Published on 12 April 2021

FOURTH SECTION

Application no. 47448/12 Yervand NALTAKYAN and Others against Armenia lodged on 13 June 2012 communicated on 23 March 2021

STATEMENT OF FACTS

A list of the applicants is set out in Appendix 1. They are represented before the Court by Ms M. Ghulyan and Mr G. Margaryan, lawyers practising in Yerevan.

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

The applicants were owners of plots of land in the Artavaz and Pyunik communities of the Artavaz village community in the region of Kotayk. The details concerning the applicants ’ property situated in those communities are set out in Appendix 2.

On 25 February 2010 “A&M RARE” LLC (“the Company”) was established.

On the same date the Company filed an application with the Government on the basis of the Law on Alienation of Property for the needs of Society and the State (“the Law”), seeking to acquire plots of land in the Artavaz village community, which included the plots of land owned by the applicants. According to the application the acquisition of the land was necessary for a prevailing public interest which was the implementation of an investment project on the construction of a mineral water plant in the community.

On the same date the Government adopted Decree no. 241-N (“the Decree”) granting the Company ’ s application. By this decree the Government approved the expropriation zones of territories situated within the administrative boundaries of the rural community of Artavaz in the region of Kotayk to be taken for State needs. The Decree stated that the expropriation of the private plots of land was justified by a prevailing public interest in the implementation of an investment project aimed at ensuring proportionate regional development, which was important for the overall social-economic development of the country. According to the Decree, the Company was to acquire the units of land listed in its annexes, 95.87549 ha land in total. The plots of land owned by the applicants were listed among the units of land falling within the expropriation zones defined by the Decree.

On 10 February 2011 the Government adopted Decree no. N-100 whereby it amended the Decree by correcting the wrongly indicated sizes of some of the applicants ’ plots of land.

Some of the applicants sought a judicial review of the Decree in proceedings before the Administrative Court which ended with a judgment of 14 September 2010 whereby their claims were rejected. Their further appeal against that judgment was unsuccessful.

It appears that in June 2010 the Company obtained expert evaluations of the market value of the units of land specified in the Decree. The valuation was carried out by Tosp LLC, a private real estate evaluation company.

On 13 July 2010 the Company sent draft contracts on alienation of real estate to the following applicants: Yervand Naltakyan, Yurik Naltakyan, Mekhak Abrahamyan, Khoren Naltakyan, Tsovinar Matevosyan, Margush Badalyan, Lyova Samsonyan, Arturik Arustamyan and Aleksan Tavakalyan. These applicants were either sole owners of their properties or their names appeared first on the ownership certificates of joint properties (hereinafter “owner applicants”). It appears that those draft contracts contained compensation offers corresponding to the amounts of market value as determined in the expert real estate valuation reports obtained in June.

On 21 December 2010 the Company filed claims with the Kotayk Regional Court (“the Regional Court”) against the owner applicants seeking to acquire their plots of land by payment of compensation. Those claims were supported by the expert valuation reports issued by Tosp LLC in June 2010 and more recent expert reports which had resulted from the re-evaluation of the market value of the relevant plots of land in November.

On 24 December 2010 the Company informed the Regional Court that there had been inaccuracies with regard to the indication of the sizes of the relevant plots of land in the Decree. The Company therefore asked it not to notify the applicant owners about its claims until the errors had been corrected by the Government. It appears that the Regional Court granted the Company ’ s request and did not notify the applicants about the claims of 21 December 2010.

On 18 February 2011, referring to the Decree, as amended by Decree no. N-100 of 10 February 2011, the Company filed claims with the Regional Court against owner applicants seeking to acquire their plots of land with payment of compensation. The Company submitted certificates issued by Tosp LLC, which indicated the correct sizes of the given plots of land, with its claims. In those claims the Company submitted that the relevant plots of land had been evaluated in June 2010 and then re-evaluated in November 2010 although it had appeared from the re-evaluation that there had been no change in their market value. The amounts of compensation corresponding to the market value of the respective plots of land had therefore remained unchanged (see Appendix 2 for proposed amounts of compensation per each unit of land).

