22 the proceeding must tend toward the materialization of the protection of the right recognized in the judicial ruling through the suitable application of that ruling.68 76. Taking all this into account, the Court accepts the State’s acknowledgment of responsibility in the sense that there was no judicial protection from the retroactive application of law, in a failure to honor domestic law. This implies that the ruling of the Chamber of Constitutional and Social Law of the Supreme Court had the effect of making the judicial remedy sought by the victims ineffective for protecting the aforementioned domestic law guarantees. As a consequence, the Court finds that the State violated the right to judicial protection recognized in Article 25(1), with regard to Article 1(1) of the American Convention, to the detriment of the 233 individuals indicated in the annex to this Judgment. 3. 77. Alleged violation of the right to property The Commission did not allege a violation of the right to property. 78. The representative alleged that, based on the decrees issued by the Executive Branch, SEDAPAL took measures that “had consequences for the remunerations received by the victims.” Likewise, the representative alleged that the effect produced implies a “removal and/or appropriation of those goods being used and enjoyed” by the victims “without payment of a just compensation.” In addition, he indicated that the State could have “suspended or eliminated the [s]alary [s]cale [a]djustment [s]ystem” after the date of publication of Law Decree No. 25876, “but not retroactively.” Therefore, he indicated that “the retroactive application of the aforementioned Law Decree [...] presupposes an excess of State power [...] to subordinate the specific interest of [the victims] in accessing enjoyment of the [s]alary [s]cale [s]ystem as contrasted to the general interest [... in the framework of] an economic [c]risis and that specified [n]ational r[]eactivation measures, as the suspension of the [a]djustment [s]ystem as of the date of the law’s existence. that is, as of its publication, was a more than sufficient measure for the goals indicated.” 79. For its part, the State argued that “the right to property is not absolute and allows for certain limitations on use and enjoyment for the public interest.” It added that the decrees “were issued in a specific economic-labor context [...] in which the public interest took precedence, and it was necessary to consolidate the Program of Structural Reforms to the national economy; it was not, as the applicants try to argue, an arbitrary act of the State to their detriment.” The State explained that “the decisions made [during the nineties] to control hyperinflation were based on the serious economic crisis that led to the suspension of salary regulations - whether contained or not in collective bargaining agreements - as long as they were linked to changes in price indexes, as they were elements that created higher inflation. Although it was a drastic decision, it was a measure that was used to guarantee the stability of the economy in general and in no way did it violate the right to property, as it played the social role of preserving Peruvian society in general.” 80. In this case, the Commission, the representative and the State agree that elimination of the salary scale system was proper (supra para. 62). The Court observes that the decrees issued between the years 1991 and 1992 related to the facts of this case took place within the economic context of Peru in July of 1990. Effectively, the State was “in a process of hyperinflation that had already lasted 24 months,” which produced “a drastic drop in real remunerations.”69 To this was added, among other 68 Cf. Case of Baena Ricardo et al V. Panamá. Competencia. Judgment of November 28, 2003. Serie C No. 104, para. 73; Case of Acevedo Jaramillo et al, supra note 14, para. 217, and Case of Acevedo Buendía et al (“Discharged and Retired Employees of the Office of the Comptroller”), supra note 68, para. 69.

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