THIRD SECTION
 
CASE OF PODDUBNYY v. RUSSIA
(Application no. 77185/11)
 
 
 
 
 
JUDGMENT
 
STRASBOURG
29 October 2019
 
 
 
This judgment is final but it may be subject to editorial revision. In the case of Poddubnyy v. Russia,
The European Court of Human Rights (Third Section), sitting as a Committee composed of:
 Paulo Pinto de Albuquerque, President,
 Helen Keller,
 María Elósegui, judges,
and Stephen Phillips, Section Registrar,
Having deliberated in private on 8 October 2019,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 77185/11) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Russian national, Mr Ivan Alekseyevich Poddubnyy (“the applicant”), on 16 November 2011. 2. The applicant, who had been granted legal aid, was represented by Mr E. Markov, a lawyer practising in Budapest. The Russian Government (“the Government”) were represented initially by Mr G. Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin. 3. On 27 August 2014 notice of the complaints concerning the non‑enforcement of the domestic awards in the applicant’s favour and the lack of an effective remedy was given to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court. THE FACTS
THE CIRCUMSTANCES OF THE CASEBackground information

4. In 1970 the applicant was injured in a work-related accident and acquired a life-long disability. The applicant’s ex-employer, a collective farm, was found liable for the accident and was obliged to make periodic monthly payments in the applicant’s favour. The collective farm was subsequently restructured into a limited liability agricultural partnership and later into a closed joint-stock company, ZAO Novodmitriyevskoye (“the ZAO”). 5. On 23 June 2004 the Commercial Court of Krasnodar Region (“the Commercial Court”) declared the ZAO insolvent and ordered that the insolvency proceedings be opened in respect of the company. Judgments in the applicant’s favour against the ZAO
6. As the ZAO had failed to make regular payments to the applicant, he brought several sets of proceedings against his ex-employer, as follows. Judgment of 3 August 2004
7. On 3 August 2004 the Severskiy District Court of Krasnodar Region (“the District Court”) granted the applicant’s claim and obliged the ZAO to pay him 35,970.12 Russian roubles (RUB). This judgment was not appealed against and became final on 14 August 2004. Judgment of 21 July 2005
8. On 21 July 2005 the District Court index-linked the amount of the monthly payments due to the applicant for a specific period, and obliged the ZAO to adjust these payments in future in line with inflation. This ruling was not appealed against and became final on 3 August 2005. Decision of 26 September 2005 endorsing the friendly settlement
9. On 26 September 2005 the District Court endorsed a friendly‑settlement agreement between the applicant and the liquidator acting for the ZAO, in accordance with which the ZAO was obliged to pay the applicant RUB 202,790.40 as an aggregate lump sum in respect of the periodic payments, RUB 35,790.12 in respect of outstanding “old” debt and RUB 4,170 in compensation for legal expenses. 10. The applicant appealed against the decision, arguing, in particular, that his claim for penalty for the failure to pay the judgment debt in good time had not been included in the terms of the settlement. 11. On 22 November 2005 the Krasnodar Regional Court upheld the decision in substance. It noted, in particular, that the applicant had been duly informed of the legal consequences of the friendly settlement and had conceded to the settlement terms, which had not included the penalty. Commercial Court decision of 22 March 2006
12. On 22 March 2006 the Commercial Court established that the applicant’s claims were included in the register of the creditors’ claims for the aggregate amount (на капитализированную сумму) of RUB 115,914[1] (for relevant provisions on aggregating regular payments, see paragraph 33 below). It rejected the applicant’s claim for the transfer of the right to claim the aggregate payments to the Russian Federation and advised the applicant that he could lodge an application for an insurance payment with the local social-security office. Judgment of 13 October 2006
13. On 13 October 2006 the District Court granted the applicant’s new request for index-linking. The court index-linked the amount of the monthly payments received by the applicant, and obliged the ZAO to adjust these payments in future in line with inflation. This ruling was not appealed against and became final on 24 October 2006. Liquidation of the ZAO
14. On 14 June 2007 the Commercial Court established that the liquidation of the ZAO had been completed and ordered that a relevant entry be made in the State registry of legal entities. The ZAO’s assets were insufficient to satisfy the applicant’s claims. They were nevertheless considered as settled. 15. The applicant appealed against the decision of 14 June 2007, claiming that it had been unlawful, and that the debt of RUB 238,580.52 had not been paid to him. On 20 July 2007 the applicant’s appeal was returned to him as lodged out of time. Proceedings against the Ministry of Finance and Compensation Act proceedingsJudgment of 23 March 2008