On 1 April 2011 the owner applicants filed written submissions with the Regional Court. They submitted, inter alia , that according to the Decree the expropriation procedure was to be started no later than within three months from its entry into force. The Decree had entered into force on 10 April 2010. Considering that the Company had not taken the necessary actions for the acquisition of their property before 10 July 2010, that is the three-month time-limit set out by Article 10 of the Law, the Company had lost the right to acquire their property pursuant to Article 16 of the Law. They argued that the Decree, which was the legal basis for the expropriation of their property, had lost its legal effect. They further argued that the procedure for evaluating their property had not met the requirements of the Law on Real Estate Evaluation Activity. In particular, instead of supporting its claims by real estate evaluation reports determining the market value of their plots of land, the Company had submitted certificates issued by a private company to the Regional Court. Those letters, they argued, could not serve as a lawful basis for the determination of the market value of their property. The owner applicants pointed out that the Company had failed to conduct a fresh valuation of the property after the sizes of their plots of land had been rectified by Decree no. N-100. Even assuming that the certificates in question, even if they indicated the correct sizes of their property, were to be considered as a legal basis for the determination of the amount of compensation, the compensation amounts indicated in them had not been based on the correct sizes and therefore could not have reflected the real market value of their plots of land.

On 14 April 2011 the owner applicants lodged counterclaims with the Regional Court seeking an injunction against the Company ordering it to refrain from taking any further action in relation to the acquisition of their plots of land.

On 22 April 2011, in reply to the owner applicants ’ enquiry, the State Real Estate Registry provided a written clarification that the certificates concerning the market prices of plots of land situated in Artavaz community issued by Tosp LLC could not be considered a valuation report for the purposes of Article 11 of the Law on Real Estate Evaluation Activity.

On 27 and 28 April 2011 the Regional Court notified the applicants Gurgen Ghazaryan, Hranush Arustamyan, Anahit Naltakyan, Hambardzum Naltakyan, Arkadi Badalyan, Armine Naltakyan, Vardanush Naltakyan, Arshaluys Abrahamyan, Rudolf Abrahamyan Radik Abrahamyan, Nikolay Arustamyan, Levon Arustamyan, Serozh Naltakyan, Naira Naltakyan, Varsenik Naltakyan and Ararat Ter-Mkrtchyan (hereinafter “joint owner applicants”) that they had been involved in the proceedings initiated by the Company as co-respondents. The joint owner applicants filed written submissions with the Regional Court similar to those filed by the owner applicants on 1 April 2011.

According to the joint owner applicants, prior to 27-28 April 2011 they had not been aware either of the Company ’ s claims of 21 December 2010 nor of those dated 18 February 2011, since none of those claims had been filed against them.

In the course of the proceedings the applicants requested the Regional Court to order a new expert evaluation of their property, in accordance with the requirements of the Law on Real Estate Evaluation Activity.

On 14 June 2011 the Regional Court delivered ten judgments in respect of the plots of land owned by the applicants individually or by joint ownership whereby it granted the Company ’ s claims and dismissed the applicants ’ counterclaims. In particular, the Regional Court authorised the expropriation of the applicants ’ property with the payment of the amounts of compensation offered by the Company (see Appendix 2 for details concerning the units of property with corresponding compensation). As regards the applicants ’ complaints concerning the expropriation procedure and the Company ’ s actions, it found that the Company had respected the time-limits prescribed by Articles 10, 12 and 13 of the Law. In doing so, it considered that the three-month time-limit for sending the copies of the contracts to the applicants had ended on 11 July 2010. However, since 11 and 12 July 2010 had been non-working days, the time-limit had ended on the next working day, i.e. 13 July 2010, when the Company had sent the copies of the contracts. As regards the three-month time-limit for depositing the amounts of compensation with a court/notary public, the Regional Court found that it had ended on 13 November 2010 which was, again, a non-working day therefore, the time-limit had been extended to the next working day, i.e. 15 November 2010, when the Company made the relevant deposition. The Regional Court also held that the Company had filed its claims against the owner applicants on 21 December 2010, which had been within the one-month time-limit prescribed by Article 13 of the Law. In reaching these findings, the Regional Court relied on Articles 328 and 329 of the Civil Code. Lastly, the Regional Court dismissed the applicants ’ arguments concerning the irregularities in the procedure of the evaluation of their property concluding that it had been carried out in accordance with the applicable legislation and that the amounts of compensation were adequate.

