Case of Grafescolo s.r.l. v. the Republic of Moldova

THIRD SECTION

CASE OF GRAFESCOLO S.R.L. v. THE REPUBLIC OF MOLDOVA

(Application no. 36157/08)

JUDGMENT

STRASBOURG

22 July 2014

FINAL

22/10/2014

This judgment has become final under Article 44 § 2 of the Convention. It may be

subject to editorial revision.

GRAFESCOLO S.R.L. v. THE REPUBLIC OF MOLDOVA JUDGMENT 1

In the case of Grafescolo S.R.L. v. the Republic of Moldova, The European Court of Human Rights (Third Section), sitting as a

Chamber composed of:

Josep Casadevall, President,

Alvina Gyulumyan,

Ján Šikuta,

Dragoljub Popović,

Johannes Silvis,

Valeriu Griţco,

Iulia Antoanella Motoc, judges,

and Marialena Tsirli, Deputy Section Registrar, ,

Having deliberated in private on 1 July 2014,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 36157/08) against the

Republic of Moldova lodged with the Court under Article 34 of the

Convention for the Protection of Human Rights and Fundamental Freedoms

(“the Convention”) by a company incorporated in Moldova,

Grafescolo S.R.L (“the applicant company”), on 11 July 2008.

2. The applicant company was represented by Mr V. Nagacevschi, a

lawyer practising in Chişinău. The Moldovan Government (“the

Government”) were represented by their Agent, Mr L. Apostol.

3. The applicant company alleged, in particular, that it had been the

victim of unfair civil proceedings and arbitrary deprivation of property.

4. On 27 June 2012 the application was communicated to the

Government.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicant is a company incorporated in Moldova.

6. On 13 February 2003 the Vadul lui Voda local council adopted a

decision concerning the sale of a plot of land with a greenhouse on it to the

applicant company. Subsequently, in March 2003, a contract was entered

into for that purpose between the local council and the applicant company.

2 GRAFESCOLO S.R.L. v. THE REPUBLIC OF MOLDOVA JUDGMENT

7. On 15 June 2006 the local council adopted a decision revoking its

previous decision. The applicant initiated proceedings against the local

council.

8. On 25 December 2006 the Vadul lui Voda local council introduced a

counter action seeking the termination of the contract of sale between it and

the applicant company on the grounds that the price asked for the property

had been too low and that the land had been sold unlawfully owing to its

proximity to a river. The applicant company opposed this action and argued,

inter alia, that it was time-barred under the provisions of the Civil Code in

force at the time the contract was entered into.

9. On 13 April 2007 the Ciocana District Court rejected the applicant’s

action but accepted that of the local council and declared the contract of sale

null and void. The court held that the rules governing time limitation

contained in the new Civil Code should apply. The court expressed of its

own motion the opinion that the local council’s action had concerned the

declaration of the absolute nullity of the contract of sale and that therefore,

in accordance with the provisions of Article 217 of the new Civil Code, it

could not be time-barred. The applicant appealed.

10. On 5 September 2007 the Chişinău Court of Appeal upheld the

appeal lodged by the applicant company and quashed the judgment of the

first-instance court. It upheld the applicant company’s action and dismissed

the counter action lodged by the local council. The local council lodged an

appeal on points of law.

11. On 16 January 2008 the Supreme Court of Justice upheld the appeal

on points of law lodged by the local council. It quashed the judgment of the

Court of Appeal and upheld the judgment of the Ciocana District Court of

13 April 2007. The Supreme Court did not state any position in respect of

the applicant company’s initial defence concerning the statute of limitations.

Only the representative of the local council was present at the Supreme

Court hearing. The judgment of the Supreme Court was final.

II. RELEVANT DOMESTIC LAW AND PRACTICE

12. The relevant provisions of the Civil Code in force at the time of the

sale of the plot of land provided:

Article 74

“The general limitation period for protection through a court action of the rights of a

[natural] person is three years; it is one year for lawsuits between State organisations,

collective farms and any other social organisations.”

Article 78

“The competent court ... shall apply the limitation period whether or not the parties

request such application.”


Article 83

“Expiry of the limitation period prior to initiation of court proceedings constitutes a

ground for rejecting the claim.

