Ministers’ Deputies
Information documents

CM/Inf/DH(2009)28 … 02 June 20091
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Non-enforcement of domestic judicial decisions in Georgia: general measures to comply with the European Court’s judgments.

Memorandum prepared by the Department for the Execution of Judgments of the Court (Application of Article 46 of the ECHR)

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1. At the time of the latest examination of the cases of Iza Ltd and Makrakhidze (judgments of 27/09/2005, final on 27/12/2005) and Amat-G Ltd and Mebaghishvili (judgment of 27/09/2005, final on 15/02/2006), which concern the impossibility of obtaining enforcement by the administrative authorities of final domestic judgments ordering the payment of state debts, the Georgian authorities provided information about the general measures adopted, particularly legislative amendments and budgetary arrangements, to prevent further violations of the Convention (violations of the right of access to a court (Article 6§1) and/or the right to peaceful enjoyment of possessions (Article 1 of Protocol No. 1) and violations of the right to an effective remedy (Article 13)).

2. The Deputies decided to resume consideration of these cases at their 1059th meeting (June 2009) (DH), in the light of other information to be provided about general measures and on the basis of a possible memorandum to be prepared by the Secretariat.

3. The present memorandum reviews the information produced to date by the Georgian authorities about the enforcement of judicial decisions, and describes the questions still unresolved.

4. Information about the enforcement of judicial decisions against the state and the remedies making it possible to complain of any failure to enforce that may occur are the subject of the first part of this memorandum. Significant changes to the enforcement system, particularly to the structures, have recently taken place or are in progress in Georgia; these are described in the second part of this document.

5. The enforcement of judicial decisions in cases between private individuals and remedies for complaining of any failure to enforce that may occur will be dealt with at a later date, as cases are examined by the Committee of Ministers.

6. This memorandum will need to be updated in the light of the information and explanations provided by the Georgian authorities in future.

      I. Enforcement of judicial decisions against the state, state budget-funded departments and bodies and local and regional authorities

7. The Georgian authorities supplied statistics regarding enforcement the implementation of judicial decisions against the state (cf. § I.1) and on enforcement procedure and information on remedies available in the event of non-enforcement (cf. § I.2).

I. 1 Enforcement of judicial decisions ordering the payment of state debts: general and statistics

8. The two cases of non-enforcement examined by the Committee of Ministers to date concern violations of the applicant companies’ right of access to a court (violations of Article 6), of the right to peaceful enjoyment of their possessions (violations of Article 1 of Protocol No. 1) and of the right to an effective remedy (violations of Article 13), on the ground of the impossibility of obtaining enforcement by the administrative authorities of final domestic judgments (of May 2001 and December 1999 respectively) ordering the state to pay certain sums to the applicant companies. These cases related to commercial contracts concluded between private companies and the Ministry of Education (case of Iza Ltd) and the Ministry of Defence (case of Amat-G Ltd).

9. In its judgments, the European Court noted that the failure to enforce domestic judicial decisions was not connected with the conduct of the enforcement authorities, but with budgetary inadequacies, and that this problem was a persistent one, recognised by the national authorities.

10. At the 1051st meeting (March 2009), the Georgian authorities stated that this problem no longer existed, and supplied statistics (cf. appendix 2) concerning first, the state budget allocated to the enforcement of domestic judicial decisions, and secondly, the amount committed to the enforcement of domestic judicial decisions by the National Bureau of Enforcement, as well as the number of decisions enforced.

11. These statistics show that the budget allocated to the enforcement of domestic judicial decisions is now higher than the amount expended.

12. The 2008 report of the National Bureau of Enforcement states that the enforcement of judicial decisions relating to the collection of debts of the state and “budget-funded organisations” (or public establishments) was the priority in 2008. Thus 80% of the decisions in old cases awaiting enforcement were enforced over the period 2004-2008, including all the cases against the state.

13. The Georgian authorities state that virtually all debts (wages owed to individuals, compensation owed for damage, grants, medical treatment expenses and other sums) have been paid, and that new enforceable decisions are being, or will be, enforced without impediment within the prescribed time-limits and in accordance with the statutory procedure.

I.2 Procedures for the enforcement of judicial decisions against the state

14. These are provided by the Enforcement Proceedings Act of 16 April 1999, as amended on 15 July 2008, which came into force on 1 October 2008 (hereinafter referred to as “the Act of 16 April 1999”).

    I.2 a) Specific nature of the “enforcement of decisions to the credit or debit of the state“

15. Article 17-1 (1) of the Act of 16 April 1999, on “Enforcement of decisions to the credit or debit of the state and in other particularly important cases”, provides that the head of the National Bureau of Enforcement may, by order, set up a specialised group comprising bailiffs and members of the police to ensure the enforcement of decisions throughout Georgian territory with a view to enforcing decisions to the credit or debit of the state budget and in other particularly important cases, .