16. On 13 March 2008 the applicant lodged a court action against the Ministry of Finance of the Russian Federation (“the Ministry of Finance”) claiming aggregation as a lump sum (капитализация) of the amounts of the monthly allowance awarded by the judgments against the ZAO, in accordance with section 135(1) of the Insolvency Act (see paragraph 33 below). He claimed the lump sum of RUB 181,515.92 and periodic monthly payments in the amount of RUB 2,499.34, with subsequent index-linking. He referred in his request to the judicial awards of 3 August 2004, 21 July 2005 and 13 October 2006. He also asked for the relevant amounts for the period until 31 December 2007 to be index-linked, and for his legal costs incurred in the proceedings against the ZAO to be reimbursed. The application did not refer to the friendly settlement endorsed on 26 September 2005 (see paragraph 9 above). 17. On 23 May 2008 the District Court allowed the applicant’s claims in part. The court established that the applicant had not received the payments during the liquidation proceedings in respect of the ZAO. Accordingly, the obligation to compensate for damage to health, and, thus, to make the relevant periodic payments, had been transferred from the ZAO to the Russian Federation. In its calculation of the amounts to be paid to the applicant, the District Court took into account the sums due to him in accordance with the judgments of 3 August 2004, 21 July 2005, and 13 October 2006 (see paragraphs 7, 8, and 13 above).The court obliged the Ministry of Finance to pay the applicant a lump sum of RUB 123,937.11 and to start making monthly payments in his favour in the amount of RUB 2,499.34 from 1 January 2008. 18. On appeal, the applicant claimed RUB 160,691.19 as the amount representing the debts in accordance with the previous judicial decisions in his favour, covering the period between 2004 and 2008, and requested that that amount be subsequently index-linked. 19. The respondent authority argued in reply that the amount awarded to the applicant had not represented the aggregate payments and that he had failed to request the transfer of the ZAO’s debt to the Russian Federation during the liquidation proceedings. 20. On 1 July 2008 the appellate court upheld the judgment of 23 May 2008. It rejected the respondent’s argument concerning the applicant’s alleged failure to request the transfer in a timely manner as unfounded with reference to the Commercial Court’s ruling of 22 March 2006 (see paragraph 12 above). It also rejected the remainder of the applicant’s claims as having no basis in law. 21. On 12 February 2009 the lump sum in accordance with the judgment of 23 May 2008 was transferred to the applicant. 22. As established by the District Court on 17 August 2011 (see paragraph 25 below for details), the debtor did not make monthly payments between July 2009 and August 2011. 23. On 13 November 2012 the District Court clarified the decision of 23 May 2008, specifying that the monthly payments had to be adjusted in line with inflation. 24. On 13 January 2011 the applicant claimed outstanding regular payments in accordance with the judgment of 23 May 2008, as well as applying for those payments to be index-linked. 25. On 17 August 2011 the District Court granted the applicant’s claims in part. It found, with reference to its own calculation of the inflation adjustment, that in February 2008-July 2009 the Ministry of Finance had paid the applicant RUB 3,079 less in monthly payments than it had been due to. It also found that as of August 2009 the Ministry of Finance had discontinued the monthly payments in the applicant’s favour, which had resulted in an aggregate debt of RUB 107,875 for the period between 1 August 2009 and 30 June 2011. The court ordered the defendant to pay the applicant a total of RUB 110,954.94 in respect of unpaid monthly payments adjusted in line with inflation, for the period between 1 February 2008 and June 2011. 26. On 2 December 2011 the judgment of 17 August 2011 was fully enforced by way of a bank transfer. 27. According to the Government, the applicant has been receiving the monthly payments in good time. Compensation Act proceedings
28. On 18 February 2011 the applicant lodged an application under the 2010 Compensation Act (see paragraph 36 below), alleging a breach of his right to enforcement of the court decisions within a reasonable time. He argued that the decision of 23 May 2008 had been enforced with a significant delay, the decisions of 3 August 2004, 21 July 2005 and 13 October 2006 remained unenforced in full, and the decision of 26 September 2005 remained unenforced in the part concerning the compensation for legal expenses. He also alleged that starting from 1 January 2009 the decision of 23 May 2008 had not been enforced in the part concerning the index-linking of the monthly payments. In his final statement of claims and calculation of non-pecuniary damage sustained he referred to four judgments against the ZAO, and not to that against the State. 29. On 16 March 2011 a judge of the Krasnodar Regional Court (“the Regional Court”) dismissed the application on the grounds that the judgments of 3 August 2004, 21 July 2005 and 13 October 2006 had been issued against a private company, whereas the 2010 Compensation Act was only applicable to monetary claims against the State. The court did not address the applicant’s submissions regarding the alleged non‑enforcement of the decisions of 26 September 2005 and of 23 May 2008. 30. On 8 June 2011 the Krasnodar Regional Court upheld the decision. It found that the debtor, the ZAO, was a private entity not in receipt of budgetary funds, and therefore the claim in respect of the judgments given against the ZAO fell outside the scope of the Compensation Act. The court rejected the applicant’s reference to the State’s alleged failure to make the monthly payments ordered on 23 May 2008, as “the Ministry of Finance was a payer in respect of the sums initially recovered from the [ZAO]” which had been liquidated, whilst the regular payments had not been aggregated “in good time”. In respect of the alleged failure to index-link the periodic payments to the applicant, the appellate court noted that it had no jurisdiction to consider that part of the claim. The court also noted that it was for the court which had ordered the payments to rule on their index‑linking. RELEVANT DOMESTIC LAW AND PRACTICEProvisions on aggregate payments

