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You are here: BAILII >> Databases >> European Court of Human Rights >> KEFALAS AND OTHERS v. GREECE - 14726/89 [1995] ECHR 18 (8 June 1995)
URL: http://www.bailii.org/eu/cases/ECHR/1995/18.html
Cite as: 20 EHRR 484, (1995) 20 EHRR 484, [1995] ECHR 18
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In the case of Kefalas and Others v. Greece (1),
The European Court of Human Rights, sitting, in accordance with
Article 43 (art. 43) of the Convention for the Protection of Human
Rights and Fundamental Freedoms ("the Convention") and the relevant
provisions of Rules of Court A (2), as a Chamber composed of the
following judges:
Mr R. Ryssdal, President,
Mr R. Bernhardt,
Mr Thór Vilhjálmsson,
Mr R. Macdonald,
Mr N. Valticos,
Mr S.K. Martens,
Mrs E. Palm,
Mr A.B. Baka,
Mr J. Makarczyk,
and also of Mr H. Petzold, Registrar,
Having deliberated in private on 27 January and 25 May 1995,
Delivers the following judgment, which was adopted on the
last-mentioned date:
_______________
Notes by the Registrar
1. The case is numbered 4/1994/451/530. The first number is the
case's position on the list of cases referred to the Court in the
relevant year (second number). The last two numbers indicate the
case's position on the list of cases referred to the Court since its
creation and on the list of the corresponding originating applications
to the Commission.
2. Rules A apply to all cases referred to the Court before the entry
into force of Protocol No. 9 (P9) and thereafter only to cases
concerning States not bound by that Protocol (P9). They correspond to
the Rules that came into force on 1 January 1983, as amended several
times subsequently.
_______________
PROCEDURE
1. The case was referred to the Court by the European Commission of
Human Rights ("the Commission") on 11 March 1994, within the
three-month period laid down by Article 32 para. 1 and Article 47
(art. 32-1, art. 47) of the Convention. It originated in an
application (no. 14726/89) against the Hellenic Republic lodged with
the Commission under Article 25 (art. 25) by five Greek nationals,
Mr Alexandros Kefalas, Mr Vassilios Kefalas, Mr Antonios Giannoulatos,
Mr Georgios Giannoulatos and Mr Athanasios Giannoulatos on
23 August 1987.
The Commission's request referred to Articles 44 and 48 (art. 44,
art. 48) and to the declaration whereby Greece recognised the
compulsory jurisdiction of the Court (Article 46) (art. 46). The
object of the request was to obtain a decision as to whether the facts
of the case disclosed a breach by the respondent State of its
obligations under Article 6 (art. 6) of the Convention.
2. In response to the enquiry made in accordance with Rule 33
para. 3 (d) of Rules of Court A, the applicants stated that they wished
to take part in the proceedings and designated the lawyers who would
represent them (Rule 30).
3. The Chamber to be constituted included ex officio Mr N. Valticos,
the elected judge of Greek nationality (Article 43 of the Convention)
(art. 43), and Mr R. Ryssdal, the President of the Court (Rule 21
para. 3 (b)). On 24 March 1994, in the presence of the Registrar, the
President drew by lot the names of the other seven members, namely
Mr R. Bernhardt, Mr Thór Vilhjálmsson, Mr R. Macdonald,
Mr S.K. Martens, Mrs E. Palm, Mr A.B. Baka and Mr J. Makarczyk
(Article 43 in fine of the Convention and Rule 21 para. 4) (art. 43).
4. As President of the Chamber (Rule 21 para. 5), Mr Ryssdal, acting
through the Registrar, consulted the Agent of the Greek Government
("the Government"), the applicants' lawyers and the Delegate of the
Commission on the organisation of the proceedings (Rules 37 para. 1 and
38). Pursuant to the order made in consequence, the Registrar received
the Government's memorial on 13 September 1994 and the applicants'
memorial on 19 September. On 21 October the Secretary to the
Commission informed the Registrar that the Delegate would submit her
observations at the hearing.
5. In accordance with the President's decision, the hearing took
place in public in the Human Rights Building, Strasbourg, on
24 January 1995. The Court had held a preparatory meeting beforehand.
There appeared before the Court:
(a) for the Government
Mr V. Kondolaimos, Senior Adviser,
Legal Council of State, Delegate of the Agent;
(b) for the Commission
Mrs J. Liddy, Delegate;
(c) for the applicants
Mr P. Bernitsas,
Mr D. Mirasyesi, dikigoroi (lawyers), Counsel.
The Court heard addresses by them and also their replies to
questions put by several of its members.
