Communicated on 7 January 2016

THIRD SECTION

Application no. 41421/06 Oleg Ivanovich KIRILLOV and others against Russia lodged on 18 September 2006

STATEMENT OF FACTS

The three applicants, Mr Oleg Ivanovich Kirillov, Ms Aleksandra Anatolyevna Syrtsova and Mr Ivan Romanovich Mokhnyak, are Russian nationals who were born in 1958, 1966 and 1956 respectively and live in the town of Kopeysk in the Chelyabinsk Region. They were represented by Mr S. Zabarin, a lawyer practising in Moscow.

The circumstances of the case

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

1. Criminal procedure and confiscation of a ship

The applicants are the sole owners of a limited liability company, OOO Bit-Ost (hereinafter “Bit-Ost”).

In April 2001 a senior investigator from the Rostov Regional Department of the Federal Security Service (FSB) instituted criminal proceedings against a number of individuals suspected of large-scale smuggling. According to the authorities, the group had transported undeclared goods from Turkey to Russia on the company ’ s ship, Kalinin .

On 25 May 2001 the senior investigator issued a decision impounding Kalinin as evidence in the criminal proceedings, stating that it would be transferred to the company Doninturflot for safekeeping.

A year later the senior investigator sent a letter to Bit-Ost asking them to send a representative to “accept the Kalinin ship for safekeeping”.

The company sent the second applicant, Ms Syrtsova, to take possession. She arrived with documents confirming Bit-Ost ’ s ownership. She was not, however, given access to the ship. The investigator informed her that it was evidence in a criminal case and could no longer be used for commercial purposes.

On a number of occasions the applicants asked the investigating authorities and the trial judge to be invited to take part in the criminal proceedings in their capacity as victims and ship owners, but their requests were unsuccessful.

On 31 December 2002 the trial court convicted the smugglers but did not determine the fate of the ship.

On 20 March 2003 the Kirovskiy District Court of Rostov-on-Don (hereinafter “the District Court”) issued a separate decision impounding Kalinin as evidence in the criminal case for the benefit of the State as it was an “instrument of crime”. The court did not examine the issue of ownership or determine whether the convicted smugglers had lawfully owned Kalinin .

In August 2003 the ship was sold by the State by way of auction to a limited liability company, OOO Concept (hereinafter “Concept”), for 500,000 Russian roubles (RUB). According to an expert report prepared by the applicants during the same period in 2003, Kalinin was worth no less than RUB 32,500,000. Bit-Ost was not allowed to take part in the auction, and could not influence the assessment of the ship ’ s value prepared by the State authorities for that purpose.

2. Restitution proceedings

(a) Proceedings challenging confiscation of the ship

Following various complaints to a number of judicial authorities, including the Cassation Division of the Supreme Court of the Russian Federation, on 7 December 2005 a Supreme Court judge instituted supervisory review proceedings in respect of the decision of 20 March 2003 and transferred the case to the Presidium of the Rostov Regional Court (hereinafter “the Regional Court”) for examination. The judge observed that in its decision of 20 March 2003 the District Court had not paid any attention to the fact that Kalinin did not belong to the convicted smugglers.

On 21 January 2006 the Presidium quashed the decision of 20 March 2003 by way of supervisory review and sent the case to the District Court for fresh examination, stressing that the criminal case material clearly showed that Kalinin had belonged to Bit-Ost and not the defendants in the criminal case.

In the course of the new examination, the District Court refused to examine the applicants ’ and Bit-Ost ’ s claim to the ship for the following reasons:

“A prosecutor, [when] heard at a court hearing, stated that in compliance with the Kirovskiy District Court of Rostov-on-Don ’ s decision of 20 March 2003 the Kalinin ship was sold to the company Concept, which registered [its] title ... under the new name Gelios . At the court hearing the prosecutor stated that given the decisions of various courts studied in court, there were grounds to conclude that the company Bit ‑ Ost ’ s claims in respect of the ship were well-founded. However, the court was not provided with any objective information which could have confirmed that the company Concept ’ s registration of its title to the ship had been unlawful ... [nor was it] provided with evidence that the buyer [Concept] had acted negligently when it had bought the ship at auction. The prosecutor indicated that given the above-mentioned circumstances and the fact that the ship ’ s whereabouts were unknown at the material time, it was impossible to take a decision and determine the fate of that piece of evidence; it is therefore necessary to leave this issue without a determination on the merits, until a commercial court finally determines the issue of ownership of that ship.

