Information Note on the Court’s case-law 240

May 2020

Beshiri and Others v. Albania (dec.) - 29026/06, 3165/08, 56956/10 et al.

Decision 17.3.2020 [Section I]

Article 13

Effective remedy

Failure to exhaust new remedy dealing with prolonged non-enforcement of final decisions awarding compensation for property expropriated during the communist regime: inadmissible

Article 35

Article 35-1

Exhaustion of domestic rem edies

Effective domestic remedy

Failure to exhaust new remedy dealing with prolonged non-enforcement of final decisions awarding compensation for property expropriated during the communist regime: inadmissible

Facts – The applicants have all received final administrative decisions recognising their right to compensation in lieu of the restitution of properties that were confiscated or nationalised by the former communist regime. However, those final decisions have never been enforced in full.

In response to the Court’s pilot judgment in Manushaqe Puto and Others v. Albania , in 2015 the Albanian Parliament adopted the Treatment of Property and Finalisation of the Property Compensation Process Act (the 2015 Property Act) aimed at creating a feasi ble and workable scheme to ensure equal treatment of property owners and solve the long-standing issue.

Law – Article 13 of the Convention and Article 1 of Protocol No. 1

(a) As regards the effectiveness of the 2015 Property Act – The new remedy was found to be effective having regard to the following considerations:

(i) Appropriateness of the form of redress – The 2015 Property Act had provided for various forms of compensation. It had also taken account of the fact that unauthorised buildings had been constructed on expropriated land and had made provision for the recognition of former owners’ rights to comp ensation where restitution had been impossible. If appropriate compensation had been paid in accordance with the Court’s case-law, there had been in general no unfair balance between the parties’ interests.

Furthermore, under the 2015 Property Act, Agency for Treatment of Property (ATP) decisions could be challenged before courts at various degree of jurisdiction, including decisions on property rights and the right to compensation; any failure to determine a pending property claim or financial compensation within a three-year time-limit; and decisions on the amount of compensation. However, having regard to the reasonable time requirement, consistent judicial practice and expeditious processes had been required to deal with almost 7,000 pending property cla ims.

The ATP could not call into question the finality of decisions without quantum which would be subject to a financial evaluation in order to determine the amount of compensation. The 2015 Property Act upheld the finality of decisions determining the am ount of compensation subject to indexation. Because the right to compensation remains unchallengeable and indisputable, the 2015 Property Act did not give rise to a breach of the principle of legal certainty in so far as the right to compensation was conce rned.

The domestic authorities had enjoyed a wide margin of appreciation as regards the choice of forms of redress for breaches of property rights. Therefore the appropriateness of the form of redress provided for by the 2015 Property Act did not put into question the effectiveness of the remedy.

(ii) Adequacy of the compensation – As regards decisions without quantum, the amounts to be awarded as compensation under the 2015 Property Act might, in some cases, be considerably reduced owing to changes in the cadastral classification of the expropriated property over time. The new compensation scheme had pursued the public interest of resolving property issues within ten years under sensible financial costs and to establish social peace. It had been adopted in response to the pilot judgment to resolve a structural and systemic problem that had persisted since 1993 and affected at least 26,000 claims for compensation. The authorities’ approach had not appeared unreasonable and disproportionate, considering their duty to correct the ineffectiveness of prior legislation and given their wide margin of appreciation in situations involving a wide-reaching but controversial legislative scheme with significant economic impact for the country as a whole.

The reference to the original cadastral category of the expropriated property as a basis for carrying out the financial evaluation had not been per se arbitrary. However in order to prevent an extreme burden on former owners, the remedy could only be considered effective t o the extent that the aggregate amount of compensation had amounted to at least 10% of the value calculated by reference to the current cadastral category of the expropriated property. The 10% minimum threshold for the amount of compensation could be consi dered reasonable in view of the overall level of sacrifice imposed by the new compensation scheme on former owners compared to their expectation to receive current market value compensation which had flowed from prior legislation.

Former successful applica nts had received compensation at the market value which had been consistent with the legislation in force at the material time. The difference in treatment invoked by the applicants had related to their amount of compensation to be calculated by reference to the cadastral category of the property at the time of expropriation instead of by reference to the current market price of the property. This difference had been exclusively due to an intervening change in the legislation and could not therefore be rega rded as discriminatory. In the same vein, the fact that some former owners might be deemed to have been fully compensated under the 2015 Property Act on account of the prior (partial) restitution of the property they had obtained, could not be regarded as a difference in treatment and it had not affected or altered the form of compensation they had already obtained. The absence of an award of further compensation would indeed be the logical result of the application of the new compensation scheme. Otherwise they would obtain an unfair advantage over former owners who have not yet been able to receive any form of compensation.

Lastly, the Government’s decision to reduce the cap on financial compensation from ALL 50 million (EUR 403,763) to ALL 10 million (EUR 81,100) had not resulted in a situation of significant legal uncertainty or a general difference in treatment. The average award of financial compensation had not been significantly (if at all) reduced. Nevertheless frequent changes to the legislation, in cluding implementing decisions, might contribute to a general lack of legal certainty, which would be taken into account in assessing the State’s conduct in the future.