AS TO THE FACTS
I. Circumstances of the case
6. The applicants are shareholders of the Athinaïki Khartopiia
company, whose head office is in Athens. The company, one of the
largest Greek paper manufacturers and suppliers, owns two factories -
one in Athens and one at Drama - and plantations containing eleven
million trees. In 1984 its capital amounted to 468,000,000 drachmas
and was divided into 468,000 shares of a nominal value of
1,000 drachmas each. The applicants held 63.46% of these shares.
7. On 30 March 1984, on a request by the National Bank of Greece
acting as a creditor, the company was made subject, by an order
(no. 2544/84) issued by the Minister for the Economy, to the provisions
of Law no. 1386/83 concerning businesses "in difficulties"
(provlimatikes epikhirissis). Under sections 7 and 12 of Law
no. 1386/83 (see paragraph 25 below), management of the company was
handed over to a board of directors appointed by the Minister for the
Economy.
A. The appeals against Ministerial Order no. 2544/84
1. The application for judicial review to the Supreme
Administrative Court
8. On 25 May 1984 the applicants applied to the Supreme
Administrative Court to have Ministerial Order no. 2544/84 quashed.
9. In a judgment (no. 1093/87) adopted on 13 March 1987 by seven
votes to six, a full court of the Supreme Administrative Court
dismissed the application. It held that the appointment by the State
of an interim administration in order to ensure the survival and
operation of certain businesses of particular economic and social
importance was necessary in the public interest and constituted a
legitimate restriction on the economic freedom guaranteed in
Article 5 para. 1 of the Constitution. Making a business subject to
the provisions of Law no. 1386/83 allowed its capital to be increased
during the period of interim administration. To effect such an
increase, however, a different, independent legal instrument had to be
adopted subsequently under section 8 (8) of the Law (see paragraph 25
below); the issue whether that section was constitutional could
therefore not be either raised or considered during the instant
proceedings, which concerned solely the terms on which the business was
made subject to the provisions of Law no. 1386/83.
In so far as the applicants contended that applying those
provisions to a business was contrary to the principle of separation
of powers and improperly usurped the jurisdiction of the civil courts,
to which it normally fell to settle private disputes, the Supreme
Administrative Court held as follows:
"8. ... According to the principle of separation of State powers
and by Articles 8, 26 and 94 of the Constitution, the resolution
of private disputes comes within the jurisdiction of the civil
courts. However, an administrative decision to apply the
provisions of Law no. 1386/83 to a business and to appoint an
interim board of directors does not determine a private dispute.
Assessment of the public interest that requires a business to be
made subject to the provisions of Law no. 1386, that is to say
of the need to save a business of particular economic and social
importance in the interests of the national economy, and the
appointment of an interim board of directors come within the
discretionary powers of the administrative authorities. These
authorities may therefore also decide in making that assessment
whether the other conditions for applying the Law, as set out in
section 5 (1) (d) [of Law no. 1386/83 - see paragraph 25 below],
have been satisfied, even if they concern private-law
relationships. The indirect assessment of private-law issues,
such as the amount of the business's liabilities and its
inability to meet them, likewise cannot be regarded as the
resolution of a private dispute. [This incidental assessment],
which is always permissible when administrative decisions are
being taken, has no binding force and does not prevent the
injured party from having recourse to the appropriate remedies
(an action for a declaration, for example) in the competent civil
courts in order to obtain a final ruling on the issues. In that
case, if the decision of those courts ... is contrary to the
administrative authorities' incidental assessment, it will
deprive the administrative decision of its foundation and will
require it to be quashed or revoked, as the case may be."
According to the dissenting opinion of one of the judges:
"State intervention in the management of private businesses, as
provided for in Law no. 1386/83, namely by administrative
decision, is an unconstitutional usurpation of the jurisdiction
of the civil courts. The principle of rescuing heavily indebted
businesses is not peculiar to that Law. It is inherent in modern
insolvency law and has prevailed over the older principle of
satisfying creditors collectively and pro rata; the system of
imposed administration of businesses is already governed by it.
Under the Constitution, such administration, on account of its
nature, conditions and purpose, comes under the jurisdiction of
the civil courts. Assessing a company's contractual relations
with its creditors and deciding whether they have developed
normally or abnormally - which is done against a background of
conflict and uncertainty and leads to the deprivation of a
private right (that of managing the company) - settles, by its
nature and effect, a private dispute. Such a decision must be
taken with the guarantees of independence and the procedural
safeguards that only the civil courts can provide. The State can
interfere in the management of a private business only through
these courts. The administrative authorities are, moreover,
prohibited not only from openly dealing with disputes that come
under the jurisdiction of the courts but also from disguising
private disputes as administrative cases as in this instance.
