CEDH · PRESS;CHAMBERJUDGMENTS;ENG — 14 janvier 2010

.s800EAC49 { font-size:12pt } .s598389F8 { margin-top:0pt; margin-bottom:0pt; text-align:center; font-size:11pt } .s29100277 { font-family:Arial; font-weight:bold } .sA678F94A { margin-top:0pt; margin-bottom:0pt; text-align:right; font-size:11pt } .s7ED160F0 { text-decoration:none } .s2F5E426D { font-family:Arial; font-size:6pt; font-weight:bold; vertical-align:super; color:#0069d6 } .sC9AE5FA8 { font-family:Arial; font-weight:bold; font-style:italic; text-decoration:underline; color:#0069d6 } .sA36B60A1 { font-family:Arial; font-style:italic } .sBB9EE52A { font-family:Arial } .s4DDA3AA3 { font-family:Arial; font-weight:bold; font-style:italic } .s2E932ED2 { margin-top:0pt; margin-bottom:0pt; font-size:11pt } .s99A63BFE { margin-top:0pt; margin-bottom:0pt; text-align:left; font-size:11pt } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .s4BAE41EE { font-family:Arial; font-size:11pt } .sBACB3E60 { font-family:Arial; font-size:11pt; text-decoration:underline; color:#800080 } .sC7EAD8B { font-family:Arial; font-weight:bold; text-decoration:underline } .s9FE28126 { margin-top:0pt; margin-right:42.5pt; margin-bottom:0pt; text-align:left; font-size:11pt } .sF6A12959 { width:33%; height:1px; text-align:left } .s5FFF0A7F { margin-top:0pt; margin-bottom:0pt; font-size:9pt } .sBACB86A2 { font-family:Arial; font-size:6pt; vertical-align:super; color:#0069d6 }   27 14.01.2010   Press release issued by the Registrar   Chamber judgment [1] Kotov v. Russia (application no. 54522/00)     INABILITY TO RECOVER SAVINGS FOLLOWING A BANK COLLAPSE   BREACHED THE CONVENTION   Violation of Article 1 of Protocol No. 1 (protection of property) to the European Convention on Human Rights       Principal facts   The applicant, Vladimir Kotov, is a Russian national who was born in 1948 and lives in Krasnodar (Russia). In April 1994 he deposited a sum of money in a savings account with the Yurak commercial bank, with an interest rate of 200%. In August 1994 the applicant sought to close the account after the bank changed the rate of interest. However, the bank informed him that, owing to a lack of funds, it could not return the original deposit and the interest due on it. Mr Kotov commenced proceedings against the bank. On 5 April 1996 the Oktyabrskiy District Court of Krasnodar made a final order fixing the sum owed to the applicant by the bank at 17,983 roubles (RUR). In the meantime, on 16 June 1995, the Krasnodar Regional Arbitration Court had made a winding-up order in respect of the bank and had appointed a liquidator to oversee its liquidation.   The total of the bank’s debts exceeded its available assets. In such cases, Russian law provided for a “principle of proportionality” which meant that the assets had to be shared out among creditors who had the same ranking in proportion to the amount of their claim (the claims of creditors with a given ranking could not be met until those with a higher ranking had been paid). The relevant legislation also provided that where a bank went into liquidation, the claims of individual deposit-holders – like Mr Kotov – had first priority.   Following Yurak’s collapse the creditors’ committee decided, notwithstanding the legislation, to give priority in sharing out the bank’s assets to certain categories of persons: disabled persons, Second World War veterans, the needy and persons who had participated actively in the winding-up operation. The liquidator implemented this decision, which resulted in 700 persons receiving full reimbursement. Mr Kotov was not one of them, receiving only RUR 140 (0.78% of the amount owed to him, which in turn was equal to 0.78% of the bank’s assets on liquidation). He lodged a complaint with the liquidator and subsequently with the courts alleging a breach of the law, according to which he was a first-ranking creditor and should therefore have been given priority when it came to payment. His complaint was rejected at first instance. On appeal, however, the Regional Arbitration Court found in his favour, finding on 26   August 1998 that the liquidator had not ensured compliance with the law and directing the latter to remedy the situation. This decision, which was upheld following an appeal on points of law, remained unenforced as the bank had no remaining assets. In a new round of proceedings before the same arbitration courts, the applicant applied unsuccessfully for an order requiring the liquidator to pay the sum due to him out of his own funds.   The insolvency proceedings were terminated in June 1999 for lack of any further assets to distribute.     