Having regard to the scheme of staggered payment of compensation, the amount of compens ation ought to be indexed to inflation until final payment in order for the remedy to continue to remain effective. Under the 2015 Property Act, final decisions which had determined the amount of compensation to be awarded to former owners are subject to i ndexation.

Subject to compliance with the 10% minimum threshold for the amount of compensation, no issues had arisen as regards the adequacy of compensation provided for by the 2015 Property Act that would put into question the effectiveness of the remedy in this respect.

(iii) Accessibility and efficiency of the remedy – There had been a progression in the enforcement of decisions, the evaluation of compensation and the examination of new claims. The Government had allocated significant annual budgetary re sources for the payment of financial compensation and had also enlarged the pool of land for the payment of compensation in kind.

The 2015 Property Act had laid down clear and binding time-limits for the authorities to act and had established the responsi bility of the ATP for examining property claims and recognising property rights, including the right to compensation. The ATP would also determine the financial evaluation concerning decisions pending before the national authorities and the European Court. It had determined the financial evaluation in respect of almost each application of the present case. Otherwise a fully judicial procedure had been established, which could result in a legally binding court decision. The applicants and other former owners had already appealed against ATP decisions. And it would be speculative for the Court to find that the domestic courts dealing with such appeals were not acting with due diligence.

As regards those applicants who had introduced an application with the Eur opean Court by the date of the delivery of this decision and had chosen not to appeal against the ATP decision or not to submit any missing documents within the statutory time-limits, it had been open to the applicants, starting from the official publicati on of the 2015 Property Act, to comply with the statutory requirements. It would not be fair and reasonable to dispense them from having recourse to it. To hold differently could give rise to an unjustified difference in treatment vis-à-vis those former ow ners who had complied with the requirements of the new domestic remedy.

As regards the 10-year time-frame for the full payment of compensation, even though the applicants might have to wait for a number of years to have the compensation amounts paid to th em in full, this system might be accepted in the exceptional circumstances of this case and would not per se call into question the effectiveness of the remedy or be contrary to the reasonable time requirement guaranteed by Article 6 of the Convention.

In sum, no issues had arisen as regards the accessibility and efficiency of the remedy provided for by the 2015 Property Act.

(b) As regards the applicants’ obligation to exhaust the new remedy – Firstly, it would be in line with the spirit and logic of the p ilot judgment that applicants complaining about the non-enforcement of their right to compensation could claim redress for their grievances in the first place through the 2015 Property Act. Secondly, the 2015 Property Act had applied to all individuals who had lodged an application with the European Court before the entry into force of the 2015 Property Act. There were no exceptional circumstances to exempt the applicants from the obligation to exhaust domestic remedies.  Most of the applications were there fore rejected for non-exhaustion of domestic remedies.. As regards some of the applicants, knowing that the domestic proceedings had been pending before the domestic courts, it would be premature for the Court to deal with their complaint. The applicants w ho had received the full payment of the compensation award could no longer claim to be a victim within the meaning of Article 34 of the Convention. The Court had also found that the applicants’ complaint under Article 13 of the Convention was manifestly il l-founded.

The Court might review its position in the future depending on the authorities’ capacity to demonstrate that the remedies introduced in the 2015 Property Act had continued to comply with the Convention requirements in practice, including their a bility to (i) to deal with almost 7,000 pending property claims in an effective manner, (ii) provide for compensation of no less than 10% of the value to which the applicants would have been entitled if the financial evaluation had been carried out by refe rence to the current cadastral category of the expropriated property, and (iii) provide for indexation of the amount of compensation until final payment.

Conclusion : inadmissible.

(See also Broca and Texier-Micault v. France , 27928/02 and 31694/02, 21 Oct ober 2003, Information Note 57 ; Broniowski v. Poland [GC], 31443/96, 22 June 2004, Information Note 65 ; Ramadhi and Others v. Albania , 38222/0 2, 13 November 2007, Information Note 102 ; Wolkenberg and Others v. Poland (dec.), 50003/99, 4 December 2007, Information Note 103 ; Guiso-Gall isay v. Italy (just satisfaction) [GC], 58858/00, 22 December 2009, Information Note 125 ; Manushaqe Puto and Others v. Albania , 604/07 et al., 31 July 2012, Information Note 154 ; Vistiņš and Perepjolkins v. Latvia (just satisfaction) [GC], 71243/01, 25 October 2012, Information Note 172 ; Kurić and Others v. Slovenia (just satisfaction) [GC], 26828/06, 13 March 2014, Information Note 172 ; Preda and Others v. Romania , 9584/02 et al., 29 April 2014, Informat ion Note 173 ; and Anastasov and Others v. Slovenia (dec.), 65020/13, 18 October 2016, Information Note 201 )

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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