EHRM, 03-06-2008, nr. 34943/06

The applicant, Pindstrup Mosebrug A/S, is a private limited company registered in Denmark with its main office in Pindstrup. It was represented before the Court by Mr Per Magid, a lawyer practising in Copenhagen.

The Danish Government (‘the Government’) were represented by their Agent, Mr Peter Taksøe-Jensen of he Ministry of Foreign Affairs.

The applicant company maintained that the dispute between it and the Ministry of the Environment had not been determined within a reasonable time within the meaning of Article 6 of the Convention, which, in so far as relevant, reads:

The Government submitted that the applicant company had failed to exhaust domestic remedies because it had not at any time advanced the argument that the length of the proceedings had exceeded a reasonable time and/or asked for the date of the trial to be scheduled. The parties to the civil proceedings were an individual and a public authority; thus, had the applicant company lodged its complaint before the Supreme Court, the latter could have provided redress for any violations of the Convention when assessing the legal costs pursuant to section 312 of the Administration of Justice Act.

The applicant company pointed out that section 312, subsection 2, had been amended by Act no. 554 of 24 June 2005, in force from 1 July 2005, and that the preparatory works concerning that provision did not contain any reference to Article 6 of the Convention or to ‘length of proceedings’ as a potential ‘particular reason’ for reducing costs in accordance with the provision in question. In the light of that observation, the applicant company maintained that the Government had failed to demonstrate that section 312, subsection 2, constituted an effective and sufficient remedy.

The Court recalls that the purpose of Article 35 § 1, which sets out the rule on exhaustion of domestic remedies, is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court (see e.g. Selmouni v. France [GC], no. 25803/94, § 74, ECHR 1999-V). The rule in Article 35 § 1 is based on the assumption, reflected in Article 13 (with which it has a close affinity), that there is an effective domestic remedy available in respect of the alleged breach of an individual's Convention rights (ibid.).

Thus, in order to examine the Government's objection, although Article 13 of the Convention has not been relied on, it has to be determined whether in the present case effective remedies existed.

The Court reiterates that the burden of proving the existence of an effective and sufficient remedy lies upon the State invoking the rule (see, among other authorities, Vernillo v. France, judgment of 20 February 1991, Series A no. 198, § 27; Dalia v. France, judgment of 19 February 1998, Reports of Judgments and Decisions 1998-I, § 38; and Susini and others v. France (dec.), no. 43716/98, 8 October 2002).

It also reiterates that at the relevant time Danish law did not contain remedies which have been specifically designed or developed to provide a remedy in respect of complaints about the length of civil court proceedings, whether preventive or compensatory in nature.

However, in civil proceedings initiated by an individual against or involving a public authority, the Danish courts may grant redress for a length-of-proceedings violation, by, for example, exempting the individual from paying legal costs or by deciding that expenses and fees are to be covered by the Treasury (see, among other authorities, Kirsten Norman v. Denmark (dec.), no. 44704/98, 14 June 2001; Hansen and Others v. Denmark (dec.), no. 26194/03, 29 May 2006; and Ugilt Hansen v. Denmark (dec.), no. 11968/04, 26 June 2006).

The Court need not rule in general whether section 312, subsection 2, of the Administration of Justice Act is a remedy which, depending on the circumstances of the case, should be used, for example where a court refuses to terminate pre-trial proceedings although the case is ready for trial in the applicant's view, or to schedule court hearings at shorter intervals in order to speed up the trial.

In the present case, however, the Court is satisfied that the applicant company could have been granted an exemption from paying legal costs pursuant to section 312, subsection 2, of the Administration of Justice Act, had a complaint about the length of the proceedings been lodged and the outcome been successful.

It notes in particular that the applicant company lost the case before the Supreme Court and accordingly was ordered to pay costs to the Ministry of the Environment in the amount of DKK 1,400,000. Moreover, the applicant company was not granted free legal aid in the proceedings; hence, it could in reality have been exempted from paying legal costs (see Hansen and Others, both cited above).

