FIFTH SECTION

DECISION

Application no . 29769/06 Andris JAUNZEMS and others against Latvia

The European Court of Human Rights (Fifth Section), sitting on 20 June 2017 as a Committee composed of:

André Potocki , President, Mārtiņš Mits , Lәtif Hüseynov , judges, and Anne-Marie Dougin, Acting Deputy Section Registrar ,

Having regard to the above application lodged on 17 July 2006,

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. A list of the applicants is set out in the appendix.

2. The Latvian Government (“the Government”) were represented by their Agent, Mrs K. Līce .

A. The circumstances of the case

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

4. The applicants were employed by a State enterprise “ Alūksnes komutācijas tehnikas mezglu rūpnīca ” (hereafter – “KTMR”), a factory producing industrial equipment. On 21 February 1996 the enterprise was offered for privatisation. Later that year the privatisation process was suspended due to a dispute concerning the denationalisation of the enterprise and the related court proceedings.

1. The first set of civil proceedings concerning unpaid salaries

5. On an unknown date the applicants initiated court proceedings in which they argued that since 1999 the payment of their salaries had been delayed and that between June 2000 and January 2001 they had received no pay at all. On 14 March 2001 the Alūksne District Court upheld their claims in part and ordered KTMR to pay the outstanding salaries. No appeal was lodged against the judgment and it became final on 4 April 2001.

6. On 17 January 2002, on the basis of a request submitted by the Privatisation Agency ( Privatizācijas Aģentūra ) – a non-profit State joint stock company whose primary function was the management of the privatisation process, the bailiff adopted a decision to suspend the enforcement of the judgment. The decision relied on section 560(2) of the Civil Procedure law which provided that upon a request of the institution carrying out the privatisation the enforcement proceedings should be suspended (see paragraph 15 below). The bailiff ’ s decision indicated that it could be appealed against in a court pursuant to section 564 (3) of the Civil Procedure Law. The applicants did not appeal.

2. The second set of civil proceedings concerning unpaid salaries

7. On 20 February 2002 the applicants lodged another claim concerning the salaries that had not been paid between January 2001 and February 2002. On 22 May 2002 the Alūksne District Court upheld this claim in full. No appeal was lodged against it. No enforcement proceedings by the bailiff were initiated.

3. Insolvency of KTMR

8. On 20 March 2002 the Vidzeme Regional Court declared KTMR insolvent, having established that its debt liabilities exceeded its assets more than tenfold. More than 90% of its debt liabilities consisted of unpaid taxes and penalties. KTMR was declared insolvent as from 18 January 2002. Creditors were given a three-month time-limit for submitting their claims to the insolvency administrator.

9. On 18 July 2002 the board of creditors decided to commence the bankruptcy proceedings of KTMR. In a letter of 12 January 2004 the Deputy State Secretary of the Ministry of Economics informed the applicants on the ongoing insolvency proceedings and the fact that the liabilities of KTMR exceeded its assets by 43,802 Latvian lati (LVL) (about EUR 62,500).              On 18 May 2004 the creditors ’ meeting, inter alia , adopted the final balance sheet of KTMR which showed that the company had no assets. On those grounds it was decided to terminate the bankruptcy proceedings of KTMR. The applicants were invited to take part at the creditors ’ meeting as non-secured creditors.

10. On 2 June 2004 the Vidzeme Regional Court confirmed the completion of the bankruptcy proceedings following which KTMR was deleted from the Company Register.

4. Steps taken by the applicants to obtain the enforcement of the judgments

11. In December 2003 the applicants ’ representative submitted a complaint about the unpaid salaries to the Ministry of Economy and in January 2004 the deputy State secretary of the ministry provided a response. He replied that the enforcement of the Alūksne District Court ’ s judgments had been terminated, not because of an arbitrary decision of the Privatisation Agency, as alleged by the applicants, but because KTMR had been declared insolvent and because section 50 (2) of the Law on Insolvency of Companies ( likums “Par uzņēmumu un uzņēmējsabiedrību maksātnespēju ”, see paragraph 16 below) stipulated that the enforcement of judgments against insolvent enterprises should be terminated.

