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A Fair Balance

13.02.2014

By Oleksandr Dementiev, attorney at Ilyashev & Partners
Source: The Yurydychna Praktyka

To avoid arbitrariness, any interference with the right of property has to be lawful and must strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.

The Convention for the Protection of Human Rights and Fundamental Freedoms (the “Convention”) is one of the greatest texts in human history, the importance of which, both for Europe and the global community, can hardly be overestimated. Taking a closer look at the Convention, it becomes apparent that most of its provisions are very concise.

Versatility

This concise nature Convention’s provisions has reason behind it, as there was an intention to equally adapt the provisions for all Member States with different legal systems. A perfect evidence of high standard and circumspectness is that for over sixty years of its existence, the Convention has suffered only minor changes. Amid the incredible scientific boom in the middle of the twentieth century and until now, these changes can be regarded as microscopic. Still, the Convention owes its success to the European Court of Human Rights (the “Court”) focused on interpreting each word of each paragraph of each article of the Convention and Protocols thereto. Thanks to the Court, concise provisions of the Convention are explained and become a case law of a continental scale.

In the context of the above, it is worth noting that the Court has much effort to interpret the provisions and definitions contained in Article 1 of Protocol No. 1 which guarantees the right of property and peaceful enjoyment of possessions.

In its explanations in Jahn and Others v. Germany, applications no(s) 46720/99, 72203/01 и 72552/01, §78, the Court reiterates that Article 1 of Protocol No. 1 comprises three distinct rules: “the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, among other things, to control the use of property in accordance with the general interest … These three rules are not, however, ‘distinct’ in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule” (see §78 of the above judgment).

Whether there was an interference with the right of property

Deciding on whether there was a violation of Article 1 of Protocol No. 1, the European Court of Human Rights shall first of all establish if the applicant haв any possessions in the meaning of said Article 1 and whether there was an interference with the right of property on behalf of the state authorities.

The concept of “possessions” is not limited to “existing possessions” but may also cover assets, including claims, in respect of which the applicant can argue that he or she has at least a reasonable and “legitimate expectation” of obtaining effective enjoyment of a property right (see J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom, application no. 4430202, §61; Wolf-Ulrich Von Maltzan and others, Margarete Von Zitzewitz and others, and Man Ferrostaal and Alfred Töpfer Stiftung against Germany, applications no(s). 71916/01, 71917/01 and 10260/02, §74; Kopecký v. Slovakia, application no. 44912/98, §35). In Saghinadze and others v. Georgia, application no. 18768/05, §103, the Court notes that an “expectation” is “legitimate” if it is based on either a legislative provision or a legal act bearing on the property interest in question.

A wider definition of “possession” can be found in Depalle v. France, application no. 34044/02, § 62, Öneryildiz v. Turkey, application no. 48939/99, §124, Broniowski v. Poland, application no. 31443/96, §129, Beyeler v. Italy, application no. 33202/96, §100, and Iatridis v. Greece, application no. 31107/96, § 54. In these judgments, the Court reiterates that the concept of “possessions” referred to in the first part of Article 1 of Protocol No. 1 has an autonomous meaning which is not limited to the ownership of physical goods and is independent from the formal classification in domestic law: certain other rights and interests constituting assets can also be regarded as “property rights”, and thus as “possessions” for the purposes of this provision. In each case the issue that needs to be examined is whether the circumstances of the case, considered as a whole, conferred on the applicant title to a substantive interest protected by Article 1 of Protocol No. 1. In Paeffgen GmbH v. Germany, applications no(s) 25379/04, 21688/05, 21722/05 and 21770/05, the Court specifies that in the case of non-physical assets, the Court has taken into consideration, in particular, whether the legal position in question gave rise to financial rights and interests and thus had an economic value.

In addition to property, possessions under the Convention include: company shares (see Bramelid & Malmstrom v. Sweden, applications no(s) 8588/79 and № 8589/79); claims for indemnity under domestic laws; losses caused by arbitrary determinations; a legitimate expectation (see Pine Valley Developments Ltd and others v. Ireland” on 29 November 1991, application no. 12742/87); business interest and clientele – goodwill, intangible assets, etc. (see Iatridis v. Greece cited above and Van Marle And others v. The Netherlands); the right to pension.

Existing possessions

In Marckx v. Belgium, the Court notes that Article 1 of Protocol No. 1 does no more than enshrine the right of everyone to the peaceful enjoyment of “his” possessions, that consequently it applies only to a person’s existing possessions and that it does not guarantee the right to acquire possessions whether on intestacy or through voluntary dispositions. As such, Article 1 of Protocol No. 1 protects only person’s existing possessions. Thus, future income cannot be considered to constitute “possessions” unless it has already been earned or is definitely payable (Anheuser-Busch Inc. v. Portugal, application no. 73049/01, § 64).

According to the common practice of the Court (see the judgment in Amuur v. France on 25 June 1996, application no. 19776/92, § 50), the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful: the second sentence of the first paragraph authorises a deprivation of possessions only “subject to the conditions provided for by law” and the second paragraph recognises that the States have the right to control the use of property by enforcing “laws”.

The next requirement of the Court is that any deprivation or taking of possessions must be in the general interest of the community.

The third sentence of this paragraph also mentions public interest. The State needs to show that its control of the use of the property in question is in pursuance of a legitimate aim that benefits the community at large.

The Court reiterates, however, that in order for an interference to be compatible with that provision it must be lawful, be in the general interest and must be proportionate, that is it must strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see Sporrong and Lönnroth on 23 September 1982, §69).

In other words, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions.

 
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