I incorrectly predicted that there's no violation of human rights in ASP PP DOOEL v. "THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA".

Information

  • Judgment date: 2019-06-06
  • Communication date: 2016-08-24
  • Application number(s): 66313/14
  • Country:   MKD
  • Relevant ECHR article(s): 6, 6-1, P1-1
  • Conclusion:
    Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings
    Article 6-1 - Fair hearing)
  • Result: Violation
    • SEE FINAL JUDGMENT

JURI Prediction

  • Probability: 0.788528
  • Prediction: No violation

  • Inconsistent


Legend

 In line with the court's judgment
 In opposition to the court's judgment
Darker color: higher probability
: In line with the court's judgment  
: In opposition to the court's judgment

Communication text used for prediction

The applicant company, ASP PP DOOEL, is a single-owner limited liability company incorporated in Ohrid.
It is represented before the Court by Mr V. Pocevski, a lawyer practising in Skopje.
A.
The circumstances of the case The facts of the case, as submitted by the applicant company, may be summarised as follows.
On 30 November 2004 the applicant company signed a contract (hereafter “the contract”) with the Ministry of Finance (hereafter “the Ministry”) for approval of an investment loan in the amount of 4,000,000 Macedonian denars (MKD).
Under the terms of the contract, the loan was approved in the national currency equivalent and calculated in euros (EUR) (clause number 5 of the contract – “Кредитот ќе се одобрува во денарска противвредност пресметана во ЕВРА”); the interest rate was calculated in euros (clause number 6 of the contract); and the repayment of the loan was also defined in the national currency equivalent in euros (clause number 8 of the contract).
Clause number 11 of the contract stipulated that the debtor was obliged to pay default interest on all matured and outstanding debts in relation to the loan, according to the statutory interest rate (затезна камата по стапка утврдена со закон).
Following the applicant company’s inability to keep up with the loan repayments and unsuccessful negotiations with the Ministry, on 17 May 2013 the applicant company lodged a civil claim, seeking annulment of the contract clause concerning default interest and its amendment, by which the domestic interest rate of the foreign currency would be set as a basis for the calculation of the default interest, rather than the statutory default interest rate.
The applicant company argued that the clause was contrary to the relevant provisions of the Obligations Act and the well-established practice of the Supreme Court on the matter, referring in particular to the judgments of 8 February 2012 and 6 December 2012 respectively (Рев.бр.168/11, Рев1.бр.74/2012).
On 7 October 2013 the Ohrid Court of First Instance (Основен суд Охрид) dismissed the applicant company’s claim as unfounded.
It made no comments as to the arguments about the Supreme Court’s case-law.
The applicant company appealed against the first-instance judgment, arguing that the trial court had departed from the Supreme Court’s case-law on the matter.
On 13 January 2014 the Bitola Court of Appeal (Апелационен суд Битола) dismissed the applicant company’s appeal and upheld the first-instance judgment.
It made no comments regarding the arguments about deviation from the Supreme Court’s case-law.
In addition to the Supreme Court’s judgments on which it relied in its submissions in the impugned proceedings, regarding the relevant legal issue, the applicant company also submits two more judgments of the Skopje Court of First Instance of 5 October 2007 and 16 April 2009 respectively (ПС бр.2101/07 and ПС бр.3674/07), without providing information as to whether those judgments are final.
B.
Relevant domestic practice The Supreme Court’s judgment of 8 February 2012 (Рев.бр.168/11) concerned a claim lodged by the Ministry against a debtor for payment of the default interest rate under clause number 11 of a loan contract, approved under similar circumstances as the loan given to the applicant company.
The Supreme Court upheld the lower courts’ judgments dismissing the Ministry’s claim, and found that a contractual provision obliging a debtor to pay default interest on debt in a foreign currency according to the statutory default interest rate would put the debtor in a position whereby he would have to pay an unreasonably high interest rate on the debt, which was contrary to the relevant provisions of the Obligations Act (section 388 § 3 and section 546).
The Supreme Court’s judgment of 6 December 2012 (Рев1.бр.74/2012) concerned a claim lodged by a debtor against the Ministry seeking annulment of a contract clause concerning default interest on an investment loan in Japanese yen.
The second-instance court had granted the claim and granted leave to appeal to the Supreme Court concerning overcoming judicial inconsistencies regarding the relevant legal issue.
The Supreme Court upheld the second-instance judgment and confirmed that, for debt in a foreign currency or in the national currency equivalent of a foreign currency, the interest rate was to be calculated according to the domestic interest rate of the foreign currency.
COMPLAINTS The applicant company complains under Article 6 § 1 of the Convention, alleging judicial inconsistency in the domestic proceedings and lack of reasoning provided by the domestic courts for the alleged departure from established domestic practice.
It also invokes Article 1 of Protocol No.
1, complaining that the domestic courts’ decisions in the impugned proceedings breached its property rights.

