CASE OF VOLOKITIN AND OTHERS v. RUSSIA
Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions);Pecuniary and non-pecuniary damage - award (Article 41 - Non-pecuniary damage;Pecuniary damage;Just satisfaction);Non-pecuniary damage - finding of violation sufficient (Article 41 - Non-pecuniary damage;Just satisfaction)
Branko Lubarda;Dmitry Dedov;Georgios A. Serghides;Helen Keller;Helena Jäderblom;Pere Pastor Vilanova
6. The cases concern the 1982 State internal premium loan bonds (облигации государственного внутреннего выигрышного займа 1982 года - “1982 premium bonds”) which are in the applicants’ possession. The applicants submitted lists of serials numbers or photocopies of their bonds. 7. On 30 December 1980 the USSR Cabinet of Ministers decided to issue bonds of an internal premium loan to finance certain State programmes. The bonds had nominal values of 25, 50 and 100 Soviet roubles (SUR). Their period of circulation was set at twenty years, from 1 January 1982 to 1 January 2002, and they were redeemable at any time during the term of the loan with interest at 3% per annum. Soviet citizens could either buy the 1982 premium bonds with their own money or obtain them in exchange for bonds from an earlier 1966 State internal premium loan. The average monthly wage in 1982 was SUR 177.30 across all branches of the economy plus SUR 68.70 in various social benefits (People’s Economy of the USSR 1982, a statistical yearbook by the USSR Central Statistics Directorate, Moscow, 1983). 8. By the late 1980s the Soviet economy was suffering from a structural imbalance due a rapidly increasing money supply and decreasing availability of consumer goods sold at State-controlled prices. In January 1991 the USSR Government freed 40% of prices and carried out a monetary reform eliminating the largest banknotes in circulation and restricting the withdrawal of money from bank deposit accounts to SUR 500 a month. This led to a two to threefold increase in prices. On 22 March 1991 the USSR President issued Decree no. UP-1708, ordering a one-time increase to savings instruments, including the 1982 premium bonds, of 40% to offset the price rise. 9. On 26 December 1991 the USSR was dissolved by Declaration no. 142-N of the Supreme Soviet of the USSR. The declaration invited the heads of newly independent States to reflect on the issues of succession. 10. On 19 February 1992 the Russian Government issued Resolution no. 97, recognising its succession in respect of the obligations of the former USSR under the 1982 loan: “1. To confirm succession of the [Russian] Government in respect of the obligations of the former USSR vis-à-vis Russian Federation citizens arising out of the bonds of the 1982 State internal premium loan. ... 6. To give Russian Federation citizens who are holders of bonds of the 1982 State internal premium loan the right to voluntarily exchange their bonds against State securities, including 1992 Russian internal premium loan bonds, shares in the Savings Bank ... and also to credit the proceeds of sale of the bonds into deposit accounts open in the Savings Bank ... from 1 October 1992 ...” 11. Between 1995 and 2000 a series of Russian laws and regulations were passed which provided for the conversion of Soviet securities, including the 1982 premium bonds, into special Russian promissory notes nominated in “promissory roubles” (DOR) (for details, see Yuriy Lobanov v. Russia, no. 15578/03, §§ 16-21, 2 December 2010). 12. From 2003 to the present day, the application and implementation of those laws and regulations have been continuously suspended, most recently for the period 1 January 2017 to 1 January 2020, by Law no. 429FZ of 19 December 2016 and Resolution no. 1437 dated 22 December 2016. 13. The applicants applied to the Russian financial authorities and the courts, seeking the redemption of their bonds. Their claims were rejected on procedural and substantive grounds. Mr Ruzanov’s claim was allowed at first instance but the judgment was later overturned on appeal. On 5 May 2014 Mr Israfilov obtained a decision from the Leninskiy District Court in Makhachkala, requiring the Russian Government to convert his bonds into special promissory notes. 14. Mr Losyakov and Ms Losyakova’s claim was referred by the Supreme Court to the Constitutional Court. By decision no. 632-O of 3 April 2012, the Constitutional Court declared it inadmissible, finding that it was not competent to rule on the issue of an alleged failure of federal lawmakers to enact laws guaranteeing the protection of savings which had been recognised as Russia’s internal debt. In its view, the federal lawmakers had adequate discretion to legislate on those issues in the interests of everyone, taking into account the specific social and economic conditions prevailing in Russia and the balance between the rights and lawful interests of various categories of citizens, including those who acted as creditors of the State and others in respect of whom the State had public policy obligations. The legislature was entitled to restrict the rights, including property rights, of some people for the protection of rights and lawful interests of others.