The letter stated that the Law on Insolvency of Companies was lex specialis compared to the laws on which the judgments of the Alūksne District Court had been based. Furthermore, in 2002 KTMR had been granted LVL 17 242.67 from the State budget in order to cover the employees ’ claims, out of which LVL 7 0 33.88 had been paid to the employees to cover three months ’ salaries and severance pay. Accordingly, the deputy State secretary was of the view that all claims guaranteed to the applicants under the Law on Protection of Employees in Case of Insolvency of Employer ( likums “Par darbinieku aizsardzību darba devēja maksātnespējas gadījumā ” ) had been fully covered from the State budget. With regard to the applicants ’ question as to whether and when they would receive their salaries, the deputy State secretary responded that it depended on whether during the course of the liquidation proceedings sufficient funds would be left after the debts of the priority creditors were covered.

12. According to the applicants, they had received severance grants from KTMR. The salaries owed to the applicants on 20 December 2002, according to the accounting data of KTMR, are listed in the appendix. These sums are also confirmed by the applicants.

13. On 20 January 2006 the applicants lodged a complaint with the Constitutional Court ( Satversmes tiesa ), challenging the compliance of Articles 560 (2) of the Civil Procedure Law (see paragraph 15 below) with Article 83 of the Constitution which provided that the judges should be independent and subjected only to the law. They alleged that the bailiff ’ s powers to suspend the enforcement of judgment in the first set of civil proceedings interfered with the court ’ s functions.

14. On 21 February 2006 a panel of three judges of the Constitutional Court, relying on Section 20 of the Constitutional Court Law, refused the initiation of constitutional proceedings. The Constitutional Court noted several shortcomings, namely: the applicants had not indicated in the complaint which fundamental rights had been infringed; they had not exhausted all ordinary remedies by submitting an appeal against the impugned decision of 17 January 2002 adopted by the bailiff (see paragraph 6 above) and, finally, their complaint had been submitted more than six months after the above-mentioned decision, which therefore in any event prevented the Constitutional Court from accepting the constitutional complaint. This decision was final.

B. Relevant domestic law

1. Civil Procedure Law

15. Section 560 (2) of the Civil Procedure Law requires the suspension of the enforcement proceedings in the case of a decision being taken to privatise the debtor company. In particular, it states that upon a request of the institution carrying out the privatisation (i.e. the Privatisation Agency) any enforcement proceedings against this company shall be suspended, except if they concern compensation for an accident at work or occupational illness.

16. Section 563 (2) of the Civil Procedure Law provides that the enforcement of a judgment is to be terminated upon a request from an insolvency administrator if the debtor has been declared insolvent. This provision at the relevant time was echoed in section 50 (2) of the Law on Insolvency of Companies that was in force until 1 January 2008.

17. According to section 564 (3) of the Civil Procedure Law, in force until 24 July 2003, judgment creditors and debtors could challenge a decision to suspend, renew or terminate enforcement proceedings before the court. After the said date such right was removed.

2. Law on the Constitutional Court

18. Pursuant to Section 19²(1), an individual constitutional complaint must include justification as to how the applicant ’ s fundamental rights as defined in the Constitution have been infringed.

19. Section 20 (5) (3) provides that in examining applications, the panel dealing with the application may refuse to initiate a matter if the application does not comply with the requirements specified in Sections 18 or 19-19 ³ of the Constitutional Court Law.

20. Section 19 ² of the Law on the Constitutional Court provides:

“(1) Any person who considers that a legal provision, which is not in compliance with a provision having superior legal force, has infringed his or her fundamental rights under the Constitution may lodge a constitutional complaint (an application) with the Constitutional Court.

(2) A constitutional complaint (an application) may be lodged only after exhaustion of all the possibilities for securing protection of such rights through ordinary legal remedies (appeal to a higher authority, appeal or application to a court of general jurisdiction, etc.) or where no such remedies exist.