Judgment

FIRST SECTION

CASE OF ASP PP DOOEL v. NORTH MACEDONIA

(Application no. 66313/14)

JUDGMENT

STRASBOURG

6 June 2019

This judgment is final but it may be subject to editorial revision. In the case of Asp Pp Dooel v. North Macedonia,
The European Court of Human Rights (First Section), sitting as a Committee composed of:
Aleš Pejchal, President,Tim Eicke,Jovan Ilievski, judges,and Renata Degener, Deputy Section Registrar,
Having deliberated in private on 14 May 2019,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 66313/14) against the Republic of North Macedonia, lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Asp Pp Dooel, a company registered in Ohrid (“the applicant company”), on 30 September 2014. 2. The applicant company was represented by Mr V. Pocevski, a lawyer practising in Skopje. The Government of North Macedonia (“the Government”) were represented by their former Agent, Mr K. Bogdanov, subsequently succeeded by their present Agent, Ms D. Djonova. 3. On 24 August 2016 notice of the applicant company’s complaints under Article 6 of inconsistent practice and a lack of reasons and a complaint under Article 1 of Protocol No. 1 was given to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court. THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
4. On 30 November 2004 the applicant company signed a contract (“the contract”) with the Ministry of Finance (“the Ministry”) for an investment loan, expressed in the equivalent of the national currency, with the repayments calculated in euros (во денарска противвредност пресметана во евра). Clause 11 of the contract stipulated that a statutory default interest rate (затезна камата по стапка yтврдена со закон) was to be paid on all overdue repayments, which, according to an annex forming part of the contract, were expressed in euros. 5. On 4 September 2012 a bailiff issued an enforcement order under the terms of the contract. The applicant company’s protest and appeal against the enforcement order were dismissed by both the President of the Ohrid Court of First Instance (Основен суд Охрид) and by the Bitola Court of Appeal (Апелационен суд Битола), with the final decision being dated 3 April 2013. 6. On 17 May 2013 the applicant company lodged a civil claim against the Ministry seeking an annulment of clause 11 of the contract, claiming that, in accordance with domestic law, interest on the repayment of loans in foreign currencies should be calculated on the basis of that foreign currency’s domestic rate (домицилна камата) instead of the statutory default interest rate. In that respect it relied on a judgment by the Supreme Court in which the same provision, contained in an identical contract regarding a State-granted loan to another person, had been annulled (Рев1. бр. 74/2012). 7. The applicant company’s claim was dismissed by the Ohrid Court of First Instance and the Bitola Court of Appeal on 7 October and 13 January 2014 respectively, each holding that the loan had been approved in the national currency and therefore the statutory default interest rate applied. Neither court commented as to the Supreme Court’s case-law. The final judgment was served on the applicant company’s representative on 31 March 2014. 8. On 27 May 2015 insolvency proceedings were opened in respect of the applicant company. II. RELEVANT DOMESTIC PRACTICE
9. In judgments Рев.1 бр. 168/2011 of 8 February 2012, Рев.1 бр.74/2012 of 6 December 2012 and Рев. бр. 202/2012 of 24 October 2013, the Supreme Court held that interest on State-granted loans which were to be repaid in amounts expressed in a foreign currency should be calculated on the basis of that currency’s domestic interest rate. The Supreme Court took the stance that the loan repayment instalments were the determinative factor in the cases, and since, in those cases, the instalments had been expressed in a foreign currency, the statutory default interest rate was not applicable. The same stance was taken in two appeal court judgments (ТСЖ бр. 828/08 of 21 May 2008 and ТСЖ 1527/09 of 11 November 2009). THE LAW
I. ALLEGED VIOLATIONS OF ARTICLE 6 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION
10. The applicant company complained that the domestic courts had dismissed its claim contrary to established case-law without providing any reasons in their decisions for their departure from that case-law. As a result, a higher interest rate was applied to the repayment of its loan. It relied on Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention. Article 6 reads, in so far as relevant, as follows:
