In the case of OAO
Plodovaya Kompaniya v. Russia,
The European Court of Human
Rights (First Section), sitting as a Chamber composed of:
Mr
C.L.
Rozakis, President,
Mr
L.
Loucaides,
Mrs
F. Tulkens,
Mrs
N. Vajić,
Mr
A.
Kovler,
Mrs
E. Steiner,
Mr
K.
Hajiyev, judges,
and Mr S.
Nielsen, Section
Registrar,
Having deliberated in
private on 15 May 2007,
Delivers the following
judgment, which was adopted on that date:
PROCEDURE
1. The case
originated in an application (no. 1641/02) against the
Russian Federation lodged with the Court
under Article 34 of the Convention for the Protection of Human
Rights and Fundamental Freedoms (“the Convention”) by OAO
Plodovaya Kompaniya, an open joint-stock company incorporated in
Russia
(“the applicant”), on 20 December 2001.
2. The applicant
was represented by Mr M. de Guillenchmidt, a lawyer practising
in Paris. The Russian Government (“the
Government”) were represented by Mr P. Laptev, Representative of
the Russian Federation
at the European Court of Human Rights.
3. The applicant
alleged that the final decision in its civil case before the
commercial courts was quashed by way of supervisory review in
violation of Articles 6, 13 and 14 of the Convention and of
Article 1 of Protocol No. 1 to the Convention.
4. By a decision
of 23 May 2006, the Court declared the application admissible.
5. The applicant
and the Government each filed further written observations (Rule
59 § 1). The Chamber having decided, after consulting the
parties, that no hearing on the merits was required (Rule 59 § 3
in fine), the parties
replied in writing to each other's observations.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
6. In 1966 the
Ministry of Foreign Trade of the
USSR
created a State Export and Import Agency “Soyuzplodoimport” (Всесоюзное
экспортно-импортное объединение «Союзплодоимпорт»).
Its assets included the trademarks to a number of brands of
alcohol (such as Vodka Stolichnaya, Vodka Moskovskaya and their
derivatives).
7. On 5 January
1990 the agency was reorganised into the State Foreign Trade
Agency “Soyuzplodoimport” (Всесоюзное
внешнеэкономическое объединение «Союзплодоимпорт»).
8. On 20 January
1992 the applicant company was set up in the form of a closed
joint-stock company. It was called the “Foreign Trade Stock
Company 'Soyuzplodoimport'” (Внешнеэкономическое
акционерное общество
закрытого типа
«Союзплодоимпорт», VAO “Soyuzplodoimport”), and was
registered with the relevant state agency, namely the Moscow
Registration Chamber. According to its memorandum of
association, it was set up by several founders, including the
State Foreign Trade Agency “Soyuzplodoimport”, which held 3,880
of its 17,000 shares. The memorandum of association provided
that the applicant company was a “successor” to the State
Foreign Trade Agency “Soyuzplodoimport”.
9. In 1998 the
applicant company converted into an open joint-stock company.
10. On 24
December 1999 the general shareholders' meeting of the applicant
company adopted a new memorandum of association. The company
name was changed to OAO “Plodovaya Kompaniya” (ОАО
«Плодовая компания»). The new memorandum of
association contained a declaration that the applicant company
was the successor of the State Foreign Trade Agency
“Soyuzplodoimport”.
11. In the above
period the applicant company notified the trademark registration
authority that the trademarks of the State Foreign Trade Agency
“Soyuzplodoimport” had changed ownership through succession and
consequently obtained trademark certificates in its own name. It
subsequently used the trademarks as collateral in a number of
commercial transactions with third parties.
12. On 31 October
2000 the Deputy Prosecutor General challenged the applicant
company's new memorandum of association, particularly the
declaration of succession, before the Commercial Court of
Moscow.
13. On 21
December 2000 the Commercial Court of Moscow declared the
provision on succession null and void. It held that the
applicant company had had no legal grounds to claim succession
to the State Foreign Trade Agency “Soyuzplodoimport”. The
applicant company had been set up as a new company and not
converted from an existing one. It held that a mere declaration
by the applicant company in its founding memorandum of
association was insufficient to enable it to become the
successor of another company. Likewise, it found that, although
the applicant company had de
facto acted as a successor before the trademark
registration authorities and courts of arbitration, this was
irrelevant to the establishment of corporate succession.