If the competent court ... finds that the action has not commenced within the

limitation period for well-founded reasons, the right in question shall be protected.”

13. The relevant provisions of the new Civil Code, in force after 12 June

2003, read:

Article 6. Effect of civil law in time

“(1) The civil law does not have retroactive effect. It cannot modify or suppress the

conditions in which a prior legal situation was constituted or the conditions in which

such a legal situation was extinguished. The new law cannot alter or abolish the

previously-created effects of a legal situation which has ceased to exist or is in the

process of execution.”

Article 217. The absolute nullity of a legal act

“(1) The absolute nullity of a legal act can be invoked by any person having an

interest. The court can invoke it on its own motion...

(3) An action to declare the absolute nullity is not limited in time.”

14. In its judgment of 20 April 2005 (case no. 2ra-563/05) the Supreme

Court of Justice dismissed the plaintiff’s contentions – which were based on

the provisions of the new Civil Code – because the facts of the case related

to a period before the entry into force of the new Civil Code, and the

provisions of the old Civil Code were therefore applicable.

15. The relevant provisions of the Code of Civil Procedure read as

follows:

“Article 105. Service of the summons...

(1) The summons ... shall be sent by registered mail with confirmation of delivery

or through a person authorised by the court. The date of service of the summons ...

shall be written on the summons, as well as on the receipt, which shall be returned to

the court.

...

(5) The summons ... addressed to a natural person shall be served on him or her

personally and shall be countersigned on the receipt. The summons ... addressed to a

legal person shall be served on the authorised employee and shall be countersigned on

the receipt; if such a person is absent, the summons shall be served on another

employee in the same conditions...”

“Article 441

... (2) The President of the Chamber [of the Supreme Court of Justice] shall set,

within one month, the date for hearing the appeal in cassation and inform the parties

accordingly. A copy of the appeal in cassation shall be sent to the other parties

together with a summons to attend the hearing, indicating that a written reply should

be submitted to the court not later than five days before the hearing.

Article 444


... (2) The appeal in cassation shall be examined after the parties have been

summoned. However, their failure to appear shall not prevent the examination of the

appeal.”

16. On 12 December 2005 the Plenary Supreme Court of Justice adopted

a decision “Regarding the application of the rules of the Code of Civil

Procedure to the examination of cases by the first-instance courts”. In

point 5 of that decision the court noted that examining a case in the absence

of a party which had not been properly summoned was contrary to the law.

It added that under Article 105 § 5 of the Code of Civil Procedure a person

should be considered as lawfully summoned only if he or she had been

personally served with the summons and had countersigned the receipt.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

17. The applicant company complained of a violation of its right to a fair

trial, contrary to Article 6 of the Convention. In particular, it complained

that the courts had failed to apply the statute of limitations and that it had

not been summoned to the hearing before the Supreme Court of Justice. The

relevant part of Article 6 reads as follows:

“1. In the determination of his civil rights and obligations ..., everyone is entitled to

a fair ... hearing ... by an independent and impartial tribunal established by law.”

A. Admissibility

18. The Court notes that the complaint is not manifestly ill-founded

within the meaning of Article 35 § 3 (a) of the Convention. It further notes

that it is not inadmissible on any other grounds. It must therefore be

declared admissible.

B. Merits

19. The applicant company submitted that the proceedings had been

unfair because the domestic courts had failed to apply the provisions of the

Civil Code concerning time limitation that were in force at the time the

contract of sale for the plot of land was entered into and had chosen to apply

the provisions of the new Civil Code. Moreover, the applicant company had

not been summoned to the hearing before the Supreme Court of Justice.

20. The Government disagreed with the applicant company and argued

that the statute of limitations did not apply because the domestic courts had

declared the absolute nullity of the contract of sale. Moreover, the


Government contested the applicant company’s allegation that it had not

been summoned to appear at the hearing before the Supreme Court of

Justice.

21. The Court refers to its previous case-law, in which it has stated that

the observance of admissibility requirements for carrying out procedural

acts is an important aspect of the right to a fair trial. The role played by

limitation periods is of major importance when interpreted in the light of the

Preamble to the Convention, which, in its relevant part, declares the rule of

law to be part of the common heritage of the Contracting States (see

Dacia SRL v. Moldova, no. 3052/04, § 75, 18 March 2008).

