Published on 7 June 2021

FOURTH SECTION

Application no. 62079/14 ELAGRA LLC against Armenia lodged on 10 September 2014 communicated on 21 May 2021

STATEMENT OF FACTS

The applicant, ELAGRA LLC (“the applicant company”), was set up in 2008 and has its registered office in Noyemberyan . It is represented before the Court by Mr G. Mughnetsyan , a lawyer practising in Yerevan.

The facts of the case, as submitted by the applicant company, may be summarised as follows.

On 27 April 2010 the Head of Bagratashen village decided to allocate a plot of land measuring 2907.42 sq. m to S., a private entrepreneur. The plot of land was situated in the Tavoush region close to the border between Armenia and Georgia.

On 12 May 2010 the Head of Bagratashen village and S. concluded a lease agreement for a period of ninety-nine years which stated that the land was to be used for the purpose of operating a marketplace.

On 12 October 2012 S. concluded a sublease agreement with the applicant company in respect of the plot of land in question.

On 17 October 2012 the Tavoush territorial division of the State Real Estate Registry registered the applicant company ’ s rights in respect of the plot of land in question.

On 29 October 2012 the applicant company in its turn entered into sublease agreements with private entrepreneurs A., G., V., A., E.H., M., V.B., J. and S.M. (“the private entrepreneurs”). The sublease agreements stipulated that the plot of land in question was to be used for operating a marketplace.

It appears that the applicant company was responsible for managing the organisation of the marketplace.

On an unspecified date the private entrepreneurs applied to the Ijevan territorial division of the State Revenue Committee (“the SRC”) seeking the registration of their fiscal cash registers, a legal pre-condition to carry out business activities.

On 6 November 2012 the SRC adopted a number of administrative decisions refusing to register the fiscal cash registers at issue. Those decisions stated , in particular, the following:

“... at the present time [the applicant company] cannot carry out business organisation related activities in Bagratashen village. As a result, the registration of your cash registers is refused . ”

On 18 November 2012 the private entrepreneurs informed the applicant company that due to the refusal of the SRC to register their fiscal cash registers, they had been unable to secure the payment of the rental fees specified in the respective sublease agreements.

On an unspecified date the private entrepreneurs lodged a claim with the Administrative Court seeking to have the administrative acts adopted on 6 November 2012 annulled, and the SRC compelled to register their fiscal cash registers. The applicant company became involved in the proceedings as a third party.

In their submissions the applicant company and the private entrepreneurs argued that the administrative acts adopted by the SRC had been unlawful since they did not contain the relevant legal ground to justify those refusals.

The SRC lodged a counterclaim, arguing, inter alia , that the address indicated by the private entrepreneurs and the applicant company was not suitable for carrying out business activities since it was located close to the border between Armenia and Georgia. It further stated that a prior authorisation was required from the National Security Service (NSS) border guard control troops before conducting any business or commercial activities in the border area while both the private entrepreneurs and the applicant company had failed to apply for the relevant authorisation.

On 9 July 2013 the Administrative Court granted the private entrepreneurs ’ and the applicant company ’ s claims in their entirety. It held that the SRC had failed to provide any factual or legal ground to substantiate the refusal to register the fiscal cash registers. As regards the arguments submitted by the SRC, the Administrative Court rejected them as unsubstantiated stating, inter alia , that Article 23 of the Law on the State Border made no exception as to the conduct of business activities during daylight hours. Consequently, the Administrative Court ordered the SRC to register the cash registers at issue.

The SRC appealed against that judgment, reiterating its arguments submitted before the Administrative Court.

By its decision of 8 January 2014 the Administrative Court of Appeal quashed and amended the judgment of 9 July 2013. It stated that the address for the planned business activities indicated by the private entrepreneurs was not “operational” to be used for business activities and they were therefore not authorised to run a marketplace at that address. The registration of their fiscal cash registers was thus refused.

The applicant company and the private entrepreneurs lodged an appeal on points of law. They reiterated their previous arguments raised before the Administrative Court concerning the lack of any legal ground for refusing the registration of the fiscal cash registers.