According to the owner applicants, it was only after the receipt of the judgments of 14 June 2011 that they found out that the Company had filed its claims against them already on 21 December 2010.

On 14 July 2011 the applicants appealed against the judgments of 14 June 2011. As regards the lawfulness of the expropriation of their property, they relied on Article 16 of the Law, especially on the legal consequences of missing the relevant time-limits by an acquirer of expropriated real estate. The joint owner applicants, in particular, argued that the Company had failed to undertake any action in respect of their shares in the joint ownership with the owner applicants. In particular, the Company had not sent them the drafts of the alienation contracts, had not deposited the amounts of their compensation with a court/notary public or included them in its claims lodged with the Regional Court. The owner applicants, in turn, argued that the Company had taken the relevant actions in their respect in breach of the time-limits set out by Articles 10, 12 and 13 of the Law. They argued that the deadline for the Company to send copies of the draft contracts was 10 July 2010. In case the property owners chose not to sign those contracts, the time-limit to deposit the amounts of compensation with a court/notary public was 10 October 2010. Thereafter, in case no agreement was reached within seven days, the time-limit for the Company to initiate a judicial process for the expropriation was 17 December 2010. However, the Company had sent the alienation contracts only on 13 July 2010, while it had applied to a court on 18 February 2011. They submitted that the Regional Court had erred in the interpretation and application of Article 329 of the Civil Code when reviewing the lawfulness of the actions and inaction of the Company since the expropriation of their property involved public interest and the rules of private law governing private law transactions could not be applicable. They argued that the Law contained rules for the calculation of the time-limits for the actions of the acquirer and therefore no rule of private law could apply to a legal relationship involving a compulsory deprivation of property for public interest. As regards the evaluation of their property and the amounts of proposed compensation, they submitted arguments similar to those which they had submitted to the Regional Court on 1 April 2011.

On 30 September, 9, 13, 14, 19 and 28 October 2011, the Civil Court of Appeal delivered decisions, with similar content, rejecting the appeals lodged against the judgments of 14 June 2011. It held that the expropriation procedure had been lawful, both as regards the owner applicants and the joint owner applicants, and therefore Article 16 of the Law was not applicable. As regards the argument that the Company had failed to take any of the actions required by the Law in so far as the joint owner applicants were concerned, it held that in case of joint ownership of property, each owner had the right to dispose of the joint property, unless the joint owners agreed otherwise. In such cases there was a presumption that all owners endorsed the agreement entered by one of the owners. It relied on Article 198 § 3 of the Civil Code in this respect. Finally, the Civil Court of Appeal fully upheld the lower court ’ s findings in relation to the evaluation of the applicants ’ property and the adequacy of the compensation.

On 2, 16, 22, 30 November 2011 the applicants lodged appeals on points of law. As regards the reliance by the Court of Appeal on Article 198 of the Civil Code, they argued that its applicability had not been foreseeable considering that the provision in question applied when one of the owners in joint ownership concluded an agreement binding joint owners of the same property. In their case none of the owners in the joint ownership had either expressed the wish or actually concluded an agreement concerning their joint property. Furthermore, that provision was aimed at regulating situations where one of the joint owners of property would agree to a transaction in the absence of another joint owner ’ s agreement in an ordinary civil law relationship. In their case, however, the applicable regime was that of public law nature as regulated by the Law which expressly required that the relevant actions be taken by the acquirer of property in respect of all owners. Article 198 of the Civil Code could not therefore be invoked to justify failure of the Company to comply with the requirements of the Law.

On 23 November, 7, 14 and 23 December 2011 the Court of Cassation declared the applicants ’ appeals on points of law inadmissible for lack of merit.

According to Article 31, everyone shall have the right to dispose of, use, manage and bequeath his property in the way he sees fit. No one can be deprived of his property, save by a court in cases prescribed by law. Property can be expropriated for the needs of society and the State only in exceptional cases of paramount public interest, in a procedure prescribed by law and with prior equivalent compensation.

