The seizure of assets of relatives and managers of the leading Bank, without any evidence, violated the right to respect their property

JUDGMENT 

Uzan and others v. Turkey 07.03.19 (no. 19620/05, 41487/05, 17613/08 and 19316/08)

see here 

SUMMARY

Imposition of seizure measures against the applicants’ property on the ground that their relatives or their superiors were being prosecuted for abuse of public money in a case concerning the activities of Türkiye İmar Bankası.

This bank has been operated since 1984 by the Uzan group and whose banking license has been revoked since a loss of several billions of euros has been recorded. The Court found, in particular, that the Turkish authorities had failed to strike a fair balance between the requirements of public interest and the requirements to protect the right to respect for the applicants’ property.

In its reasoning, the Court found, inter alia, that the period of validity of the restrictions imposed was almost 10 years in the case of an applicant and between 12 and 15 years in relation to the others. The Court also noted the automated, systematic and inelastic nature of these measures and their wide scope where the applicants (two of them were then minors) were denied the opportunity to buy a wide range of goods and encountered difficulties in terms of wages, their cars and their savings. Finally, the Court noted the lack of evidence of the involvement of the applicants in any fraudulent activity. Strasbourg noted that the interference with the rights set out in Article 1 of the First Additional Protocol was unjustified, in the absence of a hearing in accordance with the principle of equality of arms. In the present case, it noted that the applicants, who had not been accused in the criminal proceedings, had not benefited from those procedural guarantees. Infringement of Article 1 of the First Additional Protocol (protection of property) of the ECHR.

PROVISION

Article 1 of the First Additional Protocol

PRINCIPAL FACTS 

The applicants Jasmin Paris Uzan, Renç Emre Uzan, Ayla Uzan-Ashaboğlu, Nimet Hülya Talu and Bilge
Doğru, are Turkish nationals who were born in 2003, 1999, 1971, 1948, and 1952 respectively.

Ayla Uzan-Ashaboğlu lives in San Francisco (USA) and the other applicants live in Istanbul (Turkey).
In July 2003 İmarbank’s banking licence was withdrawn as the authorities considered that the bank,
which had registered a loss of several billion euros, was no longer in a position to conduct normal
business. The administration and oversight of İmarbank were transferred to the Savings Deposit Insurance Fund (Tasarruf Mevduatı Sigorta Fonu – SDIF), and the Commercial Court ordered
attachment measures vis-à-vis the ownership and compensation rights of the former managers of
the bank. Subsequently, further attachment measures were ordered against the property of other
persons, including the applicants.

In December 2003, criminal proceedings were brought against the managers and the majority
shareholders of the bank on charges of conspiring to commit criminal offences (embezzlement and
fraud). Furthermore, the SDIF decided to continue recovering Treasury debts from İmarbank, to a
total estimated at 4,284,172,000 euros at the material time.

In January 2004 the SDIF asked the State Prosecutor to commence criminal proceedings for
embezzlement and aiding and abetting against a number of natural and legal persons, including the
applicants. The prosecutor gave a discontinuance decision. Subsequently, further criminal
proceedings were brought against Ms Talu and Ms Doğru, but they were acquitted.

In June 2005 the Istanbul Commercial Court declared İmarbank bankrupt.

As regards the attachment measures imposed on the applicants’ property:
– Between 2003 and 2015 attachment measures were imposed on the property of Jasmin Paris Uzan
and Renç Emre Uzan, who were the children (minors at the time) of one of the defendants in the
main criminal proceedings (C.C. Uzan). In the framework of those proceedings, the domestic courts
conferred on these two applicants “status other than that of parties to the proceedings (dava dışı)”.
Such status, which would not appear to be set out in Turkish law, prevented them from appealing,
even though they were affected by the outcome of the proceedings.

– Attachment measures were imposed on the property of Ayla Uzan-Ashaboğlu, who was the
daughter of the bank’s executive director, from 2003 onwards. Those measures were still in force in
2016.

– The property of Nimet Hülya Talu and Bilge Doğru, who had been management auditors at the
bank, was the subject of attachment measures ordered from 2003 onwards. Subsequently, those
measures were partly lifted, in particular as regards part of their salaries. In 2013 all the attachment
measures imposed on Ms Talu’s property were lifted. Also in 2013 the measures concerning

Ms Doğru were partly lifted. In 2015, however, her real property had still been distrained.