In these circumstances, the Court finds that the applicant company failed to avail itself of a remedy which may be considered effective for the purpose of Article 35 § 1 of the Convention. It follows that the Government's objection is well-founded and that this part of the application must be rejected pursuant to Article 35 § 4 of the Convention.

Relying on Article 6 of the Convention, the applicant company also complained that it had not had a fair hearing before the Supreme Court, because the latter had failed to duly state reasons for dismissing the company's further alternative claim in the amount of DKK 883,782.90 concerning the refund of the rent and property taxes paid between 1979 and 1997, and the interest accruing on those payments.

The Government submitted that this part of the application should be declared inadmissible either because of the applicant company's lack of status as victim or because it had failed to exhaust domestic remedies.

They pointed out that before the Supreme Court the applicant company's further alternative claim had relied on the same two legal bases as the main and the alternative claim, namely a claim for compensation for conservation under the Nature Preservation Act and a claim for compensation for expropriation under section 73 of the Constitution.

They argued that the Supreme Court had given detailed reasons as to why it had found against the applicant company in respect of the two legal bases relied on and it could not have been expected to repeat exactly the same reasoning in respect of the alternative and the further alternative claim.

Moreover, in so far as the applicant company's further alternative claim had relied on another legal basis, for example general contract law, they argued that it should have advanced submissions in relation to that basis.

The Government noted that civil cases were subject to the adversarial system, which meant that the courts could only consider submissions produced by the litigants. Accordingly, the fact that the Supreme Court had not considered the further alternative claim in the light of general contract law or another legal basis had been entirely due to the applicant company's failure to ask it to do so.

Consequently, the Government submitted that the applicant company, which had been represented by legal counsel throughout the proceedings, could not reasonably claim to be a victim for the purpose of Article 34 of the Convention or be considered to have exhausted domestic remedies within the meaning of Article 35 of the Convention.

The applicant company reiterated that its further alternative claim had been based on the right of property, more specifically section 73 of the Constitution, just as its principal and alternative claims had been. Thus, there had been no reason to speculate on contract law or other legal bases.

The applicant company pointed out that before the court it had submitted three claims; the principal claim was for payment of DKK 15,200,000; the alternative claim was for payment of a lesser amount; and the further alternative claim was for payment of DKK 883,782.90. The first two claims had been related, whereas the further alternative claim was distinct. Had it not been distinct, it would have been covered by the alternative claim. It had been stated explicitly that the amount was equivalent to what had been paid under the contract between 1979 and 1997 in rent and property taxes, together with accruing interest, in relation to the area of 66 hectares in which the applicant company had planned to extract peat. Thus, although obviously the further alternative claim was also a claim for compensation, it had been based on different factual grounds, namely the collection of payments between 1979 and 1997 as opposed to the profit expected in 1978 had the peat extraction gone ahead.

Accordingly, the further alternative claim had been based on a different submission from the principal and the alternative claim, which had been ‘in favour of compensation for being denied the right to extract sphagnum’. Rather, it had been a submission in favour of compensation ‘for expenses defrayed in the form of rent and property tax after the instigation of the preservation procedure.’

The Supreme Court had not even mentioned the specific submission in support of the further alternative claim and the applicant company had been left with the impression that the claim had simply been neglected. In those circumstances, the applicant company maintained that the proceedings had fallen short of the obligations arising out of Article 6 of the Convention.

The Court reiterates that, according to its established case-law reflecting a principle linked to the proper administration of justice, judgments of courts and tribunals should adequately state the reasons on which they are based. The extent to which this duty to give reasons applies may vary according to the nature of the decision and must be determined in the light of the circumstances of the case. Although Article 6 § 1 obliges courts to give reasons for their decisions, it cannot be understood as requiring a detailed answer to every argument. The function of a reasoned judgment is inter alia to show the parties that their submissions have been heard (see, among other authorities, Klemeco Nord AB v. Sweden, no. 73841/01, § 42, 19 December 2006).

