SECOND SECTION

CASE OF RUSU LINTAX S.R.L. v. THE REPUBLIC OF MOLDOVA

( Application no. 17992/09 )

JUDGMENT (Just satisfaction)

STRASBOURG

6 April 2021

This judgment is final but it may be subject to editorial revision.

In the case of Rusu Lintax S.R.L. v. the Republic of Moldova ,

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

Branko Lubarda, President, Valeriu Griţco , Pauliine Koskelo , judges, and Hasan Bakırcı , Deputy Section Registrar ,

Having regard to:

the application (no. 17992/09) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Moldovan company, Rusu Lintax S.R.L. (“the applicant”), on 18 March 2009;

Having deliberated in private on 16 March 2021 ,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1 . The case originated in an application (no. 17992/09) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a company incorporated under Moldovan law, Rusu Lintax SRL (“the applicant company”), on 18 March 2009.

2 . In a judgment delivered on 13 December 2016 (“the principal judgment”), the Court held that there had been a violation of Article 6 § 1 of the Convention and of Article 1 of Protocol No. 1 to the Convention ( Rusu Lintax S.R.L. v. the Republic of Moldova, no. 17992/09, 13 December 2016).

3 . Since the question of the application of Article 41 of the Convention was not ready for decision, the Court reserved it and invited the Government and the applicant company to submit, within three months, their written observations on that issue and, in particular, to notify the Court of any agreement they might reach (ibid., § 19 and point 3 of the operative provisions).

4 . The applicant company and the Government each filed observations.

BACKGROUND OF THE CASE

5 . The applicant is a limited liability company incorporated under Moldovan law. It was represented by Mr V. Nagacevschi , a lawyer practising in Chişinău . The Government was represented by their Agent, O. Rotari.

6 . On 11 June 2008 the Supreme Court of Justice acknowledged the applicant company ’ s entitlement to a plot of land adjacent to a warehouse it owned. The judgment ordered the Public Property Agency to sell the plot of land to the applicant company. The judgment was final.

7 . On 24 December 2008 the Supreme Court of Justice upheld an application for revision lodged by a third party, quashed the final judgment of 11 June 2008 and remitted the case for a fresh examination on the merits. As new evidence the court cited a letter dated 2 November 2007 from the Public Property Agency which, referring to the disputed plot of land and other plots, listed the legal provisions applicable to the sale of land that was public property.

8 . After a fresh hearing, on 16 June 2010 the Supreme Court of Justice dismissed in a final judgment the applicant company ’ s claims in respect of the plot of land as unsubstantiated.

9 . The Court ruled in the principal judgment that the quashing by the Supreme Court of Justice on 24 December 2008 of its judgment of 11 June 2008 had been contrary to the principle of legal certainty and had breached the applicant company ’ s rights guaranteed by Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention (see paragraphs 14 and 15 of the principal judgment).

10 . As a result of the principal judgment, the parties lodged a revision request with the Supreme Court asking for the quashing of its judgment of 24 December 2008 and of all the judgments which followed in the proceedings and the dismissal of the application for revision lodged against the judgment of the Supreme Court of 11 June 2008.

11 . On 26 July 2017 the Supreme Court of Justice upheld the above revision request and, after quashing all the subsequent judgments, restored its judgment of 11 June 2008 and dismissed the application for its revision. The Supreme Court refused to award any damages to the applicant on the ground that it was for the parties in the proceedings before the Court to negotiate and reach an agreement in respect of them.

RELEVANT LEGAL FRAMEWORK

12 . The relevant provision of the Civil Code as applicable at the material time reads as follows:

Article 619. Default interest

“1 ) Default interest is payable for the delayed execution of pecuniary obligations. Default interest shall be 5% above the interest rate provided for in Article 585 [the National Bank of Moldova ’ s refinancing interest rate] unless the law or contract provides otherwise. Proof that less damage has been incurred shall be admissible.

2) In non-consumer-related situations default interest shall be 9% above the interest rate provided for in Article 585 unless the law or contract provides otherwise. Proof that less damage has been incurred shall be inadmissible.”

APPLICATION OF aRTICLE 41 OF THE CONVENTION

13 . Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

14 . The applicant company argued that the impossibility to use the land adjacent to its warehouse, made it impossible for it to use the warehouse also because there was no access to it.

15 . The applicant company presented copies of two contracts concluded with two third companies for the period 1 June 2007 – 1 May 2010 according to which the latter companies were to rent from it different portions of the warehouse and its adjacent territory in exchange of a total amount of 2,324,466.67 Moldovan Lei (MDL) for the whole period. The applicant company argued that the execution of the above contracts was rendered impossible due to the abusive quashing of the judgment of 11 June 2008. The applicant presented a calculation of the net revenue it could have obtained from the above gross amount after the deduction of all the applicable taxes, wear and tear, salaries for two employees, insurance, electricity and security. According to it, the net amount on 1 May 2010 represented MDL 1,943,135.67 (the equivalent of 92,668.83 Euro (EUR) on that date).

16 . The applicant company also claimed compensation for default interest calculated according to the provisions of the Civil Code (see paragraph 12 above) in an amount of EUR 83,539.46.

17 . The applicant company maintained further that, due to the fact that the third company with which it had the litigation leading to the present case had destroyed the access platform to the warehouse in April 2007, it could no longer exploit the warehouse and had to relocate the merchandise it kept inside the warehouse. According to the documents presented by the applicant, it paid EUR 1,030.97 for the relocation.

