ABRIAL and OTHERS v. FRANCE
Inadmissible
The applicants are French nationals. They are all members of the French Association of Holders of Russian Bonds (“AFPER”), which has more than 15,000 members. They were represented before the Court by Mr M. de Guillenchmidt, a lawyer practising in Paris. Between 1822 and 1914 some two million French families purchased bonds issued by the Russian State for a total sum of approximately twelve billion gold francs, which represented a capital of 3,480 tons of gold. In 1892 the French Government allowed the bonds to be listed on the Paris stock exchange. In a decree of 14 January 1918 the Soviet Central Committee decided to cancel all the bonds issued by the tsarist regime. As soon as the Soviet Government took power – and over the following years – the French Government promised on a number of occasions to press the bondholders’ claims. After the signing of the Treaty of Versailles France secured the re-assignment to itself of forty-seven tons of gold, which was part of the gold paid by Russia to Germany under the Treaty of Brest-Litovsk. In a statement made to the Senate on 9 April 1924 the Prime Minister declared that the said gold had been definitively made over to France in reduction of Russia’s debt. In 1929 the French State held 648,000,000 gold francs worth of Russian bonds in France. In 1963 the above-mentioned forty-seven tons of gold were officially assigned to reducing Russia’s debt to France. In a treaty of 29 October 1990 the French and Soviet Governments undertook to solve their financial dispute quickly. That treaty was not ratified, however. In 1992, when the Russian regime changed, the French authorities initiated negotiations again. An agreement of 7 February 1992, which was ratified but not applied, set out a solution to the dispute relating to the financial and material aspects of the property and interests of individuals and legal entities in both countries. In a memorandum signed 26 November 1996 the Government of the Federation of Russia undertook to pay 400,000,000 dollars (approximately 2.4 billion francs) in eight six-monthly instalments. Under the terms of that agreement “The Government of the French Republic and the Government of the Federation of Russia agreed the following: The Government of the Federation of Russia shall pay the Government of the French Republic the sum of 400,000,000 US dollars in full and final settlement of mutual debts between France and Russia accumulated prior to 9 May 1945. The sum shall be paid as follows: eight six-monthly instalments of 50,000,000 US dollars payable on 1 February and 1 August 1997, 1998, 1999 and 2000. Neither the French party nor the Russian party shall, on their own behalf or on behalf of French or Russian natural and legal persons, present to each other or support in any way any financial debts or debts in rem whatsoever accumulated prior to 9 May 1945. All the debts shall be deemed to have been fully and finally settled by payment of the entire sum referred to in the present memorandum. The parties agree that, on the basis of the present memorandum, they shall reach an agreement as soon as possible on the payment of France and Russia’s mutual debts.” According to the applicants, that sum was less than 1% of the debts converted to current value. By Decree no. 97-134 of 12 February 1997 a “monitoring commission” was set up within the Conseil d’Etat with the task of proposing to the Government a means of identifying the qualifying bondholders according to the Franco-Russian basis and agreements, a method of assessing the value of the qualifying bonds and arrangements for paying compensation. On 27 May 1997 a supplementary agreement was signed between the French Government and the Russian Government. Article 1 of that agreement listed the Russian debts which France agreed to waive and Article 2 listed the French debts in respect of which Russia undertook to make no further claim. Article 3 set out the arrangements for repayment by Russia of its debts as established in the 1996 memorandum. Article 4 added that all the debts would be deemed to have been fully and finally settled by the payment of the entirety of the sum referred to. Article 5 provided that on the date of entry into force of the agreement neither of the parties would take action against the other on the basis of any financial debts or debts in rem whatsoever accumulated prior to 9 May 1945. On 11 June and 1 August 1997, Russia paid the first two instalments provided for in the agreement in a total sum of 100,000,000 dollars. Further instalments were sent to France in 1998, on 3 February and 4 August 1999 and, lastly, in February 2000, amounting to seven instalments in all. In a government Bill (no. 229) filed on 24 September 1997, the Prime Minister acknowledged, in the statement of reasons, that the Franco-Russian agreements of 26 November 1996 and 27 May 1997 did not include any provision for others and produced no effects for the rights of third parties. On 20 November 1997 the National Assembly adopted a Bill, which was also adopted by the Senate on 10 December 1997, authorising approval of the above-mentioned agreements. In a Law of 19 December 1997 (no. 97-1160) Parliament authorised the ratification of those agreements. Section 73 of Law no. 98-546 of 2 July 1998 and the Implementing Decree no. 98-552 of 3 July 1998 provided that the number of bondholders should be identified. This was done over a period of six months from the date of entry into force of the decree. On 9 February 1999 the provisional results obtained by the Ministry of the Economy, Finance and Industry showed 132,440 declarations in respect of a total of 3,760,98 bonds. On 23 March 1999 the Minister for the Budget stated that the number of bondholders was, to be more precise, 135,620 and the number of bonds 3,822,549. On 9 July 1999 the Ministry of the Economy, Finance and Industry declared that the number of bondholders stood at 300,000 and that there were more than 9,000,000 bonds. According to the applicants, those figures were inaccurate. Their attempts to obtain clarification of this point