Case of European Court of Human Rights, September 05, 2019 (case AGRO FRIGO OOD v. BULGARIA)

Defense:BULGARIA
Resolution Date:September 05, 2019
SUMMARY

No violation of Article 6 - Right to a fair trial (Article 6 - Administrative proceedings;Article 6-1 - Fair hearing);No violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)

 
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FIFTH SECTION

CASE OF AGRO FRIGO OOD v. BULGARIA

(Application no. 39814/12)

JUDGMENT

STRASBOURG

5 September 2019

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Agro Frigo OOD v. Bulgaria,

The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:

Angelika Nußberger, President,Ganna Yudkivska,Síofra O’Leary,Mārtiņš Mits,Lәtif Hüseynov,Lado Chanturia, judges,Mira Raycheva, ad hoc judge,and Milan Blaško, Deputy Section Registrar,

Having deliberated in private on 9 July 2019,

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

PROCEDURE

  1. The case originated in an application (no. 39814/12) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Bulgarian limited liability company, Agro Frigo OOD (“the applicant company”), on 12 June 2012.

  2. The applicant company was represented by Mr M. Ekimdzhiev and Ms K. Boncheva, lawyers practising in Plovdiv. The Bulgarian Government (“the Government”) were represented by their Agent, Ms V. Hristova, of the Ministry of Justice.

  3. The applicant company alleged that the quashing of a final judgment in its favour, awarding it damages against the State, impinged on its rights to a fair trial and to peaceful enjoyment of its possessions.

  4. On 13 June 2017 notice of the application was given to the Government.

  5. Mr Yonko Grozev, the judge elected in respect of Bulgaria, was unable to sit in the case (Rule 28). On 25 January 2019 the President of the Chamber decided to appoint Ms Mira Raycheva to sit as an ad hoc judge (Rule 29).

    THE FACTS

    1. THE CIRCUMSTANCES OF THE CASE

  6. The applicant company has its registered seat in Nova Zagora.

    1. The applicant company’s application under the SAPARD

  7. The Special Accession Programme for Agriculture and Rural Development (SAPARD) was established in 1999 by the Council of the European Union. Its aim was to provide support for pre-accession measures in the field of agriculture and rural development to Central and Eastern European candidate countries. In Bulgaria, the programme was managed by a governmental agency called the State Fund “Agriculture” (hereinafter “the Fund”, see paragraph 29 below).

  8. In 2006 the applicant company applied for a subsidy under the SAPARD, for a project envisaging the construction of an agricultural market in the town of Nova Zagora. The subsidy sought was intended to cover half of the project’s cost. However, in a decision of 18 August 2006 the head of the Fund rejected the applicant company’s application, finding that it had not been supported by the necessary documents and that it did not meet the relevant requirements; in particular, the project envisaged that grapevine seedlings would also be sold at the market, while financing under the SAPARD could be provided for agricultural markets where fruit, vegetables, flowers and fish only were sold.

  9. The applicant company applied for judicial review and in a judgment of 31 March 2008 the Sofia City Court quashed the impugned decision, remitting the case to the Fund for a fresh examination. That judgment was upheld on 29 December 2008 by the Supreme Administrative Court. The national courts found that the applicant company had submitted all requisite documents and that its project met the applicable requirements; in the latter aspect they noted that grapevine seedlings were agricultural products and thus suitable to be sold at an agricultural market.

  10. However, the application for a subsidy could not be re-examined. In a letter dated 10 December 2009 the head of the Fund informed the applicant company that contracting by the Fund to final beneficiaries under the SAPARD had stopped in October 2007, Bulgaria having joined the European Union on 1 January 2007.

    1. Tort proceedings

  11. In the beginning of 2010 the applicant company brought a tort action against the Fund under the State and Municipalities Responsibility for Damage Act (see paragraph 22 below), claiming in damage 5,587,998 Bulgarian levs (BGN), the equivalent of approximately 2,850,000 euros (EUR), corresponding to the subsidy which it would have received had its application been accepted, plus interest.

  12. In a judgment of 15 November 2010 the Sofia Administrative Court dismissed the claim finding, in particular, that the quashing of the first refusal of the head of the Fund of 18 August 2006 (see paragraph 8 above) could not be seen as meaning that the applicant company would have in any event been accorded the subsidy sought. No direct causal link could be established between the Fund’s ultimate refusal to provide the subsidy, contained in its letter of 10 December 2009 (see paragraph 10 above), and any damage suffered by the applicant company.

  13. However, upon appeal, in a judgment of 15 April 2011 the Supreme Administrative Court reversed the first-instance decision. It found, in particular, that the refusal contained in the letter of 10 December 2009 (see paragraph 10 above) was null and void as it contradicted a previous final court judgment. That previous judgment had established that the applicant company’s application for a subsidy met the relevant criteria – a conclusion which was binding on the Fund. The latter’s refusal of 10 December 2009 was based on the fact that the relevant time-limit for examining an application for a subsidy had expired, but it had become unable to carry out such examination through its own fault. Had it entered into a contract to provide the subsidy sought by the applicant company, instead of giving the decision of 18 August 2006 which had subsequently been quashed, the applicant company would have received the subsidy claimed. Thus, the non-payment of such a subsidy had inflicted on the latter damage. As to the amount of the potential subsidy, it had been established by an expert appointed by the Sofia Administrative Court and had been supported by contracts submitted by the applicant company and showing the cost of the intended works. Thus, the applicant company had fully substantiated its claim, in the amount indicated above (BGN 5,587,998 – see paragraph 11 above), and the Supreme Administrative Court awarded that sum. It awarded the applicant company an additional BGN 717,811 (the equivalent of approximately EUR 367,000) in interest.

  14. The judgment above was not subject to appeal and was final.

  15. Following it, on 17 May 2011 the applicant company obtained a writ of execution against the Fund.

    1. Re-opening of the proceedings

  16. In June 2011 the Minister of Finance, acting on behalf of the State, applied for the judgment of the Supreme Administrative Court of 15 April 2011 to be set aside and the proceedings to be re-opened, under Article 245 et seq. of the Code of Administrative Procedure (see paragraph 27 below). He pointed out that, payments under the SAPARD having already stopped, the compensation awarded to the applicant company had to be paid from the State budget, which meant that the State had been affected by the judgment at issue, while it had not been summoned to participate in the proceedings.

  17. The Minister made, in addition, a number of arguments concerning the substance of the dispute. He pointed out that the Fund’s refusal of 10 December 2009 to examine the applicant company’s application for...

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