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PEKARNY A CUKRARNY KLATOVY, A.S. - 12266/07 [2012] ECHR 37 (12 January 2012)
URL: http://www.bailii.org/eu/cases/ECHR/2012/37.html
Cite as:
[2012] ECHR 37
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FIFTH
SECTION
CASE OF PEKÁRNY A CUKRÁRNY KLATOVY, A.S.
v. THE
CZECH REPUBLIC
(Applications
nos. 12266/07, 40059/07, 36038/09 and 47155/09)
JUDGMENT
STRASBOURG
12
January 2012
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 Pekárny a
cukrárny Klatovy, a.s. v. the Czech Republic,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Dean Spielmann,
President,
Elisabet Fura,
Karel
Jungwiert,
Boštjan M. Zupančič,
Mark
Villiger,
Ganna Yudkivska,
Angelika Nußberger,
judges,
and Claudia Westerdiek,
Section Registrar,
Having
deliberated in private on 29 November 2011,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in four applications (nos. 12266/07, 40059/07,
36038/09 and 47155/09) against the Czech Republic lodged with the
Court under Article 34 of the Convention for the Protection of Human
Rights and Fundamental Freedoms (“the Convention”) by
Pekárny a cukrárny Klatovy a.s. (“the applicant
company”) on 16 March 2007, 5 September 2007, 25 June
2009, and 28 August 2009 respectively.
The
applicant company was represented by Mr J. Skácel and
Mr P. Zima, lawyers practising in Prague. The Czech
Government (“the Government”) were represented by their
Agent, Mr V. A. Schorm, and Deputy Agent, Mr J. Kmec, of the Ministry
of Justice.
The
applicant company alleged, in particular, violations of its right to
property under Article 1 of Protocol No. 1 to the Convention and to a
fair trial under Article 6 of the Convention.
On
30 August 2010 the President of the Fifth Section decided to give
notice of the applications to the Government. It was also decided to
rule on the admissibility and merits of the applications at the same
time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
On
11 July 2005 company P. instituted proceedings against Mr Karel
BlaZek claiming to be the true owner of shares held by him
constituting a ninety percent share of the applicant company. Mr
Karel BlaZek is the chair of the board of directors of the applicant
company and signed the powers of attorney accompanying the present
applications. These proceedings (“share surrender proceedings”)
are pending.
During
these proceedings company P. asked the courts to order interim
measures to prohibit the applicant company from holding scheduled
general meetings. It argued that a general meeting would have
irreversible negative effects on its rights, such as the payout of
the company’s dividends amounting to approximately 40,000,000
Czech korunas (CZK) (approximately 1,667,000 euros (EUR)), and
control being gained over the company through personnel changes in
the board of directors. Such effects should be seen in the context of
the existing situation where the ownership or holding of shares and
the attached entitlement to exercise voting rights was controversial,
or, rather, where a person other than the owner had the majority of
shares at his unauthorised disposal.
The
applicant company runs a bakery business in several cities in
south-west Bohemia. Between 2006 and 2009 it generated annual profits
of between CZK 19,000,000 and 34,000,000 (EUR 790,000 and 1,420,000).
A. Application no. 12266/07
On
1 November 2005 the Prague Municipal Court (městský
soud) granted an interim measure and, without any reasoning,
prohibited the applicant company from convening its general meeting
scheduled for 9 November 2005. On 20 December 2006 and 21
February 2007 respectively, it ordered the same interim measures
regarding general meetings scheduled for 15 January 2007 and 5 March
2007, respectively. Only the last decision was reasoned: the court
stated that the aim of the interim measure was to preclude the
adoption of fundamental decisions concerning the applicant company
without the claimant, who claimed to be a majority shareholder, being
able to influence those decisions.
The
applicant company appealed against the original interim measure
arguing that it was not a party to the main proceedings but that the
court had nevertheless imposed obligations on it which had a negative
effect on its business, that it had learnt about the interim measure
only after it had been ordered, and that the decision had lacked any
reasoning.
