MIHAYLOVA v. BULGARIA
Inadmissible
George Nicolaou;Guido Raimondi;Krzysztof Wojtyczek;Nona Tsotsoria;Päivi Hirvelä;Zdravka Kalaydjieva
1. The applicant, Ms Margarita Mihaylova Mihaylova, is a Bulgarian national, who was born in 1945 and lives in Varna. She was represented before the Court by Mr M. Ekimdzhiev and Ms G. Chernicherska, lawyers practising in Plovdiv. 2. The Bulgarian Government (“the Government”) were represented by their Agents, first Ms N. Nikolova, and then Ms M. Kotseva and Ms A. Panova, of the Ministry of Justice. 3. The facts of the case, as submitted by the parties, may be summarised as follows. 4. The applicant’s grandfather owned several plots of agricultural land in the area surrounding Varna measuring 48,500 square metres in total, which were expropriated between 1966 and 1970 for urban development. 5. Following the enactment of restitution legislation in Bulgaria in the early 1990s, on 20 February 1992 the applicant’s father applied to have the expropriation revoked. The request, initially addressed to the local agricultural land commission, was forwarded to the mayor of Varna on 21 July 1994, as it was decided that the 1992 Restitution Act (see paragraph 21 below) applied to the case. After the time-limit for assessing whether the land should be returned elapsed without any decision being made, on 5 September 1994 the applicant’s father sought judicial review of the mayor’s tacit refusal. 6. In a judgment of 10 January 1996 the Varna Regional Court overturned the mayor’s refusal in part by revoking the expropriation in so far as it concerned 14,700 square metres of land and returning the land in question to the applicant’s father. The Regional Court’s judgment was subject to supervisory review (преглед по реда на надзора). Following a request by the mayor of Varna, on 21 October 1997 the judgment was quashed by the Supreme Administrative Court and the case remitted to the lower court. 7. On 21 April 1998, after re-examining the case, the Varna Regional Court once again revoked the expropriation of the land and returned it to the applicant’s father on the grounds that no construction works had yet taken place and that it was sufficient in size to form an independent plot. It did not comment on any rights to that land by third parties such as Cherno More EAD and ET Koti (see paragraphs 10-11 below). 8. No appeal was lodged against the above-mentioned judgment and on 20 May 1998 it became final. On 13 November 1998 the mayor of Varna applied to the Supreme Administrative Court to have the judicial proceedings reopened, referring to newly discovered evidence, but on 25 May 1999 the application was dismissed. 9. On an unspecified date prior to 31 May 1996 the applicant’s father paid back 4,504.87 Bulgarian levs (BGL) to the municipality, representing the monetary compensation received at the time of expropriation. At that time, because of inflation and the depreciation of Bulgarian currency, the sum repaid equalled approximately 90 German marks (DEM). At the same time the applicant’s father requested to have the plot of land marked as his in the relevant cadastral plans, which was necessary in order to obtain possession, but this was refused as it was established that third parties asserted competing rights to the same property (see below). 10. Following expropriation, the plot of land at issue formed part of Varna’s industrial zone and a plant, storehouses and accompanying infrastructure were constructed on it. In 1987 the land was allocated for use by a State enterprise, which in 1991 was transformed into a limited liability company and then in 1992 into a joint-stock company named Cherno More EAD (“Cherno More”), the shares of which were owned entirely by the State. 11. In November 1994 Cherno More put 9,925 square metres of the land it owned up for sale. On 2 March 1995 the land was sold to ET Koti (“Koti”), a sole trader. It appears that this land was situated entirely within the boundaries of the larger 14,700 square metre plot which had been the subject of the applicant’s father’s restitution claim. 12. On 21 March 1997 the applicant’s father brought a rei vindicatio action against Cherno More and Koti. He based his claim on the Varna Regional Court’s judgment of 10 January 1996 (see paragraph 6 above), arguing that he owned the 9,925 square metre plot of land which Koti had bought from Cherno More in 1995. 13. On 19 June 1997, upon a request by Koti, to which the applicant’s father consented, the proceedings were stayed pending the outcome of related litigation between the two defendants regarding ownership of the disputed land. The proceedings were resumed in February 1999, but were again briefly stayed pending the outcome of the application by the mayor of Varna for restitution proceedings to be reopened (see paragraph 8 above). 14. After the rei vindicatio proceedings were resumed, in their respective judgments of 12 May and 17 November 2000 the Varna Regional Court and the Varna Court of Appeal disallowed the claim. While the proceedings were under way, the applicant’s father died and the applicant and her mother joined the proceedings as his heirs. They subsequently lodged an appeal on points of law. 15. In a judgment of 23 November 2001 the Supreme Court of Cassation quashed the Court of Appeal’s judgment and remitted the case on the grounds that the lower courts had failed to take into account the Varna Regional Court’s judgment of 21 April 1998. 