The outcome of that hearing was that the court finds the prosecutor ’ s arguments particularly convincing and also considers that the court is currently unable to determine the fate of the indicated piece of evidence, Kalinin , not only because its whereabouts are unknown at the present time, but also because there is an objective contradiction between the interests of OOO Concept which had lawfully, on the basis of the Kirovskiy District Court of Rostov-on-Don ’ s then final decision of 20 March 2003, bought that ship (the court had not been provided with any evidence showing that the buyer had been negligent), and the interests of ...the company Bit-Ost, which had been the ship ’ s original owner and which had a lawful claim in respect of [it]... after the court decisions [including that of 20 March 2003] had been quashed... The court considers that a commercial court should settle those objective contradictions when one of the parties concerned initiates such commercial proceedings. Until those contradictions are settled [the court] finds it impossible to determine the fate of the ship as a piece of evidence in the criminal case, as under Article 81 § 3 (6) of the Russian Code of Criminal Procedure pieces of evidence which do not belong to defendants in a criminal case (it was established the disputed ship does not belong to any of those convicted in the criminal case, including Mr L.) should be returned to their lawful owners. At the same time, both the company Bit-Ost and OOO Concept currently have objective grounds to claim title to the disputed ship. The court considers that this uncertainty is the objective ground ... [and it] may be determined in civil (commercial) proceedings involving the two companies.”

The District Court also dismissed the applicants ’ and their company ’ s requests to be assigned victim status in the criminal proceedings against the smugglers, noting that there was no evidence that they had suffered any damage as a result of the smugglers ’ actions.

On 11 April 2006 the decision was upheld on appeal by the Rostov Regional Court, which endorsed the first-instance court ’ s reasoning.

(b) Compensation proceedings

In March 2006 the applicants brought a claim against the State in Bit ‑ Ost ’ s name, claiming compensation for damage caused by the seizure and subsequent sale of Kalinin .

On 7 April 2006 the District Court refused to examine the claim, noting that the issue fell under the jurisdiction of the commercial courts.

On 30 May 2006 the Regional Court upheld that decision, noting that the issue of compensation could not be determined until a commercial court had determined the ownership claims in respect of the ship.

(c) Proceedings against Concept

By a final judgment of 14 August 2007, the commercial courts confirmed that Concept was the bona fide lawful owner of Kalinin following its title registration with the State authorities in April 2004. Bit-Ost was a third party in those proceedings.

(d) Proceedings about a judicial error

Bit-Ost brought a claim in the District Court, seeking compensation for damage caused by its unlawful decision on 20 March 2003 in the course of the criminal proceedings ordering the ship ’ s confiscation.

On 14 January 2008 the District Court dismissed the claim, noting that it was not a criminal law matter and should be examined within civil proceedings.

(e) Commercial compensation proceedings

On 28 October 2008 the Moscow Commercial Court dismissed the claim brought by Bit-Ost against the Russian Federation seeking compensation for damage caused by the court decision to confiscate Kalinin . Referring to Article 1070 of the Russian Civil Code, it noted that the State was only liable to compensation where a judge ’ s guilt had been established in a final criminal conviction. It further stressed that the claimant had not provided a copy of a final judgment issued in a criminal case against the judge.

On 27 February 2009 the Federal Commercial Court of the Moscow Circuit quashed the judgment on appeal and remitted the case for fresh examination.

On 21 July 2009 the Moscow Commercial Court again dismissed the company ’ s claim, observing as follows:

“... the court made the following conclusions: as the case material shows, on 31 December 2002 [a group of individuals, including Mr L.] were found guilty of smuggling.

By a decision of the same court issued on 20 March 2003 in the course of the same criminal case, the piece of evidence, the Kalinin ship was found to be an instrument of crime and was seized for the benefit of the State and was subsequently sold at auction.

By a decision of the Presidium of the Rostov Regional Court issued on 12 January 2006, the part of the above-mentioned decision pertaining to the fate of ... the Kalinin ship was quashed [and] the case was sent for fresh examination, which on 22 June 2006 [resulted in] the Kirovskiy District Court of Rostov-on-Don [leaving] the issue of the fate of the ship without examination, as both the company Bit-Ost and the company Concept could objectively dispute [its] title to the ship.

In these circumstances, the claimant has suffered damage caused by the Kirovskiy District Court of Rostov-on-Don ’ s decision, and [in particular] by judge M.

...

[Having studied a number of documents] the court finds that the claimant was the lawful owner of the Kalinin ship at the time it was confiscated and sold.

...

