AS TO THE ADMISSIBILITY OF
by INVESTYLIA PUBLIC COMPANY LIMITED
The European Court of Human Rights (First Section), sitting on 17 Septembre 2009 as a Chamber composed of:
Sverre Erik Jebens,
George Nicolaou, judges,
and André Wampach, Deputy Section Registrar,
Having regard to the above application lodged on 16 June 2005,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
The applicant, Investylia Public Company Ltd, is a company incorporated under Cypriot law with its registered office in Larnaca. It was represented before the Court by Ms L. Stylianou, a lawyer practising in Nicosia. The Cypriot Government (“the Government”) were represented by their Agent, Mr P. Clerides, Attorney-General of the Republic of Cyprus.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
1. Background to the case
In January 2000 the applicant company was registered as a public company.
During the same month an investor company (Livadhiotis Bros Investments Ltd) made an offer to the applicant company to purchase 20 founder’s shares and 20,000 ordinary shares, at 0.5 Cypriot pounds (CYP) each; the total value amounting to CYP 12,020. The offer was accepted by the applicant company and the investor company made an advance payment of CYP 1,200.
In March 2000 the applicant company declared a public offer of the shares.
On 7 April 2000 Law 42(I)/2000 came into force, amending the Securities and Cyprus Stock Exchange Law of 1993 (Law 14(I)/1993).
In May 2000 the investor company paid the remaining sum of CYP 10,820 to the applicant company.
In June 2000 the shares were transferred to the investor company.
On 14 June 2000 the applicant submitted an application to introduce the share titles on the Cyprus Stock Exchange.
The application was rejected by the Cyprus Stock Exchange Council.
On 16 February 2001 Law 42(I)/2000 was amended by Law 9(I)/2001. Section 58A of Law 42(I)/2000 was abolished and replaced.
On 12 May 2001 the investor company requested reimbursement of the sum paid for the purchase of the shares plus interest, as the share titles had not been introduced on the Stock Exchange.
The applicant company was granted an extension by the Cyprus Stock Exchange for the return of the money. This extension covered the period from 28 September 2000 until 20 February 2002.
2. First-instance proceedings before the Larnaca District Court
On 11 September 2001 the investor company (“plaintiff”) brought civil proceedings against the applicant company (action no. 2780/01) before the District Court of Larnaca claiming the return of the sum of CYP 12,020 paid to the applicant company for the purchase of the shares. The claim was based on sections 58 A (3) (b) of the Securities and Cyprus Stock Exchange Law of 1993 as amended by Law 42(I)/2000 and, alternatively, on section 3 (3) of the latter law.
The applicant company alleged, inter alia, that the relevant law did not provide the plaintiff with the right to request reimbursement of the sums paid, nor did it require the applicant company to return this money. The applicant company also raised the question of the constitutionality of the applicable law, referring to Articles 23, 25 (1) and 26 (1) of the Constitution and the case of Lapertas Fisheries Ltd v. the Police (Criminal Appeals 7279 and 7289, judgment of 9 July 2002) in which the Supreme Court had found that section 3 (1) of Law 42 (1)/ 2000 contravened the Constitution.
On 30 July 2003 the Larnaca District Court issued its judgment. The court observed that the first part of the sum had been paid by the plaintiff in January 2000, that is before the entry into force of Law 42(I)/2000, whereas the rest of the sum had been paid afterwards, in May 2000. The court found that in the light of sections 58A (3) (b) and 3 (3) the plaintiff had an actionable right which commenced after the lapse of three months from the date of the submission of an application for the introduction of the relevant titles on the Stock Exchange or earlier in the event of rejection of the application. In such an event the issuer or company or person who received the sum had to return it to the purchaser within ten days of the date when the purchaser asked for it. Law 9(I)/2001 did not affect rights and obligations which had been created before its entry into force.
Following the three-month period the applicant company had been granted an extension by the Stock Exchange for the return of the money. This extension was still in force both when the plaintiff requested the return of the shares (12 May 2001) and when the plaintiff brought the civil proceedings (11 September 2001). Therefore, in so far as the sum of CYP 1,200 was concerned, which was claimed on the basis of section 3 (3) of Law 42(I)/2000, this claim was premature in view of the extension given to the applicant company by the Stock Exchange.