This question is quite distinct from the authorities' generally
recognised discretion to make an incidental assessment of private
rights. Such an assessment is permissible in purely
administrative cases which the authorities deal with by taking
an administrative decision, which was not so in this instance."
For the rest, the Supreme Administrative Court upheld Order
no. 2544/84 in the following terms:
"18. The evidence shows that the 'Athinaïki Khartopiia' is the
largest Greek paper manufacturer and has two factory complexes,
one in Athens and one at Drama. The one at Drama is the most
modern in the country ... The firm has about 2,500 employees.
According to the administrative authorities, if the firm is put
on a sound footing, it will be able to survive and contribute to
the development of the national economy. Having regard to these
factors, the application of Law no. 1386/83 to the firm is
legally and sufficiently justified by its particular economic and
social importance. The ground alleging the contrary must
therefore be dismissed as unfounded.
However, in the opinion of one member of the Court, the file
should have shown more clearly what sectors of the national
economy were affected by the operation of the firm concerned and
in what way.
19. The ... conditions laid down in section 5 (1) (d) of Law
no. 1386/83 for making a business subject to the provisions of
the Law, namely that it has liabilities five times greater than
the sum of its capital and apparent reserves and its inability
to meet them, are separate conditions which must both be
satisfied. Under the Law, inability to pay may be proved by a
declaration by the bank which is the business's main source of
finance to the effect that it will not continue to support the
business. Such a declaration is manifestly contained in the
request in which that bank, as creditor, seeks to have the
business made subject to the regime of Law no. 1386/83. In the
instant case it is clear from the file that the 'Athinaïki
Khartopiia' company's debts to the National Bank of Greece
totalled 7,546,400,000 drachmas at 31 December 1983, a figure
five times greater than the firm's capital and apparent reserves,
which amounted to 1,100,000,000 drachmas. Furthermore, this sum
had been made subject to the provisions of Law no. 1386/83
following a request by the creditor bank on 27 March 1984, which
proves a manifest inability to honour the aforementioned debts.
Consequently, the impugned decision was legally and sufficiently
reasoned and the ground maintaining the contrary must be
dismissed as unfounded.
However, in the opinion of six members of the Court, the [bank's]
declaration to the effect that it would no longer support the
firm financially proved only that the firm's liquidity indicators
had deteriorated, that is to say that only one of the conditions
laid down in section 5 (2) (c) of Law no. 1386/83, all of which
had to be fulfilled in order to establish manifest inability to
meet liabilities, had been satisfied. Consequently, in the
instant case it should have been considered whether the other two
conditions had been met, namely a fall in production and in the
number of employees - due to the lack of liquid assets - and an
accumulation of debts due."
2. The action for a declaration in the Athens Court of First
Instance
10. On 10 July 1987 the applicants brought an action for a
declaration in the Athens Court of First Instance. They sought a
ruling from the court that the joint conditions laid down in
section 5 (1) (d) of Law no. 1386/83 (see paragraph 25 below) had not
been satisfied at the time the company in issue was made subject to
that Law.
11. In a judgment of 11 March 1988 (no. 1807/88) the court held that
the conditions for making a business subject to the Law had been
fulfilled and, in consequence, dismissed the applicants' action.
12. On 9 April 1990 the Athens Court of Appeal (in judgment
no. 4025/90) set aside the Court of First Instance's judgment.
However, before giving a final ruling, the Court of Appeal
ordered further inquiries into the facts and a report to be made by an
accountant in order to satisfy itself that, at the time it was made
subject to the provisions of Law no. 1386/83, Athinaïki Khartopiia owed
450,708,920 drachmas to the public electricity company and
8,729,045,319 drachmas to the National Bank of Greece.
The expert estimated the latter debt at 8,584,641,153 drachmas.
At the date of the hearing before the Court (24 January 1995),
the Court of Appeal had still not given judgment.
B. The alterations in capital
13. In an order (no. 153/86) of 10 June 1986 the Minister for
Industry, Research and Technology approved a decision of the Business
Revival Agency (Organismos Anasyngrotisseos Epikhirisseon, "the OAE" -
see paragraph 24 below) and, under section 8 (8) of Law no. 1386/83
(see paragraph 25 below), increased Athinaïki Khartopiia's capital by
940,000,000 drachmas by issuing 9,400,000 new shares of a nominal value
of 100 drachmas each. The order stated that the existing shareholders
had an unlimited pre-emptive right, which, however, they had to
exercise by making a declaration in writing within one month of the
publication of the order in the Official Gazette; it also provided that
the company's interim board of directors could freely dispose of shares
not bought by the existing shareholders.