Article 6
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
Article 1 of Protocol No. 1 to the Convention provides as follows:
Article 1 of Protocol No. 1
“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.”
A. Admissibility
1. Incompatibility ratione personae and abuse of the right of individual petition
11. The Government invited the Court to reject the application as inadmissible ratione personae owing to the applicant company’s failure to inform the Court of the ongoing insolvency proceedings (see paragraph 8 above). In their opinion, that also constituted an abuse of the right of individual petition. These objections followed the applicant company’s observations to the Court, in which it had informed the Court of the insolvency proceedings and submitted a letter of authority for its representative issued by the appointed insolvency practitioner. 12. The applicant company maintained that it had informed the Court of those circumstances as soon as it had been invited to make submissions. 13. The Court notes that the institution of insolvency proceedings did not, in itself, mean that the applicant company ceased to exist, or that its claims and obligations were extinguished at a domestic level. Accordingly, the mere institution of insolvency proceedings does not affect the applicant company’s status as a victim before the Court. 14. Furthermore, although it would have been appropriate for the applicant company to inform the Court as soon as the insolvency proceedings had been opened, that omission alone, which does not affect the very core of the case, cannot be regarded as an abuse of the right of individual petition (compare Lukarev v. the former Yugoslav Republic of Macedonia (dec.), no. 3172/07, § 24 15 January 2013, and Gross v. Switzerland [GC], no. 67810/10, § 35, ECHR 2014). The Government’s objections under this head must therefore be rejected. 2. Compliance with the six-month time-limit
15. The Government submitted that the six-month time-limit had started to run from the dismissal of the applicant company’s appeal in the enforcement proceedings, namely on 3 April 2013 (see paragraph 5 above) and that the subsequent civil claim lodged by the applicant company had had no prospect of success. 16. The applicant company argued that the application related solely to the civil proceedings. 17. The Court notes that the enforcement proceedings were not the subject of the application. They are therefore irrelevant for the present case, which only concerns the civil proceedings described above (see paragraphs 6 and 7). Given the date of service of the final decision in those proceedings (see paragraph 7 above) the Government’s objection in this respect must be rejected. 3. Conclusion
18. The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible. B. Merits
1. Complaint under Article 6 of the Convention
(a) The parties’ submissions
19. Relying on the annex to the contract (see paragraph 4 above), the applicant company argued that the loan had been issued and repaid in a foreign currency. It argued that the domestic case-law was applicable and that its case had been the only one in which the courts had decided contrary to that case-law without providing reasons for their decision to depart from it. 20. The Government argued that the applicant company’s case was factually different from the judgments referred to on account of the fact that the loan had been granted in the domestic currency, while the judgments relied on concerned loans granted in foreign currencies. (b) The Court’s assessment
21. The general principles in respect of the duty of domestic courts to give adequate and sufficient reasons are summarised in the case of Moreira Ferreira v. Portugal (no. 2) ([GC], no. 19867/12, § 84, 11 July 2017). 22. The Court notes that the present case concerns civil proceedings in which the applicant company sought annulment of a provision of the loan contract according to which the domestic statutory default interest rate would be applied to late repayments made in a foreign currency. The currency of the repayments was established as the determinative factor by the Supreme Court in cases which were identical to the present one as to the relevant issues of fact and law. Namely, the Supreme Court held that in such circumstances default interest rates applicable to the currency of the loan repayments, instead of the statutory default interest rate, should apply (see paragraph 9 above). The Court further observes that the repayments in the instant case were also expressed in a foreign currency (see paragraph 4 above). 