The court then went on to examine the applicant company’s claim regarding constitutionality. In this respect it firstly held, inter alia, that Article 23 of the Constitution, providing for the protection of the right to property, was not relevant to the contested legislative provisions. In considering the applicant company’s complaint as to the constitutionality of the provisions in question in relation to Articles 25 and 26 of the Constitution protecting the freedom to conduct business and the freedom to contract respectively, the court observed that such an issue could not be examined in abstracto but only in relation to the circumstances of a given case. Although the applicant company claimed that the law interfered with an agreement between the parties that had come into effect, the facts put before the court did not support this claim. First of all, it could not be ascertained when the agreement had been reached. Secondly, the court was not aware of the contents of the agreement, and in particular whether the agreement contained conditions as to the rights and obligations of the parties in the event that the share titles were not introduced on the Stock Exchange. It could not therefore be ascertained whether the sections of the law in question affected and/or interfered with the specific agreement in any way. Consequently, the court held that it could not, on the basis of the facts before it, examine the issue of constitutionality raised before it.
Furthermore, the court held that the case of Lapertas Fisheries Ltd v. the Police (cited above) relied on by the applicant was not applicable. In this respect it noted that in that case the Supreme Court had examined the constitutionality of sections 3 (1) and (2) of Law 42(I)/2000 in relation to Article 25 of the Constitution. Section 3 (1) imposed an obligation on the company to submit a (duly completed and well-founded) application for the introduction of titles on the Stock Exchange within two months, or alternatively on another date but not more than eight months following the date of entry into force of the applicable law. The Supreme Court found that section 3 (1) was unconstitutional as it deprived the appellant company [in that case] of the capability of acting in the way which it considered promoted the financial interests of the company and those of its members. It rendered criminal the freedom of the appellant company to regulate its financial relations and the free financial operation of the business so that it could operate profitably.
The court pointed out that in the present case the plaintiff was not seeking to interfere with the activities of the applicant company but had requested reimbursement of the sums it had paid for the purchase of the shares, with the prospect that the share titles would be introduced on the Stock Exchange, a right which had been implicitly, if not directly, recognised by the Supreme Court in the case of Lapertas, where the following was stated:
“The complainant-investors have contracted freely and of their own accord with the appellants. The Cyprus legal framework contains provisions which protect the rights of the investor. For a possible violation of rights which emanate from the relationship which they created with the appellants, they may resort to the remedies provided by the Civil Law.”
Accordingly, the court found in favour of the plaintiff and awarded it the sum of CYP 10,820 with 6% interest from 14 June 2000, the date of the submission of the application to introduce the share titles on to the Stock Exchange, until payment. Costs were awarded against the applicant company.
3. Appeal proceedings before the Supreme Court
On 31 July 2003 the applicant company lodged an appeal with the Supreme Court (appeal no. 11802). The applicant company had eighteen grounds of appeal. It raised, inter alia, the compatibility of the legal provisions in question with Articles 21, 23, 25 and 26 of the Constitution (see below), Articles 11 and 14 of the Convention and Article 1 of Protocol No. 1. In the context particularly of Article 25, the applicant company, in its written submission to the court, alleged that it had made known to prospective purchasers that it did not meet one of the basic requirements for admission to the Stock Exchange.
However, during the hearing of the appeal, the applicant company restricted its grounds of appeal to two points. Firstly, that the respondents did not have an actionable right on the basis of the relevant provisions and secondly that these provisions were unconstitutional because they contravened Article 23 of the Constitution, which protected the right to property. The applicant company’s complaint of unconstitutionality was therefore limited to the above Constitutional provision. In this respect, the applicant relied on the Supreme Court’s judgment in the case of Charalambos Markides v. Cyber Group Ltd (Criminal Appeal no. 7730, judgment of 7 February 2005) in which the Supreme Court had found that the Law on the Return of Money to Investors (Law 168(I)/2000) contravened Article 23 of the Constitution.