31. An obligation is terminated with the liquidation of a legal entity, except in cases where the law or other legal acts impose the discharge of the obligation of the liquidated legal entity upon the other person (in particular, by the claims for the compensation of the harm caused to life or health) (Article 419 of the Civil Code). 32. In the event of the liquidation of the legal entity liable for harm to life or health, the appropriate payments must be aggregated for their payment to the victim in accordance with rules established by law or other legal provisions (Article 1093 § 2 of the Civil Code). 33. Pursuant to section 135(1) of the Insolvency Act of 26 October 2002 No. 127-FZ, as in force at the material time, the total in claims of citizens to which the debtor was liable for harm to life or health were to be calculated by means of aggregating the relevant regular payments which were established on adoption by the commercial court of the decision declaring the debtor company insolvent and which were payable to those citizens until they reached the age of seventy, but with a minimum of ten years payment. 34. Pursuant to section 135(3) of the Insolvency Act, as in force at the material time, upon the citizen’s consent his or her right to claim the aggregate amount of the regular payments was to be transferred to the Russian Federation. In that case the debtor’s obligation to pay the aggregate amount to the citizen was to be transferred to the Russian Federation and was to be fulfilled by the State in compliance with federal law in the manner determined by the Government of the Russian Federation. 35. By the Information Letter of 13 April 2010 no. 136 the Presidium of the Supreme Commercial Court of Russia clarified, inter alia, that a commercial court dealing with the insolvency case had to advise the claimants of their right to consent to the transfer of their right to claim to the Russian Federation, as well as of the consequences of the transfer. The consent of an individual for assignment of his claims to the Russian Federation had to be given in the form of an application to the commercial court which considered the bankruptcy case. Compensation Act
36. Federal Law no. 68‑FZ of 30 April 2010 On Compensation for Violation of the Right to a Trial within a Reasonable Time or the Right to Enforcement of a Judgment within a Reasonable Time (“the Compensation Act”), as in force at the material time, entitled a party concerned to bring an action for compensation of a violation of his or her right to a trial within a reasonable time or of the right to enforcement within a reasonable time of a judgment establishing a debt to be recovered from the State (section 1(1)). Further details of the Compensation Act may be found in the Court’s decision in Nagovitsyn and Nalgiyev v. Russia ((dec.), nos. 27451/09 and 60650/09, § 40, 23 September 2010). THE LAW
ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL no. 1 ON ACCOUNT OF THE NON-ENFORCEMENT
37. The applicant complained under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 of the non-enforcement or delayed enforcement by the State of the judgments of 3 August 2004, 21 July and 26 September 2005, 13 October 2006, 23 May 2008 and 17 August 2011. Article 6 § 1
“In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”
Article 1 of Protocol No. 1
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The parties’ submissionsThe Government

