BULGARTSVET-VELINGRAD OOD AND KOPPE v. BULGARIA
Inadmissible
George Nicolaou;Guido Raimondi;Krzysztof Wojtyczek;Nona Tsotsoria;Päivi Hirvelä;Zdravka Kalaydjieva
1. The applicant company, Bulgartsvet-Velingrad OOD, is a limited liability company created in 1992. It is registered in Velingrad, Bulgaria. The applicant, Mr Konstantin Mihaylov Koppe, is a German national who was born in 1943 and lives in Germany. The applicants were represented before the Court by Mr Y. Grozev, a lawyer practising in Sofia. The respondent Government were represented by their Agents, V. Hristova, M. Kotseva and M. Dimova, of the Ministry of Justice. 2. The German Government, informed of their right to intervene in the proceedings in accordance with Article 36 § 1 of the Convention and Rule 44 § 1 of the Rules of Court, have not availed themselves of this opportunity. 3. The applicant held a fifty per cent stake in the applicant company. The other fifty per cent was held by Fabrika 12 EOOD, a Bulgarian limited liability company wholly owned by the applicant. 4. On 3 February 1998 another company, Oranzherii Pazardzhik EAD (“OP”), a state-owned limited liability company, was declared insolvent and insolvency proceedings were opened. Following a public auction of part of its property, on 24 March 1999 the applicant company acquired several greenhouses. However, in a final decision of 22 November 1999 the auction was cancelled. 5. Pending a new auction, on 14 December 1999 OP, represented by its trustee in insolvency, and the applicant company signed a contract pursuant to which the applicant company was appointed guardian of the greenhouses until they were sold. The applicant company undertook to maintain the greenhouses’ equipment and to carry out urgent repair works. In the meantime the applicant company was entitled to use the property and in exchange undertook to pay monthly rent. 6. In addition to the repairs indicated in the contract of 14 December 1999, the applicant company carried out substantial works on the greenhouses, which it alleged were necessary for the latter’s proper functioning. On an unspecified date it requested the trustee in insolvency of OP to reimburse the costs of those works. Initially the trustee included those costs in the list of accepted claims against OP. Later, however, following an objection by one of the other creditors of OP, which was based on the fact that the costs were substantial, had not been approved by the creditors and had been incurred after the beginning of the insolvency proceedings, in a decision of 4 July 2000 the trustee removed this claim from the list. 7. In a final decision of 11 July 2000, the Pazardzhik Regional Court upheld the removal, as it was not satisfied that the additional works had been urgent and necessary. Moreover, the works had not been authorised by the trustee and the remaining creditors. The Regional Court considered that a creditor such as the applicant company, with a claim which had not been agreed in the insolvency proceedings, could make that claim in separate civil proceedings. 8. On 31 October 2000 the applicant company brought a civil claim against OP and also against the Ministry of Agriculture, as a representative of the State, which owned OP’s capital. Initially it sought 100,000 Bulgarian levs (BGN) (the equivalent of 51,072 euros (EUR)), representing part of the repair costs. In the course of the proceedings it increased its claim to BGN 1,195,520 (approximately EUR 610,582), claiming that OP had unjustly enriched itself by that amount. The applicant company did not seek to have its claim included in the list of accepted claims prepared by the trustee, but argued that it was entitled to receive payment prior to the distribution of any amounts obtained through the sale of the property of OP among the remaining creditors. 9. In a judgment of 30 October 2001, the Sofia City Court granted the claim against OP. It found that the applicant company had been unable to claim or receive payment in the course of the insolvency proceedings, and that therefore it was open to it to do so in separate civil proceedings. It went on to say that the repairs had been necessary, that the defendant company had unjustly enriched itself, and that it had had to reimburse the costs of the repairs. It accepted the applicant company’s argument that it had been a “third party” to the insolvency proceedings, and that it was entitled to receive payment outside those proceedings. Thus, the domestic court ordered OP to pay the applicant company the amount of BGN 1,195,520, plus interest and costs. 10. On the other hand, the Sofia City Court dismissed the applicant company’s claim against the Ministry of Agriculture, finding that the latter could not be held liable for OP’s debts. 11. OP appealed against the above judgment, but its appeal was rejected as inadmissible in a final decision of the Supreme Court of Cassation of 17 May 2002. As a result, the Sofia City Court’s judgment became final. 12. On 9 June 2002 OP requested the reopening of the proceedings, claiming that it had not been properly summoned to the first two hearings in the case, held on 11 December 2000 and 12 February 2001. In a judgment of 14 March 2003 the Supreme Court of Cassation allowed the request and reopened the proceedings. 13. After a fresh examination of the case, in a decision of 22 March 2004 the Sofia City Court discontinued the proceedings in respect of OP. It held that the claim was precluded by virtue of the provision of the newly introduced section 637(5) of the Commerce Act (“the CA”, see paragraph 25 below), which concerned procedural rights and was therefore applicable to pending proceedings. 14. As regards the proceedings against the Ministry of Agriculture, the Sofia City Court observed that they were still pending. 15. On appeals by the applicant company, on 9 May and 6 August 2004 respectively the Sofia City Court’s conclusions were upheld by the Sofia Court of Appeal and the Supreme Court of Cassation. 16. The Supreme Court of Cassation considered in addition that the applicant company should have lodged a claim under section 694 of the CA (see paragraph 24 below) within the insolvency proceedings. 17. The applicant company submits that it became aware of the Supreme Court of Cassation’s decision of 6 August 2004 on 14 September 2004. 18. Following the discontinuation of the proceedings in so far as they concerned OP, the proceedings continued against the Ministry of Agriculture. 19. In a judgment of 23 January 2008, the Sofia City Court rejected the applicant company’s claim against the Ministry. It noted that it had ordered OP to provide several invoices which it considered relevant. Those invoices had not been presented (OP had in the meantime been wound up); accordingly, the domestic court found that the claim had not been proved. 20. The applicant company did not lodge an appeal against the above judgment, as it was entitled to do under domestic law. 21. The applicant company used the greenhouses until 2002, when it was evicted. The greenhouses were sold at a new public auction in 2004. 22. Company insolvency is governed by Part IV of the Commerce Act (“the CA”) of 1991. Since its enactment in 1994, its provisions relating to company insolvency were amended on numerous occasions. 23. Pursuant to section 685 of the CA, creditors had to declare their claims against the insolvent company. The trustee in insolvency then prepared a list of accepted claims. Refusal by the trustee to accept a claim and include it in the list could be contested before the insolvency court. A creditor could also object to a decision to accept another creditor’s claim. At the relevant time, the trustee would decide on the matter and then submit the list for approval to the insolvency court. 24. By section 694 of the CA, introduced in October 2000 and as worded at the time, a creditor whose claim had not been accepted and included in the list could also bring an action for a declaration seeking to establish the existence of the claim. Such an action could be brought within fourteen days of the entry in the company register of the insolvency court’s decision approving the list of accepted claims. If the claimant was successful, the claim was to be satisfied within the insolvency proceedings. A similar provision existed in the CA until June 1998, when it was repealed. 25. Until the end of June 2003 there was no provision which explicitly allowed or barred the bringing of a civil claim against an insolvent company separately from the insolvency proceedings against that company, and there was no well-established practice of the domestic courts in this regard. Following amendments to the CA of June 2003, a bar to such claims was introduced (initially section 637(5), currently (6)).