The applicants did not avail themselves of their pre-emptive
right. The new shares were acquired by the OAE without any cash
payment but to offset its claims against the company. It now held
66.76% of all Athinaïki Khartopiia's shares and the applicants 21.09%.
14. On 8 January 1987, at an extraordinary general meeting of the
company, the OAE decided to reduce the company's capital to
5,000,000 drachmas, the minimum level permitted for public limited
companies under the legislation in force. The Minister for Industry,
Energy and Technology approved that decision in an order of
19 March 1987.
15. Lastly, on 9 June 1987, the same Minister made a second increase
in the capital, which was raised to 30,900,000,000 drachmas by an issue
of new shares acquired by the OAE. On this occasion the order
(no. 360/87) made no provision for a pre-emptive right for existing
shareholders.
16. Since these operations the applicants have held 0.003423% of
Athinaïki Khartopiia's capital, the OAE 62.3% and the National Bank of
Greece 33.9%.
C. The proceedings to challenge the alterations in capital
1. The proceedings to challenge the first increase in capital
17. On 26 June 1986 the applicants made an application to the Supreme
Administrative Court for judicial review of Order no. 153/86 (see
paragraph 13 above).
18. On 3 April 1987 the Supreme Administrative Court refused the
application (judgment no. 1398/87). By way of establishing that it had
jurisdiction, it noted that a parallel application could be made in the
Administrative Court of Appeal only where a decision to increase
capital was based on section 10 of Law no. 1386/83 and not, as in the
instant case, on section 8 (8).
The Supreme Administrative Court went on to declare the grounds
concerning Ministerial Order no. 2544/84 (see paragraph 7 above)
inadmissible because it had already ruled on an action concerning it
(see paragraph 9 above). More specifically, it held that "all grounds
for review had to be rejected as inadmissible which related to defects
not in the ministerial order in issue (no. 153 of 6 June 1986) ... but,
according to the applicants, in the previous order (no. 2544 of
30 March 1984) - challenged at the same time in an inadmissible
application - making the aforementioned company subject to interim
administration by the OAE and whose adoption [was] a prerequisite for
the making of the order in dispute".
With regard to the increase in capital, the Supreme
Administrative Court held that this did not infringe the applicants'
constitutional rights (Articles 5 para. 1 and 17 of the Constitution),
since where the authorities acted under section 8 of Law no. 1386/83
it was for them to set the nominal value of the new shares as they were
minded; the risks of such a measure for existing shareholders were
offset by the pre-emptive right they enjoyed (section 8 (8) - see
paragraph 25 below). As to the applicants' assertion that by the time
they had been invited to exercise their pre-emptive right, they no
longer had the one-month period in which to do so that was provided in
the impugned order, the Supreme Administrative Court rejected it as,
even supposing that the complaint was made out, it disclosed no defect
in the order as such.
19. On 10 November and 23 December 1987 the applicants brought two
actions for a declaration in the Athens Court of First Instance
seeking, firstly, a ruling that the increase in capital was null and
void and, secondly, an order that the OAE should compensate the
company's existing shareholders.
In two judgments on 4 November 1988 (nos. 5136/88 and 7817/88)
the court found against the applicants.
2. The proceedings to challenge the reduction of capital
20. On 8 May 1987 the applicants made an application to the Supreme
Administrative Court for judicial review of the ministerial order
approving the OAE's decision to reduce Athinaïki Khartopiia's capital
(see paragraph 14 above).
21. On 16 June 1987 the applicants also brought an action for a
declaration in the Athens Court of First Instance, which (in judgment
no. 1481/88) stayed the proceedings on account of the appeal pending
in the Athens Court of Appeal (see paragraph 12 above). At the date
of the hearing before the European Court the proceedings had not ended.
3. The proceedings to challenge the second increase in capital
22. The applications for judicial review of Ministerial Order
no. 360/87 (see paragraph 15 above) made by the applicants to the
Athens Administrative Court of Appeal and the Supreme Administrative
Court on 12 June and 13 July 1987 and their two actions in the Athens
Court of First Instance seeking a declaration that the second increase
in capital was null and void were still pending at the date of the
hearing before the European Court.
D. The actions for damages against the OAE and the State
23. On 24 January 1990 and 29 May and 20 November 1991 the applicants
brought four actions for damages against the OAE and the State in the
Athens Court of First Instance and the Athens Administrative Court.
In these they sought compensation for the damage allegedly caused them
by the OAE's management of the company and by the unlawful increases
in capital. These actions, which were still pending at the date of the
hearing before the Court, were founded on the Civil Code provisions on
the State's liability in tort and unjust enrichment.