On
10 May 2006 the Prague High Court (vrchní soud) upheld
the interim measure. It held that according to the law, decisions on
interim measures did not need to be reasoned if the defendant had not
raised any arguments against it, as in the present case. It further
held that all the legal conditions for ordering the measure had been
satisfied. Lastly, it opined that the law allowed for an interim
measure to impose obligations on third parties under exceptional
circumstances. This condition, the court held, had been satisfied in
the present case, because the defendant controlled the applicant
company and the general meeting could have had serious negative and
irreversible effects on the claimant’s rights.
On
19 September 2006 the Constitutional Court (Ústavní
soud) dismissed the applicant company’s constitutional
appeal holding that constitutional appeals against interim measures
were not allowed.
B. Application no. 40059/07
On
16 June 2006 the Municipal Court, upon company P.’s request,
granted another interim measure prohibiting the applicant company
from convening another general meeting scheduled for 30 June 2006. It
held that all the legal requirements for ordering the interim measure
had been satisfied, including the existence of a danger of serious
harm to the claimant’s interests.
On
27 July 2006 the High Court, upon the applicant company’s
appeal in which it argued that the interim measure would be
detrimental to its business and that the legal conditions for
ordering it had not been met, upheld the decision of the Municipal
Court noting that the applicant company was not being hindered in the
ordinary day-to-day running of its business and that had the proposed
agenda of the general meeting contained only issues not able to
negatively affect company P.’s rights, such as only approving
statements reports, there would have been no need to order the
interim measure.
On
27 March 2007 the Constitutional Court dismissed the applicant
company’s constitutional appeal holding that that remedy was
not allowed against interim measures.
C. Application no. 36038/09
On
19 January 2009 the Municipal Court granted a new interim measure and
prohibited, without any reasoning, the applicant company from
convening the general meeting scheduled for 30 January 2009.
On
an unspecified date before 30 January 2009, the applicant company
appealed, arguing that it was not a party to the main proceedings but
the court had nevertheless imposed obligations on it which had
a negative effect on its business, that the decision on the
interim measure had not been reasoned and that the legal conditions
for ordering the interim measure had not been met.
On
5 February 2009 the High Court dismissed the applicant company’s
appeal as inadmissible under Article 218 of the Code of Civil
Procedure holding that since the interim measure had already lost
effect (because it prohibited a meeting scheduled for 30 January
2009), any review of the measure would be immaterial. The court added
that even assuming that the appeal had been admissible it would have
upheld the decision of the Municipal Court.
The
applicant company lodged a constitutional appeal, which remains
undecided.
D. Application no. 47155/09
On
10 March 2009 the Municipal Court granted another interim measure
prohibiting the applicant company from convening two general meetings
scheduled for 13 and 16 March 2009. The decision was not reasoned. On
5 May 2009 it further prohibited the company from convening general
meetings scheduled for 11 and 18 May 2009. This decision was not
reasoned either.
On
16 July 2009 the High Court dismissed the applicant company’s
appeals as inadmissible under Article 218 of the Code of Civil
Procedure. It held that since the interim measures had already lost
effect as they prohibited meetings in the past, their review would be
immaterial.
The
applicant company’s constitutional appeal is pending before the
Constitutional Court.
E. Additional information
It
seems that the applicant company held several general meetings
despite the interim measures prohibiting them. Subsequently, company
P. instituted proceedings seeking the nullity of all decisions
adopted at these meetings.
In
one of these proceedings, on 20 December 2006, the Plzeň
Regional Court (krajský soud) held that all decisions
adopted at the general meeting of 9 November 2005 were null and void.
The decision was upheld on appeal.
However,
on 24 August 2010 the Supreme Court quashed these decisions holding
that the meeting of shareholders on 9 November 2005 could not be
considered as a general meeting, the holding of which had been
prohibited by the court order. Consequently, it was not possible to
pronounce its decisions null and void because anything adopted at
that meeting could not have been legally considered as a decision of
a general meeting. It also agreed with the High Court that it could
not review the interim measures in these proceedings.