(3) Where examination of a constitutional complaint (an application) is in the public interest or where legal protection of the rights in question via ordinary remedies does not enable the appellant to avoid substantial damage, the Constitutional Court may decide to examine the application even before all other domestic remedies have been exhausted.

(4) A constitutional complaint (an application) may be lodged within six months of the date on which the decision of the highest instance becomes final.

(5) The submission of a constitutional complaint (an application) shall not suspend the execution of a judicial decision, except in cases where the Constitutional Court decides otherwise.

(6) In addition to its substance, as required by section 18(1) of the present Law, a constitutional complaint (an application) must contain submissions concerning:

(i) the violation of the appellant ’ s fundamental human rights as provided in the Constitution, and;

(ii) the exhaustion of all ordinary remedies or the fact that no such remedies exist.

(7) The following information must be appended to a constitutional complaint (an application):

(i) the explanations and documentation required to establish the facts of the case;

(ii) documents certifying that, where they exist, all ordinary remedies have been exhausted.”

COMPLAINT

21. The applicants complained under Article 1 of Protocol No. 1 to the Convention about their inability to obtain payment of their salaries pursuant to two final domestic courts ’ judgments.

THE LAW

22. The applicants complained that the failure to obtain the enforcement of two judgments in their favour had been in breach of Article 1 of Protocol No. 1 to the Convention which 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.”

A. Enforcement of the judgment of 14 March 2001

23. The Government invited the Court to declare that, with regard to the judgment which became final on 4 April 2001, the applicants had failed to comply with the six-month rule as their complaint with the Court had only been lodged on 17 July 2006.

24. The applicants accepted the Government ’ s objection.

25. In the light of the above, the Court finds that this part of the application must be declared inadmissible for failure to comply with the six ‑ month time-limit, pursuant to Article 35 §§ 1 and 4 of the Convention.

B. Enforcement of the judgment of 22 May 2002

26. The Government invited the Court, inter alia , to conclude that the applicants had failed to comply with the six-month rule on the grounds that the Constitutional Court proceedings with relation to bailiff activities had no relevance to the enforcement of the judgment of 22 May 2002. They submitted, first, that on 2 June 2004 KTMR was deleted from the Company Register and that the applicants had attempted to bring constitutional proceedings only a year and a half later. Secondly, they argued that, even assuming that the applicants had been successful in instituting the proceedings before the Constitutional Court, in the present case this remedy would be devoid of effectiveness. At the time the judgment of 22 May 2002 was adopted, KTMR had already been declared insolvent and therefore no enforcement proceedings by the bailiff had been initiated. In that case, a constitutional complaint in which the applicants contested the constitutionality of a provision regulating the activities of a bailiff could not be considered as an effective remedy.

27. The applicants contended that, with regard to the judgment of 22 May 2002, the running of the six month time-limit should be counted from the Constitutional Court ’ s decision to refuse the initiation of the proceedings on the grounds that there was no other more efficient date.

28. The Court reiterates that pursuant to Article 35 § 1 of the Convention, the Court may only deal with a matter “within a period of six months from the date on which the final decision was taken”. This Article cannot be interpreted in a manner which would require an applicant to seize the Court of his complaint before his position in connection with the matter has been finally settled at the domestic level (see Lecomte v. Germany, no. 80442/12 , §§ 62-64, 6 October 2015 and the cases cited therein) . In that connection , the running of the six-month period will be interrupted only in relation to those Convention issues which have been aired before the domestic courts at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law (see Azinas v. Cyprus , no. 56679/00, § 38, 20 June 2002).