II. Relevant domestic law
A. Law no. 1386 of 5 August 1983 establishing the Business Revival
Agency
24. The OAE was established by Law no. 1386 of 5 August 1983 and is
a public limited company under the supervision of the State.
Designed to serve the public interest, it contributes to the
country's economic and social development by putting businesses on a
sound financial footing, importing and applying foreign technological
know-how and developing Greek technological know-how, and setting up
and running nationalised or semi-public businesses (section 2 (2) of
the Law).
To achieve these objectives the OAE may, among other things, take
over the management of businesses being rehabilitated or nationalised,
acquire shareholdings in businesses, grant loans to businesses in which
it has an interest or give guarantees for such loans, issue debenture
loans and transfer shares to employees or to organisations representing
them, local authorities or other public-law entities (section 2 (3) of
the Law).
25. The relevant provisions of Law no. 1386/83 provide:
Section 5
"Conditions for making a business subject
to the provisions of this Law
1. By an order of the Minister for the Economy, issued after
consultation of the advisory committee ..., the provisions of
this Law may be applied to businesses
(a) which have suspended or ceased their activities for financial
reasons;
(b) which have suspended payments;
(c) which are insolvent or have been placed under the management
of their creditors or under provisional management or which have
gone into liquidation ...
(d) whose total liabilities are five times greater than the sum
of their capital and apparent reserves and which are manifestly
unable to meet their liabilities ...
(e) which concern the country's defence or are of vital
importance for the development of national resources or whose
main object is the provision of public services and which are
manifestly unable to meet their liabilities;
(f) which request application of the provisions to them.
2. For the purposes of applying the preceding subsection,
...
(c) 'Manifestly unable to meet their liabilities' means: (a) a
fall in production and in the number of employees due to the lack
of liquid assets; (b) an accumulation of debts due; and (c) a
deterioration in the liquidity indicators. This situation may
also be proved by a declaration by one or more banks which are
the business's main source of finance to the effect that they
will no longer maintain their financial support.
..."
Section 6
"Procedure for making a business subject
to the provisions of this Law
1. The order by the Minister for the Economy making the business
subject to the provisions of this Law ... shall be made
(a) at the request of the business;
(b) ...
(c) at the request of a bank or of the administrative authorities
or of a public-law entity where these have matured claims against
the business;
(d) at the request of the business's creditors other than those
mentioned in sub-paragraphs (b) and (c) whose claims represent
at least 20% of the business's outstanding debts ...
(e) at the request of the ... trustee in bankruptcy or of the
insolvent firm.
..."
Section 7
"Provisions on the rehabilitation of businesses
The order by the Minister for the Economy ... may provide for
1. the taking over of the management of the business by the OAE,
in accordance with section 8;
2. the satisfaction of the business's obligations in such a way
as to ensure its viability
(a) by a compulsory increase in the capital by means of
contributions of new assets or by the conversion of existing
debts into shares ...
...
3. winding-up, in accordance with section 9 of this Law."
Section 8
"Taking over of management
1. ...
When the ministerial order is published, the powers of the
business's managerial bodies shall cease. The general meeting
of shareholders ... shall continue to be held but may not decide
to dismiss the directors appointed by the OAE. The approval of
the Minister for the Economy shall be required for the
distribution of profits and the establishment of reserves.
...
5. During the interim administration the OAE shall produce a
report on the business's viability and negotiate with the
shareholders and creditors in order to conclude an agreement on
the business's survival ...
...
8. During the interim administration the OAE may, by a decision
approved in an order of the Minister for the Economy published
in the Official Gazette and as an exception to the provisions
governing public limited companies, increase the business's
capital. This increase may be made either in cash or by
contributions in kind. Payment of the contribution may be made
by set-off. All the particulars relating to the increase in
capital shall be laid down in the aforementioned ministerial
order.
The existing shareholders retain a pre-emptive right, which shall
be exercised within a period of time to be laid down by the
ministerial order.
9. The OAE or the management appointed by it shall be liable
only in the event of fraud or serious negligence."
Section 12
"Transitional period
While the secretariat of the OAE is being set up and until it
comes into operation, the Minister for the Economy shall take the
measures provided for in sections 7-10 of this Law by means of
an order."
B. The Court of Justice of the European Communities' judgment of
30 May 1991
26. A reference for a preliminary ruling having been made to it by
the Greek Supreme Administrative Court, the Court of Justice of the
European Communities gave judgment on issues relating to the
compatibility of Law no. 1386/83 with the Second Council Directive
(77/91/EEC) of 13 December 1976 (concerning the formation of public
limited companies and the maintenance and alteration of their capital)
and more particularly with Article 25 of the Directive, according to
which "any increase in capital must be decided upon by the general
meeting".