Turning to the circumstances of the specific case, the Court notes that it is not in dispute that the applicant company relied on the same two legal bases for its claims for compensation, whether concerning the principal claim, the alternative claim or the further alternative claim. The legal bases were the Nature Preservation Act and the provisions on expropriation under section 73 of the Constitution.

The Supreme Court firstly endorsed the High Court's finding that it was not the preservation initiated in December 1978, but the general prohibition in section 43, subsection 2, of the Nature Preservation Act that was the reason why the applicant company was prevented from exercising its right to extract peat/sphagnum from Draved Bog, and that therefore the applicant company was not entitled to compensation under the rules of the Nature Preservation Act.

Thereafter the Supreme Court turned to the question whether in relation to the applicant company the general prohibition in section 43, subsection 2, of the Nature Preservation Act and the County Council's refusal of 13 June 1983 to grant permission to continue peat extraction (confirmed by the Preservation Agency on 1 June 1984) had amounted to expropriation which could justify a claim for compensation under section 73 of the Constitution. That question was to be determined on the basis of an overall assessment of the interference with the applicant company's right of extraction.

The Supreme Court noted that the County Council and the Preservation Agency had found, respectively, that ‘the southern part of the area in question consists of unspoiled raised bog, which must be described as nationally unique, geologically as well as biologically’ and that ‘Draved Bog is nationally of the greatest value in terms of nature preservation’.

Thereafter it stated: ‘the interference was motivated by significant nature and environmental interests. It was part of a general programme to preserve bogs and included a general restriction on the right to extract peat in Denmark. This affected all manufacturers of sphagnum, and it has not been shown that [the applicant company], which at the relevant time had not invested in production facilities for the purpose of exercising its extraction rights at Draved Bog, and which, moreover, had access to the extraction of considerable amounts of peat elsewhere in this country, was affected in a particularly severe manner. Against this background, we find no basis for awarding the applicant company compensation under section 73 of the Constitution.’

Accordingly, the Supreme Court found ‘in favour of the Ministry of the Environment's claims’, without additionally addressing the applicant company's alternative claim or its further alternative claim.

In the Court's view the Supreme Court's judgment provided reasons that must be deemed sufficiently detailed for its conclusion that the legal bases relied on by the applicant company could not justify a claim for compensation either under the Nature Preservation Act or under section 73 of the Constitution. Moreover, since all the claims relied on the same legal bases, it could hardly be expected that the Supreme Court, before reaching its overall conclusion in favour of the Ministry, separately should repeat its reasoning as to the main claim in order to dismiss the alternative and further alternative claims.

Accordingly, the Court finds that the Supreme Court's judgment 28 February 2006 did contain sufficient reasons for the purposes of Article 6 § 1 of the Convention. Consequently, this part of the application is manifestly ill-founded and must be dismissed pursuant to Article 35 §§ 3 and 4 of the Convention.

Lastly, the applicant company complained that the outcome of the Supreme Court's judgment of 28 February 2006 was in breach of Article 1 of Protocol No. 1 to the Convention, which reads:

The Government submitted, in line with the Supreme Court, that only the County Council's decision of 13 June 1983 to refuse permission to extract peat, later upheld by the Preservation Agency, constituted an interference with the applicant company's right under the provision relied on.

They maintained that the interference had constituted control of the use of property, falling within the scope of the second paragraph of Article 1 of Protocol No. 1 (the third rule) since the rights were only limited. They observed that the applicant company had been granted permission to extract peat in the northern part of Draved Bog, which contained 56% of the peat in the bog. Moreover, they pointed out that from 25 May 1973 until 1 March 1983 the applicant company had sublet to another company the cultivated area, which amounted to 110 hectares. According to the sublease contract, the applicant company had received DKK 50,000 in rent per year. Thus, since allegedly under the 1954 contract the applicant company had paid an average rent of DKK 13,600 per year, it was evident that it had continued to derive financial benefit from the lease.

