Communicated on 22 February 2018

FIRST SECTION

Application no. 70173/14 Mher CHATINYAN and Others against Armenia lodged on 20 October 2014

STATEMENT OF FACTS

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

A. The circumstances of the case

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

On 26 February 2007 the applicants entered into a contract with the Vanadzor city municipality (“the Municipality”), according to which the applicants agreed to give up their temporary shelter and occupied land in return for compensation. It appears that the Municipality failed to comply with its undertaking and in 2007 the applicants instituted compensation proceedings against the Municipality.

On 15 September 2011 the applicants and the Municipality, represented by the Mayor of Vanadzor city, concluded a friendly settlement of the dispute.

On 5 October 2011 the Lori Regional Court affirmed the settlement with a judgment setting out the following conditions: the Municipality undertook to (a) provide the applicants with a flat by 1 October 2013, (b) pay the applicants monthly 15,000 Armenian drams (AMD) in living expenses until the flat was provided; and (c) pay the applicants compensation in the amount of 38,000 US dollars if the first condition was not met. The Regional Court also ordered the Municipality to pay the applicants 300,000 AMD in legal and 40,800 AMD in expert costs.

No appeals were lodged, so the judgment entered into force on 7 November 2011.

On 14 and 20 December 2011 the Municipality issued two payment orders awarding the applicants 300,000 AMD in total. The orders specified that the basis of the payments was the judgment of 5 October 2011.

On 26 December 2011 the Municipality paid the National Bureau of Forensic Examinations 20,400 AMD in expert costs.

On 16 March 2012 the Council of Elders of the Municipality (the Council) affirmed the report of the Head of the Municipality on implementation of the Municipality ’ s budget of 2011. The payment orders issued by the Municipality in 2011 pursuant to the judgment of 5 October 2011 were included in the budget for 2011.

On 2 September 2013 the Municipality paid one of the applicants, Chatinyan Albert, 30,000 AMD in living expenses.

It appears that no flat was provided for the applicants by the deadline of 1 October 2013.

On 25 December 2013 the Lori Regional Court issued a writ of execution of the judgment of 5 October 2011.

On 30 January 2014 the bailiff instituted enforcement proceedings against the Municipality.

On the same day the bailiff imposed restrictions on the monetary means of the Municipality for ensuring execution of the judgment of 5 October 2011.

On 13 February 2014 the Council, represented by one of its members on the basis of a letter of attorney issued by the Council, lodged an out-of-time appeal against the final judgment of 5 October 2011 with the Civil Court of Appeal on the ground that the Regional Court had failed to involve the Council in the proceedings as a third party pursuing its own interests. The Council stressed that it was within its competence to manage municipal property. The friendly settlement and the judgment of 5 October 2011 affirming it were unlawful, as the settlement concerned municipal property, but the Council had not provided its consent with regard to alienation of that property and had not been involved as a party to the proceedings. Finally, the Council submitted that it had become aware of the judgment of 5 October 2011 from the decision of the bailiff of 30 January 2014.

On 27 February 2014 the applicants filed their objections with the Civil Court of Appeal, arguing that (a) the Council lacked competence to appeal against final court judgments. If the Council found that the Head of the Municipality had adopted an unlawful decision, then it had to challenge that decision; (b) the Council lacked the legal personality required under domestic law for issuing a letter of attorney for its court representative; and (c) the Council ’ s appeal was time-barred. The Council ought to have become aware of the judgment of 5 October 2011 earlier, as for several years the Municipality had issued and executed, with the Council ’ s approval, numerous payment orders to the applicants on the basis of that judgment.

On 3 March 2014 the Civil Court of Appeal decided to admit the Council ’ s appeal. As regards the applicants ’ first argument, it reasoned that the signing of the settlement by the Head of the Municipality was an action which prima facie breached the law and the rights of the Council. As regards the applicants ’ second argument, it reasoned that the legal personality of the Municipality was sufficient for the Council to issue a mandate of attorney. As regards the applicants ’ third argument, it reasoned that the fact of the Council ’ s knowledge of the judgment of 5 October 2011 could not have been inferred from the payment orders, while the applicants failed to submit other evidence.