In its judgment of 30 May 1991 (Marina Karella and
Nikolaos Karellas v. Minister of Industry, Energy and Technology and
Organismos Anasyngrotisseos Epikhirisseon, Reports of Cases before the
Court of Justice and the Court of First Instance, 1991-5, I-2691) the
Court of Justice held:
"Article 25 in conjunction with Article 41 (1) of the Second
Directive must be interpreted as meaning that they preclude
national rules which, in order to ensure the survival and
continued operation of undertakings which are of particular
economic and social importance for society as a whole and are in
exceptional circumstances by reason of their excessive debt
burden, provide for the adoption by administrative act of a
decision to increase the company capital, without prejudice to
the right of pre-emption of the original shareholders when the
new shares are issued."
C. Law no. 2000/91 on the denationalisation, simplification of
winding-up proceedings and strengthening of competition rules
27. In 1991 the legislature passed Law no. 2000/91 in order to
facilitate the privatisation of certain businesses which had come under
State control between 1982 and 1989.
Section 54 of this Law provides that if the increase in the
capital of a business in difficulties is quashed in a judgment of the
Supreme Administrative Court or a final judgment of another court, the
debts of the business that had been capitalised with a view to making
the increase and which had been taken over by the business's creditors
in the form of shares "revive and shall be deemed never to have been
extinguished".
D. Review of administrative decisions and the finality of judgments
of the Supreme Administrative Court
28. Article 95 para. 1 (a) of the 1975 Constitution provides:
"The Supreme Administrative Court's powers shall include the
following:
(a) setting aside, on an application for judicial review, of
enforceable decisions by administrative authorities that are
ultra vires or contrary to law.
..."
29. Under Article 48 of Legislative Decree no. 18/1989 codifying the
statutory provisions relating to the Supreme Administrative Court,
"The grounds on which an application for judicial review may be
based are
(a) lack of jurisdiction in the administrative authority that
took the decision;
(b) failure to comply with essential formalities required for the
decision;
(c) breach of substantive provisions of law; and
(d) misuse of powers, where the administrative authority's
decision, even though it appears lawful as such, was taken for
reasons and for a purpose other than those contemplated by the
legislature when making provision for such a decision."
30. The Supreme Administrative Court's review of administrative
decisions is a review of lawfulness modelled on that carried out by the
French Conseil d'Etat on applications for judicial review.
31. Nevertheless, where the question is one of determining whether
statutory requirements have been complied with, the Supreme
Administrative Court looks to see whether the findings of the
administrative body responsible for the decision correspond with
reality. If they do not, there has been a mistake of fact and the
decision falls to be quashed. The Supreme Administrative Court also
examines the reasons for the decision, in particular whether it is
based on substantive provisions or an interpretation of them, the
substantive assessment of the circumstances of fact and their possible
legal classification and the administrative body's criteria and
conclusions in respect of the exercise of its discretion. The
reasoning must be derived from the case file; it must be precise and
adequate and contain the essential circumstances of the case in order
that it may be determined whether the administrative body's application
of the legal rules was justified (E. Spiliotopoulos, Enkhiridion
Diikitikou Dikeou ("Manual of Administrative Law"), 4th edition,
Athens, A.N. Sakkoulas, pp. 475-82).
The administrative authority's mistake of fact must be directly
apparent from the file or from evidence produced by the parties
(Supreme Administrative Court, judgment no. 3336/78). The applicant
cannot rely on facts not previously submitted to the administrative
body responsible for the impugned decision (Supreme Administrative
Court, judgments nos. 1720/77 and 662/78).
The administrative body's assessment of facts whose reality has
not been disputed is not subject to review by the Supreme
Administrative Court except where and in so far as the applicant
alleges that that assessment went beyond the extreme limits of the
administrative authority's discretion (Supreme Administrative Court,
judgments nos. 1020/72, 1303/77 and 201/78).
32. Judgments of the Supreme Administrative Court are final. No
appeal lies against them other than an application by a third party to
set aside a judgment adversely affecting his interests or an
application to the Special Supreme Court if there is doubt about the
constitutionality of provisions on which a judgment is based.
Consequently, an administrative decision held to be valid by the
Supreme Administrative Court is covered by res judicata, which cannot
be overturned in a judgment of the civil courts.
E. Revocation of administrative decisions
33. The success of an action for a declaration brought in the civil
courts against an administrative decision that has been held to be
valid by the Supreme Administrative Court does not mean that the
decision is quashed; it merely encourages the administrative
authorities to cancel it or revoke it if they are so minded.