They submitted that the interference had been in accordance with the law and had pursued a legitimate aim, namely to protect the natural environment, and more specifically to preserve the remaining raised bogs in Denmark and thereby ensure the preservation of unique areas like Draved Bog.

With regard to the assessment of whether a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights had been struck, in the Government's view a particular wide margin of appreciation should be allowed.

The Government did not contest as such that at the relevant time the applicant company had been the only peat-producing company affected by the general prohibition in section 43, subsection 2, of the Nature Preservation Act introduced by Act no. 219 of 24 May 1978. They pointed out, however, that the fact that the applicant company was dominant in extracting peat from raised bogs could not alter the character of Act no. 219 as a general regulatory act entailing general preservation of bogs and thus a general limitation on the right to extract peat in Denmark. They pointed out that the legislative amendment had not been specifically aimed at the applicant company or at Draved Bog, and that the applicant company had certainly not been the only holder of rights over bogs to have been affected by the amendment.

The Government argued that the interference with the applicant company's property rights had been of limited intensity.

In support of that argument they submitted, firstly, that at the relevant time the applicant company had made virtually no investment with a view to extracting peat. They acknowledged that the applicant company had cleared some growth in the bog in the autumn of 1978 with a view to subsequent extraction and that in 1980, for the purpose of the legal proceedings it had drawn up a detailed plan for the establishment of production facilities and a compensation statement. Both measures, however, had entailed very limited costs and the applicant company had failed to substantiate that in 1978, the same year in which Act no. 219 was adopted, it had indeed planned to commence extracting peat.

Secondly, the Government pointed out that from the 1960s until approximately 1971 the applicant company had extracted peat in Draved Bog and had presumably made a profit from its activities in that connection. Moreover, since the permission to extract peat had been refused only for the southern part of the bog the applicant company could continue extracting in the northern part.

Thirdly, as found by the Supreme Court, only a small part of the applicant company's overall business had been affected by Act no. 219 and the subsequent refusal of permission to extract peat in the southern part of Draved Bog.

The Government contested that the applicant company should enjoy special protection under Article 1 of Protocol No. 1 to the Convention because its rights derived from an ‘irrevocable State contract’ as it had argued. Its expectations of the contract must have decreased at least in May 1978, when Act no. 219 had been passed by Parliament. The Government thus argued that it had been reasonable to expect that from that time the applicant company had had a duty to mitigate its possible losses by adapting its other activities of extracting and importing peat to the prospect that permission to extract peat from all parts of Draved Bog might not be obtained. Furthermore, the Government found that the applicant company's alleged expectations had been seriously compromised by the fact that it had been aware even before the enactment of Act no. 219 that extraction of peat was subject to a system of official registration and authorisation in accordance with the Raw Materials Act as applicable at the time.

Lastly, the Government found it relevant to take into account the fact that the State had on several occasions engaged in serious settlement negotiations with the applicant company, on issues including the repayment of rent paid by it since 1979. Nevertheless, the applicant company had allegedly refused and had chosen to continue its contractual obligation with the State. However, had the applicant company found that the limitation on its extraction facilities constituted a failure of the basic condition of the lease it could have invoked general contract law and terminated the lease for breach of contract.

The applicant company claimed as its main submission that it was contrary to Article 1 of Protocol No. 1 that its rights under the State contract for peat extraction in Draved Bog had been interfered with without provision of compensation.

As a subsidiary argument, it claimed that it was contrary to that provision that the State had collected full payment under the contract although the applicant company's rights had been denied.

The applicant company pointed out that it had entered into a State contract, which was valid for fifty years, and thus until April 2005. In 1973, pursuant to the Raw Materials Act, it had had to provide notification of its rights. Those rights had been officially acknowledged in 1975. Nevertheless, owing to the preservation procedure, which had been initiated on 21 December 1978, to the introduction on 1 January 1979 of section 43, subsection 2, of the Nature Preservation Act, and to the subsequent refusals to grant permission, the applicant company had suddenly been deprived of its rights to extract peat in the southern area of Draved Bog, amounting to 66 hectares. Those interferences had taken away the very raison d'être underpinning the State contract.