On 30 April 2014 the Civil Court of Appeal granted the Council ’ s appeal. It noted that the judgment of 5 October 2011 established the Municipality ’ s duty on alienation of its property, while Article 16 § 20 of the Local Self-Government Act required that the Head of the Municipality first obtain the Council ’ s decision on alienation of municipal property. Since the case-file did not contain such a decision, the Civil Court of Appeal concluded that the rights of the Council had been breached . It reversed the judgment of 5 October 2011 and ordered new examination.

The applicants filed an appeal on points of law against that decision.

On 20 August 2014 the Court of Cassation declared their appeal on points of law inadmissible for lack of merit.

On 25 September 2014 the Lori Regional Court commenced the renewed civil proceedings concerning the applicants ’ initial claim against the Municipality, the Municipality ’ s counter-claim seeking to amend the Municipality ’ s initial undertaking on providing a flat for the applicants, as well as the Council ’ s claim against the applicants and the Municipality seeking to quash the contract of 26 February 2007 on provision of property to the applicants.

On 11 January 2016 the Lori Regional Court allowed the Council ’ s claim and quashed the contract of 26 February 2007. It also rejected the applicants ’ claim and discontinued the proceedings in respect of the Municipality ’ s counter-claim. The Regional Court reasoned that in the absence of the consent of the Council, the Municipality lacked competence to alienate municipal property to other individuals.

That judgment was upheld upon appeal by the Civil Court of Appeal and the Court of Cassation on 22 July and 12 October 2016 respectively.

B. Relevant domestic law

1. The Constitution (as amended in 2005)

Article 107 § 2 provides that the Council of Elders of a municipality has the power to dispose of municipal property, to approve the municipal budget at the proposal of the head of the municipality, to oversee the implementation of the municipal budget.

2. Local Self-Government Act (in force since 2002)

Article 4 provides that a municipality is a community of inhabitants of one or more settlements and an administrative and territorial unit. A municipality is a legal person.

Article 6 provides that self-government bodies to be elected in municipalities are the Council of Elders (representative body) and the Head of the Municipality (executive body). A municipality is represented by its head.

Article 16 provides that the Council of Elders approves the municipal budget and annual budgetary implementation report. The Council of Elders oversees the execution of the municipal budget and the use of other financial means of the municipality. The Council of Elders has the right to institute court proceedings against unlawful decisions of the Head of the Municipality. A t the proposal of the Head of the Municipality, the Council of Elders makes a decision on the alienation of municipal property.

3. Code of Civil Procedure (in force since 1999)

Article 38 provides that the head of a municipality has the authority to institute court proceedings for the protection of the property interests of the municipality.

Article 41 § 2 provides that a letter of attorney on behalf of a legal person is issued by the head of its executive body.

Article 207 § 5 provides that persons who were not involved as a party to the proceedings but whose rights and obligations were affected by a court judgment are entitled to bring an appeal within three months from the date on which they became aware, or ought to have become aware, of the adoption of that judgment, except when twenty years have passed since that judgment entered into force.

Article 207 § 7 provides that an appeal against a judgment of the first instance court which has entered into force may be admitted for examination in exceptional cases when, during the previous examination of the case, gross violations of substantive or procedural law have taken place, as a result of which the adopted judgment impairs the very essence of administration of justice or there exist newly discovered or new circumstances.

COMPLAINTS

The applicants complain under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 that the quashing of the final judgment of 5 October 2011 breached the principle of legal certainty and their property rights.

QUESTION TO THE PARTIES

Was the quashing of the final judgment of Lori Regional Court of 5 October 2011 by the Civil Court of Appeal compatible with the requirements of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 ( see, for example, Karen Poghosyan v. Armenia , no. 62356/09 , §§ 44 and 46 ) ?

Appendix

N o .

First name LAST NAME

Birth date and year

Nationality

Place of residence

Mr Mher CHATINYAN

18 July 1989

Armenian

Vanadzor

Mr David CHATINYAN

18 July 1989

Armenian

Vanadzor

Ms Naira ZAKARYAN

1 August 1960

Armenian

Vanadzor

Mr Hamlet CHATINYAN

25 November 1958

Armenian

Vanadzor

Ms Rozik KOSTANDYAN

19 October 1937

Armenian

Vanadzor