5.  The facts of the case, as submitted by the parties, may be summarised as follows. 6.  In 1997 the Government of Moldova submitted to Parliament a bill “On the Privatisation Programme for 1997-1998”. Parliament adopted the Act in 1997. The annex to the Act listed the State property to be privatised, which included the four-star “Dacia” hotel. The Act established that the Department for the Privatisation of State Property (“the Department”) would organise the privatisation of the property listed in the annex. 7.  The Department created an Auction Commission. In December 1998 the Auction Commission published an advertisement for privatisation of the hotel and set a reserve price of 20 million Moldovan lei (MDL) (2,006,782 United States Dollars (USD)). In order to be allowed to participate in the auction, each participant was required to deposit MDL 1 million in the Department’s account. 8.  The applicant company’s predecessor, “Selikat-Mix” (“S.”), participated in the auction and on 23 January 1999 was announced as the winner, having offered MDL 20,150,000. In order to be able to pay that amount, S. concluded a contract with an Austrian company, “Kungan Overseas Corp.”, for a loan of USD 2.2 million. According to the terms of the contract, S. was to repay the loan within one year and to pay 15% interest during that time. Failure to repay the loan would result in a penalty of 0.2% of the outstanding debt for each day of delay (subject to any eventual prolongation of the period of repayment), while a failure to pay the interest would result in a penalty of 0.1% of the outstanding debt for each day of delay. 9.  At S.’s request, on 29 January 1999 the Auction Commission decided to extend the period for the payment of the auction price until 17 February 1999. 10.  On 8 February 1999 S. obtained a certificate from the National Bank of Moldova confirming the credit agreement with “Kungan Overseas Corp.”. It transferred MDL 20,150,000 to the State budget within the new deadline established by the Auction Commission. On 18 February 1999 it concluded a contract with the Department for the purchase of the hotel. 11.  In June 1999 S. was re-registered as “Dacia S.R.L.” (the applicant company). On 13 September 1999 the applicant company purchased from the Chişinău municipality the 0.21 hectares of land on which the hotel was situated, for MDL 50,840 (EUR 4,395). 12.  According to the applicant company, in the years following the purchase of the hotel large sums of money were spent on its renovation and the purchase of new furnishings and equipment. 13.  In 2000 the Prosecutor General’s Office initiated a criminal investigation into the alleged unlawfulness of the hotel’s privatisation. It established that no criminal act had been committed and closed the investigation on 30 August 2000. 14.  On 31 January 2003 “Kungan Overseas Corp.” assigned its credit rights in respect of the loan to the applicant company to the Belgian company “Vikol NV” (V.). On 18 February 2003 the applicant company pledged the hotel and the land as a guarantee for the loan from V. In view of the applicant company’s failure to repay the loan, V. claimed in court the right to become the hotel’s owner. 15.  On 23 June 2003 the Regional Economic Court in Chişinău accepted that claim and ordered the transfer of the hotel to V. The State Chancellery requested the annulment of that order. On 25 July 2003 the Chişinău Regional Economic Court annulled the order of 23 June 2003 in light of the judgments of the Economic Court of 6 June 2003 and the Supreme Court of Justice of 24 July 2003 (in the annulment proceedings described below). 16.  On 11 January 2003 the Prosecutor General’s Office initiated court proceedings in the interest of the State (namely, the State Chancellery, a subdivision of the Government which was the former administrator of the hotel) against S. and the Department, seeking the annulment of the hotel’s privatisation and repayment to the applicant company of the price paid. 17.  On an unspecified date the Prosecutor General requested the court to designate the applicant company as respondent in the case, since the respondent it had previously designated in its claim (S.) had ceased to exist. On 31 March 2003 the Economic Court of Moldova accepted that request and ordered that the applicant company be summoned to its next hearing. 18.  The Prosecutor General did not pay any court fees to initiate those proceedings, by virtue of an exemption provided for by law for court actions initiated by him in the interests of the State. In respect of the limitation period, he referred to Article 86 of the Civil Code (see paragraph 40 below). 19.  On 6 June 2003 the Economic Court of Moldova accepted the Prosecutor General’s request and annulled the Auction Commission’s decision of 23 January 1999 and the contract of 18 February 1999 for the sale of the hotel. The applicant company was ordered to return the hotel to the State Chancellery and the Ministry of Finance was ordered to repay to the applicant company MDL 20,150,000 (EUR 1,219,055 at the time). 20.  The reasons given by the Economic Court of Moldova for finding that the privatisation had been unlawful were: (a) the State Chancellery, as the former administrator of the hotel, had not given its agreement to the sale; (b) S. (the applicant company’s predecessor) had failed to pay the entire amount within seven days of winning the auction, as required by the auction regulation; and (c) the price paid was some MDL 5 million (EUR 511,996) lower than the hotel’s real value. The court found that the Auction Commission’s decision to extend the period during which S. could pay for the hotel had been taken ultra vires. However, the court did not annul the decision to extend the time-limit or the decision setting the reserve price at MDL 20 million, nor did any other authority. The court also noted that S. had been the only participant in the privatisation auction, but did not indicate whether this was contrary to any law.