The applicant company maintained that the interference either amounted to deprivation of property or came under the general rule concerning peaceful enjoyment of property.

The permission granted as to the northern part of the bog was immaterial, since it was not possible commercially to exploit the darker peat found there unless mixed with the lighter peat from the southern part. Likewise, although the applicant company had retained its rights to sublet the cultivated areas of Draved Bog, and had in fact done so in respect of an area of 110 hectares, the income from the sublease, amounting to DKK 50,000 per year, was only marginal when compared to the profit expected to be made from peat extraction. The applicant company pointed out that the income from the sublease could not be compared to the average rent of DKK 13,600 per year which it had paid under the 1954 contract, since the latter sum had only covered the rent relating to the 66 hectares in the southern part of the bog.

The applicant company disagreed with the Government that the latter should enjoy a particular wide margin of appreciation in the present case. They maintained that State contracts in general should give rise to special protection under Article 1 of Protocol No. 1 in order to prevent the State from upsetting contractual equality through sovereign actions.

As to the State contract in question, it was no coincidence that it had been intended to last for fifty years. Peat had also been a limited resource at the time the contract was signed and the contractual partner, Lindet State Forest District, had acknowledged that it was for the applicant company to carry out the overall planning. The latter had had faith in the contract and there had been no urgency to embark on peat extraction in Draved Bog. Otherwise, the applicant company would naturally have commenced extraction early on.

The applicant company pointed out that it was seeking compensation for lost profit, as opposed to investment made. Thus, the fact that only minor investments had been made in 1978, nearly thirty years before the expiry of the contract, was in perfect conformity with the intentions underpinning the contract. In response to the Government's submission as to the possibility for the applicant company to import peat, it stressed that importing would necessarily entail transport costs and that if it had wished to look for an alternative solution, exploiting its facilities at other bogs in Denmark (Lille Vildmose and Store Vildmose) would have been more obvious. However, Draved Bog was attractive from a financial point of view, because the lighter peat was a limited resource.

The applicant company contested the Government's allegation that it had refused the offer of 21 June 1993 from the Forest and Nature Agency to negotiate the recovery of some of the rent payments. Had the State been serious in this matter, the rent could simply have been repaid. Moreover, the applicant company contested that it could have terminated the State contract, since that option, and the option to refuse to pay the rent, would have entailed significant risks. Thus, in the event that a permit had been granted under section 43, subsection 2, of the Nature Preservation Act, termination of the contract or non-payment of the rent would have produced a new, separate basis on which the right to extract peat might have been disputed. Accordingly, by collecting full payment under the contract between 1979 and 1997, Lindet State Forest District had taken advantage of the applicant company's precarious situation. The applicant company pointed out, however, that the State could not on the one hand take away the raison d'être of the State contract, and on the other hand claim full payment in accordance with the original terms of the very same contract. Such behaviour and, subsequently, the refusal to reimburse the amounts collected after 1978 constituted a violation of Article 1 of Protocol No. 1 to the Convention, as set out in the applicant company's subsidiary claim.

The Court reiterates that Article 1 of Protocol No. 1 to the Convention comprises three distinct rules. The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property. The second rule, contained in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions. The third rule, stated in the second paragraph, recognises that Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. Moreover, ‘possessions’ within the meaning of the provision can be ‘existing possessions’ or assets, including claims, in respect of which an applicant can argue that he has at least a ‘legitimate expectation’ of obtaining effective enjoyment of a property right (see, inter alia, Stretch v. the United Kingdom, no. 44277/98, §§ 32–40, 24 June 2003; Iatridis v. Greece, no. 31107/96, § 54, ECHR 1999-II; and Bruncrona v. Finland, no. 41673/98, §§ 78–79, 16 November 2004). The three rules are not ‘distinct’ in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to the peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule and must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to the aim sought to be realised (see, for example, Beyeler v. Italy [GC], no. 33202/96, §§ 108-14, ECHR 2000-I).