16. It is also the head of the National Bureau of Enforcement who “shall decide on the assignment of cases to a special category, and on the assignment of the enforcement of cases to a specialised group as provided for in Article 17-1”.

      Observations of the Secretariat
      Details about implementation of this article are awaited. Information about the powers of the members of the police in these specialised groups would be welcome.

    I.2 b) Access to forcible execution procedures

    · Timescale:

Principle

17. Article 92 of the Act of 16 April 1999 provides for forcible execution to be begun:

    - one month after the invitation voluntarily to comply with a judicial decision whereby a state-funded body is obliged to pay a sum of money, when the debtor is a public-law corporation;
    - three months after the invitation voluntarily to comply with a judicial decision, when the debtor is a “budget-funded organisation” (a public-law body).

18. Furthermore, Article 268 §1 of the Code of Civil Procedure provides certain judicial decisions subject to immediate enforcement; the main ones are:
“a) judgments concerning entitlement to alimony;
b) judgments concerning the entitlement to compensation for damages caused by mutilation or other bodily
injury or by death of a carer;
c) judgments concerning employees' entitlement to loss of salary in respect of no more than three months;
d) judgments concerning the restoration to office of an unlawfully dismissed person.”

    Observations of the Secretariat
    Confirmation is awaited that Article 268 of the Code of Civil Procedure also applies to the state.

Exception

19. Enforcement may be postponed upon decision of a court.

20. Article 263 of the Code of Civil Procedure provides that “The court which has made a decision may postpone or order its partial execution following the parties' request, taking into account their financial situation and other circumstances if it decides to postpone, once and for a period of three months, execution of the decision, or to proceed to partial execution thereof for a period of one year” (Article 263 §1). “The order postponement or the partial execution of a decision ... may be challenged in court ...” (Article 263 §3).

21. This article already existed at the material time in the case of AMAT-G Ltd, and it should be noted that, in that case, the state had requested from the Georgian courts application to its benefit of this article, but that this had been refused on the ground that a postponement of enforcement would negatively affect the interests of the applicant company, AMAT-G Ltd (see §16 of the judgment).

      Observations of the Secretariat
      Other examples of application of this article are awaited. It would be useful in particular to know whether this article has already been applied to the benefit of the state. If so, in what circumstances? To what extent is the public interest taken into consideration by the domestic courts? (The question of compensation for the postponement of enforcement is dealt with below, cf. § 25 -26 of this memorandum.)
      Lastly, the Secretariat would like to know whether other exceptions exist to the principle laid down in Article 92 of the Act of 16 April 1999.

    · Costs:

22. Article 38 of the Act provides that the costs of the enforcement of decisions taken by a court or another body shall be paid into the bank account of the National Bureau of Enforcement. These costs, which are used to open forcible execution procedure, vary according to whether the forcible execution relates to a sum of money or to an object; certain creditors may be exempted, either in pursuance of the Act, or on a judicial decision, account being taken of the state of their assets.

However, it is clear from Article 38 §13 of the Act that the creditors of “state and local bodies” are exonerated from payment of this sum.

    I.2 c) Forcible execution

23. Article 17 of the Act of 16 April 1999 provides that “during forcible execution, bailiffs shall be entitled to seize and to sell the debtor’s property, but if the property concerned belongs to the state or to its local or regional authorities, bailiffs shall inform the responsible state or local bodies”.

      Observations of the Secretariat
      The rest of the procedure for the seizure and sale of the property is not described in the information sent to the Secretariat by the Georgian authorities. Detailed information on this subject is therefore awaited.

24. Chapter 11 of the Act of 16 April 1999 concerns enforcement relating to immovable property.

      Observations of the Secretariat
      It is not clear from this chapter whether it applies to immovable property belonging to the state.

I. 3 Possibility of compensation in the event of delayed enforcement

    I.3 a) Compensation by courts for material damage

25. Article 411 of the Code of Civil Procedure provides for damage to be compensated in respect not only of actual financial loss, but also of loss of income, and for compensation for loss of income to correspond to the amount which could have been obtained had contractual obligations been fulfilled.

26. Article 412 states that “Damages shall be paid only when the harm could have been foreseen by the party in default and there exists a causal link between the harmful action and the result”.