38. The Government contested the applicant’s arguments. As regards the claimant’s consent to the transfer of the obligations to the State, they noted that Information letter no. 136 of the Supreme Commercial Court of Russia clarifying the matter (see paragraph 35 above) had not been issued at the time of the events. However, according to the established practice at the material time the consent of an individual to the assignment of the claims to the Russian Federation had had to be expressed by way of lodging an application with the commercial court dealing with the case. The transfer of the obligation had been considered completed when the person’s name in the register of creditors’ claims had been replaced by the Russian Federation. According to the Government, the applicant made no such application. However, he claimed that the transfer had taken place in the proceedings before the court of general jurisdiction. They accordingly argued that the District Court had established the transfer of the obligations from the ZAO to the State by the decision of 23 May 2008, in so far as the previous judicial decisions in the applicant’s favour against the ZAO of 3 August 2004, 21 July 2005 and 13 October 2006 had been concerned. The Government submitted that the lump sum set out in the decision of 23 May 2008 had been paid to the applicant within less than eight months, and the applicant had been receiving the regular monthly payments in good time. Similarly, they argued that the judgment of 17 August 2011 had been enforced within four months, that is to say within a reasonable time. 39. As regards the decision of 26 September 2005, the Government submitted that the applicant had not expressed his consent to the transfer of his claim rights under that decision to the Russian Federation and had not claimed it in the domestic proceedings. Therefore he had failed to exhaust the available domestic remedies. In any event, they argued that in accordance with the Insolvency Act the amounts under a friendly settlement between a creditor and an insolvency officer – such as the decision in question – were not to be aggregated. Therefore, the obligations under the decision of 26 September 2005 could not be transferred to the State in the way the obligations to make the regular payments had been transferred. The applicant
40. The applicant argued in reply that the judgments in his favour had not been enforced fully and in due time. He claimed that the Government had been under an obligation to enforce the judgments initially issued against the ZAO from 23 June 2004, the date of institution of the insolvency proceedings in respect of the ZAO or, at least, from the date of the liquidation of the company. He also submitted that under domestic law, there had been no procedure in place to apply for the transfer of the obligations of an insolvent debtor to the State. Thus, he argued that the obligations under all judicial decisions in his favour issued initially against the ZAO had been transferred to the State irrespective of whether he had applied for such a transfer. In respect of the monthly payments under the judgment of 23 May 2008, the applicant submitted that they had been either paid to him irregularly or had not been index-linked. He argued furthermore that in 2011 the courts had dismissed his application under the Compensation Act on purely formal grounds. Lastly, he submitted that the judgment of 17 August 2011 had not been enforced until June 2012.

Outcome for Article 6: violation