In the present case the applicant company maintained that the interference had been caused both by the preservation procedure, which was initiated on 21 December 1978, and by the introduction on 1 January 1979 of section 43, subsection 2, of the Nature Preservation Act and the subsequent refusals by the authorities to grant it permission to extract peat from the 66 hectares of the southern part of Draved Bog.

The Court observes that in 1954 the applicant company entered into the contract with Lindet State Forest District for the exclusive and irrevocable rights to extract peat in Draved Bog for fifty years over an area of 212 hectares.

Both the High Court and the Supreme Court found that it was the general prohibition in section 43, subsection 2, of the Nature Preservation Act, in force from 1 January 1979, that was the reason why the applicant company had been prevented from exercising its right to extract peat from Draved Bog. The Court finds that it is not in a better position to conclude otherwise. Pursuant to the provision in question, alterations of the state of bogs could only take place with the permission of the County Council. Such legislation cannot be qualified as a deprivation of possessions. Nevertheless, it meant that the applicant company had to request a permit, which was refused by the County Council on 9 June 1983, in a decision upheld by the Preservation Agency on 1 June 1984, in respect of the southern part of Draved Bog amounting to 66 hectares. That confirmed that the applicant company had a proprietary interest in the leased area of Draved Bog. Thus, although the legislation was intended as a means of controlling bog owners' use of their possessions, with regard to the applicant company the law comes close to an interference which should be analysed in the light of the general rule in the first sentence of Article 1 of Protocol No. 1 (see Broniowski v. Poland [GC], no. 31443/96, § 136, ECHR 2004-V).

The Court must examine whether an interference with the peaceful enjoyment of possessions strikes the requisite fair balance between the demands of the general interest of the public and the requirements of the protection of the individual's fundamental rights, or whether it imposes a disproportionate and excessive burden on the applicant (see, among many other authorities, Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, § 93, ECHR 2005-VI). More specifically in the present case, it must examine whether the Supreme Court in its judgment of 28 February 2006 struck a ‘fair balance’ between the demands of the general interests of the community and the requirements of the applicant company's proprietary interest.

It is undisputed that the southern part of Draved Bog consisted of unspoiled raised bog, described as nationally unique, geologically as well as biologically, and that nationally it was of the greatest value in terms of nature preservation. Thus, undoubtedly there was an important general interest on the part of the community in preserving it. The Supreme Court stated in that connection that section 43, subsection 2, of the Nature Preservation Act was motivated by significant nature and environmental interests. Furthermore, within the areas of environmental, social and financial policy, national authorities enjoy a certain margin of appreciation in the implementation of laws regulating property and contractual relationships (see Alatulkkila and Others v. Finland, no. 33538/96, § 67, 28 July 2005, Perinelli and others v. Italy (dec.), no. 7718/03 and Longobardi and others v. Italy, no. 7670/03, both of 26 June 2007).

Turning to the applicant company's fundamental rights, the Supreme Court found that the company was not affected in a particularly severe manner. It noted in this connection that the introduction of section 43, subsection 2, of the Nature Preservation Act had affected all manufacturers of sphagnum, that at the relevant time the applicant company had not invested in production facilities for the purpose of exercising its extraction rights at Draved Bog, and that it had access to the extraction of considerable amounts of peat elsewhere in Denmark.

The Court endorses the Government's observations that section 43, subsection 2, of the Nature Preservation Act, introduced by Act no. 219 of 24 May 1978, was a general regulatory act entailing general preservation of bogs and consequently a general limitation of the right to extract peat, and that the applicant company's dominant position on the peat-extraction market at the relevant time could not alter this fact.