14. On 19
February 2001 the Appellate Board of the Commercial Court of
Moscow examined the applicant company's appeal. Without entering
into the merits it quashed the first-instance judgment and
terminated the proceedings on the ground that the prosecutor's
office did not have standing to bring proceedings. This decision
entered into force on the same day. It was not appealed against
either by a cassation appeal or by a separate appeal.
15. On 18 April
2001 the Moscow Registration Chamber registered the change of
name of the State Foreign Trade Agency “Soyuzplodoimport”. Its
new name was the Federal State Unitary Enterprise
“Soyuzplodoimport” (Федеральное
государственное унитарное предприятие «Внешнеэкономическое
объединение Союзплодоимпорт»).
16. On 13 June
2001 the Deputy Prosecutor General submitted a request for
supervisory review of the decision of 19 February 2001.
17. The applicant
company was summoned to the hearing before the supervisory
instance, but those summons were not served on it because it
could not be found at its official address. The representatives
of the applicant company learned about the hearing, however,
submitted written comments on the merits of the case and
attended the hearing.
18. On 16 October
2001 the Presidium of the Supreme Commercial Court of Russia
examined the case in supervisory review proceedings. The
applicant company was represented by the company's president,
who made oral submissions before the Presidium.
19. The Presidium
quashed the decision of 19 February 2001 and reinstated the
first-instance judgment of 21 December 2000. On the procedural
point, it held that the prosecutor's office was entitled by law
to represent the State in proceedings before commercial courts
where public or State interests were involved. It found that the
proceedings at issue concerned State property, and that this
provided sufficient grounds for the prosecutor to intervene. As
to the merits of the case, the Presidium upheld the finding that
the applicant company was not entitled to claim succession to
the State Foreign Trade Agency “Soyuzplodoimport” because there
had been no decision on the latter's conversion, and the
applicant company itself had been created as a new entity and
not as a result of any reorganisation of an existing legal
person. Accordingly, the provisions on succession made in its
memorandums of association were null and void. This decision
entered into force on the same day and was not subject to
further appeal.
II. RELEVANT DOMESTIC LAW
A. Corporate succession
20. The Civil
Code of the Russian Federation provides that a legal person may
be reorganised or liquidated upon a decision of its founders or
its management body as authorised in its constitutional
documents, or by a competent court in the circumstances provided
for by law (Articles 57 and 61). In the event of reorganisation
in a form of merger, conversion or accession, the assets of the
legal person that ceases to exist are transferred pursuant to an
act of transfer to a newly created legal person and, in the
latter case – to an existing legal person. In the event of
reorganisation in a form of division or separation, the assets
of the reorganised legal person are divided and transferred
pursuant to a separation balance sheet (Article 58). In the
event of liquidation the legal person ceases to exist without
succession (Article 61).
B. Supervision review in proceedings before
commercial courts
21. The Code of
Commercial Procedure (no. 70-FZ of 5 May 1995, in force at the
material time) established that final judgments and decisions of
all commercial courts of the Russian Federation were amenable to
supervisory review initiated on an application by the President
of the Supreme Commercial Court or his deputy or by the
Prosecutor General of the Russian Federation or his deputy
(Articles 180 and 181). The Code did not list the grounds for
lodging an application for supervisory review: it merely
specified that it could be lodged “also in connection with a
request by a party to the proceedings” (Article 185 § 1). The
summoning of parties to the hearing before the Presidium of the Supreme Commercial Court
was to be at the discretion of the Presidium (Article 186 § 2).
There was no time-limit for lodging an application for
supervisory review, and, in principle, such applications could
be lodged at any time after a judgment had become final.
THE LAW
I. ALLEGED
VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION
22. The applicant
company complained that there had been a violation of its right
to the peaceful enjoyment of its possessions, in particular the
assets of its alleged predecessor corporation. In particular, it
contended that the supervisory review had resulted in their
claim to be the holder of the alcohol trademarks being declared
void. It relied on Article 1 of Protocol No. 1, which provides:
Article 1 of Protocol No. 1 (protection of
property)
“Every natural or legal
person is entitled to the peaceful enjoyment of his possessions.
