of the tender. The Panel does not find any plausible evidence that the plaintiff- appellee had free access to other competitors ’ applications, in order to oppose his right of contestation to the appellant-defendant ’ s participation in the public tender.”

The Supreme Court deducted from this statement of fact that the first instance and the appellate courts had correctly decided to accept the late claim. The Tribunal is not in a position and has no competence to retrace and reappraise the facts. In these circumstances it cannot find an egregious misapplication of procedural law and a procedure which is tainted by bad faith.”

17. As to the applicant ’ s complaint that the courts adjudicated to the plaintiff company more than it had requested, the Arbitral Tribunal, found as follows:

“The Tribunal has also considered the decision of the Economic Court of Appeal that declared the competitor “as the winner of the tender for the setting-up of a network of “duty-free” stores at the state border crossing points”, although it stated before that the plaintiff had only asked for a declaration of illegality of the Tender results. The court argued that the Tender results had infringed upon the rights of the competitor and that the competitor had been the only other participant in the Tender. The Supreme Court reconsidered the matter and found that the decision of the Economic Court of Appeal did not disadvantage Le Bridge. It declared that:

“ the cassation court is convinced that this is the only way reestablishing the plaintiff in its rights taking into consideration the fact that there are no other competitors which are claiming their rights of winners, and the authority in charge of the tender has not referred to any objections regarding the plaintiff ’ s incompatibility with the tender requirements.”

The Tribunal realizes that the competitor did not make a formal request to be declared the winner of the contest. It did, however, explicitly pursue its action to push Le Bridge aside and – logically – to take its place. In Le Bridge ’ s appeal in cassation, the competitor evidently defended the decision of the Economic Court of Appeal. The Tribunal believes that the Economic Court of Appeal did decide ultra petita by substituting a formal request by its logical deduction. That was an error and remained an error despite the excuses formulated by the Supreme Court.

Is the error tainted by impermissible bias and bad faith? The Tribunal is not convinced for the following reasons: the court ’ s decisions had no negative impact on Le Bridge ’ s position and business. For Le Bridge, the important part of the decision was the invalidation of the Tender result declaring it the winner. The further and unwarranted declaration of another winner did in fact neither disadvantage Le Bridge nor, indirectly, Mr. Arif . That might have been different if the status of exclusivity of entitlement on duty-free business had been maintained. But the State had already invalidated the exclusivity right to open and operate border shops for reasons of competition law. Moreover, the Tender results and the July 1, 2008 Agreement had been cancelled, including the alleged rights to exclusivity. This allowed Le Bridge to continue its operations, side by side with the winning competitor, in its shops at the border crossings which had been identified in the Tender documents. The erroneous decision of the Economic Court of Appeal had therefore no effect on Le Bridge. It was wrong, but not manifestly unjust.”

18. In spite of the above findings, the Republic of Moldova was found responsible for the breach of numerous provisions of the 1997 Moldovan ‑ French agreement as a result of the applicant company ’ s impossibility to open and operate a fifth duty free shop at Chi È™ in ă u airport, a complaint which is not the object of the present application. The Government of the Republic of Moldova was ordered to pay Mr Arif compensation in an amount of 35,136,294 Moldovan lei (the equivalent of some 2,187,487 euros at the time). It appears that the Government of Moldova complied with the above decision and paid the compensation awarded to Mr Arif .

II. RELEVANT NON-CONVENTION MATERIAL

19. The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution established in 1965 for legal dispute resolution and conciliation between international investors. The ICSID is part of and funded by the World Bank Group , with headquarters in Washington, D.C. , in the United States . It is an autonomous, multilateral specialized institution to encourage international flow of investment and mitigate non-commercial risks by a treaty drafted by the International Bank for Reconstruction and Development ‘ s executive directors and signed by member countries. As of May 2016, 153 contracting member states had agreed to enforce and uphold arbitral awards in accordance with the ICSID Convention.

COMPLAINTS

20. The applicant company complains under Article 6 § 1 of the Convention that its right to a fair hearing by a tribunal established by law was violated because the economic courts were not competent to examine the case. It also argues that the solution given by the courts was contrary to the principle of legal certainty because the action was upheld after the expiry of the thirty-day time limit. Moreover, the proceedings were unfair because the courts adjudicated to the plaintiff company more than it had requested and because the courts failed to give sufficient reasons in their decisions. The applicant company also claims that the domestic courts failed to observe the principle of equality of arms and lacked impartiality.

21. The applicant company finally argues that its right to respect for its property as guaranteed by Article 1 of Protocol No. 1 to the Convention was violated as a result of the unfair civil proceedings.

THE LAW

22. The Government submitted that the application should be declared inadmissible on the basis of Article 35 § 2 (b) of the Convention because the same complaints have been submitted by the applicant to another procedure of international investigation or settlement, namely to the ICSID.