      Observations of the Secretariat
      Information is awaited about the arrangements for application of these articles in proceedings involving the state:

    - Does Article 411 allow compensation in the event of non-enforcement without any need to demonstrate that the State was at fault?
    - Does Article 411 apply in the event of a postponement of enforcement decided in pursuance of Article 263 of the Code of Civil Procedure (cf. § 20-21 of this memorandum), or do other provisions govern this last situation?
    - Does the first part of Article 412 (“Damages shall be paid only when the harm could have been foreseen by the party in default”) imply that the state would not be responsible in the event of an unforeseen financial problem?

    I.3 b) Compensation by the courts for non-pecuniary damage

27. No information has been submitted about the possibility of receiving compensation for non-pecuniary damage. It should be pointed out that the Court has on several occasions said that there was a strong but rebuttable presumption that excessively long proceedings would occasion non-pecuniary damage (cf. Scordino v. Italy §§ 203-204 and Wasserman v. Russia No. 2 § 50). The Court also said recently that it “considers this presumption to be particularly strong in the event of excessive delay in enforcement by the State of a judgment delivered against it, given the inevitable frustration arising from the State’s disregard for its obligation to honour its debt and the fact that the applicant has already gone through judicial proceedings and obtained success” (cf. Burdov v. Russia No. 2 § 100).

      Observations of the Secretariat
      Precise information about compensation for non-pecuniary damage is awaited.

    I.3 c) Default interest

28. Finally, on the subject of material damage, is there a law requiring automatic payment of default interest in the event of non-compliance, particularly by the state, with a judicial decision requiring the payment of sums of money?

I.4 Remedies in respect of criminal responsibility

29. According to Article 381 of the Criminal Code: “The failure to enforce a binding judicial decision or other judicial decision, or the obstruction to its execution by the state, government or local-government officials, or by the executives of a corporation or other organisations [shall be punished] ...”.

30. It is pointed out that, in the case of Iza Ltd and Makrakhidze, the second applicant had requested the Prosecutor General to start criminal proceedings for the non-implementation of a binding judicial decision, but that his request had been dismissed on the grounds that no intentional wrongdoing on the part of the authorities could be found and that the reason for non-implementation was objective, namely lack of finances in the state budget (cf. § 15 of the judgment).

Provisional assessment - summary

It seems that the material problem which gave rise to the violations in the cases of Iza Ltd and Amat-G Ltd, namely the inadequacy of the state budget allocated to the enforcement of judicial decisions against the state, has been resolved. Furthermore, the government has promised that this problem will not recur.

However, certain legal questions remain unresolved, one concerning effective remedies in the event of non-enforcement, the other concerning default interest.

More detailed information is awaited about:

    - the purpose and implementation of Article 17-1 (1) of the Act of 16 April 1999, “Enforcement of decisions to the credit or debit of the state and in other particularly important cases”;
    - the forcible execution procedures vis-à-vis the state, and particularly procedures for the seizure of movable and immovable state property;
    - the possibilities of compensation for non-pecuniary damage;
    - the possibilities of receiving default interest. 

      II. Reform of the enforcement system

31. Most of the information in this part is based on the 2008 annual report of the National Bureau of Enforcement, in the French-language version produced by the Georgian authorities.

32. Reform of the enforcement system is under way, and the Georgian authorities have also supplied the action plan of the National Bureau of Enforcement for the year 2009 (cf appendix 1).

II. 1 Structural reform and increase in material resources

II.1 a) Structural reform

    · Setting up of the National Bureau of Enforcement

33. The Enforcement Proceedings Act of 16 April 1999, as amended on 15 July 2008, which came into force on 1 October 2008, set up the National Bureau of Enforcement, a public-law legal entity attached to the Ministry of Justice, and its regional bodies (enforcement bureaus). The 2008 reform thus replaced the former execution department of the Ministry of Justice with a public-law body which enjoys greater independence. The enforcement bureaus are responsible for the execution of judicial decisions, with the assistance of bailiffs, whose rights and obligations are defined in Article 17 of the Act of 16 April 1999.

    · It is planned to set up a mixed public/private bailiff system.

34. Currently, all officials of execution offices are public servants.

35. Amendments of October 2008 to the Act of 16 April 1999 should come into force in July 2009, providing for some of the duties previously performed exclusively by publicly-employed bailiffs to be able to be delegated to licensed privately-employed bailiffs. These persons, empowered by the Act to perform the duties of a state bailiff, and enjoying the same legal means, will independently enforce decisions in the civil cases allocated to them. The first qualifying examination for private bailiffs will take place in June 2009.

II.1 b) Increase in material resources

36. Significant material resources are being devoted to setting up these new structures.

37. The National Bureau of Enforcement building in Tbilisi, which will also house the Tbilisi enforcement bureaux, is to be rebuilt in the near future.