Administrative case-law is well established on this point. The
Supreme Administrative Court has held that, in accordance with a
general principle, the administrative authorities are not obliged to
revoke their unlawful decisions; this course is merely open to them -
where, moreover, such revocation takes place within a reasonable time
(which may not exceed five years, according to the Athens
Administrative Court of Appeal - judgment no. 1003/82, Armenopoulos 38,
p. 153) from the taking of the decision in issue (Supreme
Administrative Court, judgments nos. 2575/82 and 2586/82, Epitheorissi
Nomologias 1985, p. 502). Such an obligation would have the effect of
creating and prolonging unstable situations as there would be no
time-limit for challenges to unlawful administrative decisions (Athens
Administrative Court of Appeal, judgment no. 334/83, Epitheorissi
Nomologias 1983, p. 528).
34. Lastly, the authorities are not required to consider requests to
revoke their unlawful decisions (Supreme Administrative Court,
judgments nos. 4090/87, 4091/87 and 5352/87, Nomiko Vima no. 38,
p. 758). Administrative decisions, even unlawful ones, are deemed
valid and continue to take effect for as long as they are not
judicially revoked or quashed (Supreme Administrative Court, judgment
no. 1555/80, Nomiko Vima no. 30).
PROCEEDINGS BEFORE THE COMMISSION
35. The applicants applied to the Commission on 23 August 1987
(application no. 14726/89). They made two separate complaints.
The first of these concerned Ministerial Order no. 2544/84 of
30 March 1984 (see paragraph 7 above). The applicants complained that
no court had jurisdiction to determine the question whether the
conditions for making Athinaïki Khartopiia subject to the regime for
businesses in difficulties had been satisfied and, in particular,
whether the company really had large debts. They relied on Article 6
(art. 6) of the Convention.
The second complaint concerned the successive increases in the
company's capital and the acquisition of new shares by the OAE and the
National Bank of Greece (see paragraphs 13-16 above). The applicants
alleged that they had been dispossessed of their property and deprived
of an effective remedy before a national authority in order to complain
of the infringement of their right to the peaceful enjoyment of their
possessions. They relied on Article 1 of Protocol No. 1 (P1-1) and
Article 13 of the Convention taken together with Article 1 of
Protocol No. 1 (art. 13+P1-1).
36. On 20 May 1992 the Commission declared the first complaint
admissible, taking the view that it related to the Supreme
Administrative Court's judgment of 13 March 1987; the second complaint
it declared inadmissible. In its report of 17 January 1994
(Article 31) (art. 31), it expressed the opinion by ten votes to four
that there had been no breach of Article 6 para. 1 (art. 6-1) as the
first complaint lay outside its jurisdiction ratione temporis. The
full text of the Commission's opinion and of the three separate
opinions contained in the report is reproduced as an annex to this
judgment (1).
_______________
1. Note by the Registrar: for practical reasons this annex will appear
only with the printed version of the judgment (volume 318-A of
Series A of the Publications of the Court), but a copy of the
Commission's report is obtainable from the registry.
_______________
FINAL SUBMISSIONS TO THE COURT
37. In their memorial the Government asked the Court to reject
totally the application brought before it as inadmissible or
alternatively as unfounded on the merits.
38. The applicants asked the Court
(a) to hold that their rights under Article 6 (art. 6) of the
European Convention had been violated and to award fair
compensation of 180,000,000,000 drachmas; and
(b) to award them 15,000,000 drachmas in respect of costs and
expenses.
AS TO THE LAW
THE GOVERNMENT'S PRELIMINARY OBJECTIONS
39. The Government argued, as their main submission, as they had
before the Commission, that the applicants' complaint lay outside the
Court's jurisdiction ratione temporis because it related to facts that
had occurred before 20 November 1985, the date when Greece's acceptance
of the right of individual petition had taken effect. Greece's
declaration under Article 25 (art. 25) of the Convention provides:
"... the Government of Greece recognises, for the period
beginning on 20 November 1985 and ending on 19 November 1988, the
competence of the European Commission of Human Rights to receive
petitions addressed to the Secretary General of the Council of
Europe, [after 19 November 1985,] by any person, non-governmental
organisation or group of individuals claiming, in relation to any
act, decision, facts or events subsequent to this date, to be the
victim of a violation of the rights set forth in the Convention
and in the Additional Protocol (P1) ..."
40. The Commission agreed with the Government. In its view, it was
not the fact that Ministerial Order no. 2544/84 of 30 March 1984 had
determined civil rights of the applicants which posed a problem under
the Convention but the possible lack of any judicial remedy in respect
of the order that would have given them an opportunity to have their
rights established in full compliance with Article 6 (art. 6).
