issued by the Registrar of the Court ECHR 404 (2012) 06.11.

2012

Depositors inability to recover old foreign-currency savings in Serbia and Slovenia; application of the pilot procedure
In todays Chamber judgment in the case of Alii and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the Former Yugoslav Republic of Macedonia (application no. 60642/08), which is not final1, the European Court of Human Rights held -unanimously, that there had been: a violation of Article 1 of Protocol No. 1 (protection of property) and a violation of Article 13 (right to an effective remedy) of the European Convention on Human Rights by Serbia with regard to Mr ahdanovi, but no violation of Article 1 of Protocol No. 1 and no violation of Article 13 by the other States; and, -by a majority (six votes to one), that there had been: a violation of Article 1 of Protocol No. 1 and a violation of Article 13 by Slovenia with regard to Ms Alii and Mr Sadak. The case concerned the applicants inability to recover old foreign-currency savings deposited with two banks in what is now Bosnia and Herzegovina - following the dissolution of the former Socialist Federal Republic of Yugoslavia (SFRY). The Court considered it appropriate to apply the pilot-judgment procedure, as there were more than 1,650 similar applications pending before it, involving more than 8,000 applicants. The Court concluded that Slovenia and Serbia should undertake all necessary measures within six months from the date on which this judgment became final in order to allow the applicants and all others in their position to be paid back their old foreigncurrency savings under the same conditions as those who had such savings in domestic branches of Slovenian and Serbian banks. The Court also adjourned the examination of all similar cases during this period.

Principal facts
The applicants, Emina Alii, Aziz Sadak, and Sakib ahdanovi, are nationals of Bosnia and Herzegovina who were born in 1976, 1949 and 1952, respectively, and live in Germany. Emina Alii is also a German national. They complained that they were unable to withdraw their foreign-currency savings deposited before the dissolution of the Socialist Federal Republic of Yugoslavia with two

1 Under Articles 43 and 44 of the Convention, this Chamber judgment is not final. During the three-month period following its delivery, any party may request that the case be referred to the Grand Chamber of the Court. If such a request is made, a panel of five judges considers whether the case deserves further examination. In that event, the Grand Chamber will hear the case and deliver a final judgment. If the referral request is refused, the Chamber judgment will become final on that day. Once a judgment becomes final, it is transmitted to the Committee of Ministers of the Council of Europe for supervision of its execution. Further information about the execution process can be found here: www.coe.int/t/dghl/monitoring/execution

banks in what is now Bosnia and Herzegovina: the Ljubljanska banka Sarajevo (a Slovenian-based bank) and the Tuzla branch of the Investbanka (a Serbian-based bank). Until 1989/90, the former Socialist Federal Republic of Yugoslavia (SFRY) made it attractive for its citizens to deposit foreign currency with its banks. They earned high interest and a State guarantee was to be activated at the request of the bank in case of bankruptcy or manifest insolvency. The depositors were also entitled to collect their savings from the banks at any time, with accrued interest. With the 1989/90 reforms, Ljubljanska Banka Sarajevo became a branch of Ljubljanska Banka Ljubljana and the latter took over the formers rights, assets and liabilities. Investbanka became an independent bank with its headquarters in Serbia and a number of branches in Bosnia and Herzegovina, including the Tuzla branch. After the disintegration of the SFRY in 1991/92, foreign currency deposited beforehand was customarily referred to as old or frozen foreign-currency savings in the successor States. After the savings remained frozen for various periods of time after the disintegration of the SFRY, the successor States agreed to repay them into domestic banks. However, in Bosnia and Herzegovina, the Constitutional Court has examined numerous individual complaints about the failure of Bosnia and Herzegovina and its Entities to pay back old foreign-currency savings at the domestic branches of Ljubljanska Banka Ljubljana and Investbanka: it held that neither Bosnia and Herzegovina nor its Entities were liable and ordered instead the State to help the clients of those branches to recover their savings from Slovenia and Serbia, respectively. In the framework of the negotiations for the Agreement on Succession Issues, four rounds of negotiations regarding the distribution of the SFRYs guarantees of old foreign-currency savings were held in 2001 and 2002. As the successor States could not reach an agreement, in September 2002 the Bank for International Settlements (the BIS) informed them that it would not be further involved in the matter.

Complaints, procedure and composition of the Court

Relying on Article 1 of Protocol No. 1 (protection of property), Article 13 (right to an effective remedy) and Article 14 (prohibition of discrimination), the applicants complained in particular about the delay in reaching a settlement and that they have not had at their disposal an effective remedy for their complaints in respect of any of the States concerned. The application was lodged with the European Court of Human Rights on 30 July 2005. On 17 October 2011, the Court declared the application admissible. Judgment was given by a Chamber of seven judges, composed as follows: Nicolas Bratza (the United Kingdom), President, Lech Garlicki (Poland), Nina Vaji (Croatia), Botjan M. Zupani (Slovenia), Ljiljana Mijovi (Bosnia and Herzegovina), Dragoljub Popovi (Serbia), Mirjana Lazarova Trajkovska (the Former Yugoslav Republic of Macedonia), and also Lawrence Early, Section Registrar.