II. RELEVANT DOMESTIC LAW
A. Code of Civil Procedure (Act no. 99/1963)
Under
Article 102 a court may impose an interim measure during ongoing
proceedings if it is necessary to regulate the situation of the
parties, or if there is a concern that the enforcement of the
judgment would be threatened.
Article 76 § 2 provides that a court may impose,
by means of an interim measure, an obligation upon a person who is
not a party to the proceedings only if it can be reasonably required
from that person.
Pursuant
to Article 77a, if an interim measure was terminated or was quashed
for any other reason than following a decision on the merits in
favour of the claimant or that the claimant’s right has been
satisfied, the claimant is obliged to compensate any damage or other
harm sustained by a person as a result of the interim measure.
Under
Article 169 § 2, the written rendering of the decision to fully
grant a request against which nobody has protested or which concerns
the conduct of the proceedings, or of certain decisions on the
court’s jurisdiction, need not contain reasoning.
Pursuant
to Article 218 an appellate court must dismiss an appeal as
inadmissible if it has been lodged by a person not entitled to do so
or if it has been lodged against a decision which is not subject to
appeal.
B. Commercial Code (Act no. 513/1991)
Article 125 § 1 provides that the general meeting
of a company’s shareholders is the highest body of the company.
Its powers include:
(a)
approval of transactions made in the name of the company under
Article 64 prior to its incorporation;
(b)
approval of the company’s ordinary, extraordinary and
consolidated financial statements and, in the instances stipulated by
law, interim financial statements, distribution of its profit and
settlement of any loss;
(c)
approval of the articles of association statutes and changes to them;
(d)
decision making on any change to the content of the deed of
association, unless such change is based on another legal fact
(Article 141);
(e)
decision making on raising or lowering the share capital;
(f)
appointment, dismissal and remuneration of the company’s
executive officers;
(g)
appointment, dismissal and remuneration of the members of the
supervisory board;
(h)
forced transfer of shares of a member of the company in accordance
with Articles 113 and 121;
(i)
appointment, dismissal and remuneration of a liquidator, and decision
making on whether to wind up the company, if the deed of association
so permits;
(j)
approval of contracts mentioned in Article 67a;
(k)
decision making on mergers, transfer of business assets to a sole
member, division, or conversion of legal form;
(l)
approval of controlling agreements (Article 190b), contracts on
profit transfers (Article 190a) and contracts with silent partners,
and amendments to them;
(m)
approval of contracts on performance of an office (Article 66 §
2);
(n)
approval of financial assistance under Article 120a;
(o)
any other matters entrusted to the general meeting by law or the deed
of association.
Under
Article 156 § 7 bearer shares (akcie na majitele) are
fully negotiable without limitations. The rights attached to bearer
shares in certificated form shall be exercised by the person who
presents such shares or by the person who demonstrates, by way of
furnishing a written statement by the person who performs custody or
deposit under a separate legal regulation, that the shares are
deposited for him under a separate legal regulation.
THE LAW
I. JOINDER OF THE APPLICATIONS
The
Court notes that the subject matter of the applications
(nos. 12266/07, 40059/07, 36038/09 and 47155/09) is similar and
that they were submitted by the same applicant company. It is
therefore appropriate to join them, in application of Rule 42 of the
Rules of Court.
II. THE GOVERNMENT’S OBJECTIONS OF INCOMPATIBILITY
RATIONE PERSONAE AND ALLEGED ABUSE OF THE RIGHT OF APPLICATION
A. Arguments of the parties
The
Government maintained that the applications were incompatible ratione
personae with the Convention as none of the persons who signed
the powers of attorney was a member of the applicant company’s
governing body. At the same time, they contended that the applicant
company had not informed the Court of a number of sets of proceedings
before the Plzeň Regional Court on the invalidity of the general
meetings, to which the interim measures were related and that this
fact was relevant for assessing the admissibility and merits of the
application. Therefore, they held that if no reasonable explanation
was provided for the applicant company’s omission, it would be
appropriate to declare the applications inadmissible for abuse of the
right of application.