The court finds proven the claimant ’ s argument pertaining to the amount of the real damage claimed as it concerned the market value of the ship at the time it was confiscated, as well as the loss of profit as shown [by various documents submitted by the claimant] in the [total amount of RUB 71,501,927].

At the same time, taking into account the Supreme Commercial Court of the Russian Federation ’ s position ... the court finds that the unlawful actions of the court were not proven and that the court is therefore not responsible for causing damage to the claimant ...

The merit-related essence of a court [decision] can be subjected to re-examination in compliance with the established appeal procedure, as was the case following the quashing of the Kirovskiy District Court of Rostov-on-Don ’ s decision of 20 March 2003 by the Rostov Regional Court.

At the same time, balancing an incorrect court decision and a given judge ’ s guilt would necessarily mean negating the right to judicial discretion put into practice when a judge takes a decision.

It follows that there are no grounds established by law to place the blame for causing damage on a judge as a result of his incorrect merit-based decision.”

The court also ordered Bit-Ost to pay RUB 100,000 in court fees.

That judgment became final on 15 October 2009 when the Federal Commercial Court of the Moscow Circuit upheld it on appeal. The appellate court once again confirmed Bit-Ost ’ s title to the ship at the time of the confiscation order and subsequent sale, agreed with the lower court ’ s assessment of the damage caused to the company and stated that there were no legal grounds to compensate the company as the damage had been caused by the erroneous decision of a court.

On 3 December 2009 the Supreme Commercial Court refused to re ‑ examine the merits of the case.

(f) Other attempts to have the fate of the ship determined

In 2011 the applicants again lodged a complaint with the District Court, arguing that it had failed to comply with the supervisory review decision of 12 January 2006 and finally determine the fate of Kalinin , which had been considered a piece of evidence in the criminal case.

On 14 January 2011 the District Court left the complaint without examination, noting that the claim could not be adjudicated. It reiterated the commercial court judgment in 2007 by which Concept had been considered the lawful owner of Kalinin after April 2004. It further stated that the issue of ownership was outside the court ’ s competence in the present case and advised Bit-Ost to bring a civil claim to restore its rights to the ship. The decision was upheld on appeal by the Regional Court on 22 March 2011.

The applicants lodged a number of other complaints with the District Court, all of which were dismissed because it considered the issues to fall within the jurisdiction of the civil or commercial courts. In particular, the applicants claimed the return of the ship or compensation for its value, that they should be considered victims of a criminal offence and paid compensation in the course of the restitution proceedings, and that as owners of Bit-Ost they should be compensated for damage caused by the confiscation of the ship.

(g) Further commercial court proceedings

On the District Court ’ s instructions, Bit-Ost brought a further claim in the commercial courts, seeking compensation for damage caused by the State as a result of a violation of its property rights, and the refusal to pay them compensation for that violation.

On 30 January 2012 the Moscow Commercial Court allowed the company ’ s claim for the value of the ship and dismissed the remaining part of the claim for loss of profit, considering that the company had failed to substantiate it.

On 28 April 2012 the Ninth Appellate Commercial Court quashed the judgment of 30 January 2012 and discontinued the proceedings for compensation. It held that the same dispute between the same parties had already been determined by the commercial courts in 2009 and the judgment in that case had become final.

On 2 August 2012 the Federal Commercial Court of the Moscow Circuit upheld the judgment of 28 April 2012, fully accepting the appellate court ’ s reasoning. On 16 November 2012 the Supreme Commercial Court refused to reconsider the final judgment by way of supervisory review.

COMPLAINTS

The applicants complain under Article 1 of Protocol No. 1 and Article 13 of the Convention that their ship was unlawfully taken from them by the State without the payment of compensation, and that their attempts to obtain compensation or the return of the ship has been fruitless for many years, given the lack of an effective remedy to complain of a violation of their property rights as a result of a judicial error.

QUESTIONS TO THE PARTIES

1. Do the applicants have standing to complain under Article 1 of Protocol No. 1 about the seizure of the Kalinin ship which belong to the Bit-Ost company?

2. Given the court decision to seize the Kalinin ship, and taking into account its subsequent sale for the benefit of the State, were the applicants deprived of their possessions in accordance with the conditions provided for by law, within the meaning of Article 1 of Protocol No. 1?

If so, did that deprivation impose an excessive individual burden on the applicants (see Immobiliare Saffi v. Italy, [GC], no. 22774/93, § 59, ECHR 1999-V?)

3. Did the applicants have at their disposal an effective domestic remedy for their complaint under Article 1 of Protocol No. 1, as required by Article 13 of the Convention?