Decision of the Court

Preliminary objections on the admissibility
The Court found that the submissions of the Bosnian-Herzegovinian and Croatian Governments concerning the compatibility ratione personae2 did not call for any reconsideration of the Courts conclusion in its admissibility decision in this case, notably that the respondent States had accepted that old foreign-currency savings were part of the SFRYs financial liabilities which they should share.

Article 1 of Protocol no. 1

As regards the period before the dissolution of the SFRY, the Court noted in particular that the State guarantee for the old foreign-currency could only be activated at the request of a bank and therefore found that liability had not shifted from the banks to the SFRY. Consequently, Ljubljanska Banka Ljubljana, based in Slovenia, and Investbanka, based in Serbia, had remained liable for old foreign-currency savings in their branches, irrespective of their location, until the dissolution of the SFRY. As regards the period after the dissolution of the SFRY, the Court found that there were sufficient grounds, in the special circumstances of the cases, to deem Slovenia liable for the banks debt to Ms Alii and Mr Sadak, and Serbia liable for the banks debt to Mr ahdanovi as it was clear that Slovenia and Serbia respectively controlled these banks. Indeed Slovenia had become the sole shareholder of the old Ljubljanska Banka, which was administered by a Government agency. Moreover, the Court recalled its conclusion in comparable cases that Serbia was liable for debts of socially-owned capital. Therefore Slovenia was liable for old foreign-currency savings in Ljubljanska Banka Ljubljanas Sarajevo branch and Serbia for old foreign-currency savings in Investbankas Tuzla branch. The Court then examined whether the applicants inability to freely dispose of their old foreign-currency savings in those branches since 1991/92 had amounted to a violation of Article 1 of Protocol No. 1 by those States. It considered that, although certain delays could be justified in exceptional circumstances, the applicants continued inability to freely dispose of their savings despite the BIS negotiations conducted under the Agreement on Succession Issues as well as a lack of any meaningful negotiations concerning this issue thereafter was contrary to Article 1 of Protocol No. 1. Consequently, there had been a violation of this provision by Slovenia with regard to Ms Alii and Mr Sadak and by Serbia with regard to Mr Sadak and no violation as regards the other respondent States.

Article 13
The Court examined whether effective remedies were available to the applicants, as regards the Sarajevo branch of the old Ljubljanska banka and the Tuzla branch of Investbanka. Concerning the Sarajevo branch of the old Ljubljanska banka, the Court found that none of the remedies available to the applicants in Slovenia could have provided sufficient redress to the applicants such as civil action against the old Ljubljanska banka in courts, petition to the Constitutional Court or had offered reasonable prospects of success such as civil action against the Republic of Slovenia. The Court further noted that the provision limiting the States liability to old foreign currency savings in the old Ljubljanska banka was not subject to a review by the Constitutional Court. As to the
2

Compatibility ratione personae requires the alleged violation of the Convention to have been committed by a Contracting State or to be in some way attributable to it.

possibility of a civil action in the Croatian courts, the Court observed that the Slovenian government had not given any example of a successful outcome for a Sarajevo branch saver there. Turning to the Tuzla branch of Investbanka, the Court observed that although hundreds of clients of Bosnian-Herzegovinian branches of Investbanka had lodged claims to the competent bankruptcy court in Serbia, none of them had so far been successful. Moreover the Serbian Government had failed to show that any of the judgments obtained in the Serbian courts ordering the banks to pay their old foreign-currency savings had in fact been enforced. The Court therefore concluded that the applicants had had no effective remedy at their disposal in Slovenia or Serbia for their complaint under Article 1 of Protocol no.1, in breach of Article 13. The Court found that there had been no violation of that provision as regards the other respondent States.

Article 14
Having regard to the above conclusions, the Court considered that it was not necessary to examine the applicants complaint under Article 14.

Article 46
The Court considered it appropriate to apply the pilot-judgment procedure in this case, as there were more than 1,650 similar applications pending before it, introduced on behalf of more than 8,000 applicants. Considering the systemic situation identified, general measures at national level were necessary in the implementation of the present judgment. Notably, Slovenia and Serbia should undertake all necessary measures within six months from the date on which the Courts judgment became final in order to allow Ms Alii, Mr Sadak, Mr ahdanovi and all others in their position to be paid back their old foreign-currency savings under the same conditions as those who had such savings in domestic branches of Slovenian and Serbian banks. Although the Court did not find it necessary, at present, to order that adequate redress be awarded to all persons affected by past delays, if either Serbia or Slovenia failed to apply the general measures indicated by the Court, it could reconsider this issue in an appropriate future case against the State in question. The Court further noted that Serbia and Slovenia could only exclude from their repayment schemes persons who had been paid their entire old foreign currency savings by other successor States on humanitarian or any other grounds. Lastly, the Court adjourned the examination of all similar cases for six months from the date on which its judgment became final without prejudice to its power at any moment to declare inadmissible any such case or to strike it out of its list of cases.

Just satisfaction (Article 41)

The court held that that Serbia was to pay Mr ahdanovi 4,000 euros (EUR) and Slovenia the same amount to Ms Alii and Mr Sadak in respect of non-pecuniary damage.

Separate opinion
Judge Zupani expressed a dissenting opinion which is annexed to the judgment. The judgment is available only in English.

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