CEDH · CASELAW;CLIN;ENG — 8 mars 2011

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Latvia - 71243/01 Judgment 8.3.2011 [Section III] Article 1 of Protocol No. 1 Article 1 para. 1 of Protocol No. 1 Deprivation of property Compensation significantly lower than current cadastral value of land expropriated following restoration of Latvian independence: no violation [This case was referred to the Grand Chamber on 15 September 2011] Facts – By deeds of gift inter vivos signed in 1994 the applicants became the owners of several plots of land on an island forming part of Riga and consisting mainly of port facilities. The land had previously been unlawfully expropriated by the Soviet Union but the donors had recovered its ownership in the context of denationalisation at the beginning of the 1990s. The cadastral value of the land indicated at the time of the gift was low, but in 1996, following the inclusion of that land within the perimeter of the Port of Riga, the value of the first applicant’s land was estimated to be approximately EUR 900,000 and that of the second applicant’s land at EUR 5   million. In 1997 the Latvian parliament enacted the law on expropriation of land for State use within the Autonomous Commercial Port of Riga. The amounts of compensation due to the applicants were set at EUR 850 and EUR 13,500 in accordance with the new statutory provision, which imposed a ceiling on expropriation compensation for land at its cadastral value on 22   July 1940 multiplied by a conversion coefficient. In 1999 the applicants brought actions in the courts seeking to obtain arrears of rent payments for use of their land since 1994; they were awarded the equivalent of approximately EUR 85,000 and EUR 593,150 respectively. They also asked the courts to cancel the registration of the State’s ownership in the land registers, submitting in particular that the procedure provided for in the 1923 General Expropriation Act had not been complied with. Their request was dismissed on the ground that the expropriation of their land had been based on the special law of 1997 rather than on the General Expropriation Act of 1923. Law – Article 1 of Protocol No. 1: The impugned measure had been part of a much wider process of denationalisation following the restoration of Latvia’s independence. The return of the land at issue to the former owners’ heirs, their gift to the applicants and the expropriation of that land had occurred over a relatively short period of time. It was precisely in that sphere that the legislature required a particularly wide margin of appreciation in order to correct, on the grounds of equity and social justice, shortcomings or injustices created during denationalisation. The enactment of specific and targeted laws in such a situation could be justified having regard to Article   1 of Protocol No.   1. The Court saw nothing unreasonable or manifestly contrary to the fundamental objectives of that Article in the special law of 1997, and the expropriation of the land at issue had therefore been carried out “subject to the conditions provided for by law”. Furthermore, the expropriation had pursued a legitimate public-interest aim, namely that of optimising the management of the facilities of the Autonomous Port of Riga, a question of transport policy and, more generally, of the country’s economic policy. As regards the proportionality of the measure, the Court found that the difference between the current cadastral value of the land and that (up to one thousand times lower) of the compensation finally obtained by the applicants had been disproportionate in the extreme. The Court noted, however, that the substantial increase in the value of the land had resulted from development of the port facilities located on it and a total change in the land’s strategic importance over several decades, objective factors to which neither the applicants nor the former owners had contributed. Furthermore, the applicants had acquired the land free of charge and had owned it for only three years, without making any investments or paying any related taxes. In those circumstances, and given the considerations of equity and general policy, the Court considered that the Latvian authorities had been justified in not reimbursing the full cadastral or market value of the land. Moreover, the applicants had received significant amounts in respect of rent arrears and easements, which had been calculated on the basis of the current value of the land. Although those sums had been paid on a legal basis that was completely unrelated, the fact remained that they had profited from a “windfall effect” and, if the situation was considered as a whole, the amounts paid in respect of compensation did not appear disproportionate. The Court noted lastly that the impugned measure had been the direct result of a legislative act and that the applicants had enjoyed sufficient procedural guarantees before the Latvian courts. Accordingly, the national authorities had not overstepped their margin of appreciation, as the burden imposed on the applicants had been neither disproportionate nor excessive, and the “fair balance” between public interest and the protection of property had not been upset. Conclusion : no violation (six votes to one). Article 14 of the Convention in conjunction with Article   1 of Protocol No.   1: The Court had serious doubts that the situation in which the applicants had found themselves was comparable to that of other owners of immovable property. Even had it been, given the public interest pursued and the margin of appreciation enjoyed by the State on account of the denationalisation process, the Court considered that the manner in which the applicants had been treated had had an objective and reasonable justification. Conclusion : no violation (unanimously).   © Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court. Click here for the Case-Law Information Notes