SECOND SECTION

DECISION

Application no. 25174/18 HUP - ZAGREB D.D. against Croatia

The European Court of Human Rights (Second Section), sitting on 5 September 2023 as a Committee composed of:

Pauliine Koskelo , President , Lorraine Schembri Orland, Davor Derenčinović , judges ,

and Dorothee von Arnim, Deputy Section Registrar,

Having regard to the above application lodged on 24 May 2018,

Having regard to the declaration submitted by the respondent Government on 5 April 2023 requesting the Court to strike the application out of the list of cases and the applicant company’s reply to that declaration,

Having deliberated, decides as follows:

FACTS AND PROCEDURE

1. The applicant, HUP - ZAGREB d.d., is a joint stock company incorporated under Croatian law and having its registered office in Zagreb. It was represented before the Court by Ms R. Rukljač , a lawyer practising in Zagreb.

2. The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik.

3. The applicant company’s complaint under Article 1 of Protocol No. 1 to the Convention was communicated to the Government, while the remainder of the application was declared inadmissible.

THE LAW

4 . The application concerns the State’s positive obligations under Article 1 of Protocol No. 1 to the Convention in the situation where the State had first sequestered the applicant company’s hotel and in the period between 1991 and 2001 used it to provide accommodation for around 650 war veterans, internally displaced persons and refugees. In 2005 the applicant company instituted civil proceedings against the State claiming that the persons accommodated in its hotel had badly damaged it. The claim was dismissed on the grounds that there was no legal basis for the State’s liability in such circumstances.

5. Before the Court the applicant company complained under Article 1 of Protocol No. 1 to the Convention that the State bore liability for the damage to its hotel.

6 . After the failure of attempts to reach a friendly settlement, by a letter of 5 April 2023 the Government informed the Court that they proposed to make a unilateral declaration with a view to resolving the issue raised by the application. They further requested the Court to strike out the application in accordance with Article 37 of the Convention.

The declaration provided as follows:

“Having regard to the Court’s judgment in the case of Dabić v. Croatia , no. 49001/14, 18 March 2021, and in view of the possibility provided by the Civil Procedure Act to seek reopening of the civil proceedings on the basis of the Court’s strike-out decision, I declare, by way of this unilateral declaration, that the Government of the Republic of Croatia:

(a) acknowledges that in the instant case there has been a violation of the applicant company’s right to the peaceful enjoyment of its possessions guaranteed by Article 1 of Protocol No. 1 to the Convention; and

(b) is ready to pay the applicant company the amount of EUR 2,550 (two thousand five hundred fifty euros), to cover the costs and expenses incurred before the Constitutional Court of the Republic of Croatia, and the costs and expenses incurred before the Court, plus any tax that may be chargeable to the applicant company.

This sum will be payable within three months from the date of notification of the decision by the Court pursuant to Article 37 § 1 of the European Convention on Human Rights to the account indicated by the applicant company. In the event of failure to pay this sum within the said three-month period, the Government undertakes to pay simple interest on it, from the expiry of that period until settlement, at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points. The payment will constitute the final resolution of the case.”

7 . By a letter of 3 May 2023, the applicant company indicated that it was not satisfied with the terms of the unilateral declaration on the ground that the amount offered did not cover the costs and expenses incurred before the civil courts. Furthermore, no compensation had been offered for the pecuniary damage sustained, which was substantial especially in view of the accrued statutory default interest. Lastly, the domestic proceedings, together with those before the Court, had already been pending too long (see paragraph 4 above).

8. The Court reiterates that Article 37 of the Convention provides that it may at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to one of the conclusions specified, under (a), (b) or (c) of paragraph 1 of that Article. Article 37 § 1 (c) enables the Court in particular to strike a case out of its list if:

“for any other reason established by the Court, it is no longer justified to continue the examination of the application”.

9. It also reiterates that it may strike out an application under Article 37 § 1 (c) on the basis of a unilateral declaration by a respondent Government even if the applicant wishes the examination of the case to be continued.