No one shall be deprived of his possessions except in the public
interest and subject to the conditions provided for by law and
by the general principles of international law.
The preceding provisions shall not, however,
in any way impair the right of a State to enforce such laws as
it deems necessary to control the use of property in accordance
with the general interest or to secure the payment of taxes or
other contributions or penalties.”
23. The
Government denied that there had been an interference with the
applicant's possessions. They disputed the applicant's title to
the disputed trademarks or to any other assets which it had
allegedly acquired from the State Foreign Trade Agency
“Soyuzplodoimport”. Furthermore, they pointed out that the
judicial decision quashed by the supervisory instance had been a
procedural one and did not confer any right or entitlement on
the applicant company and did not create any legitimate
expectation to acquire them. Accordingly, its reversal could not
deprive the applicant company of any possessions within the
meaning of Article 1 of Protocol No. 1.
24. In contrast,
the applicant company maintained that, as a result of the
supervisory review proceedings and of the entire dispute
resolution process before the commercial courts, it had been
deprived of its possessions, notably of all the assets of its
alleged predecessor, the State Foreign Trade Agency
“Soyuzplodoimport”.
25. The Court
notes, firstly, that the subject matter of the parties' dispute
before the domestic instances, and of the applicant's claims
before the Court, was the
existence of the universal legal succession between the State
Foreign Trade Agency “Soyuzplodoimport” and the applicant
company. The question of ownership of individual
assets, such as trademarks, was not as such contested in the
impugned proceedings and subsequently does not call for the
Court's assessment.
26. The Court
further notes that the applicant company laid claim to the
alleged corporate succession, which presupposes the existence of
a bilateral deed between two companies or a unilateral deed from
a reorganised company by which assets are reassigned. However,
the applicant company has not presented any proof of the
intention of the State Foreign Trade Agency “Soyuzplodoimport”
to convert itself into another company or to reorganise itself
so as to separate from its assets in favour of the applicant
company. On the contrary, the Court considers it established
that the State Foreign Trade Agency “Soyuzplodoimport” continued
to exist in its original corporate form until 2001, when it was
re-registered as a Federal State Unitary Enterprise
“Soyuzplodoimport”.
27. The Court
also finds it pertinent that the applicant company has never
succeeded in having its title to the legal succession
established in domestic judicial proceedings. No court judgment
has determined this point in the applicant company's favour. In
its decision of 19 February 2001, the appeal instance did not
resolve the dispute in substance and took only a procedural
decision to exclude the public prosecutor from participation in
the proceedings. In this context, the Court reiterates its
established case-law that a “claim” can constitute a
“possession” within the meaning of Article 1 of Protocol No. 1
only if it is sufficiently
established to be enforceable (see
Burdov v. Russia,
no. 59498/00, § 40, ECHR 2002‑III and
Stran Greek Refineries and
Stratis Andreadis v. Greece, judgment of 9 December
1994, Series A no. 301-B, p. 84, § 59). In the circumstances of
the instant case, it considers that at no stage of the domestic
proceedings was there a judicial decision such as to establish
the applicant company's claim to “possessions” within the
meaning of Article 1 of Protocol No. 1.
28. Accordingly
the decisions of the Russian courts cannot be considered as an
interference with the applicant's “possessions” within the
meaning of Article 1 of Protocol No. 1.
29. It follows
that there has been no violation of Article 1 of Protocol No. 1
to the Convention.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF
THE CONVENTION AND OF ARTICLES 13 AND 14 IN CONJUNCTION WITH
ARTICLE 6 § 1 OF THE CONVENTION
30. The applicant
company complained under Article 6 § 1 of the Convention and
under Articles 13 and 14 in conjunction with Article 6 § 1 that
the final decision of the Appellate Board of the Commercial
Court of Moscow of 19 February 2001 had been quashed by way of
supervisory review, in violation of the principle of legal
certainty. It also complained that the proceedings before the
Presidium of the Supreme Commercial Court of Russian Federation
had been conducted in violation of the principle of equality of
arms, in that the State, as a party to proceedings, had
exercised its extraordinary power to institute supervisory
review whilst the applicant company had no such possibility.