22. The Court further reiterates that Article 6 § 1 of the Convention

obliges the courts to give reasons for their judgments. In Ruiz Torija

v. Spain, (judgment of 9 December 1994, Series A no. 303-A), the Court

found that the failure of a domestic court to give reasons for not accepting

an objection that the action was time-barred amounted to a violation of that

provision.

23. The Court notes in the above context that the issue concerning the

Statute of Limitation was an important argument raised by the applicant

company during the proceedings. If accepted, it could have led to the

dismissal of the action lodged by the local council against the applicant

company. In spite of that, the Supreme Court of Justice omitted to give any

reasons for not accepting this important argument (see paragraph 11 above).

Moreover, the hearing of the Supreme Court was held without the applicant

company being summoned to it. Indeed, the Government did not submit any

evidence to the contrary.

24. In the light of the above, the Court concludes that the proceedings

were not fair and that, accordingly, there has been a violation of Article 6

§ 1 of the Convention.

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO

THE CONVENTION

25. The applicant company also complained that its rights guaranteed by

Article 1 of Protocol No. 1 to the Convention had been breached.

26. The relevant part of Article 1 of Protocol No. 1 to the Convention

reads:

“Every natural or legal person is entitled to the peaceful enjoyment of his

possessions. No one shall be deprived of his possessions except in the public interest

and subject to the conditions provided for by law and by the general principles of

international law. ...”

27. The Court has found a violation of Article 6 § 1 of the Convention as

a result of the failure of the Supreme Court of Justice to examine an

important argument raised by the applicant company in its defence and to

summon the applicant company to its hearing. It cannot, however, speculate


as to the outcome of the proceedings, had they been fair under Article 6 § 1

of the Convention. It therefore considers that this complaint is inadmissible

as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the

Convention.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

28. Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols

thereto, and if the internal law of the High Contracting Party concerned allows only

partial reparation to be made, the Court shall, if necessary, afford just satisfaction to

the injured party.”

A. Damage

29. The applicant company claimed 25,000 euros (EUR) in respect of

non-pecuniary damage and the restitution of the plot of land in respect of

the pecuniary damage.

30. The Court does not discern any causal link between the violation

found and the pecuniary damage alleged; it therefore rejects this claim. On

the other hand, it awards the applicant company EUR 3,600 in respect of

non-pecuniary damage.

B. Costs and expenses

31. The applicant company also claimed EUR 2,350 for the costs and

expenses incurred before the Court.

32. The Government objected and argued that the amount claimed was

excessive.

33. Regard being had to the circumstances of the case and to the

documents submitted by the applicant company, the Court considers it

reasonable to award EUR 2,000 for costs and expenses.

C. Default interest

34. The Court considers it appropriate that the default interest rate

should be based on the marginal lending rate of the European Central Bank,

to which should be added three percentage points.


FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares admissible the complaint under Article 6 § 1 of the Convention,

and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention;

3. Holds

(a) that the respondent State is to pay the applicant company, within

three months from the date on which the judgment becomes final in

accordance with Article 44 § 2 of the Convention, the following

amounts, to be converted into the currency of the respondent State at the

rate applicable at the date of settlement:

(i) EUR 3,600 (three thousand six hundred euros), plus any tax that

may be chargeable, in respect of non-pecuniary damage;

(ii) EUR 2,000 (two thousand euros), plus any tax that may be

chargeable to the applicant, in respect of costs and expenses;

(b) that from the expiry of the above-mentioned three months until

settlement simple interest shall be payable on the above amounts at a

rate equal to the marginal lending rate of the European Central Bank

during the default period plus three percentage points;

4. Dismisses the remainder of the applicant company’s claim for just

satisfaction.

Done in English, and notified in writing on 22 July 2014, pursuant to

Rule 77 §§ 2 and 3 of the Rules of Court.

Marialena Tsirli Josep Casadevall

Deputy Registrar President

Case of Grafescolo s.r.l. v. the Republic of Moldova

Documents

Transcript of Case of Grafescolo s.r.l. v. the Republic of Moldova