On 26 May 2005 the Supreme Court upheld the first-instance judgment and dismissed the appeal. With regard to the question of constitutionality the court noted that the case of Charalambos Markides (cited above) relied on by the applicant was distinguishable from the present case. The court noted that the above decision of the Supreme Court concerned a criminal case in which the provisions of section 3 of Law 168(I)/2000 were examined. This law criminalised a specific omission by a person, which arose from the operation of a private agreement, that is to say in the domain of civil law. The court pointed out that the issue which arose in the present appeal was covered fully by the decision of the Supreme Court in the case of Harvest Capital Management Ltd v. Georgiou Tamasiou (Civil Appeal 11192, judgment of 26 November) where the provisions of section 3(3) of Law 42(1)/2000, which were in essence identical to the contested provision, namely section 58A (3) (b), were discussed extensively. In that case the Supreme Court decided that the provisions of the relevant section were constitutional. The Supreme Court decided that the same was applicable to the provisions of section 58A (3) (b). In particular, the court noted that legislative provisions and regulations which had the object of protecting the public interest and social and financial interests as well as those of the public and citizens, were permissible. The Supreme Court went on to cite the essential parts of the above judgment:
“We consider that in the present case too what has been done by the legislation in issue is the regulation of the relations between the contracting parties thus excluding the application of the provisions of Article 23 (of the Constitution). Even if in any case it could be said, if this article was applicable, that the provisions of section 3 (3) were put there for the protection of the rights of third parties, as permitted by paragraph 3 of the above article of the Constitution.
In any case, as has also been stated in Chimonides (above), legislative provisions and regulations are permissible which have the object of protecting the public interest, the social and financial interests as well as the protection of the public and the citizens. The same section provides for the prevention of exploitation by persons who have peculiar financial power, something which in our view would be completely applicable to our case, where learned counsel for the appellant himself in his oral address before us referred extensively to the problems and situations created by the introduction of companies on to the Cyprus Stock Exchange. In any case, however, in the case of the Supreme Court of the USA Home Building and Loan Association v. John H. Blaisdell (1933) 290 U.S. 398, at page 434, it was said that the State also continues to have the power to secure the vital interests of its people. It does not matter if appropriate legislation which serves this purpose has the consequence of amending or annulling agreements already in force (see Stephenson v. Binford, 287 U.S. 251, 276).”
B. Relevant domestic law and practice
1. Relevant provisions of the Securities and Cyprus
Law of 1993 (as amended) and relevant case-law
Section 58A (3) (b) of the Securities and Cyprus Stock Exchange Law (Law 14(I)/1993) as amended by Law 42(I)/2000 which entered into force on 7 April 2000 provides as follows:
“Any interested purchaser who has paid any sum or other consideration to an issuer, a company or a person for the purchase of shares either in accordance with the provisions of sub-section (1) above or otherwise, may after three months have elapsed from the date of the submission of an application for the introduction of the relevant titles on the Stock Exchange, or earlier in the event of rejection of the application, apply in writing for the return of the sum or consideration if the relevant titles have not been given to him or the relevant titles have been given to him but they have not as yet been introduced on the Stock Exchange. In such an event the issuer or company or person who received the sum or consideration must return it to the interested purchaser within ten days of the date when the interested purchaser asked for the return of the sum or consideration, with 6% interest calculated from the date when the application for the introduction of the said titles on the Stock Exchange was made, and must return the relevant titles if they have been issued and given to the interested purchaser:
Provided that, notwithstanding the provisions of sub-section (2), the Council may bar an issuer or company which contravenes the provisions of this section from introducing titles on the Stock Exchange.”
On 16 February 2001 Law 42(I)/2000 was amended by Law 9(I)/2001. Section 58A of Law 42(I)/2000 was abolished and replaced. However, the provisions of Law 42(I)/2000 continued to be applied to rights and obligations that arose before Law 9(I)/2001 came into force.
Sections 3 (1), (2) and (3) of Law 42(I)/2000 provide as follows:
“3 (1) Any issuer, company, member of the board of a company or person who has received or has bound any sum or has received any consideration for the sale or offer for sale or acceptance of an offer for the purchase of titles on their behalf or on behalf of any company incorporated or being incorporated before the entry into force of the Securities and Cyprus Stock Exchange (Amending) (No. 4) Law of 2000, with the prospect and/or representations that the said titles would be introduced on the Stock Exchange, shall within two months or within any other period which will be decided by two-thirds of the interested purchasers and which shall not in any case exceed eight months from the date of entry into force of the Securities and Cyprus Stock Exchange (Amending) (No. 4) Law of 2000 take all the necessary actions for the submission of a duly substantiated and documented application (in accordance with the present Law and the Regulations issued thereunder) for the introduction of the relevant titles on to the Stock Exchange.