Complaints, procedure and composition of the Court   Relying on Article 1 of Protocol No. 1, Mr Kotov complained of his inability to obtain effective repayment of the debt owed to him on account of the unlawful distribution of the bank’s assets.   The application was lodged with the European Commission of Human Rights on 15 July 1998, before being transmitted to the Court on 1 November 1998 (the date of entry into force of Protocol No. 11 to the Convention). By a decision of 4 May 2006 the Court declared inadmissible the applicant’s complaint concerning the alleged unfairness of the proceedings.   Judgment was given by a Chamber of seven judges, composed as follows:   Christos Rozakis (Greece), President , Nina Vajić (Croatia), Anatoly Kovler (Russia), Elisabeth Steiner (Austria), Khanlar Hajiyev (Azerbaijan), Dean Spielmann (Luxembourg), Sverre Erik Jebens (Norway), judges ,   and also Søren Nielsen , Section Registrar .   Decision of the Court   Mr Kotov’s enforceable claim to an amount of RUR 17,983 amounted to a “possession” attracting the protection of Article 1 of Protocol No. 1.   The Court accepted that the State could not be held liable for the obligations of a private institution which was unable to pay its debts following its collapse. However, the Court had to ascertain, firstly, whether the State’s responsibility could be engaged on account of the acts or omissions of the liquidator whose unlawful actions were complained of by Mr Kotov, and secondly, to what extent this applied.   On the first point the Court, unlike the Government, took the view that the liquidator could be considered as a representative of the State, particularly in view of his status. Liquidators were appointed by the courts to conduct insolvency proceedings under the latter’s supervision, and thus exercised public authority. Their actions were therefore capable of engaging the responsibility of the State.   On the second point the Court observed that in the present case the bank’s assets would have been sufficient to meet Mr Kotov’s claim (or at least a substantial proportion of it) had the liquidator treated him as a priority creditor in accordance with the law.   Mr Kotov’s permanent inability to recover more than RUR 140 of the sum owed to him had stemmed directly from the abuse of authority committed by the liquidator. The abuse had been twofold: not only had there been a breach of the legal principle of proportionality governing the distribution of assets between creditors with the same ranking but, in addition, Russian law made no provision for the categories of creditors (disabled persons, Second World War veterans, persons in need, etc.) who had received repayment in full from the liquidator, plus interest and index-linking. Moreover, the legal basis on which these creditors had been fully reimbursed - while Mr   Kotov had been deprived of the sum which should have been due to him - remained unknown.   The Court therefore concluded that the interference by the public authorities with the exercise of Mr Kotov’s right to peaceful enjoyment of his possessions had lacked any legal basis. It held unanimously that there had been a violation of Article 1 of Protocol No. 1.   As the applicant did not submit a claim in time, the Court made no award under Article 41 (just satisfaction).   ***   The judgment is available only in French. This press release is a document produced by the Registry. It does not bind the Court. The judgments are available on its   website ( http://www.echr.coe.int ).     Press contacts Frédéric Dolt (tel: + 33 (0)3 90 21 53 39) or Stefano Piedimonte (tel: + 33 (0)3 90 21 42 04) Tracey Turner-Tretz (tel: + 33 (0)3 88 41 35 30) Kristina Pencheva-Malinowski (tel: + 33 (0)3 88 41 35 70) Céline Menu-Lange (tel: + 33 (0)3 90 21 58 77) Nina Salomon (tel: + 33 (0)3 90 21 49 79)   The European Court of Human Rights was set up in Strasbourg by the Council of Europe Member States in 1959 to deal with alleged violations of the 1950 European Convention on Human Rights. [1] Under Article 43 of the Convention, within three months from the date of a Chamber judgment, any party to the case may, in exceptional cases, request that the case be referred to the 17 ‑ member Grand Chamber of the Court. In that event, a panel of five judges considers whether the case raises a serious question affecting the interpretation or application of the Convention or its protocols, or a serious issue of general importance, in which case the Grand Chamber will deliver a final judgment. If no such question or issue arises, the panel will reject the request, at which point the judgment becomes final. Otherwise Chamber judgments become final on the expiry of the three-month period or earlier if the parties declare that they do not intend to make a request to refer.