Referring to the Court's judgment in the case of Stamoulakatos v.
Greece (26 October 1993, Series A no. 271, p. 14, para. 33), it
considered that, as regards ascertaining whether the applicants had
available to them a judicial remedy in accordance with Article 6
(art. 6), account had to be taken of the situation at the time when
Ministerial Order no. 2544/84 was adopted, namely 30 March 1984 (see
paragraph 7 above).
41. A minority of five members, however, considered - as had the
Commission when examining the admissibility of the application - that
the applicants' complaint was directed not at the relevant ministerial
order as such but at the scope of the review carried out by the Supreme
Administrative Court in its judgment of 13 March 1987 (see
paragraph 9 above), that is to say after 20 November 1985. The
Commission should therefore have dealt with the merits of the case.
42. In their memorial to the Court the applicants claimed that the
Commission's reasoning conflicted with the Supreme Administrative
Court's judgments of 13 March and 3 April 1987 (see paragraphs 9 and
18 above). Ministerial Order no. 2544/84 had to be considered in the
light of subsequent orders whereby the interim board of directors had
managed to gain control of Athinaïki Khartopiia (see paragraphs 13-16
above). Although Order no. 2544/84 had been made before the critical
date of 19 November 1985, it had not become final in Greek law until
after that date, on 13 March 1987, when the Supreme Administrative
Court had refused their application for judicial review (see
paragraph 9 above).
Furthermore, in its judgment of 3 April 1987 the Supreme
Administrative Court had, they said, upheld the validity of Order
no. 153/86, the most detrimental decision in regard to them (see
paragraph 13 above), in reliance, inter alia, on its earlier
conclusions as to the lawfulness of Order no. 2544/84 (see
paragraph 9 above).
The two judgments of the Supreme Administrative Court had thereby
made any effective judicial review of the merits of the applicants'
complaints impossible and had thus deprived them of their right of
access to a court.
43. The Court points out that in their application to the Commission
the applicants made two separate complaints. One of them, based on a
breach of Article 6 (art. 6) of the Convention, related to Ministerial
Order no. 2544/84; the other, based on a breach of Article 1 of
Protocol No. 1 (P1-1) and of Article 13 of the Convention taken
together with Article 1 of Protocol No. 1 (art. 13+P1-1) (see paragraph
35 above), related to the subsequent orders whereby their company's
capital was successively increased and reduced.
In its admissibility decision of 20 May 1992, which defines the
scope of the case, the Commission declared the second complaint
inadmissible; it declared the first complaint admissible, expressing
the view that it was in reality directed against the Supreme
Administrative Court's judgment of 13 March 1987 (see paragraph 36
above).
44. Within the bounds thus laid down, the Court has jurisdiction to
consider the complaint referred to it and is not bound by the
Commission's interpretation of it (see, mutatis mutandis, the
Kamasinski v. Austria judgment of 19 December 1989, Series A no. 168,
p. 30, para. 59).
45. The Court shares the opinion of the majority of the Commission.
In their only complaint before the Court the applicants essentially
criticised the impossibility in Greek law of having Ministerial Order
no. 2544/84 reviewed by a judicial body with full jurisdiction. Even
supposing that this impossibility amounted to a breach of Article 6
(art. 6) of the Convention (the only provision (art. 6) on which this
complaint is based), the applicants would have become victims of it on
30 March 1984, when the order in issue was published in the Official
Gazette and thereby became binding. However, Greece had not by then
recognised the right of individual petition (see paragraph 39 above).
The facts possibly constituting a breach are therefore covered by the
time limitation in Greece's declaration of acceptance.
Despite its continuing effects, such a breach would only have
been momentary in regard to the applicants under Article 6 (art. 6).
Consequently, contrary to what they maintained, it was not the Supreme
Administrative Court's judgment of 13 March 1987 that deprived them of
their right of access to a court: it was Greece's legislation which did
not afford them such a right at the time when Ministerial Order
no. 2544/84 of 30 March 1984 was adopted. In duly carrying out its
review of lawfulness, the Supreme Administrative Court merely
highlighted the aforementioned impossibility. As to the Supreme
Administrative Court's subsequent judgments, which the applicants also
relied on, the Court will do no more than point out that they lie
outside the compass of the case before it.
In short, the objection is well-founded.
46. This conclusion makes it unnecessary to consider the Government's
other submissions.
FOR THESE REASONS, THE COURT UNANIMOUSLY
Holds that it cannot deal with the merits of the case.
Done in English and in French, and delivered at a public hearing
in the Human Rights Building, Strasbourg, on 8 June 1995.
Signed: Rolv RYSSDAL
President
Signed: Herbert PETZOLD
Registrar