23. The applicant company agreed with the Government that the ICSID could be considered “another procedure of international investigation and settlement” for the purposes of Article 35 § 2 (b) of the Convention and that the same complaints were submitted in the proceedings before it. Nevertheless, relying on OAO Neftyanaya Kompaniya Yukos v. Russia (no. 14902/04, 20 September 2011) the applicant company argued that the applicants in the two sets of proceedings were different. Namely, it was Mr Franck Charles Arif in his capacity as a natural person and investor in the proceedings before the ICSID while in the Strasbourg proceedings the applicant was Le Bridge, a legal entity. According to the applicant company, the fact that Mr Arif owned 100% of the shares of the applicant company was not relevant for the purposes of the present case.

24. Article 35 § 2 (b) of the Convention, reads as follows:

“2. The Court shall not deal with any application submitted under Article 34 that

...

(b) is substantially the same as a matter that has already been examined by the Court or has already been submitted to another procedure of international investigation or settlement and contains no relevant new information.”

25. The Court recalls that the purpose of this provision is to avoid a plurality of international proceedings relating to the same cases. This is achieved by restricting the Court ’ s competence in relation to any applications falling within the scope of the provision. The Court has no jurisdiction over such cases (see OAO Neftyanaya Kompaniya Yukos , cited above, § 520, with further references).

26. The Court notes in the first place that it is undisputed between the parties that the ICSID constitutes another international procedure for the purposes of this admissibility criterion. For this admissibility criterion to apply, the application to the Court must be “substantially the same” as the complaint to the ICSID. Having regard to the detailed examination of Mr Arif ’ s complaint conducted by the ICSID, it is clear to the Court that the applicant company ’ s complaint under the Convention is the same in substance. Indeed, the essence of the argument in both sets of international proceedings is that the civil proceedings before the domestic courts were unfair.

27. This is not sufficient, however, to settle the issue under Article 35 § 2 (b) of the Convention . According to the principles established in Convention case-law, the complainant before the other international organ should also be the same as the applicant before the Court (see Folgerø and Others v. Norway , ( dec. ) no. 15472/02, 14 February 2006, with further references).

28. The Court recalls that a somewhat similar situation was examined in the case of OAO Neftyanaya Kompaniya Yukos (cited above), where a group of shareholders representing sixty percent of all shares of the applicant company brought proceedings before an arbitration tribunal. The Court found that the applicants in the two sets of proceedings were not the same because inter alia the shareholders in the arbitration proceedings had never taken part, either directly or indirectly, in the Strasbourg proceedings.

29. Unlike the case of OAO Neftyanaya Kompaniya Yukos (cited above), which had numerous shareholders who did not coordinate their actions and were not aware of the actions of the applicant company, and only a part of whom applied to arbitration tribunals, the applicant company in the present case had only one shareholder who was directly involved in the Strasbourg proceedings. Mr Arif was also the CEO of the applicant company and in that capacity he signed the application form when introducing the case with the Court.

30. The Court recalls in this connection, that while the piercing of the “corporate veil” or the disregarding of a company ’ s legal personality will be justified only in exceptional circumstances ( Agrotexim and Others v. Greece , 24 October 1995, § 66, Series A no. 330 ‑ A), it has accepted that such exceptional circumstances exist for the purposes of victim status when a sole owner and shareholder brings an application complaining of acts directly affecting the company ( Hubert Ankarcrona v. Sweden , ( dec. ), no. 35178/97, 27 June 2000).

31. The Court further notes that in the proceedings before the ICSID Arbitral Tribunal, the Government contended that Mr Franck Arif did not have standing because he had not been a party to the domestic proceedings. To this, Mr Arif objected that Le Bridge could not be dissociated from him as investor (see paragraph 13 above).

32. In this connection, the Court notes that the applicant company, in its submissions under Article 41 of the Convention , did not dissociate itself from Mr Arif and stated the following:

“The applicant communicates to the Court that it will not file under this process the quantified claim for pecuniary and non-pecuniary damage caused as a result of a violation of the Convention by Moldova.

The applicant is intending to submit its claim for equitable compensation in the process of arbitration to the ICSID, initiated by Mr Franck Arif , owner of Le Bridge [...]”

33. In such circumstances, the Court cannot but conclude that the complaint before it and the ICSID Arbitral Tribunal was in substance submitted by the same complainant. Thus the application is substantially the same as a matter that has already been submitted to “another procedure of international investigation or settlement and contains no new information”. It must therefore be rejected in accordance with Article 35 §§ 2(b) and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 19 April 2018 .

Hasan Bakırcı Ledi Bianku              Deputy Registrar President