Expropriation took no account of loss of means of subsistence and so it violated applicants’ property rights

JUDGMENT 

Osmananyan and Amiraghyan v. Armenia 11.10.2018 (no.  71306/11)

see here

SUMMARY

The case concerned the expropriation of the applicants’ land for mining.

The Court noted that the applicants had complained that the expropriation price was too low and
took no account of the income they gained from fruit trees on the land.

The domestic courts had ignored that argument and had approved a price based solely on the
market value. The courts had neither looked at the applicants’ actual loss from being deprived of
their means of subsistence, nor considered whether they could afford to buy other land in the area.

The Court found that the applicants had suffered an excessive burden and that the expropriation
had violated the Convention

PROVISION 

Article 1 of the First Additional Court

PRINCIPAL FACTS

The applicants Suren Osmanyan, Serob Osmanyan, Bakur Osmanyan, Mane Osmanyan and Donara
Amiraghyan are Armenian nationals who were born in 1935, 1961, 1988, 1990 and 1966 respectively
and live in the village of Teghout (Armenia).

The applicants jointly owned a plot of land of 0.383 hectares in Teghout. In 2007 the Government
decreed that various plots of land could be bought via expropriation by a company which was to
exploit a copper-molybdenum deposit in the area.

An initial appraisal valued the applicants’ land at the equivalent of 409 euros (EUR) as the market
value. The Teghout mining company subsequently offered EUR 470, including an additional 15%
required by law, but the applicants considered the price to be too low.

The company went to court in May 2008 for an order to oblige the applicants to sign an
expropriation sale agreement. Further proceedings, including more valuations, led in April 2011 to a
court order with a sale price of EUR 575, which was upheld on appeal.

One of the applicants’ main arguments was that the price they had been offered took no account of
the value to them of fruit trees on the land

THE DECISION OF THE COURT

The Court found that the domestic law on expropriations in this case was in line with the Convention
requirements as it had been possible for the applicants to foresee in general terms how the market
value of their property would be assessed. They were then able to challenge that valuation and so
were given protection against arbitrariness.

There was also no reason to doubt the authorities’ argument that the expropriation decision was in
the public interest as it had been for the development of the economy and infrastructure from the
exploitation of the copper-molybdenum deposit.

The Court noted that the price had been set on the basis of the market value of the land in
comparison with other plots in the expropriation area. However, the Court raised questions about
that decision.

Firstly, it was possible that the applicants would have had difficulties in buying another piece of land
given the amount they were awarded. In addition, even a market price might not be adequate
compensation for expropriation if the property was the main or sole source of income and the sum
offered in exchange did not reflect that loss.

In that connection, the applicants’ argument that as a family unit they were financially dependent on
the land in question had not been considered by the domestic courts. Nor had they looked at
whether the compensation would cover the actual loss involved in the applicants being deprived of
their means of subsistence, or whether it at least covered the cost of equivalent land in the area.

The courts’ decision to only consider the market price of the land meant the applicants had had to
bear an excessive burden and the expropriation had violated the Convention.

Just satisfaction (Article 41)

The Court held that Armenia was to pay the applicants 10,000 euros (EUR) to cover all heads of
damage as well as EUR 2,000 in respect of costs and expenses(echrcaselaw.com editing). 


ECHRCaseLaw

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