THE DECISION OF THE COURT 

Article 1 of Protocol No. 1 to the Convention (protection of property)

The interference and legitimate aim

The Court noted that the attachment measures had not been intended to deprive the applicants of
their property, but merely to prevent them from using it temporarily, pending the outcome of the
criminal proceedings and the recovery of the sums claimed by the SDIF. It also noted that domestic
legislation allowed the courts to decide to maintain those measures until such time as all the sums
claimed by the SDIF had been recovered, against a background of uncertainty as to the outcome of
the criminal proceedings against the persons presumed responsible for the financial losses, on
account of those persons’ absence. The Court also observed that the measures had been in the
public interest of preventing the use of property liable to have been purchased with the proceeds of
crime.

Proportionality of the interference

The Court accepted that the imposition of attachment measures could be justified on public-interest
grounds where the aim was to prevent fraudulent activities in order to ensure the payment of debts.
However, it pointed out that in view of the restrictive nature of those measures they had to be
terminated when no longer necessary.

In the present case the Court noted that the problem of the proportionality of the attachment
measures had arisen when the applicants had benefited from the discontinuance decision of
21 January 2004. It also noted that the attachment measures had remained in force for at least
almost 10 years in the case of each applicant. Moreover, in assessing the severity of the burden
placed on the applicants, the Court also considered the following facts relevant:

– The period of validity of the restrictions: almost 10 years for one applicant and over 12 and 15
years in the case of the other applicants.

– The extent of the restrictions in question: Ms and Mr Uzan had been deprived of the opportunity of
purchasing a wide range of goods. The other applicants had been deprived, among other things, of
the enjoyment of their salaries, their private vehicles and/or their savings.

– The automatic, systematic and inflexible nature of the impugned restrictions, which were not
subject to regular individual review, even though the applicants had never been convicted in the
framework of the criminal proceedings and the domestic courts had established that the persons in
question could not be held responsible for the pecuniary damage sustained by the SDIF.

– The lack of evidence that the applicants might have been involved in any kind of fraudulent activity:
they had all benefited from a discontinuance decision in 2004 and had not been involved in the main
criminal proceedings. Furthermore, Ms Talu and Ms Doğru had been acquitted in 2008.

The Court also found that the assignment by the Istanbul Assize Court to some of the applicants of
“status other than that of parties to the proceedings (dava dışı)” had prevented them, and was still
preventing them, from taking part in the main criminal proceedings, even though the fate of their
rights depended on those proceedings. Neither the domestic courts’ decisions nor the Government’s
observations had explained why such status had been conferred on the applicants.

Finally, the Court stated that the importance of the procedural obligations under Article 1 of
Protocol No. 1 should not be overlooked. For example, judicial proceedings concerning the right to
respect for property should provide the individual in question with an opportunity to explain his or her case to the competent authorities in order to effectively contest the measures infringing the
rights secured under that provision.

Thus, interference with the rights laid down in Article 1 of Protocol No. 1 could not be justified in the
absence of an adversarial hearing complying with the equality of arms principle, which facilitated
discussion of facts relevant to the outcome of the proceedings. Consequently, the imposition and
automatic maintaining of the attachment measures concerning the applicants’ property pursuant to
domestic legislation for the sole reason that some of them were related to the bank managers and
the others had, at some time, discharged duties at the bank – despite the discontinuance decisions
and acquittals on all charges – were incompatible with those principles because they prevented the
judge from assessing which instruments were best suited to the specific circumstances of the case
and also, more broadly, from balancing the underlying legitimate aim against the rights of those
affected by the said sanction. Moreover, the applicants – not having been parties to the main
criminal proceedings – had benefited from none of those procedural safeguards.

Consequently, the Court found that the Turkish authorities had failed to strike a “fair balance”
between public-interest imperatives and the requirements of the protection of the applicants’ right
to respect for their property. There had therefore been a violation of Article 1 of Protocol No. 1 to
the Convention.

Just satisfaction (Article 41)

The Court held that the question of just satisfaction was not ready for decision and reserved it. It
invited the Government and the applicants to send it their observations on that question within six
months of the notification of the present judgment.

Separate opinion

Judge Lemmens expressed a partly dissenting opinion which is annexed to the judgment(echrcaselaw.com editing).


ECHRCaseLaw

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