According to Article 136 § 4, every individual who believes that a government decree has breached his or her rights may apply to the Administrative Court within a three-month time-limit starting from the moment of the alleged breach.

According to Article 1 § 6, civil law legislation does not apply to legal relationships established under public law (e.g. tax, finance, administrative law), including those involving property, unless otherwise provided by law.

According to Article 198 § 3, each owner in joint ownership of property has the right to conclude an agreement disposing of joint property, unless the joint owners have agreed otherwise.

According to Article 328 § 3 a monthly time-limit expires on the respective date of the last month of the time-limit. If a monthly time-limit expires in a month which does not have the respective date, then the time-limit expires on the last date of that month.

According to Article 329, if a time-limit ends on a non-working day, then the end of that time-limit is the next working day.

According to Article 3 § 2, the constitutional requirements for alienation of property for the needs of society and the State are the following:

( a) alienation must be carried out in accordance with a procedure prescribed by the law;

( b) prior adequate compensation should be provided for property subject to alienation.

According to Article 4 § 2, the prevailing public interest may pursue, inter alia , the implementation of mining projects having important State or community significance. The aim of securing additional income for the State or community budget is not by itself a prevailing public interest.

According to Article 10 § 1, the acquirer of property subject to expropriation is required to send copies of the contracts concerning the alienation of the property to the owners concerned within the time-limit fixed by the relevant government decree for the commencement of the alienation process.

According to Article 11 § 1, adequate compensation should be paid to the owner of the property subject to expropriation. The market value of the property plus an additional 15% is considered to be an adequate amount of compensation.

According to Article 11 § 3 the determination of the market value of real estate and property rights in respect of real estate is carried out in accordance with the procedure set out by the Law on Real Estate Evaluation Activity.

According to Article 12 § 1, in case the property owners and persons possessing other property rights, who had received the alienation contract, do not sign it within three months after its receipt, then the acquirer shall deposit the amounts of compensation with a court or notary within a period of one month, and notify the persons concerned.

According to Article 13 § 1, if the property is not alienated within seven days after the deposition of the amounts of compensation, the acquirer is obliged to apply to a court seeking judicial expropriation within a month.

According to Article 16 § 1, if the acquirer fails to take the actions required by Articles 10, 12 and 13 within the prescribed time-limits, i.e. to send a copy of the contract to property owners and other property right-holders, to deposit the amounts of compensation with a court/notary public or to institute court proceedings against the property right holders within the time-limits prescribed by those provisions, it should be presumed that the acquirer abandoned its intention to acquire the real estate in question and, as a result, all related expropriation documents shall be invalid.

According to Article 4, which sets out a list of definitions used in this law, the real estate evaluation report is a document containing information about the market value of property as of the date of the report, as determined in accordance with law and evaluation standards.

According to Article 11, the results of the evaluation of real estate should be formulated in writing as an evaluation report, which must contain the following:

 names and business addresses of the evaluators;

 month and year of evaluation and site examination;

 evaluation methods and standards;

 rights and restrictions attached to an evaluated real estate;

 calculations of market value of a real estate as a result of the application of the applicable standards and the methods of evaluation;

 list of documents used for a real estate evaluation;

 responsibility of the evaluator before the client and third parties;

 name, surname, signature, as well as the serial number of the qualification certificate of the evaluator.

The real estate evaluation report shall be validated by the evaluator ’ s signature and seal. The report shall also contain the serial number of the evaluator ’ s license.

For the purpose of the implementation of an investment project by establishing a mineral water factory, the Government decided to approve the expropriation zones of agricultural land situated within the administrative boundaries of the Artavaz rural community in the region of Lori to be taken for State needs, with a total area of 95.87549 ha. According to the Decree, the public interest in regional proportional development prevailed over the private interests of the property owners and did not cause unjustified damage.

The Decree stated that the Company would be acting in the capacity of the acquirer of the real estate indicated therein. It further stated that the Company had a three-month time-limit starting from the date of entry into force of the Decree for the initiation of the alienation process. It was stated that the Degree was to enter into force on the tenth day following its official publication [1] .