(2) Failure by an issuer, company, member of the board of a company or any person to act in accordance with the provisions of sub-section (1) above is a criminal offence punishable by imprisonment of up to two years or a fine of up to fifty thousand pounds and/or with both these penalties and entails the compulsory return of any sum or consideration received or the release of any bound sum, with interest of 6% to be paid to the interested purchaser with the return at the same time of the relevant titles if they have been issued and given to the interested purchaser.
(3) Any issuer, company, member of the board of a company or person who has received any sum or any consideration from the sale or offer for sale or acceptance of an offer for the purchase of titles on behalf of any company incorporated or being incorporated before the entry into force of the Securities and Cyprus Stock Exchange (Amending) (No. 4) Law of 2000, with the prospect or representations that the said titles would be introduced on the Stock Exchange, shall, if the relevant titles are not introduced for any reason on the Stock Exchange within three months of the date of the submission of the application for their introduction on the Stock Exchange, or earlier in the event of rejection of the application, and if the interested purchaser asks for it in writing, return the sums or considerations to those who had paid them within ten days of the date when the interested purchaser asked for them, which he had paid with 6% interest calculated from the date of the submission of the application, at the same time as the return of the relevant titles:
Provided that, if the Council ascertains that the application under consideration is duly and sufficiently substantiated and documented in accordance with the Stock Exchange Regulations and that there is no prima facie substantial obstacle to the approval of the application and that the delay in approving the application is not due to the applicant, it may grant a reasonable extension of time to the applicant with regard to the return of the sums received.”
Section 3 (1) above imposes an obligation on any “issuer, company, member of the board of a company or person” to submit an application for the introduction of shares on to the Stock Exchange within two months or within any other period which will be decided by two-thirds of the interested purchasers and which shall not in any case exceed eight months from the date of entry into force of the amending Law 42(Ι)/2000. Failure to submit such an application is a criminal offence. In the case of Lapertas Fisheries Ltd v. the Police (cited above) the Supreme Court found that the penalisation of the failure to submit an application to introduce titles on to the Stock Exchange within a fixed time-limit, and in an absolute manner, was an impermissible interference with the right protected by Article 25 (1) of the Constitution and nullified the freedom which that provision guaranteed. It accordingly held that section 3 (1) was unconstitutional.
In the case of Charalambos Markides (cited above) the Supreme Court found that section 3 of the Return of Money to Investors Law (Law 168(I)/2000) was unconstitutional. This case was a criminal case and the law in question criminalised a specific failure by a person which had risen from the operation of a private agreement, that is to say in the domain of civil law. In that case the Supreme Court held the following:
“A purchaser has bought shares from an issuer on the condition that the latter would introduce them on the Stock Exchange, and this has not happened, then, if the procedure provided by section 3(1) of the law is followed, he is entitled to ask for the return of the money or the consideration which he gave for the purchase of the shares. If the issuer does not return to the purchaser the money or the consideration he gave, then he commits a criminal offence as provided in section 5 of the law, and if convicted is liable to imprisonment of up to five years or to a fine of up to £50,000.
Our thoughts and judgment follow. As to the amount or any consideration given by a purchaser of shares to the issuer, who both issues and hands over the shares to him, that amount and any other consideration come into the absolute ownership of the issuer just as the shares come into the ownership of the purchaser. The use by the law of the term “returns” is without true legal substance. It does not correspond to the legal truth. What the law essentially provides is the compulsion of the issuer, by the likelihood of prosecution and conviction, to deliver to the purchaser, and the registered owner of the shares, part of his property. This is constitutionally impermissible, because it compels the issuer to alienate part of his property, otherwise he will face the consequences which the law provides.
The decision of our Supreme Court in Harvest Capital Management Ltd v. Georgiou Tamasiou (2003) 1 CLR 1683 has no relation to the legal treatment that this criminal appeal ought to have. In that case it was decided that the legislative provision (section 3(3) of Law 42(1) 2000) constituted a regulation of contractual relations and for this reason it did not violate Article 26 of the Constitution.