On 19 March 2014 the Court of Cassation declared the appeal inadmissible for lack of merit.

According to Article 34, third parties who have their own claims on the subject matter of the dispute may join the proceedings before the adoption of a final ruling by court. They enjoy all the rights of the plaintiff and bear all his responsibilities.

According to Article 35 § 1, third parties who do not have independent claims on the subject matter of the dispute may join the proceedings on behalf of the plaintiff or defendant before the adoption of a final ruling by court, if the judicial act adopted as a result of the proceedings may affect their rights or obligations vis-à-vis one of the parties to a dispute.

According to Article 35 § 2, third parties who do not submit separate claims on the subject matter of the dispute shall enjoy all the rights of the party to a dispute, except for the right to change the grounds or the subject matter of the claim, to increase or decrease the amount of the claim, to withdraw the claim, to accept the claim or to conclude a friendly-settlement agreement as well as to demand the enforcement of a judicial act.

According to Article 4 § 1, the use of cash registers is mandatory for individual entrepreneurs, notaries, advocates (hereafter, private entrepreneurs) and for all organisations operating in the territory of the Republic of Armenia in the exercise of cash payments or in all cases of payments made by means of plastic cards (including prepayments) in respect of the retailing of goods or provision of services to the population in commercial facilities and retail establishments.

According to Article 22 § 1, permission to enter the border area and to stay there temporarily is given by the border guard control troops with the consent of the state competent bodies of the National Security Service and the Police of the Republic of Armenia. If necessary, the border troops command may impose additional temporary regime restrictions on temporary entry and stay in the border area.

According to Article 22 § 2, in case of the imposition of temporary regime restrictions, local self-government bodies should be informed of any restriction or prohibition of the entry of persons, vehicles, pets, cargo, other property, and other activities in the border area.

According to Article 23 § 2, economic activities in the border area are conducted only during daylight hours. At night and in the dark, the conduct of economic activities in the border area is prohibited, except in cases of necessity, with the permission of the head of the frontier detachment and with the consent of the command of the border troops.

Rule 4 provides that the organisations whose activities require the mandatory use of cash registers should submit to the tax inspectorate of their place of registration the cash register (registers) and the cash register passport (passports) in view of their registration.

Rule 5 provides that after receiving the cash register and the passport (passports) specified in Rule 4, the tax inspectorate immediately fills in and signs an application for the registration of the cash register in accordance with the form No. 10. The copy of the signed application is provided to the organisation whose activities require a mandatory use of cash registers. Immediately after the signature of the application requesting the registration of the cash registers, the tax inspectorate registers them.

COMPLAINT

The applicant company complains under Article 1 of Protocol No. 1 to the Convention that the authorities ’ refusal to register the private entrepreneurs ’ fiscal cash registers constituted an interference with its right to the peaceful enjoyment of its possessions. In particular, as a result of that refusal it was prevented from using the business premises it had lawfully rented and receiving rental income pursuant to the sublease agreements concluded with the private entrepreneurs.

QUESTIONS TO THE PARTIES

1. Can the applicant company claim to be a victim of a violation of Article 1 of Protocol No. 1?

2. In the affirmative, has there been an interference with the applicant company ’ s right to the peaceful enjoyment of its possessions as guaranteed under Article 1 of Protocol No. 1? If so, was that interference necessary to control the use of property in accordance with the general interest? In particular, did that interference impose an excessive individual burden on the applicant company (see Pine Valley Developments Ltd and Others v. Ireland , 29 November 1991, § 51, Series A no. 222 ; Stretch v. the United Kingdom , no. 44277/98, §§ 32-35, 24 June 2003; and Werra Naturstein GmbH & Co KG v. Germany , no. 32377/12, §§ 37 and 41, 19 January 2017)?

The applicant company is requested to provide copies of the following documents: the claim lodged with the Administrative Court; the submissions before the Administrative Court of Appeal in reply to the appeal lodged by the State Revenue Committee, if any; and the appeal on points of law lodged against the decision of the Administrative Court of Appeal dated 8 January 2014.