The Constitutional Court, firstly, noted that the application of the contested legal provision was far from being certain in the practice of ordinary courts. Secondly, it stressed the importance of safeguarding the rights of all owners in joint ownership of property. In this regard, the Constitutional Court noted that the positive agreement of all joint owners was required in case one owner concluded an agreement concerning property under joint ownership. The court emphasised that it was the exclusive right of a property owner to decide how to own, use and dispose of his or her property, irrespective of whether the property has sole or multiple owners.

COMPLAINTS

The applicants complain under Article 1 of Protocol No. 1 of the Convention that the expropriation of their property was not in compliance with the requirements of the law.

In particular, the applicants Yervand Naltakyan, Yurik Naltakyan, Mekhak Abrahamyan, Khoren Naltakyan, Tsovinar Matevosyan, Margush Badalyan, Lyova Samsonyan, Arturik Arustamyan and Aleksan Tavakalyan complain that by the time the Company had initiated the judicial proceedings against them, it had already lost its right to acquire their property by virtue of Article 16 of the Law. Furthermore, the Company had failed to respect the time-limits prescribed by Articles 12 and 13 of the Law.

The applicants Gurgen Ghazaryan, Hranush Arustamyan, Anahit Naltakyan, Hambardzum Naltakyan, Arkadi Badalyan, Armine Naltakyan, Vardanush Naltakyan, Arshaluys Abrahamyan, Rudolf Abrahamyan Radik Abrahamyan, Nikolay Arustamyan, Levon Arustamyan, Serozh Naltakyan, Naira Naltakyan, Varsenik Naltakyan and Ararat Ter-Mkrtchyan complain that the Company had failed to take any of the actions required by the Law in their respect as joint owners, thereby losing its right to acquire their property by virtue of the application of Article 16 of the Law.

The applicants further complain under the same provision that they lost their main source of income as a result of the expropriation and that the evaluation of their property was not carried out in accordance with the Law on Real Estate Evaluation Activity. Moreover, the evaluation was based on incorrect data concerning the sizes of their plots of land, which resulted in inadequate amounts of compensation.

QUESTIONS TO THE PARTIES

1. Was the deprivation of the applicants ’ property compatible with the requirements of Article 1 of Protocol No. 1 to the Convention? In particular:

( a) was the deprivation of their property carried out under the conditions provided for by law (see Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, §§ 95-97, 25 October 2012)? In particular:

( i ) were the time-limits set out in Articles 10, 12 and 13 of the Law on Alienation of Property for the Needs of Society and the State respected by the acquirer as regards the applicants Yervand Naltakyan, Yurik Naltakyan, Mekhak Abrahamyan, Khoren Naltakyan, Tsovinar Matevosyan, Margush Badalyan, Lyova Samsonyan, Arturik Arustamyan and Aleksan Tavakalyan? In this respect, was the application of the rules for the calculation of civil law time-limits foreseeable in terms of the calculation of the consecutive time-limits prescribed in those provisions, as well as of the time-limit for the entry into force of Government Decree no. 247-N of 25 February 2010?

( ii ) as regards the applicants Gurgen Ghazaryan, Hranush Arustamyan, Anahit Naltakyan, Hambardzum Naltakyan, Arkadi Badalyan, Armine Naltakyan, Vardanush Naltakyan, Arshaluys Abrahamyan, Rudolf Abrahamyan Radik Abrahamyan, Nikolay Arustamyan, Levon Arustamyan, Serozh Naltakyan, Naira Naltakyan, Varsenik Naltakyan and Ararat Ter-Mkrtchyan, can it be said that the acquirer complied with its obligations in their respect as co-owners of property subject to expropriation? In this regard, was the manner in which Article 198 § 3 of the Civil Code was interpreted and applied foreseeable in their case?

( b) did the deprivation of their property strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual ’ s fundamental rights (see Vistiņš and Perepjolkins , cited above, §§ 110-14)? In particular:

( i ) were the means employed proportionate to the aim sought to be achieved?

