NIKOLAY KOSTADINOV v. BULGARIA

Judgment Date08 November 2022
ECLIECLI:CE:ECHR:2022:1108JUD002174315
CounselEKIMDZHIEV M. ; BONCHEVA K. ; EKIMDZHIEVA T.
Date08 November 2022
Application Number21743/15
CourtFourth Section (European Court of Human Rights)
Respondent StateBulgaria
Applied Rules41;P1-1;P1-1-1

FOURTH SECTION

CASE OF NIKOLAY KOSTADINOV v. BULGARIA

(Application no. 21743/15)

JUDGMENT

Art 1 P1 • Peaceful enjoyment of possessions • Positive obligations • Failure to protect shareholder from fraudulent takeover of his company, its shares and assets, by a private party • Lack of adequate domestic legal procedures • Failure to investigate serious suspicions that the criminal offences were carried out by a criminal group, and thus to establish their circumstances

STRASBOURG

8 November 2022

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 Nikolay Kostadinov v. Bulgaria,

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

Gabriele Kucsko-Stadlmayer, President,
Faris Vehabović,
Iulia Antoanella Motoc,
Yonko Grozev,
Pere Pastor Vilanova,
Jolien Schukking,
Ana Maria Guerra Martins, judges,
and Ilse Freiwirth, Deputy Section Registrar,

Having regard to:

the application (no. 21743/15) 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 national, Mr Nikolay Kostadinov Kostadinov (“the applicant”), on 30 April 2015;

the decision to give notice of the application to the Bulgarian Government (“the Government”);

the parties’ observations;

Having deliberated in private on 4 October 2022,

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

INTRODUCTION

1. The case concerns the adequacy of the domestic authorities’ reaction to a criminal encroachment upon the applicant’s “possessions”, namely a third party fraudulently taking control of the applicant’s company and of assets of that company, and raises issues relating to the positive obligations of the State under Article 1 of Protocol No. 1.

THE FACTS

2. The applicant was born in 1971 and lives in Versailles, France. He was represented before the Court by Mr M. Ekimdzhiev, Ms K. Boncheva and Ms T. Ekimdzhieva, lawyers practising in Plovdiv.

3. The Government were represented by their Agent, Ms R. Nikolova, of the Ministry of Justice.

4. The facts of the case may be summarised as follows.

  1. the Setting up of the applicant’s company

5. In 2004 the applicant and his sister set up a limited liability company – Vandom OOD (hereinafter “Vandom”) – with its registered office in Sofia. The two co-founders each owned 50% of the company shares.

6. On 14 December 2004 Vandom bought a plot of land measuring 5,000 square metres (hereinafter “the plot of land”), situated in an industrial zone in the vicinity of Varna, with a view to its economic development.

  1. D.A.’s actions and initial events related to them

7. On 27 December 2007 Vandom signed a contract with a bank for a mortgage on the plot of land, intended to secure a bank loan for the company. The respective documents were presented to an official of the property register on 28 December 2007. However, when the company attempted to actually receive the money loaned, the applicant and his sister were informed of another transaction concerning the plot.

8. They thus found out that on 28 December 2007 D.A., a person unknown to them, acting as a representative of Vandom, had sold to himself the plot of land. For the purposes of the sale he had presented an authority form and other documents, found subsequently to have been forged, seemingly signed by the applicant’s sister, who had been the company’s manager at the time. That transaction had also been presented to an official of the property register on 28 December 2007, later than the transaction described in the previous paragraph, but had been entered into the register first.

9. On 18 January 2008, through a real property agency to which he explained that he was in a hurry to resell, D.A. resold the plot of land to a third party – H.H. The declared price was 16,250 Bulgarian levs (BGN), the equivalent of 8,312 euros (EUR). The property was once again resold in 2010, to a company named V.

10. In February 2008, the applicant’s sister, on behalf of Vandom, brought rei vindicatio proceedings against H.H. However, in April 2009 the action was declared inadmissible, after I.D. – a person indicated in the company register as the manager of the company – discontinued the proceedings.

11. The applicant and his sister thus became aware that they were no longer considered shareholders in Vandom. As a matter of fact, on 27 December 2007 the same D.A. had introduced with the Sofia City Court a request to have new circumstances concerning Vandom entered into the register of companies. He had presented in particular the following documents, which had subsequently been shown to be forged: minutes of a meeting of the shareholders of Vandom (the applicant and his sister) dated 12 August 2007, containing a decision on their part to transfer their shares to a third party, and an authority form dated 10 December 2007 whereby the applicant and his sister seemingly authorised D.A. to sell their shares.

12. On the basis of those and other documents, in a decision of 23 January 2008 the Sofia City Court had entered in the register of companies the transfer of all shares to D.A., D.A. as the sole owner and manager of the company, and a new registered office for the company in Gabrovo.

13. In September 2008 D.A. had transferred all shares in Vandom to another person, who, in turn, had resold them in December 2008. The...

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