Finally, it complained that it had not been summoned to take
part in the proceedings.
31. In so far as
relevant, the Convention Articles relied on by the applicant
provide:
Article 6 (right to a fair hearing)
“In the determination of
his civil rights and obligations ..., everyone is entitled to a
fair ... hearing ... by [a] ... tribunal...”
Article 13 (right to an effective remedy)
“Everyone whose rights and
freedoms as set forth in [the] Convention are violated shall
have an effective remedy before a national authority
notwithstanding that the violation has been committed by persons
acting in an official capacity.”
Article 14 (prohibition of discrimination)
“The enjoyment of the
rights and freedoms set forth in [the] Convention shall be
secured without discrimination on any ground such as sex, race,
colour, language, religion, political or other opinion, national
or social origin, association with a national minority,
property, birth or other status.”
32. The
Government responded that there had been no violation of the
applicant's right to a fair trial. They considered that it had
been necessary to quash the decision of the appellate instance
because it had been taken in breach of the domestic law. They
also considered that the principle of legal certainty had not
been violated, in that the supervisory review was instituted
shortly after the appeal decision and thus constituted the next
stage of the proceedings. They referred to Article 187 of the
Code of Commercial Procedure, which provided that a case could
be reviewed on points of law in supervisory review proceedings.
Moreover, the applicant had been aware that such a possibility
existed under domestic law and therefore it could not rely on
the appeal decision as a final judicial act. They further added
that the relevant legislation had changed, in particular through
the 2002 Code of Commercial Procedure, which introduced
time-limits for initiating supervisory review.
33. The applicant
company maintained its complaints. It considered that the
appellate court's decision had been quashed on supervisory
review in violation of the principle of legal certainty.
34. The Court
recalls that Article 6 § 1 extends only to a dispute
(“contestation”) over a “civil right” which can be said, at
least on arguable grounds, to be recognised under domestic law.
The dispute must be genuine and serious; it may relate not only
to the existence of a right but also to its scope and the manner
of its exercise; and, finally, the outcome of the proceedings
must be directly decisive for the right in question (see
Hamer v. France,
judgment of 7 August 1996,
Reports 1996-III, pp. 1043-44, § 73; and
Zhigalev v. Russia, no. 54891/00, §§ 159-62,
6 July 2006). As the Court has consistently held, mere tenuous
connections or remote consequences are not sufficient to bring
Article 6 § 1 into play (see
Balmer-Schafroth and
Others v. Switzerland, judgment of 26 August 1997,
Reports of Judgments and
Decisions 1997‑IV, p. 1357, § 32;
Athanassoglou and Others
v.
Switzerland [GC], no.
27644/95, § 43, ECHR 2000‑IV;
Gorraiz Lizarraga and
Others v.
Spain, no. 62543/00, § 43,
ECHR 2004‑III; and
Association de Défence des Intérêts du Sport v. France
(dec.), no. 36178/03, 10 April 2007).
35. The Court
refers to its finding above that the applicant company was
defending in commercial proceedings a claim of corporate
succession which had no basis in domestic law (see paragraphs
25-27 above). In view of this finding the Court considers that
for the purposes of Article 6 of the Convention the applicant
did not have a “civil right” recognisable under domestic law.
Therefore there was no basis for the rights guaranteed by
Article 6 § 1 to arise.
36. It follows
that there has been no violation of Article 6 § 1 of the
Convention.
37. Having regard
to the above conclusion the Court finds no separate issues under
Articles 13 and 14 of the Convention.
FOR THESE REASONS, THE COURT
1. Holds
unanimously that there has been no violation of Article 1 of
Protocol No. 1 to the Convention;
2. Holds
by six votes to one that there has been no violation of Article
6 of the Convention;
3. Holds
unanimously that no separate issues arise under Articles 13 and
14 of the Convention.
Done in English, and notified in writing on 7
June 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen
Christos Rozakis
Registrar
President
In accordance with Article
45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court,
the partly dissenting opinion of Mrs Tulkens is annexed to this
judgment.
C.L.R.
S.N.