38. The enforcement bureaux of the regions of Imereti, Kvemo Kartli, Samtskhe-Javakheti and Mtskheta-Mtianeti have been set up in new buildings. The Shida Kartli, Kakheti, Samegrelo-Zemo Svaneti, Adjara and Racha bureaux are currently being set up (the buildings have already been chosen, in co-operation with the Ministry of Economic Development, and the transfer process is virtually complete).

39. Considerable improvements were made to these bureaux' IT and technical facilities during 2008.

40. Other material resources needed for the work of the National Bureau of Enforcement and the regional bureaux are being provided: in particular, enforcement bureaux receive regular supplies of petrol and telephone cards; there is a postal service; some vehicles in the National Bureau of Enforcement's fleet have been replaced by new ones.

II. 2 Measures to increase the professionalism of enforcement officials

41. Several measures intended to increase the professionalism of bailiffs, the enforcement police and the staff of the National Bureau of Enforcement have been adopted or are being planned.

    II.2 a) Training

42. Training courses have been held for bailiffs and enforcement police. In 2008, three groups of bailiffs were trained at the judicial training centre. Training courses are planned for the bailiffs of bureaux in Georgia's eastern and western regions.

43. Training courses for members of Tbilisi's enforcement police have been held at the Ministry of the Interior’s Academy. The staff of the other bureaus will receive the same training, and there should be regular co-operation with the Academy.

44. The staff of the National Bureau made a study visit to Germany in November 2008, and plans are being made for a study visit to Sweden.

    II.2 b) Creation of professional tools

45. A collection of standard-setting texts is being prepared, and a practical handbook for bailiffs is planned.

46. A computerised case-management programme is being created, thanks to the support of the German Technical Co-operation Society (GTZ).

    II.2 c) New rates of pay for enforcement staff

47. Bailiffs' pay has more than doubled since 2006 (GEL 290 in 2006, GEL 710 in 2008, GEL 960 to 1,010 today). There have also been significant increases in the pay of heads of regional bureaux and heads of departments.

48. Furthermore, the National Bureau of Enforcement has been authorised to introduce a system of bonuses for bailiffs.

    II.2 d) The creation of private posts of bailiff will give users/creditors a choice between a public or a private bailiff, thereby making the system competitive.

II. 3 Improvement of relations with users

49. Administrative procedures are more transparent.

50. Information about auctions, services, bailiffs' duties and creditors' and debtors' legal guarantees is regularly published on the official website of the National Bureau of Enforcement (www.nbe.gov.ge).

51. A unified register of debtors will be introduced from 2010, making it possible to obtain information about debtors and the enforcement procedures carried out.

52. A telephone hotline (749 649) operates round the clock, enabling people to raise any questions they may have about enforcement bureaus' activities or enforcement in general.

53. Preparations are being made for a campaign to inform the public about the enforcement system and procedures; this should mainly take the form of short messages on radio or television.

      Observations of the Secretariat
      In view of the benefits of these reforms, the Committee of Ministers may wish to continue receiving information about their development and their tangible effects on improving the enforcement of judicial decisions.

The Committee of Ministers is invited to take note with satisfaction of the fact that reforms are currently under way with a view to preventing further violations of the Convention as a result of non-enforcement of decisions of domestic courts.

The Georgian authorities are invited to keep the Committee of Ministers informed of further developments in these reforms.

APPENDIX 1
National Bureau of enforcement
Legal entity of Public Law
Possible Activities of 2009

Objective

Task

Timeframe

Outcome

1. Completion of normative basis in order to meet the national Bureau of Enforcement the requirements of international standard and to function effectively

1.1. creation of working group with the representatives from International Donor Organisations and National Bureau of Enforcement;

1.2. elaboration of concrete proposals and recommendations by the working group and submission to the Ministry of Justice.

1.1. II quarter of 2009;




1.2 III quarter of 2009

The recommendations of foreign experts will be maximally considered and the completion of normative basis regulating the enforcement system will be promoted. As a result the problems of legislative omission will be reduced to a minimum.

2. Increase of statistical indicator of enforcement of cases

2.1 renewal of personal of the enforcement system (to arrange a competition for bailiffs);

2.2. increase in human resources (interns);

2.3. increase of salaries of the staff in case of additional income;

2.4 introduction of premium system in accordance with the established criteria

2.5 to make the activities of the monitoring division more active within the condition of strict administration.

2.1. IV quarter of 2009 (October, November);


2.2. I quarter of 2009 (March);

2.3. IV quarter of 2009;



2.4 IV quarter of 2009;



2.5. I quarter of 2009

As a result the amount of transferred money to the State Budget will be increased and it will amount 10 000 000 Gel on average in a year. As well as the income of the enforcement system will be increased. The interests of creditors will be met promptly and effectively and the authority of the enforcement system will be improved.