The court ordered the Department to return to the applicant company the price paid for the hotel in 1999 (MDL 20,150,000). 21.  The court finally ordered that each of the parties pay half of the court fees, that is, MDL 302,340 (EUR 18,291), finding that both the authorities and the applicant company had acted in bad faith because of the above-mentioned failure to follow the auction procedure correctly. In particular, the applicant company was accused of contributing to reducing the hotel’s privatisation price. 22.  The applicant company appealed to the Supreme Court of Justice, arguing that it had been a good faith buyer and had complied with all the requirements set by the State authorities during the privatisation, and that the court action brought against it by the Prosecutor General’s Office was out of time since it had been lodged some four years after the relevant events. 23.  On 8 July 2003 the Supreme Court of Justice noted that the applicant company had paid MDL 50,000 (EUR 3,114) in court fees out of the MDL 453,100 (EUR 28,227) required. The court requested payment of the full amount of fees. The applicant company asked for permission to pay in instalments over a three-month period, but was granted sixteen days. It submitted documents confirming its inability to pay and relied on the fact that all of its assets had been seized by the authorities. On 24 July 2003 the court refused to examine the appeal because of the failure to pay the entire amount of the court fees. That decision was final. 24.  The Prosecutor General initiated new proceedings “in the interests of the State” requesting the annulment of the contract concluded between the applicant company and the municipality for the purchase of the land on which the hotel was situated. 25.  On 27 October 2003 the Appellate Chamber of the Economic Court of Moldova accepted that claim and annulled the contract for the purchase of the land because the land could not be separated from the hotel itself. 26.  On 19 February 2004 the Supreme Court of Justice upheld that judgment. 27.  On 25 July 2003 the Commission on Transferring the Assets of “Dacia” S.R.L. to the State began its activity in order to enforce the judgment of 6 June 2003. By 7 August 2003 the hotel was transferred to its new owner, the State Chancellery (see paragraph 19 above). 28.  On 29 July 2003 the applicant company sent the warrant for the enforcement of the judgment of 6 June 2003 to the Decisions Enforcement Department. It continued to write to various authorities about the non-enforcement of the judgment. 29.  The Department of Privatisation and Administration of State Property requested an interpretation of the text of the judgment of 6 June 2003. The applicant company also requested an interpretation and a re-evaluation of the amount it had been awarded by that judgment, in order to take account of the effects of inflation on the value of the award. 30.  On 8 October 2003 the Appellate Chamber of the Economic Court gave an explanatory decision in which it identified the Ministry of Finance as responsible for repaying the applicant company the price of the hotel. It also rejected the applicant company’s claim for re-evaluation of the award since the hotel had been bought in Moldovan lei and not in any foreign currency and the law did not provide for compensation for the effects of inflation in cases such as that under consideration. The court informed the applicant company of its right to lodge a separate claim for any investments made for the repair and furnishing of the hotel. 31.  On 13 November 2003 the Supreme Court of Justice upheld that judgment. However, it annulled, as exceeding the powers of interpretation of judgments, the lower court’s explanation that part of the judgment of 6 June 2003 could be enforced even if the applicant company had not been repaid any of the hotel’s price. The hotel remained in the possession of the State. 32.  On 3 December 2003, in view of the apparent lack of resources in the State budget which was preventing enforcement of the judgment in its favour, the applicant company requested that the Decisions Enforcement Department enforce the judgment by selling the “Dacia” hotel and the underlying land. 33.  On 4 February 2004 the warrant for the enforcement of the interpretative judgment of 8 October 2003 was sent to the Ministry of Finance. 34.  The judgment of 6 June 2003 was fully enforced in instalments in the period between 13 April and 27 October 2004. 35.  The applicant company initiated court proceedings against the Government (including the Ministry of Privatisation and the Ministry of Finance) claiming compensation for damage caused to it as a good faith buyer of the hotel. The damages sought MDL 16,157,774 (equivalent to EUR 979,259) included the value of repairs and new equipment, the penalties for the delay in repaying the loan to V., sums of money taken from the hotel when it was transferred to the State and interest for the use of MDL 20,150,000 over four years, as well as compensation for the effects of inflation on that amount. The above amount included a deduction of amounts corresponding to the applicant company’s profits from the hotel during the relevant period. It submitted that the State had committed the errors referred to in the judgment of 6 June 2003 and that the State should therefore bear the consequences of those mistakes. 36.  On 10 March 2005 the Appellate Chamber of the Economic Court of Moldova rejected these claims. The court found that the applicant company could not claim to have been a good faith buyer, since it had failed to pay for the hotel within seven days as prescribed by the auction regulations. The court also found that the judgment of 6 June 2003 had established the applicant company’s complicity in “contributing to reducing the hotel’s price” (without giving any details), thus excluding the applicant company’s good faith as a basis for claiming compensation, and that this also applied in respect of the claim for interest on its money in the State’s possession. 37.  The court rejected the argument that the State had obtained unjust enrichment since there was a legal basis for the increase in its assets – the contract with the applicant company for the purchase of the hotel. The argument that the State had offered for sale an object affected by hidden legal impediments was also rejected as unfounded, despite the authorities’ failure to observe certain rules during the privatisation of the hotel (such as obtaining the State Chancellery’s agreement). Since the applicant company had known from the hotel’s by-laws that the Chancellery was its founder and since the latter had not given its approval for the privatisation, the applicant company could not claim that it had not known of the legal impediment at issue. 38.  The applicant company appealed but was unable to pay the court fees MDL 242,349 (approximately EUR 14,600). It requested a court fee waiver until after the judgment, in view of the fact that it had transferred to its creditor all the money received from the Ministry of Finance after the judgment of 6 June 2003 and that it had no alternative sources of income, as confirmed by relevant bank statements. 39.  On 4 May 2005 the Supreme Court of Justice dismissed the applicant company’s request for a court fee waiver. It informed the applicant company that the appeal could not be examined on account of the failure to pay the court fees. The new time-limit for paying the court fees was 25 May 2005; the applicant company did not meet this deadline.