Facts
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In 1972, Stran Greek Refineries (owned by Stratis Andreadis) contracted with the Greek state to construct and operate an oil refinery; the contract included an arbitration clause.
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After restoration of democracy, the Greek government unilaterally terminated the contract in 1977, triggering a dispute over responsibility and compensation.
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Stran initiated arbitration; the tribunal apportioned fault (approximately 70% to the state, 30% to Stran) and awarded damages to Stran.
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Greek courts reviewed the award: the Court of First Instance and the Court of Appeal upheld it; the state appealed to the Court of Cassation.
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While the appeal was pending, the legislature enacted a special retroactive statute aimed at the dispute that:
- declared the 1972 contract void,
- nullified the arbitration clause, and
- made arbitral awards based on that clause unenforceable.
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Applying the new statute, the Court of Cassation annulled the arbitral award, depriving Stran of the benefit of the prior judgments upholding it.
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Stran complained to the European Court of Human Rights, alleging violations of Article 6(1) (fair hearing and reasonable time) and Article 1 of Protocol No. 1 (protection of property).
Issues
- Whether a retroactive, case-specific statute enacted during pending proceedings to determine the outcome of that dispute violates Article 6(1)’s fair-hearing guarantee and legal certainty.
- Whether the overall duration of the domestic proceedings violated Article 6(1)’s “reasonable time” requirement.
- Whether the arbitral award, as upheld by domestic courts, constituted a “possession,” and whether its retroactive nullification and judicial annulment violated Article 1 of Protocol No. 1.
Decision
- The court found a violation of Article 6(1) because the legislature intervened in pending litigation through targeted retroactive legislation that effectively dictated the judicial outcome.
- The court found a violation of Article 6(1) for failure to conclude the domestic proceedings within a reasonable time.
- The court found a violation of Article 1 of Protocol No. 1 because the applicants’ claim under the award, confirmed by domestic courts, was a “possession,” and the retroactive nullification amounted to an unjustified interference.
- The court awarded just satisfaction for pecuniary and non-pecuniary damage and for costs and expenses.
Legal Principles
- Article 6(1) protects adjudicative independence and legal certainty; legislation aimed at a specific pending case that alters the result of that case is incompatible with a fair hearing.
- A state may enact retroactive legislation in limited settings, but targeted retroactive measures that set aside adjudicated rights in ongoing litigation violate the rule-of-law requirements embedded in Article 6(1).
- A sufficiently established claim arising from an arbitral award upheld by courts can constitute a “possession” under Article 1 of Protocol No. 1.
- Retroactively eliminating an enforceable award and compelling courts to annul it can amount to a deprivation or equivalent interference requiring public-interest justification and proportionality; imposing an excessive individual burden breaches Protocol No. 1.
Conclusion
The court held that Greece violated the Convention by using retroactive, dispute-specific legislation to defeat an arbitral award during pending proceedings, thereby denying a fair hearing, exceeding a reasonable time, and unjustifiably interfering with the applicants’ property interests in a judicially recognized claim.