remained fruitless. On 13 October 1999 the association representing the applicants (the AFPER) served official notice on the Minister for the Economy, Finance and Industry to publish, département by département, a monthly breakdown of the results of the survey, the number of bonds per category, a breakdown of the four thousand types of qualifying bonds taken into account and justification for the increase in the number of holders and bonds as compared to the figures given at the end of March. On 2 May 2000 an identical notice was served on the new Minister for the Economy, Finance and Industry. On 26 July 1999 the AFPER served formal notice on the Federation of Russia to pay the sum of nine billion francs in honour of its debt plus interest. On 27 August 1999 the embassy of the Russian Federation replied as follows: “In accordance with the memorandum of agreement of 26 November 1996 between the Government of the French Republic and the Government of the Federation of Russia regarding final settlement of mutual financial debts and debts in rem accumulated before 9 May 1945, the French party undertook not to submit to its Russian counterpart, either on its own behalf or on the behalf of French natural or legal persons, or to support in any other manner financial debts or debts in rem of any kind accumulated prior to 9 May 1945. The legal summons ... and service thereof on the embassy of the Federation of Russia constitute a breach of the above-mentioned undertakings. It is for the French party to explain the above-mentioned provisions to the natural and legal persons concerned and to the courts in order to prevent any further misunderstandings in future.” Various other legal actions instituted in France were equally unsuccessful. On 18 December 1998 various bondholders applied to the judge of the Versailles tribunal de grande instance responsible for the execution of judgments for registration of a legal charge on real property situated in France belonging to the Russian State. In an order of 23 April 1999 the judge found that the bondholders’ claims were valid in theory. He considered that the debt subsisted and “was of undeniable public interest” despite payment of the sum of 400,000,000 dollars. However, he refused to charge the property in question because it was protected by diplomatic immunity. On 19 September 1999 some members of the APFER lodged an application with the judge of the Paris tribunal de grande instance responsible for the execution of judgments for registration of a provisional interim legal charge on shares of the Banque commerciale pour l’Europe du Nord. However, that application was also dismissed on the ground that “the principle of the applicant’s claim cannot be considered valid ... it cannot be inferred from the Russian State’s inertia that recovery of the debt is in jeopardy”. In a judgment of 30 March 1966 the Conseil d’Etat acknowledged that the public authorities were liable for the loss which international agreements to which the State was a party might occasion for individuals. In the Compagnie générale d’énergie radio-électrique case, the applicant, whose property had been requisitioned by the German army, claimed to be entitled to compensation from the French State on the basis that there had been a breach of equality vis-à-vis public burdens as a result of the signing by the French Government of international agreements which prevented it until an unspecified date from pursuing its claim against the German State. The Conseil d’Etat held that “the responsibility of the State is liable to be engaged on the basis of equality of citizens vis-à-vis public burdens to ensure that loss arising from agreements signed by France with other States and lawfully incorporated into domestic law is compensated, on condition that neither the Convention itself nor the Act authorising its ratification may be construed as having intended to exclude any compensation and that the loss in respect of which compensation is claimed is sufficiently serious and is individual in nature”. The Conseil d’Etat concluded that the condition relating to individuality had not been fulfilled “having regard to the generality of the above-mentioned agreements and the number of French citizens who were victims of damage analogous to the damage alleged by the applicant company” (Recueil du Conseil d’Etat, p. 257). On 18 May 1992 the National Group for the Defence of Holders of Russian bonds (“GNDPTR”), which was a different association of holders of Russian bonds from the one of which the applicants were members, had sued the French State in the Paris Administrative Court for compensation for bondholders. On 17 December 1993 the Administrative Court dismissed the application for the following reasons: “The applicant association seeks to establish responsibility on the part of the State on account of the conduct of the French authorities, who allegedly refused to engage in negotiations with the Soviet State and the succeeding States with a view to compensating its members; the Government’s decisions in that area are inextricably linked to the conduct of international relations between the two Governments; accordingly, the pleadings referred to above raise a question which, by its nature, is not a subject for contentious proceedings. The provisions of Article 1 of Protocol No. 1 to the European Convention on Human Rights cannot usefully be relied upon where the interference or compliance with the right guaranteed by that Article are not imputable to the French State; similarly, a breach of the provisions of Article 14 of the said Convention combined with Article 1 of Protocol No. 1 cannot usefully be relied upon... Lastly, the loss in respect of which the applicants seek compensation arises as a result of an act of a foreign State and cannot engage the responsibility of the French State even in the sphere of equality vis-à-vis public burdens; in any event, having regard to the risks attached to the realisation of financial operations with a foreign State, the damage in respect of which compensation is sought cannot be deemed to be abnormal or special...”