CONCURRING OPINION OF JUDGE PAVLOVSCHI

In my opinion, the present application is inadmissible on account of the applicant company ' s failure to exhaust all available domestic remedies, as required by the Convention, in its attempts to obtain full compensation for the damage sustained.

The problem of compensation for damage is not only closely linked to the problem of exhaustion or non-exhaustion of domestic remedies. In my opinion, it is also closely linked to the problem of proportionality, which forms part of the examination of the merits of the case.

Despite my firm conviction that the present application is inadmissible, I have decided to go along with my fellow judges in finding a violation in the case of Bimer S.A. v. Moldova .

Let me explain the line of reasoning which led me to this decision and which - to some extent - is similar to that expressed in my partly concurring opinion in the case of Cooperativa Agricola Slobozia-Hanesei v. Moldova (application no. 39745/02), namely that international judges in their decision-making activity are to a certain extent bound by the positions expressed by the parties and the evidence submitted by them.

Returning to the present case, I consider that it may be treated as another in a series of economic cases which have already been examined or are still pending before this Court.

Economic cases always pose extremely complex questions, the answers to which require deep professional knowledge. Their examination is even more difficult when such cases involve taxation issues taken together with various legislative changes. Dealing with taxation matters creates problems even for persons who are specialised in this field, not to mention international judges. That is why the parties ' submissions are crucial and decisive in the correct adjudication of these cases. Where a party fails to comply with its procedural obligations, the Court ' s task is rendered even more difficult.

The case of Bimer S.A. presents a clear illustration of the above statement. In my opinion t his case has two basic aspects.

The first of these aspects is an administrative dispute between Bimer S.A. and the Customs Department. This part of the case commenced on 11 June 2002, when Bimer S.A. brought administrative proceedings before the Administrative Court seeking annulment of the Customs

Department ' s order no. 127-0 of 18 May 2002, an order which had the immediate and intended effect of preventing the applicant from continuing to operate its duty-free business at the LeuÅŸeni Customs Office and of terminating the applicant ' s existing licence to conduct business at that location. Those proceedings were terminated by the final decision of the Supreme Court of Justice of 11 September 2002, which dismissed the applicant ' s action.

Thus, in respect of its request for annulment of the Customs Department ' s order, the applicant did indeed exhaust all domestic remedies.

The second aspect of the case is whether the applicant exhausted domestic remedies with regard to its claim for compensation for the damage allegedly caused by the closure of its duty-free shop and bar. Here I really do have some very serious doubts.

No one may question the sovereign power of member States ' national Parliaments to enact any laws they see fit in the field of taxation, in order to reflect national realities, international obligations and the economic situation existing in those states. In enacting such measures, however, member States must take into consideration different competing interests.

According to the Court ' s well-established case-law, an interference, including one resulting from measures to secure payment of taxes, must strike a “fair balance” between the demands of the general interests of the community and the requirements of the protection of the individual ' s fundamental rights.

Furthermore, in determining whether this requirement has been met, it is recognised that a Contracting State, not least when framing and implementing policies in the area of taxation, enjoys a wide margin of appreciation and the Court will respect the legislature ' s assessment in such matters unless it is devoid of reasonable foundation (see National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom , judgment of 23 October 1997, Reports of Judgments and Decisions 1997-VII, §§ 80-82).

The Customs Department ' s order had the effect of terminating a valid licence to run a business, which amounts to an interference with the right to the peaceful enjoyment of possessions guaranteed by Article 1 of the Protocol. Such an interference represents a measure to control the use of property as set out in the second paragraph of that Article.

In the light of the above, it is important to study how national legislation strikes a “fair balance” between the demands of the general interests of the community and the requirements of the protection of the individual ' s fundamental rights. Or, to put it more bluntly, what forms of compensation for the damage caused to foreign investors by various forms of interference with their property rights existed, were available and, accordingly, ought to have been exhausted by the applicant?

In this connection the Foreign Investments Act is particularly relevant. Here I refer to Moldovan legislation that was in force at the material time. Section 39 of this Act directly stipulates that foreign investments in Moldova are granted complete security and protection. They cannot be expropriated, nationalised or subject to any other similar measure in any way other than according to the law ... and against the “payment of appropriate compensation”. Compensation is to correspond to the value of the investment assessed immediately before the moment of expropriation, nationalisation or similar measure. It must be paid not later than three months from the moment the above measures are taken, with an appropriate bank interest rate calculated before the date of payment (see paragraph 24 of the judgment).

According to section 45 of the same Act, all litigation between foreign investors and state bodies concerning the methods of application of the Act and the provisions of other legal acts of Moldova is to be adjudicated by the Economic Court of Moldova.

In my opinion, the decision to withdraw the licence was clearly a measure to control the taxation sector in the country. Such a decision involved a deprivation of property, in so far as the licence itself could be considered a possession, but in the circumstances of the present case the deprivation formed a constituent element of control of the use of property in the interests of taxation.

Given that the applicant company incurred pecuniary damage as a result of the State authorities ' actions, it should have initiated compensation proceedings before the Economic Court of Moldova, in accordance with the above-mentioned provisions of sections 39 and 45 of the Foreign Investment Act. This was not done. In practical terms, this means that the applicant has failed to exhaust all available domestic remedies.

At the stage of communication the Government were asked a direct question: “Did the applicant exhaust all the domestic remedies avail able to it under domestic law?”

Despite the fact that – in the particular circumstances of the present case – the answer to this question was self-evident and did not present any particular difficulty, the Government ' s representatives failed to respond or preferred not to deal with this question in their observations.

Where a case has been communicated to the respondent Government, it is the normal practice of this Court not to declare the application inadmissible for failure to exhaust domestic remedies unless this matter is raised by the Government in their observations (see Rehbock v. Slovenia , no. 29462/95, (dec), 20 May 1998).

This failure by the Government representatives to answer a direct question put by the Court resulted in the following unanimous finding, reflected in the admissibility decision of 23 May 2006: “ ... The Court notes that the respondent Government have not pleaded that the applicant has failed to make use of domestic remedies, and it need not therefore examine this matter ... ” (see the admissibility decision in the case of Bimer S.A. v. Moldova of 23 May 2006, application no. 15084/03).

The Court decided to declare the present application admissible.

Thus, it is my opinion that the Government ' s failure to raise the question of non-exhaustion of domestic remedies from the very outset pre-determined the fate of the present case and made its outcome quite foreseeable.

Such shortcomings create a false impression as to the non-existence in the Republic of Moldova of any remedies for the protection of foreign investment or any possibility for foreign investors to obtain compensation for damage caused by the state authorities, something that, in my view, is completely wrong.

The damages awarded by the Court in the present case are quite impressive, but they are based on the applicant ' s calculations as well as those submitted by the Government. The latter calculations were made by the National Centre for Expert Analysis and, in general terms, are in line with the calculations submitted by the applicant. For instance, if the applicant claimed USD 798,956.51 (see paragraph 71), then the Government, in turn, stated that the damage suffered by Bimer S.A. amounted to USD 614,404.99 (see paragraph 75). Awarding EUR 520,000 in such a situation can be considered as a perfectly equitable sum, because it presents a fair balance between the sum requested by the applicant and the figure submitted by the Government.

In my opinion, in such circumstances the Court simply had no option but to accept a “fair balance” approach.