Of assistance in the present case is the decision in Criminal Appeals 7279 and 7280 Lapertas Fisheries Ltd. v. Police, 9.7.02, a decision which was upheld by the Full Bench in recourses 79/02 and others Demetris Pitsillides and others v. the Cyprus Securities and Exchange Commission, 19.1.04. We observe, however, that in both the above two cases the Court discussed whether the law violated Article 25 of the Constitution, given the suggestion that the legislative provision was necessary for the reasons contained in paragraph 2 of the Article of the Constitution. The law in issue, examined in this case, as we said above, and for the reasons we have explained, abolishes in toto the fundamental right secured by Article 23 of the Constitution.
We will not deal with anything else, which results from the good work done collectively by the advocates in the case. The law in issue, the Return of Money to Investors Law of 2002, 168(1) is held to be unconstitutional.”
2. Additional relevant provisions of the Constitution
Article 21 –The right to freedom of peaceful assembly
Article 21 of the Constitution provides as follows, in so far as relevant:
“1. Every person has the right to freedom of peaceful assembly.
2. Every person has the right to freedom of association with others, including the right to form and to join trade unions for the protection of his interests. Notwithstanding any restriction under paragraph 3 of this Article, no person shall be compelled to join any association or to continue to be a member thereof.
3. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are absolutely necessary only in the ‘interests of the security of the Republic or the constitutional order or the public safety or the public order or the public health or the public morals or for the protection of the rights and liberties guaranteed by this Constitution to any person, whether or not such person participates in such assembly or is a member of such association.
6. Subject to the provisions of any law regulating the establishment or incorporation, membership (including rights and obligations of members), management and administration, and winding up and dissolution, the provisions of this Article shall also apply to the formation of companies, societies and other associations functioning for profit.”
Article 23 - The right to property
Article 23 of the Constitution provides as follows, in so far as relevant:
“1. Every person, alone or jointly with others, has the right to acquire, own, possess, enjoy or dispose of any movable or immovable property and has the right to respect for such right.
2. No deprivation or restriction or limitation of any such right shall be made except as provided in this Article.”
Article 25 - The right to work
Article 25 of the Constitution provides as follows, in so far as relevant:
“1. Every person has the right to practise any profession or to carry on any occupation, trade or business.”
Article 26 - The right to contract freely
Article 26 of the Constitution provides as follows, in so far as relevant:
1. Every person has the right to enter freely into any contract subject to such conditions, limitations or restrictions as are laid down by the general principles of the law of contract. A law shall provide for the prevention of exploitation by persons who are commanding economic power.
A. The applicant’s complaints under Article 1 of Protocol No. 1 and Article 13 of the Convention
1. The applicant company complained under Article 1 of Protocol No. 1 that the judgment of the District Court, ordering it to return the original value of the shares plus interest to the shareholder, constituted an unlawful interference with the peaceful enjoyment of its assets. The above provision reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
1. The parties’ submissions
(a) The Government
The Government firstly noted that the date of the agreement for the purchase of the shares in question from the applicant company was not referred to in the court proceedings or in the related pleadings and did not form part of the evidence before the District Court.
The Government further maintained that there had not been an interference with the peaceful enjoyment of the applicant’s possessions within the meaning of Article 1 of Protocol No. 1. In any event, the law applied by the domestic courts requiring the applicant company to return the amount invested in its shares was aimed at regulating contractual relations between contracting parties and therefore any interference with the applicant’s rights was justified in the general interest. The Government referred to the Supreme Court’s judgment of 26 May 2005 and endorsed its findings in this respect. It further pointed to the distinctions made in that judgment between the present case and other cases invoked in the domestic proceedings. In this connection, the Government noted that the Court, in accordance with its case-law, did not intervene with the findings of the domestic courts and their interpretation and application of domestic law unless it was established that the courts had acted in an arbitrary manner.
