PROCON S.R.L. v. THE REPUBLIC OF MOLDOVA
Inadmissible
Nebojša Vučinić;Paul Lemmens;Stéphanie Mourou-Vikström;Georges Ravarani;Ksenija Turković
1. The applicant, Procon S.R.L., is a company registered in Moldova. It was represented before the Court by Mr F. Nagacevschi, a lawyer practising in Chișinău. 2. The Moldovan Government (“the Government”) were represented by their Agent, Mr L. Apostol. 3. The facts of the case, as submitted by the parties, may be summarised as follows. 4. The applicant company rented part of the basement of a State-owned building (the Ginta-Latină theatre, “G-L”). The premises were equipped for use as a bar (“the bar”). 5. By decision no. 37 of 30 June 1998 the Commission for Privatisation of Rented Property (“the Commission”, a subdivision of the Department of Privatisation and Administration of State Property, “the Department”) allowed the privatisation of the bar and set the initial price at 423,390 Moldovan lei (“MDL”, the equivalent of approximately 57,373 United States Dollars (“USD”) at the time). On 21 August 1998 the Commission adopted decision no. 40 allowing the applicant company to pay the price of the bar. 6. On 5 October 1998 the applicant company received a letter from the Department in which it was invited to appear before it in order to receive information about the modalities of payment, failing which the bar would be offered for privatisation at an auction. 7. On 13 November 1998 the Commission adopted decision no. 42 (“the 1998 decision”) confirming the permission to privatise the bar and setting the final price at MDL 348,676 (the equivalent of approximately USD 47,250 at the time). 8. On 24 December 1998 the applicant company concluded a contract with the Department for the purchase of the bar from the State. The applicant company paid the full price indicated in the contract (MDL 348,676). 9. On 15 January 1999 G-L initiated court proceedings against the Department, seeking to have the 1998 decision overturned and have the bar’s activity suspended. It argued that the type of property which the Commission had allowed the applicant company to buy was part of a building constituting national cultural heritage and was one of the types of property (room with a technical lines hub, common use room for the entire building) not subject to privatisation in accordance with the law. 10. According to the applicant company, at its requests of 5 February and 31 May 1999 it was accepted on the latter date in the proceedings as a third party having its own claims. 11. Following several decisions regarding procedural matters, on 4 May 2000 the Economic Court of the Republic of Moldova rejected G-L’s claim. No appeal was lodged and the judgment became final fifteen days later. 12. The Prosecutor General requested the Supreme Court of Justice to reopen the proceedings as part of an extraordinary remedy. On 28 November 2001 the Supreme Court of Justice agreed and quashed the judgment of 4 May 2000, ordering a re-hearing of the case. 13. On 29 October 2002 G-L added to its earlier claims against the applicant company a request to declare the contract of 24 December 1998 for the sale of the bar null and void. The Department also brought a court action against the applicant company on the same day, seeking the annulment of that contract, since its object was property that could not have been lawfully privatised. 14. In the meantime, on 6 September 2001 the Commission adopted decision no. 89 (“the 2001 decision”) by which it annulled the part of the 1998 decision which had authorised the privatisation of the bar, without giving reasons. 15. On 11 October 2002 the applicant company initiated court proceedings, seeking the overturning of the Commission decision mentioned in the preceding paragraph. In that respect it noted that the relevant part of the 1998 decision allowing the privatisation of the bar had been the subject of judicial proceedings ending with the judgment of 11 October 2000 (see paragraph 25 above), which had become final. 16. The Economic Court of the Republic of Moldova decided to join the proceedings of the applicant company against the Commission (concerning the 2001 decision) with those brought by G-L and the Department against the applicant company (concerning the annulment of the sale of the bar). 17. On 18 November 2002 the same court allowed the applicant company’s claims and rejected those of the Department and G-L. It quashed the 2001 decision as unlawful. The court noted that by the final Economic Court judgment of 11 October 2000 (see paragraph 25 below) the 1999 decision had been quashed, and that that judgment confirmed the lawfulness of the decision to allow the privatisation of the bar. The court went on to examine the substance of the case, and found that the privatisation had not been contrary to any legislative provision. 18. The Department and G-L appealed. The applicant company submitted that it had made the purchase in good faith, and emphasised that it had been the initiative of the Department to privatise the bar and that the applicant had been warned that the bar would be sold at auction if it did not purchase it (see paragraph 6 above). 19. On 12 February 2003 the Supreme Court of Justice quashed the judgment of 18 November 2002. It ruled on the merits of the case and found that the lower court had incorrectly interpreted certain aspects of the relevant legislation and concluded that in accordance with the law G-L’s basement was situated in a building that was part of State property which was not subject to privatisation. Accordingly, it declared null and void the contract for the purchase of the bar from the Department, and ordered restitutio in integrum, the applicant to receive the sum paid during the privatisation. 20. According to the Government, the applicant company was allowed to continue renting the bar from the State. 21. In the meantime, while the first set of proceedings was pending, the applicant company sought to have its title to the bar entered in the Territorial Land Registry (“the TLR”), relying on the 1998 decision and the contract with the Department. The TLR rejected that request on 2 and 16 February 1999 because of the Government decision no. 39 of 22 January 1999, under which the entire building had been transferred for free to the Parliament. On 17 March 1999 the applicant company took legal action against the Department (asking for de facto transfer of the property) and against the TLR (asking it to register the company’s title to the privatised property). 22. On 30 June 1999 the Chişinău Economic Court ordered the TLR to register the applicant company’s title to the bar and issue it with the relevant confirmation, and the Department to transfer the property to the applicant company. The court noted that in accordance with the 1998 decision and the contract between the Department and the applicant company the latter had bought the relevant property and that the Department did not object to the applicant company’s claim, while the TLR was absent. No appeal was lodged and the judgment became final. 23. The Prosecutor General requested the Supreme Court of Justice to reopen the proceedings (recurs în anulare), arguing inter alia that another court action concerning the lawfulness of privatisation (the first set of proceedings) was pending. The Supreme Court of Justice rejected that request on 15 December 1999, noting that if the parallel proceedings referred to by the Prosecutor General resulted in the annulment of the contract for the sale of the relevant property, the judgment of 30 June 1999 could be reviewed in accordance with the law. 24. While the first set of proceedings was still pending, on 10 September 1999 the Commission adopted decision no. 59 (“the 1999 decision”) by which it quashed the part of the 1998 decision regarding the permission to privatise the bar, without giving reasons for doing so. On 21 January 2000 the Department informed the applicant company of that decision, specifying that in reaching it the Commission had taken into account the Government decision no. 39 of 22 January 1999 transferring the building to the Parliament. 25. On 12 July 2000 the applicant company initiated court proceedings seeking to overturn the 1999 decision. On 11 October 2000 the Economic Court of Moldova quashed the Commission’s 1999 decision as unlawful, finding that in the meantime the Government decision no. 39 mentioned above had been overturned by Government decision no. 435 of 10 May 2000. G-L was not a party to those proceedings. 26. On 21 November 2001 the Appeals Chamber of the Economic Court of the Republic of Moldova rejected the Department’s appeal as out of time. The judgment of 11 October 2000 became final.