( ii ) did the applicants bear an “individual and excessive burden” due to the manner by which the amounts of compensation were determined? Additionally, having regard to the applicants ’ claim that they lost their main source of income as a result of the expropriation of their plots of land, did the amounts of compensation received by them reflect that loss (see Osmanyan and Amiraghyan v. Armenia , no. 71306/11 , §§ 69-71, 11 October 2018)?

APPENDIX I

No.

Applicant ’ s Name

Birth year

Nationality

Place of residence

1Yervand NALTAKYAN

1958Armenian

Artavaz village

2Arshaluys ABRAHAMYAN

1950Armenian

Pyunik village

3Mekhak ABRAHAMYAN

1948Armenian

Pyunik village

4Radik ABRAHAMYAN

1982Armenian

Pyunik village

5Rudolf ABRAHAMYAN

1972Armenian

Artavaz village

6Arturik ARUSTAMYAN

1964Armenian

Artavaz village

7Hranush ARUSTAMYAN

1968Refugee status

Artavaz village

8Levon ARUSTAMYAN

1987Refugee status

Artavaz village

9Nikolay ARUSTAMYAN

1989Refugee status

Artavaz village

10Arkadi BADALYAN

1961Armenian

Hrazdan

11Margush BADALYAN

1935Armenian

Artavaz village

12Gurgen GHAZARYAN

1968Armenian

Artavaz village

13Tsovinar MATEVOSYAN

Armenian

Artavaz village

14Anahit NALTAKYAN

1957Armenian

Artavaz village

15Armine NALTAKYAN

1986Armenian

Artavaz village

16Hambardzum NALTAKYAN

1985Armenian

Artavaz village

17Khoren NALTAKYAN

1956Armenian

Artavaz village

18Naira NALTAKYAN

1979Refugee status

Artavaz village

19Serozh NALTAKYAN

1981Armenian

Artavaz village

20Vardanush NALTAKYAN

1961Armenian

Artavaz village

21Varsenik NALTAKYAN

1982Armenian

Artavaz village

22Yurik NALTAKYAN

1929Armenian

Artavaz village

23Lyova SAMSONYAN

1962Armenian

Yerevan

24Aleksan TAVAKALYAN

1979Armenian

Hrazdan

25Ararat TER-MKRTCHYAN

1968Armenian

Artavaz village

APPENDIX II

No.

Applicant ’ s Name

Size of plots of land in ha and type of ownership

Domestic compensation for each unit of land in Armenian Dram (AMD)

1Yervand NALTAKYAN

Armine NALTAKYAN

Hambardzum NALTAKYAN

Vardanush NALTAKYAN

1,13 ha, joint ownership

AMD 2,536,400

2Khoren NALTAKYAN

Anahit NALTAKYAN

Varsenik NALTAKYAN

Serozh NALTAKYAN

Naira NALTAKYAN

1,012 ha, joint ownership

AMD 2,290,800

3Yurik NALTAKYAN

0,475 ha

AMD 1,114,600

4Mekhak ABRAHAMYAN

Arshaluys ABRAHAMYAN

Radik ABRAHAMYAN

Rudolf ABRAHAMYAN

1,051 ha, joint ownership

AMD 2,344,300

5Gurgen GHAZARYAN

Three units:

0,399 ha, 0,73 ha and 0,94 ha, joint ownership

AMD 941,850, 698,050 and 624,800 respectively

6Arturik ARUSTAMYAN

Hranush ARUSTAMYAN

Levon ARUSTAMYAN

Nikolay ARUSTAMYAN

1,223 ha, joint ownership

AMD 1,262,700

7Arkadi BADALYAN

Margush BADALYAN

0,798 ha, joint ownership (1/4 and 3/4 respectively)

AMD 656,650

8Lyova SAMSONYAN

0,408 ha

AMD 966,000

9Aleksan TAVAKALYAN

Two units: 0,479 ha and 0,094 ha

AMD 1,736,350

10Tsovinar MATEVOSYAN

Ararat TER-MKRTCHYAN

0,49 ha, joint ownership

AMD 1,130,450

[1] The Decree was officially published on 31 March 2010. It entered into force on 10 April 2010.