16. Following a fresh examination of the case, on 27 September 2002 the Varna Court of Appeal once again dismissed the rei vindicatio claim. It found that Cherno More and Koti were not bound by the judgment of 21 April 1998 as they had not participated in the earlier proceedings and had only in the present proceedings had an opportunity to make their own claims. It further noted that a decision given in restitution proceedings could not prejudice the interests of third parties; third parties who had in the meantime acquired property from the State could always oppose their rights to the former owner claiming restitution. 17. The Varna Court of Appeal further found that the urban development projects for which the land had been expropriated had been completed, which was sufficient ground to refuse restitution. Furthermore, by the time the restitution legislation had entered into force, the land had already become the property of Cherno More, as a result of its transformation into a limited liability company, whereas the legislation had only applied to property owned by the State or municipalities when it entered into force. In addition, the land had been lawfully acquired by Koti in 1995. Accordingly, the applicant’s father, succeeded by the applicant and her mother, could not have acquired any rights of ownership as a result of the Varna Regional Court’s judgment of 21 April 1998. 18. Following an appeal by the applicant and her mother, on 25 February 2004 the above-mentioned judgment was upheld by the Supreme Court of Cassation, which reiterated that in 1995 Koti had validly acquired ownership of the disputed plot. It held further that the rei vindicatio action was in fact time-barred because the applicant’s father had not complied with the six-month time-limit provided for in paragraph 6a of the transitional and concluding provisions of the Privatisation Act (see paragraph 25 below). 19. On 17 February 2003 during the course of these proceedings the applicant’s mother died, leaving the applicant as her sole heir. 20. The Court has not been informed of what happened to the remainder of the plot of land measuring 14,700 square metres following the Regional Court’s judgment of 21 April 1998 (see paragraph 7 above). 21. The Restitution of Property Expropriated under Building Planning Legislation Act (Закон за възстановяване на собствеността върху някои отчуждени имоти по ЗТСУ, ЗПИНМ, ЗБНМ, ЗДИ и ЗС, “the Restitution Act”) entered into force in February 1992. Its most relevant provisions have been summarised in the Court’s judgment in the case of Decheva and Others v. Bulgaria (no. 43071/06, §§ 28-31, 26 June 2012). It did not contain any provision prohibiting the sale to third parties after its entry into force of properties which were subject to restitution claims. 22. The provisions of domestic law concerning the res judicata effect of court judgments have been summarised in the Court’s judgment in the case of Kehaya and Others v. Bulgaria (nos. 47797/99 and 68698/01, §§ 34-55, 12 January 2006). 23. Although not expressly stipulated in the Restitution Act, according to settled judicial practice restitution was only possible where the property taken had remained State or municipally-owned. The same view was expressed by the Constitutional Court in a decision of 11 March 1998 (Решение № 4 от 11.03.1998 г. на КС на РБ по конст. д. № 16/97 г.). According to settled judicial practice under the Restitution Act, third parties claiming property rights could not intervene in the ex parte proceedings under that Act or challenge any decision restoring the former owners’ rights, but could have their claims examined in separate judicial proceedings, in which the courts exercised “indirect judicial review” (косвен контрол) of the restitution decision. The scope of that review was discussed in an Interpretative Decision of 10 May 2006 of the Supreme Court of Cassation, which noted that a third party claiming rights to a restituted property was not bound by a decision given under the Restitution Act and could dispute all preconditions for restitution as provided for under that Act, as this was its sole means by which to defend its rights (Тълкувателно решение № 6 от 10.05.2006 г. на ВКС по т. гр. д. № 6/2005 г.). 24. The Transformation and Privatisation of State and Municipally-Owned Enterprises Act (“the Privatisation Act”), enacted in 1992 and superseded by other legislation in 2002, provided for the privatisation of State and municipally-owned enterprises and companies and publicly owned property. A summary of the legislation’s provisions relating to the transformation of companies from public enterprises into companies is set out in the Court’s judgment in the case of Sivova and Koleva v. Bulgaria (no. 30383/03, §§ 45-49, 15 November 2011). Transformation is also regulated by other legislation, summarised in the Court’s decision in the case of Credit Bank and Others v. Bulgaria ((dec.), no. 40064/98, 30 April 2002). Most notably, the transformation procedure involved transferring ownership of all the assets to the newly created company. 25. Pursuant to paragraph 6a of the transitional and concluding provisions of the Privatisation Act (“paragraph 6a”), which was added in May 1996, creditors of State and municipally-owned enterprises and companies were obliged to notify their claims to the body competent to make a decision for privatisation. Notifications had to be made within six months of the publication in the Official Gazette of a notice that the privatisation procedure had started. Creditors failing to give such notice forfeited their right to bring subsequent proceedings regarding the same claim.