10. To this end, the Court has examined the declaration in the light of the principles emerging from its case-law, in particular the Tahsin Acar judgment ( Tahsin Acar v. Turkey (preliminary objections) [GC], no. 26307/95, §§ 75 ‑ 77, ECHR 2003-VI; WAZA Sp. z o.o. v. Poland (dec.), no. 11602/02, 26 June 2007; and Sulwińska v. Poland (dec.), no. 28953/03, 18 September 2007).

11 . The Court reiterates that in cases similar to the present one it found violations of Article 1 of Protocol No. 1 to the Convention on account of the breach of the State’s positive obligations which required the domestic courts to examine the substance of the applicants’ claims for compensation, rather than dismissing them by categorically excluding any liability of the State for the damage inflicted by third persons placed temporarily in the applicants’ properties sequestered by the State (see Dabić v. Croatia , no. 49001/14, §§ 47-60, 18 March 2021; and Pero Marić v. Croatia [Committee], no. 29525/15, §§ 31-40, 17 March 2022). It also held that the most appropriate way of repairing the consequences of the violations found was to reopen the civil proceedings complained of (see Dabić , §§ 64-65; and Pero Marić , §§ 44-45).

12. In that connection the Court first notes that after the Court’s judgments in those cases, the domestic courts changed their case-law in a manner that it no longer excluded the State liability in such cases (see, for example, the Constitutional Court’s decisions no. U-III-4299/2017 of 14 October 2021 and U-III-188/2020 of 25 November 2021, and the Supreme Court’s judgment no. Rev 1284/2021-4 of 12 January 2022).

13. The Court further notes that until 19 July 2022, section 428a of the Croatian Civil Procedure Act provided applicants with a possibility of seeking reopening of the civil proceedings solely on the basis of a judgment of the Court finding a violation of the Convention or Protocols thereto. However, following the entry into force of the 2022 Amendments to that Act on 19 July 2022, applicants are now expressly entitled to seek reopening of civil proceedings also on the basis of the Court’s strike-out decisions accepting friendly settlements or the Government’s unilateral declarations.

14. It would therefore appear that, if the Court were to accept the Government’s unilateral declaration, the applicant company would be entitled to seek reopening of the civil proceedings complained of, and that in the reopened proceedings its claim for compensation could no longer be dismissed on the same grounds as before (see paragraph 4 above). The Court has no reason to doubt that, if in the reopened proceedings the domestic civil courts find the applicant company’s compensation claim well-founded, they would award it compensation for the pecuniary damage sustained, including the statutory default interest (see paragraph 7 above), and would order the State to reimburse it for the costs of the civil proceedings.

15. That being so, and having regard to the nature of the admissions contained in the Government’s declaration, as well as the amount of compensation proposed to cover the remaining costs and expenses incurred by the applicant company (see paragraph 6 above) while noting that the applicant company did not seek compensation for non-pecuniary damage, the Court considers that it is no longer justified to continue the examination of the application (Article 37 § 1 (c)).

16. Moreover, in light of the above considerations, the Court is satisfied that respect for human rights as defined in the Convention and the Protocols thereto does not require it to continue the examination of the application (Article 37 § 1 in fine ).

17. Finally, the Court emphasises that, should the Government fail to comply with the terms of their unilateral declaration, or should the domestic courts refuse to reopen the civil proceedings in question or dismiss the applicant’s company claim for compensation on grounds incompatible with the Court’s case-law on the matter (see paragraph 11 above), the application could be restored to the list in accordance with Article 37 § 2 of the Convention (see Josipović v. Serbia (dec.), no. 18369/07, 4 March 2008).

18. In view of the above, it is appropriate to strike the case out of the list.

For these reasons, the Court, unanimously,

Takes note of the terms of the respondent Government’s declaration under Article 1 of Protocol No. 1 to the Convention and of the modalities for ensuring compliance with the undertakings referred to therein;

Decides to strike the application out of its list of cases in accordance with Article 37 § 1 (c) of the Convention.

Done in English and notified in writing on 28 September 2023.

Dorothee von Arnim Pauliine Koskelo Deputy Registrar President