(b) The applicant company
The applicant company submitted that it was the legal owner of the money it had received as payment for the shares. There had therefore been an interference with its property rights under Article 1 of Protocol No. 1 when it had been required by virtue of the domestic courts’ decisions to return the money in question to the purchaser. This interference however had not been in accordance with the law applicable at the time the applicant company had made its public offer. In its opinion the agreement for the purchase of the shares had been concluded on 5 April 2000 by the letter of allotment sent by the applicant company to the plaintiff and thus prior to the entry into force of Law 42(I)/2000. The sums had been acquired and invested prior to the enactment of that law. In this respect, it submitted that there had not been a contractual agreement between the applicant company and any of its shareholders that it would introduce the share titles on the Cyprus Stock Exchange within a three-month period or in fact within any other period. However, when Law 42(I)/2000 entered into force it was applied retroactively and in the light of section 3 (1) of that law it had been obliged to make an application for the introduction of share titles on the Stock Exchange.
Furthermore, the applicant company claimed that Law 42(I)/2000 was not aimed at the furtherance of any public interest. Not only was this not provided in the law itself but its provisions only affected a small group of persons who had invested in public companies. In any event, in the applicant company’s view no fair balance had been struck between the alleged general interest and its rights. The applicant company had been forced to return the sum in question irrespective of whether it had the financial resources or liquidity to do so, the implications for its property rights, the value of the shares, and the effects this could have on the conduct of its business. The law was therefore arbitrary and the Supreme Court should not have therefore confined the applicability of its findings in the case of Charalambos Markides to criminal cases.
2. The Court’s assessment
The Court notes that the applicant company’s complaint, as formulated in the application form, is directed against the order of the District Court requiring it to return the second part of the sum paid to it in respect of the shares plus interest. The function of the domestic courts in disputes between private parties is to determine the nature and extent of their mutual duties and obligations, with the inevitable consequence that one party may ultimately be unsuccessful in the litigation in question (see, amongst a number of authorities, Nerva and Others v. the United Kingdom, no. 42295/98, § 43, ECHR 2002 VIII; Kuchar and Stis v. the Czech Republic (dec.), no. 37527/97, 21 October 1998; Ruiz Mateos v. the United Kingdom (dec.) no. 13021/87, 8 September 1988 and Bramelid and Malmström v. Sweden nos. 8588/79 and 8589/79, Commission decision of 12 October 1982, Decisions and Reports (DR) 29, p. 64). The Court has no general competence to substitute its own assessment of facts or application of the law for that of the national courts.
In the present case, the applicant company was fully able to present its case. Both the District Court’s judgment and the Supreme Court’s judgment are fully and well reasoned. Nothing in the case file indicates that these decisions were arbitrary or that the proceedings were otherwise unfair. The fact that the domestic judicial authorities provided a forum for the determination of a private-law dispute between the applicant and the State, in which the applicant was unsuccessful, does not give rise to an interference by the State with property rights under Article 1 of Protocol No. 1 to the Convention.
To the extent, however, that the applicant company’s complaint can be taken to concern the applicable legislative framework as such and its effect on its rights under Article 1 Protocol No. 1, the Court finds no appearance of a violation of this provision. Even assuming it can be said that the applicant company had a possession within the meaning of Article 1 of Protocol No. 1 and that the order by the District Court on the basis of the law to reimburse the sums paid amounted to an interference with the applicant company’s right to peaceful enjoyment of its possessions, the following should be noted: the Court is satisfied that in the circumstances of the case the deprivation was in accordance with the law which was found by the District Court to be applicable in the present case on the basis of the evidence submitted to it.
Moreover, the Court has no reason to doubt that the interference was “in the public interest”. The Supreme Court found that the legislative provisions and regulations had the object of protecting the public interest and social and financial interests as well as the public and the citizens in situations created by the introduction of companies on the Cyprus Stock Exchange. Lastly, the Court considers that the requisite fair balance was struck between the demands of the general interest and the requirements of the protection of the applicant company’s rights. In this respect, it observes that the applicant company was only required to return the money it received as consideration for the purchase of the share titles plus the interest it had gained on that capital in the meantime, as it had not succeeded in introducing the titles on to the Stock Exchange. The applicant company had been granted an extension by the Stock Exchange for the reimbursement of part of the sum. The arguments raised by the applicant company do not provide any support for its contention that a disproportionate and excessive burden was imposed on it. Lastly, the Court considers that retroactivity in the circumstances of the present case could not be contrary to the Convention as it was claimed by the applicant. In particular, the applicability of legislation to pending proceedings does not necessarily in itself upset the requisite fair balance, since the legislature is not in principle precluded in civil matters from intervening to alter the current legal position through a statute which is immediately applicable (see Draon v. France [GC], no. 1513/03, § 81, 6 October 2005).