By the introduction of internship the workload of bailiffs will be solved, which was the reason of ineffective enforcement and delay in frequent cases.

3. Transparency of the enforcement system and responsibility before the society

3.1 further completion and improvement of the webpage of the National Bureau of Enforcement;
3.2 preparation of technical and informational basis for the debtors’ registry;
3.3 creation of a unified electronic communication system within the enforcement system (so called magti programme);
3.4 elaboration of an appropriate program for the movement to the electronic form of the enforcement record keeping with the support of foreign donor organisation (ABA);
3.5 PR company;
3.6 preparation of report on freedom of information for the submission to the Parliament;
3.7 preparation of an annual report for the society;

3.1. I quarter 2009;

3.2. II-IV quarters 2009;

3.3. II quarter 2009;

3.4. II quarter 2009;

3.5. II quarter 2009;
3.6. IV quarter 2009;

3.7. IV quarter 2009;

As a result of implementation of the planned tasks the awareness of the society about the enforcement system will be increased;
The awareness of the parties to the enforcement proceedings about their rights and responsibilities will be improved and more guarantees of their rights will be insured.

Modern communication system will be improved maximally the quality of control, transparency and information.

4. Further improvement and completion of infrastructure

4.1. donation of offices to the territorial enforcement bureaux, to be conducted appropriate reconstruction and repairs;
4.2 donation of appropriate photographic, video and computer techniques to the territorial enforcement bureaux;
4.3 donation of office furniture to the territorial enforcement bureaus;
4.4. creation of unified electronic communication system within the enforcement system (so called magti program);
4.5 filling up the auto park of the enforcement system;

4.1. II-IV quarters of 2009;

4.2. II-IV quarters of 2009;

4.3. II-IV quarters of 2009;

4.4. II quarter of 2009;

4.5. II quarter of 2009;

Almost all territorial enforcement bureaus will have the office and the bailiffs will be given the necessary normal work conditions.
Bailiffs will use photo and video means more intensively during the proceedings for the publicity of their activities.

The communication between the National Bureau of Enforcement and its territorial bodies will be simplified.

5. Capacity building of the staff of the enforcement system

5.1. organisation of training and seminars for interns in the training centre of the Ministry of Justice;
5.2. organisation of training for the staff of the national Bureau of Enforcement;
5.3 preparation of a handbook for the staff of the enforcement system;
5.4 retraining of police officers of Imereti and Adjara units of the division of the enforcement police of the Academy of police of MIA

5.1. II quarter of 2009;

5.3. I quarter of 2009;

5.4. II-III quarters of 2009;

The enforcement activities will be conducted maximally speedily and effectively;

The number of dissatisfied parties of the enforcement proceedings will be reduced;
The handbook will help the bailiffs in their everyday work;

The National Bureau of enforcement will have well trained staff as well as police officers, who will defend the security both of the bailiffs and the parties to the enforcement proceedings as well.

6. Intensification of cooperation with international organisation

6.1. formation of the memorandum on inter-cooperation with the German Technical Cooperation Society (GTZ);
6.2 elaboration of an unified project for the improvement of the enforcement system in cooperation with the agency of International Development of Sweden (SIDA);
6.3. research work on the enforcement systems of eastern and western European countries and introduction of positive examples in the enforcement system of Georgia;
6.4. research work on positive aspects of the membership of the International Union of Bailiffs

6.1. I quarter 2009;

6.2. II quarter 2009;

6.3. I-IV quarters 2009;

6.4. I-II quarters 2009;

The projects will be conducted in the following fields : assistance of an expert in the elaboration of the strategy of future developments of the system; training programs for bailiffs and officials of the enforcement system in the management issues; arrangement of study visits; purchase of office furniture and techniques.

APPENDIX 2

 

2004

2005

2006

2007

2008

2009

Budget allocated to enforcement of domestic judicial decisions
(in laris)

Not available

3 millions

3 millions

10 millions

10 millions

25 millions

Amount committed to the enforcement of domestic judicial decisions by the National Bureau

1.734.884,45

2.057.889,99

2.315.811,03

3.851.725,43 laris and 21.527 dollars

8.925.592,44 laris

from 1/01/09
to 1/03/09
456 970,66 laris.

Number of judicial decisions implemented

625

441

162

1 113

1 552

from 1/01/09 to 1/03/09
280

Note 1 This document has been classified restricted at the date of issue; it will be declassified in accordance with Resolution Res(2001)6 on access to Council of Europe documents.


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