CASE OF DACIA S.R.L. v. MOLDOVA
Pecuniary and non-pecuniary damage - award
Giovanni Bonello;Ján Šikuta;Lech Garlicki;Mihai Poalelungi;Nicolas Bratza;Päivi Hirvelä
5. The applicant, Dacia S.R.L., is a company incorporated under the laws of the Republic of Moldova. 6. In 1997 the Moldovan Parliament enacted legislation for the privatisation of certain items of State property, including the “Dacia” hotel. On 29 January 1999 the applicant company was declared the successful bidder in the auction held for the sale of the hotel. It paid 20,150,000 Moldovan lei (MDL) (2,305,043 United States dollars at the time). 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 (4,395 euros (EUR) at the time). 7. 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. 8. On 11 January 2003 the Prosecutor General’s Office initiated court proceedings, seeking the annulment of the hotel’s privatisation and repayment to the applicant company of the price paid. On 6 June 2003 the Economic Court of Moldova accepted the Prosecutor General’s request and annulled the privatisation of the hotel. The court ordered the return of MDL 20,150,000 to the applicant company and the return of the hotel to the State. 9. The applicant company’s appeal was left without examination by the Supreme Court of Justice on 8 July 2003 because of a failure to pay court fees in full. 10. In separate proceedings, which ended with a judgment of the Supreme Court of Justice on 19 February 2004, the sale of the land underlying the hotel was also annulled. 11. The judgment of 6 June 2003 was fully enforced in instalments in the period between 13 April and 27 October 2004. The sum of MDL 20,150,000 was the equivalent of approximately EUR 1,342,590 in October 2004. 12. The applicant company initiated court proceedings against the Government, claiming compensation for damage caused to it as a bona fide buyer of the hotel. It paid MDL 484,733 in court fees. On 10 March 2005 the Appellate Chamber of the Economic Court of Moldova rejected these claims. On 4 May 2005 the Supreme Court of Justice dismissed the applicant company’s request for a court fee waiver owing to its inability to pay. It informed the applicant company that the appeal could not be examined on account of the failure to pay the court fees in full. The new time-limit for paying the court fees was 25 May 2005; the applicant company did not meet this deadline. 13. The applicant company hired an expert to make a valuation of the current market price of the hotel and underlying land. The expert explained that he was able to make the valuation only if he had access to the hotel itself and all its documents, including documents from the State-controlled real-estate register. Since the hotel is currently owned by the State, on 9 April 2008 the applicant company sought the assistance of the Government Agent’s office in ensuring the expert’s access to the hotel and the relevant documents. In a letter dated 23 April 2008 the Government Agent informed the applicant company that it should contact the hotel’s administration and the real-estate registry. 14. On 29 April 2008 the applicant company asked the hotel’s administration to allow the expert access to the hotel. In another letter on the same day, the applicant company asked the real-estate registry to allow its expert access to the relevant documents. In a letter dated 5 May 2008 the hotel’s administration informed the applicant company that permission from the Government was necessary in order to ensure access to the hotel. In a letter dated 15 May 2008 the real-estate registry informed the applicant company that it was not authorised to grant access to the requested documents, since it “did not offer such a service”. 15. On 8 May 2008 the Supreme Court of Justice made an attachment order, prohibiting the disposal of the hotel. On the same day, the applicant company asked the Government to allow its expert access to the hotel. It received no answer. On 11 May 2008 the applicant company informed the Government Agent about the situation and asked for his assistance in obtaining access to the hotel and the relevant documents. It also noted that the refusal to grant such access might be considered as a violation of its rights guaranteed by Article 34 of the Convention. The applicant company did not receive a reply to this letter. 16. On 29 April 2008 the applicant company lodged with the Supreme Court of Justice a request for the annulment of the judgment of 6 June 2003 and subsequent related judgments against it, referring to the principal judgment as a ground for its request. The applicant company also sought the attachment of the hotel’s building, land and bank accounts pending examination of its request. 17. At the first hearing of 12 June 2008 the parties were informed of a postponement of the hearing until 3 July 2008 in view of a request by the Government’s Agent. The applicant company asked for a copy of the request, which was refused. It then asked for access to the case-file and found no request from the Government’s Agent, who had not been a party to any of the domestic proceedings in 2003 and 2005. 18. Before the hearing of 3 July 2008, one of the judges on the bench of the Supreme Court of Justice examining the case was replaced by another judge. During that hearing the Government (plaintiff in the original domestic proceedings and current owner of the “Dacia” hotel) submitted its response to the applicant company’s request of 29 April 2008. They considered, in particular, that awarding the applicant company compensation in the amount of EUR 962,660.70 would constitute sufficient just satisfaction within the meaning of Article 41 of the Convention. 19. Before the next hearing on 17 July 2008 two judges on the bench of the Supreme Court of Justice examining the case were replaced by other judges. The examination of the case started anew. On 21 July 2008 the applicant company’s lawyer examined the case file in order to determine the reasons for the three replacements of judges in the case. He found no such explanation. 20. On 24 July 2008 the Supreme Court of Justice annulled the judgments of 6 June and 27 October 2003 and of 19 February 2004 against the applicant company (see the facts of the principal judgment for more details), and ordered a full re-hearing by the Appeals Chamber of the Economic Court. The proceedings are still pending before that court. 21. On 5 November 2008 the Court asked the parties to submit additional observations by 26 November 2008, limited to the issue of the value of the Dacia hotel, and directed the Government to allow the applicant company access to the hotel and its documents. The applicant company’s expert was then given access to the hotel and its documents. The valuation submitted by the applicant company on 26 November 2008 was prepared by an expert with 30 years’ experience in intellectual property and business valuation and comprised 65 pages and a number of annexes. The final value of the hotel (MDL 98,700,000, approximately EUR 7,612,000) was calculated by using three separate methods of valuation. On 26 November 2008 the Government asked for an extension until 2 December 2008 of the time-limit for submitting their valuation. However, they did not submit any observations by that date. They sent a “preliminary report” on 5 December 2008 on the value of the Dacia hotel. According to that “preliminary report”, made on 1 December 2008, the hotel was worth MDL 29,124,000 (EUR 2,219,191). The “preliminary report” included five pages, three of which were copies of licences held by the valuer, one page listed the “conditions and disclaimers” concerning the limits of the valuer’s liability and another described the name and address of the Dacia hotel and the amount at which it had been valued. No calculations were included. At the date adoption of its judgment, the Court had not received the final report of the valuer hired by the Government. 22. Article 619 of the Civil Code reads: “(1) Default interest is payable for delayed execution of pecuniary obligations. Default interest shall be 5% above the interest rate provided for in Article 585 [National Bank of Moldova refinancing interest rate] unless the law or the contract provides otherwise. Proof that less damage has been incurred shall be admissible. (2) In non consumer-related situations default interest shall be 9% above the interest rate provided for in Article 585 unless the law or the contract provides otherwise. Proof that less damage has been incurred shall be inadmissible.”