CASE OF PROCEDO CAPITAL CORPORATION v. NORWAY
(Application no. 3338/05)
24 September 2009
This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.
In the case of Procedo Capital Corporation v. Norway,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
Sverre Erik Jebens,
George Nicolaou, judges,
and Søren Nielsen, Section Registrar,
Having deliberated in private on 3 September 2009,
Delivers the following judgment, which was adopted on the last mentioned date:
I. THE CIRCUMSTANCES OF THE CASE
A. Factual background to the case
B. Preparatory High Court decision regarding disjoinder of proceedings
C. Appointments of lay members by the High Court at the preparatory stage
D. Oral hearing before the High Court
The assistant lawyer for the respondent then continued his opening address and entered his pleas.
The Presiding Judge informed the parties that the Court intended to rule on the various procedural questions raised in the case the next day.
“During the appeal proceedings lay member [Mr A.], who is an economist, remembered a circumstance that he thought appropriate to mention to the other members of the bench and which was then passed on to the parties.
[Mr A.] is a partner in PricewaterhouseCoopers DA. At the time of writing this company is engaged in an assignment for ABG Sundal Collier Norge ASA (referred to hereafter as ABG Sundal Collier), the parent company of one of the parties in this case, Sundal Collier & Co ASA. In collaboration with a second company, First Securities ASA, ABG Sundal Collier has undertaken a consultancy assignment for a company seeking to be listed on the Oslo Stock Exchange. PricewaterhouseCoopers' assignment consists of providing certain auditing and accounting services in connection with the stock-exchange launch. The assignment was given last spring following a tendering competition and, according to the information provided, most of the work on the assignment is being performed by PricewaterhouseCoopers' Bergen office. [Mr A] has been entrusted with the task of providing advice in connection with the assignment and will thus be one of the people who will provide the services in question. In this context he has also had some direct contact with a representative of ABG Sundal Collier. According to the submitted documents, the fee for the assignment will be approximately NOK 300,000. The assignment has not yet been completed. The company seeking listing will ultimately be liable for payment to PricewaterhouseCoopers.
After [Mr A.] had explained the situation, the [applicant company] requested further information from the opposing party and the parties subsequently exchanged pleadings on the question of eligibility. At today's hearing Advocate Gade, acting for [the applicant company], filed an objection to the eligibility of lay member [Mr A.]. The parties were given the opportunity to comment on the question. [Mr A.] was not present in court during the submissions and decision on the question of his eligibility.
[The applicant company] argues that lay member [Mr A.] is disqualified pursuant to section 108 of the Administration of Courts Act. The company refers, among other things, to the information that PricewaterhouseCoopers has obtained approximately six per cent of the commissions carried out for ABG Sundal Collier during the last three years. A commission concerning a stock market introduction is very prestigious and is currently a rare occurrence. It is obvious that PricewaterhouseCoopers has considerable interest in obtaining this type and other kinds of assignments from ABG Sundal Collier, a main actor in this market. As a partner in PricewaterhouseCoopers, [Mr A.] has a direct financial interest in the company's income and future income potential. What is decisive is how this matter would appear to the public. The counter-action in the case concerns a considerable compensation claim against Sundal Collier & Co ASA. According to the information available, there is currently no activity in this company, and it is obvious that, for the purposes of the impartiality issue, this company ought to be identified with ABG Sundal Collier, which has continued the daughter company's activity. There is clearly too close a connection between [Mr A.] and the respondent for [Mr A.] to serve as a judge in the case. A further disqualifying circumstance is that [Mr E.] of ABG Sundal Collier is a central witness in the case with regard to the question whether [the applicant company's] representative during a meeting with Sundal Collier & Co ASA, attended by [Mr E.], made statements which could provide a basis for demanding confiscation of assets. It is untenable for [Mr A.] to assess whether the witness statement from a person with whom he has a relationship of continuous professional cooperation is valid.
At the preparatory stage [the applicant company] was particularly concerned about the need for any lay members appointed to have sufficient independence from the parties and in this connection the company pointed to the close business relations between the large companies in the financial sector. It should also be emphasised that the law firm of counsel for the respondent carried out commissions for ABG Sundal Collier in connection with the stock market introduction. ...
Sundal Collier & Co ASA claim that lay member [Mr A.] is not disqualified from taking part in the case. His connection to the respondent in the appeal is too loose. This is illustrated by the fact that it never occurred to [Mr A.] in the beginning that there could be a ground for disqualifying him. The assignment in question is very small and [Mr A.] does not play a central role in it. His role is primarily to provide advice to PricewaterhouseCoopers' office in Bergen, which is handling the consultancy. Bills and fees are addressed to ABG Sundal Collier and First Securities, but it is the company which is to be introduced on the stock market which will cover the costs. [Mr A.] does not have any daily or permanent dealing with the consultancy. This is a one-off consultancy consisting in objective accountancy considerations. [Mr A.] is not personally a contractual party and PricewaterhouseCoopers has no direct or indirect interest in the outcome of the court case. [Mr A.] will be removed from the consultancy. No one from counsel's law firm who is directly involved in the case has been aware of the matter. The law firm has no commission for ABG Sundal Collier in connection with the stock market introduction but only for the company whose introduction is being sought.