29. The Court observes that the applicants ’ Convention complaint to the Court was brought under Article 1 of Protocol No.1 to the Convention with relation to the enforcement of the domestic court ’ s judgment of 22 May 2002. At the same time, in their constitutional complaint the applicants alleged that a legislative provision regulating certain acts adopted by a bailiff undermined the independence of the judiciary (see paragraph 13 above). In this regard the case-file shows that no decisions by a bailiff had been adopted in relation to the judgment of 22 May 2002 to which the applicants referred in their constitutional complaint. It does not appear, on the basis of the information before the Court, that the applicants ’ Convention grievances were the subject of their constitutional complaint (compare with the case of X. and Others v. Latvia ( dec. ), no. 27773/08, §§ 9 ‑ 11). As a consequence, even if the applicants had been successful in instituting the proceedings before the Constitutional Court about certain activities of a bailiff, it has not been shown that in the present circumstances those proceedings were capable of providing redress in respect of their Convention complaint which concerned the failure to obtain the enforcement of a final court ’ s judgment.

30. On the question of which date should be regarded as the final decision for the purposes of Article 35 § 1 of the Convention, the Court reiterates that, where it is clear from the outset that no effective remedy is available to the applicant, the period runs from the date of the acts or measures complained of or from the date of knowledge of that act or its effect on or prejudice to the applicant (see Mocanu and Others v. Romania [GC], nos. 10865/09, 45886/07 and 32431/08, § 259, ECHR 2014 (extracts)). The case-file shows that the applicants were duly informed of the insolvency process of KTMR (see paragraph 9 above) which resulted in that company being deleted from the company register in May 2004 on the grounds that it had no assets left (see paragraphs 9 and 10 above). The applicants do not claim that they were not aware of the fact that at the beginning of 2004 the debtor had no assets left and that these circumstances undeniably had an effect on the recovery of the sums which derived from the court ’ s judgment of 22 May 2002. They also did not provide an explanation, apart from referring to the proceedings before the Constitutional Court (see paragraph 13 above), on the reasons why they had attempted to institute proceedings before the Court only in 2006.

It follows from the above-mentioned circumstances that this complaint, lodged on 17 July 2006, was introduced outside the requisite six-month time-limit and must be rejected pursuant to Article 35 §§ 1 and 4 of the Convention (see, mutatis mutandis , Cone v. Romania , no. 35935/02, § 26, 24 June 2008 and Tripcovici v. Romania ( dec. ), no. 21489/03, §§ 23 and 25 ‑ 26, 22 September 2009).

31. Having regard to its findings above, the Court considers that it is not necessary to examine the other arguments of the Government concerning the inadmissibility of the application.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 13 July 2017 .

Anne-Marie Dougin André Potocki Acting Deputy Registrar President

APPENDIX

No.

Applicant ’ s name and

date of birth

Unpaid salary (LVL/approx. EUR)

Egons BARAÅ…ENKO

04/12/1957

993.97/1,408

Elita BERKULE

17/03/1947

895.19/1,144

Vasilijs BOGDANOVS

25/05/1938

656.15/937

Laimons GÄ€TERS

12/05/1941

774.73/1,105

Vitauts HANZENS

16/09/1936

1 335.12/1,907

Imants IRBE

02/01/1953

867.11/1,238

Andris JAUNZEMS

26/08/1970

982.90/1,402

Ausma JURJÄ€NE

16/12/1946

603.38/861

Anna KALNIÅ…A

26/05/1943

467.93/667

Biruta KRANCMANE

10/07/1949

717.17/1,024

Vaira KRŪMIŅA

19/03/1942

290.33/414

Boriss Å…EZLOBINS

18/02/1957

597.62/852

Guntars OZOLS

05/09/1943

880.13/1,257

Aivars PUTNS

21/09/1954

600.86/857

Māra ROZIŅA

05/03/1947

437.46/624

Māris RUTKIS

05/09/1965

175.00/250

Ivars SMUKULIS

15/10/1942

654.72/934

Ilgvars STOPNIEKS

01/02/1946

761.17/1,087

Ilga Å IKOVA

07/05/1951

560.21/800

Rolands VENDIÅ…Å

12/09/1958

696.47/994

Malda ZAĶE

28/03/1948

706.12/1,008

Kārlis ZĒĢELE

28/08/1952

725.30/1,035