In view of the above, the Court finds that the applicant company’s complaint under this provision is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected pursuant to Article 35 § 4 of the Convention.
Article 13 reads as follows:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
1. The parties’ submissions
(a) The Government
The Government submitted that there was a domestic remedy for the applicant’s complaints and, in fact, the applicant company had used this remedy; it had had recourse to the domestic courts that had examined its arguments. In this respect, they pointed out that, on appeal, the Supreme Court had dealt extensively with the arguments concerning this complaint. The fact that the applicant was unsuccessful did not affect the existence of an effective domestic remedy as required by Article 13 of the Convention.
(b) The applicant company
The applicant company contested the Government’s submissions and alleged that the Supreme Court could not be considered an effective remedy. In this connection, it argued that since the inter-communal problems in 1963 and the merging of the High Court and the Constitutional Court into one court, namely the Supreme Court, all appeals in all cases were dealt by the Supreme Court. Consequently the same judges ruled on both the legal and the constitutional aspects of a given case. Furthermore, there was no third judicial instance in Cyprus before which it could complain about the Supreme Court’s errors.
2. The Court’s assessment
The Court reiterates that Article 13 of the Convention applies only where an individual has “an arguable claim” to be the victim of a violation of a Convention right (see Boyle and Rice v. the United Kingdom, 27 April 1988, § 52, Series A no. 131; Voyager Limited v. Turkey (dec.), no. 35045/97, 4 September 2001; and Ivison v. the United Kingdom (dec.), no. 39030/97, 16 April 2002). The Court notes that it has rejected the applicant’s complaint under Article 1 of Protocol No. 1 as manifestly ill-founded. Against this background, the Court does not consider that the applicant has an “arguable claim” for the purposes of Article 13 of the Convention, and the latter provision is therefore inapplicable in the present case (see Ellersiek v. Germany (dec.), no. 77151/01, 23 June 2005).
Accordingly, this complaint is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
B. The applicant company’s remaining complaints
The applicant company complained under Articles 6, 11, 13 and 14 of the Convention and under a number of provisions of the Second Council Law Directive 77/91/EEC.
As regards the applicant company’s complaint under 6 § 1 of the Convention concerning the examination of its case by the Supreme Court, the Court notes that the applicant company had relied on eighteen grounds of appeal before the Supreme Court. However, during the hearing of the appeal it limited these grounds to two issues, namely that the respondent company did not have an actionable right on the basis of the provisions, and secondly that the provisions of the section in question were unconstitutional because they contravened Article 23 of the Constitution. It was for this reason that the Supreme Court did not consider the applicant company’s other complaints and its examination of the case was confined to the aforementioned issues.
This complaint therefore under this provision is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected pursuant to Article 35 § 4 of the Convention.
Similarly, the Court observes that although the applicant company raised its complaints under Articles 11 and 14 of the Convention before the Supreme Court in its grounds of appeal, these were not covered by the two points to which it restricted its appeal during the hearing. The Supreme Court therefore never ruled on these complaints. The Court reiterates in this respect that if a complaint presented before the Court has not been put, either explicitly or in substance, to the national courts when it could have been raised in the exercise of a remedy available to the applicant, the national legal order has been denied the opportunity to address the Convention issue which the rule on exhaustion of domestic remedies is intended to give it (see, for example, Azinas v. Cyprus [GC], no. 56679/00, § 38, ECHR 2004 III).
It follows that the applicant company has failed to exhaust domestic remedies in respect of this complaint as required by Article 35 § 1 of the Convention, and that this part of the application must be rejected pursuant to Article 35 § 4 of the Convention.
In so far as the applicant company complains that the provisions of the Second Company Law Directive 77/91/EEC have been breached, the Court reiterates that it has no jurisdiction to ensure compliance with instruments other than the European Convention on Human Rights and its Protocols.
This complaint therefore is incompatible ratione materiae with the Convention.
Lastly, to the extent that the applicant company invokes Article 13 in conjunction with the rest of its complaints, the Court notes that it has also found them all to be inadmissible and therefore not arguable within the meaning of its case-law. This complaint is accordingly manifestly ill-founded within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Wampach Nina Vajić
Deputy Registrar President