23. The Supreme Court did not examine that case-law in the applicant company’s case, although the applicant company explicitly referred to it (see paragraphs 6 and 7 above). 24. According to the Court’s case-law, the existence of well-established domestic jurisprudence imposed a duty on the Bitola Court of Appeal to give a more detailed explanation as to why it came to a contrary decision (see, mutatis mutandis, Gorou v. Greece (no. 2) [GC], no. 12686/03, § 38, 20 March 2009, and Atanasovski v. the former Yugoslav Republic of Macedonia, no. 36815/03, § 38, 14 January 2010). 25. The absence of any explanation by that court regarding its departure from the established case-law on the matter is sufficient to enable the Court to conclude that there has been a breach of Article 6 § 1 of the Convention. 2. Complaint under Article 1 of Protocol No. 1
26. The applicant company complained that a higher interest rate had been applied to its repayments as a result of the application of the domestic statutory default interest rate. 27. Having regard to its finding relating to Article 6 § 1, the Court considers that it is not necessary to examine whether, in this case, there has been a violation of Article 1 of Protocol No. 1 to the Convention (see Petko Petkov v. Bulgaria, no. 2834/06, § 38, 19 February 2013, and Nikolov v. the former Yugoslav Republic of Macedonia, no. 41195/02, § 29, 20 December 2007, with further references). II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
28. Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
A. Damage
29. The applicant company claimed 10,000 euros (EUR) in respect of pecuniary damage, claiming that this amount had been incurred as a result of the enforcement of late repayments under the loan agreement. It further claimed EUR 5,000 in respect of non-pecuniary damage. 30. The Government contested those claims as unsubstantiated and excessive. 31. The Court does not discern any causal link between the violation found and the pecuniary damage claimed by the applicant company. It therefore rejects the claim under this head. 32. In respect of the amount sought under the head of non-pecuniary damage, and having regard to its case-law (see, for example, Euromak Metal Doo v. the former Yugoslav Republic of Macedonia, no. 68039/14, § 55, 14 June 2018), the Court considers, ruling on an equitable basis, that an award of EUR 2,400, plus any tax that may be chargeable, should be made. B. Costs and expenses
33. The applicant company also claimed EUR 267 for the costs and expenses incurred before the domestic courts and EUR 1,292 for those incurred before the Court. As to the latter costs and expenses, it referred to the fee scale of the Macedonian Bar. 34. The Government contested the claim as excessive and unsubstantiated. 35. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum (see Editions Plon v. France, no. 58148/00, § 64, ECHR 2004‐IV). Regard being had to the documents in its possession, the Court considers it reasonable to award the applicant company EUR 170 for the proceedings incurred before the domestic courts and a sum of EUR 1,220 for the costs and expenses incurred before the Court, plus any tax that may be chargeable to the applicant company. C. Default interest
36. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1. Declares the application admissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention;

3. Holds that there is no need to examine the complaint under Article 1 of Protocol No. 1 to the Convention;

4. Holds
(a) that the respondent State is to pay the applicant company, within three months, the following amounts, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement:
(i) EUR 2,400 (two thousand four hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(ii) EUR 1,390 (one thousand three hundred and ninety euros), plus any tax that may be chargeable to the applicant company, in respect of costs and expenses;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

5. Dismisses the remainder of the applicant company’s claim for just satisfaction. Done in English, and notified in writing on 6 June 2019, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Renata DegenerAleš PejchalDeputy RegistrarPresident