According to the contract of 1954, the leased area of Draved Bog amounted to 212 hectares. By May 1973, 110 hectares of that area had been cultivated and were sublet to the company Pindstrup Foderindustri A/S until March 1983 for an annual amount of DKK 50,000 (equivalent to approximately EUR 6,750). The applicant company pointed out that its further alternative claim during the domestic proceedings, namely the claim for reimbursement of approximately DKK 884,000 (equivalent to approximately EUR 117,000) for rent and property taxes paid in the period between 1979 and 30 October 1997, including the calculated annual rent of approximately DKK 13,600 (equivalent to approximately EUR 1,840), plus added interest accruing on those payments, related solely to the disputed 66 hectares in the southern part of Draved Bog. Thus, in the applicant company's opinion, a comparison of the amounts of DKK 50,000 and DKK 13,600 could not be used to conclude that the company had benefited overall from the 1954 contract during those years. The Court notes, nevertheless, that the applicant company cultivated more than half of the area covered by the 1954 contract and subsequently, in the years between 1973 and 1983, made an additional profit by subletting it.

In addition, subsequent to the introduction of section 43, subsection 2, of the Nature Preservation Act, the applicant company was granted permission to extract peat from the northern part of Draved bog. The applicant company submitted that this permission was of insignificant value to it since only so-called darker peat could be extracted from that area and that in order to exploit the peat commercially, the darker peat had to be mixed with so-called lighter peat, which was in short supply in general. The Court notes, nevertheless, that the northern part contained approximately 56% of the peat which remained to be extracted from Draved Bog and that the 66 hectares at issue represented less than 32% of the total area, amounting to 212 hectares, which the applicant company had leased under the 1954 contract.

The Court is aware that the applicant company in 1980 produced a report in which it estimated its loss of expected profit relating to the area of 66 hectares at DKK 15,200,000 (equivalent to approximately EUR 2,050,000).

The High Court, although finding for the applicant company, reduced the compensation to DKK 5,000,000. In assessing that amount it stated that its calculation had taken as its starting point the 1980 report. However, according to the information provided, since 1979 the applicant company had extracted, processed and sold peat from other bogs in Denmark as well as abroad, thereby being able to meet its market demands. The profit thus acquired was to be subtracted when determining the loss for which the applicant company could claim compensation.

The Supreme Court found that the applicant company was not entitled to any compensation since it had not been affected in a particularly severe manner. It observed that at the relevant time the applicant company had not invested in any production facilities for the purpose of exercising its extraction rights at Draved Bog and that it had access to the extraction of considerable amounts of peat elsewhere in Denmark.

In the Court's view the said observations by the Supreme Court were relevant and appropriate for the determination of whether the applicant company had been affected in a particularly severe manner (see, mutatis mudandis, Longobardi and others v. Italy (dec.) and Perinelli and others v. Italy (dec.), both cited above).

Moreover, having regard to the various findings and the material before it, the Court must limit itself to an overall assessment of whether a ‘fair balance’ between the demands of the general interests of the community and the requirements of the applicant company's proprietary interest was struck by the domestic courts.

The Court is satisfied that the applicant company's claims were carefully examined by two judicial bodies, which took all the relevant elements into account, and there is nothing to show that the conclusions reached by the courts were arbitrary or unreasonable.

As regards the applicant company's subsidiary claim before the Court, which was identical to its further alternative claim before the domestic courts, it is not in dispute that this claim was based on exactly the same legal reasoning as the principal claim and the alternative claim, namely section 73 of the Constitution. Accordingly, and since it is not for the Court to speculate as to the outcome of the domestic proceedings had the applicant company relied on another legal basis for its further alternative claim, the Court's reasoning above applies likewise to the applicant company's subsidiary claim before it.

In these circumstances the Court finds that the Danish authorities cannot be said to have failed in their duty to strike a fair balance between the applicant company's property rights and the general interests of the community. It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

Declares the application inadmissible.

Claudia Westerdiek

Registrar

Rait Maruste

President