18 . The applicant company also submitted that, since the third company with which it had the litigation leading to the present case had destroyed the access platform and the fence around the warehouse, it was obliged to build new ones. It presented a contract of 2008 with a building company according to which the cost of rebuilding them was EUR 151,986.10.

19 . The applicant company finally argued that prior to the abusive quashing of the judgment of 11 June 2008, it had privatised the disputed plot of land around the warehouse and had paid for it the equivalent of EUR 22,577.97. It has never recovered that amount of money.

20 . The total amount claimed by the applicant company is EUR 351,803.33.

21 . The Government submitted that, following the Supreme Court ’ s judgment of 26 July 2017, the applicant company should have claimed compensation from the company which had benefited from the abusive quashing of the judgment of 11 June 2008 and not from the Government. The Government also expressed the view that the applicant company was not entitled to any compensation for loss of earnings because it had failed to privatise the disputed land before the judgment of 11 June 2008. Moreover, the State could not be responsible for the alleged unlawful actions of the third company who had demolished the fence and the loading platform.

22 . The contracts concerning the renting out of the warehouse to third companies were signed on 1 April 2007 and the destruction of the loading platform took place on 25 April 2007. However, the applicant company did not rent out the warehouse between 1 and 25 April 2007 and that, in the Government ’ s view, is proof of the fact that it could not have managed to obtain any income.

23 . The Government also indicated to a mistake in the banking details of one of the parties to that contract and argued that that proved that the contracts were a sham.

24 . The Government also argued that, at the time when the contracts of lease were signed, the adjacent land did not belong to the applicant company and pointed to some alleged irregularities in the exact surface of the land indicated in the contracts.

25 . The Government argued next that the applicant company did not calculate correctly the tax to be deduced from the alleged lost profit and did not deduce tax from the default interest calculated in accordance with Article 619 of the Civil Code. The Government concluded by stating that the applicant company ’ s claims in respect of the alleged lost earnings are purely speculative and asked the Court to dismiss them.

26 . The Government also argued that the applicant company was not entitled to the sum paid for the privatisation of the plot of land because by its final judgment of 26 July 2017, the Supreme Court of Justice acknowledged its right of ownership over the plot of land in question.

27 . The Court reiterates that a judgment in which it finds a breach imposes on the respondent State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Former King of Greece and Others v. Greece [GC] (just satisfaction), no. 25701/94, § 72). In the present case, the reparation should aim at putting the applicant company in the position in which it would have found itself, had the violation not occurred.

28 . The Court considers it clear that the applicant company must have suffered pecuniary damage as a result of its lack of control over its possessions and the denial to it of the possibility to use and enjoy them (see Immobiliare Saffi v. Italy [GC], no. 22774/93, ECHR 1999 ‑ V). These losses were incurred as a result of the quashing of the final judgment of 11 June 2008. As a result of the quashing, the applicant company could not use its plot of land and implicitly the warehouse situated on it.

29 . The Court considers reasonable the general approach taken by the applicant company to assessing the loss of earnings suffered as a result of a breach of its Convention rights and of the default interest calculated from that loss. Nevertheless, the Court cannot but observe that the State cannot be held responsible for the applicant ’ s impossibility to dispose of the disputed plot of land and of its warehouse prior to the date on which the Supreme Court acknowledged its right of ownership, i.e. before 11 June 2008. Similarly, the Court cannot accept the applicant ’ s claims related to the destruction of some of the property by a third party and to the need to relocate its merchandise prior to the judgment of the Supreme Court of Justice of 11 June 2008. Nor can the Court accept the applicant ’ s claims concerning the return of the price paid for the land to the State, because as correctly pointed by the Government, the applicant eventually obtained the ownership of the disputed plot of land.

30 . Having regard to the circumstances of the case, the material in its possession and making its own assessment, the Court awards the applicant company a total amount of EUR 60,000 in respect of pecuniary damage.

31 . The applicant company claimed EUR 10,000 for the non-pecuniary damage suffered as a result of the breach of its rights guaranteed by Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 to the Convention.

32 . The Government contested the amount claimed and asked the Court to dismiss the claim.

33 . Having regard to the violations found above, the Court considers that an award in respect of non-pecuniary damage is justified in this case. Ruling on an equitable basis, the Court awards the applicant company EUR 2,000 in respect of non-pecuniary damage.

34 . The applicant company also claimed EUR 1,825 for the costs and expenses incurred before the Court.

35 . The Government argued that the amount was excessive, and asked the Court to dismiss the claim.

36 . The Court reiterates that in order for costs and expenses to be included in an award under Article 41 of the Convention, it must be established that they were actually and necessarily incurred and were reasonable as to quantum (see, for example, Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 240, 23 February 2016. Having regard to all the relevant factors and to Rule 60 § 2 of the Rules of Court, the Court awards the applicant EUR 1,500 for costs and expenses.

37 . The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

(a) that the respondent State is to pay the applicant company, within three months, the following amounts , to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i) EUR 60,000 (sixty thousand euros), plus any tax that may be chargeable, in respect of pecuniary damage;

(ii) EUR 2,000 (two thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(iii) EUR 1,500 (one thousand five hundred euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

Done in English, and notified in writing on 6 April 2021 , pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Hasan Bakırcı Branko Lubarda Deputy Registrar President