The Norwegian financial milieu is small and there are very few large accountancy firms that are able to take on such consultancies. A strict interpretation of section 108 of the Administration of Courts Act would lead to a very narrow choice of competent lay members in cases where particular competence in finance and accountancy is required. ...
The High Court is of the view that there is nothing to suggest that lay member [Mr A.] is not fully able to reach an impartial decision in the case, notwithstanding the contractual relationship between ABG Sundal Collier and PricewaterhouseCoopers. It is noted that [Mr A.] himself did not view this relationship as a problem, and it was not until the second week of the proceedings that it occurred to him that he should mention the relationship. This is not decisive, however, since the question of disqualification must be considered on the basis of a more general assessment of what relationship between a lay member and a party will be deemed unacceptable pursuant to section 108 of the Administration of Courts Act.
The High Court notes that objections to the eligibility of the lay member have been entered by [the applicant company] and the court refers to [the applicant company]'s submissions as cited above. Having considered the matter in its entirety, the Court is of the view that, in the light of the circumstances, lay member [Mr A.] should withdraw.
The decision is unanimous.
[Mr A.] is ordered to withdraw.”
“Having put the question to the parties of disjoining the proceedings as provided for in Article 98 § 2 of the Code of Civil Procedure, the Court unanimously decided with respect to the counter-action – item 2 of the [applicant company's] statement of claim – that the following two questions should be considered first:
1. Whether, in the light of the negotiating situation between the parties, Sundal Collier & Co ASA were in breach of their obligations in relation to [the applicant company], in other words whether there was an obligation for SCC not to apply for attachment in Norway, Sweden and/or Luxembourg.
2. Whether there exist other fault-based or strict grounds for liability in connection with the applications for attachment in Norway, Sweden and Luxembourg.
The decision means that for the time being the court will not review questions relating to a causal link in respect of the alleged losses or the question whether there should be imputation of liability between the [the applicant company] and the company Plentius.
After the proceedings had been completed in accordance with this decision, the High Court ruled, following deliberations, that a decision should be rendered in both the primary and the counter-action on the basis of the decision adopted.
“The disqualification of the lay member [Mr A.] did not disqualify the other judges and the need for expert evidence was safeguarded in the further proceedings.”
E. Judgment by the High Court and appeal by the applicant company
II. RELEVANT DOMESTIC LAW
“Nor may a person sit as a judge or juror if there are other particular circumstances which are liable to weaken confidence in his impartiality. This applies in particular if a party requests that he withdraws on this ground.”
“A party wishing to request that a person be excluded from taking part [in the proceedings] should do so as soon as he becomes aware of the matter which justifies the request.
He may no longer request exclusion pursuant to section 108 if he was aware of the particular circumstances but nonetheless proceeded to plead the case before the court.
The request may be submitted either orally or in writing and shall state the reasons relied on.
“Before the hearing of the particular case begins, the president of the court shall inform the jurors or lay members that they are excluded from serving if they fall within any of the situations referred to in sections 106 or 107, or if, for their part, such circumstances exist as referred to in section 108, and he shall call upon them and the parties to disclose the fact if this should be the case.”
“If any member of the court or jury is unable to attend after the main hearing has begun, the hearing may be continued without summoning a replacement provided that there is only one juror or lay member and only one judge less than the number normally required. Both in civil and criminal proceedings, a judge who, in accordance with section 12(1), may serve as the president of the court must always be present.
When the Court of Appeal is composed only of three professional judges, the proceedings may not be continued if any of them is unable to attend.”
“The court may join one or more cases for combined hearing and in such case for joint ruling when the hearing of the case may thus be facilitated or accelerated and when at least one of the parties is the same in all of the cases.
The court may decide that there shall be a separate hearing concerning one or more claims combined into a single case or concerning individual issues in dispute concerning the same claim.
The decision of the court in accordance with this section may not be challenged or appealed.”
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”
The Government disputed the applicant company's complaint and invited the Court to find that there had been no violation of the Convention in the instant case.
A. Preliminary issue regarding the scope of the case
B. Submissions of the parties
1. The applicant company's arguments
2. The Government's arguments
C. Assessment by the Court
FOR THESE REASONS, THE COURT UNANIMOUSLY
Holds that there has been no violation of Article 6 § 1 of the Convention.
Done in English, and notified in writing on 24 September 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos Rozakis