The
applicant company disagreed.
B. The Court’s assessment
1. Compatibility ratione personae
The
Court notes that the powers of attorney in applications nos. 12266/07
and 40059/07 were signed by Mr Karel Robert BlaZek and Ms Jiřina
Alexandrová on 16 March and 5 September 2007 respectively, and
in applications nos. 36038/09 and 47155/09 by Mr Karel BlaZek and
Ms Lenka Tučková on 22 June and 20 August 2009
respectively.
According
to an extract from the Companies Register (výpis
z obchodního rejstříku) on the applicant
company submitted by the Government, Mr Karel BlaZek, born in 1967,
together with another member of the board of directors is entitled to
act on behalf of the applicant company. The extract also lists Mr
Karel Robert BlaZek, with the same personal identification number as
the above-mentioned Mr Karel BlaZek, as a member of the board of
directors until 25 July 2008.
The
Court notes that the powers of attorney signed by Mr Karel Robert
BlaZek and Mr Karel BlaZek contain the same signature. It considers
therefore that Mr Karel BlaZek and Mr Karel Robert BlaZek are the
same person, a person entitled to act on behalf of the applicant
company together with another member of the board of directors.
Moreover, the extract also lists Ms Jiřina Alexandrová as
a member of the board of directors from 9 November 2005 to 25
July 2008 and Ms Lenka Tučková since 2 June 2006.
Accordingly, at the time they signed the powers of attorney they were
both members of the board of directors of the applicant company.
Consequently,
the Court finds that the powers of attorney in all four applications
were duly signed by the authorised persons. It therefore dismisses
the Government’s objection.
2. Abuse of the right of application
The
Court reiterates that under Rule 47 § 6 of the Rules of Court
applicants shall keep it informed of all circumstances relevant to
the application. Moreover, an application may be rejected as abusive
under Article 35 § 3 (a) of the Convention, among other reasons,
if an applicant submits incomplete and therefore misleading
information, especially if the information concerns the very core of
the case and no sufficient explanation is given for the failure to
disclose that information (see Hadrabová v. the Czech
Republic (dec.), no. 42165/02, 25 September 2007).
The
Court does not consider that the proceedings referred to by the
Government relate to the very core of the cases concerning the impact
of the interim measures. The applicant company was an unsuccessful
defendant in these proceedings. If anything, their outcome supports
the arguments of the applicant company that they had no remedy
against the interim measures (see also paragraph 78 below).
Therefore, the Court dismisses the objection raised by the
Government.
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
The
applicant company complained that the interim measures had interfered
with its peaceful enjoyment of possessions. It relied on Article 1 of
Protocol No. 1, which 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.”
A. Admissibility
The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 (a) of the Convention. It further
notes that it is not inadmissible on any other grounds. They must
therefore be declared admissible.
B. Merits
1. Arguments of the parties
The
applicant company maintained that the interim measures, which had not
complied with the law, had prohibited it from holding general
meetings since November 2005 and, therefore, deprived it of the
ability to properly conduct its business activities. No public
interest had been pursued by the measures because only a private
entity had been their beneficiary.
The
Government acknowledged that the interim measures constituted control
of the use of property under the second paragraph of Article 1 of
Protocol No. 1. Yet, they maintained that the interference had been
legal, had a legitimate aim and was proportionate. Actually, the
interim measures had prevented considerable and irreversible
prejudice to the rights of company P., specifically the potential
considerable payout of the company’s dividends and the
potential gaining of control over the company through personnel
changes in the board of directors.
They
further maintained that any interference with the rights of the
applicant company had been only marginal. Holding general meetings
was not necessary from the perspective of a well-established
company’s day-to-day operations or its business. The applicant
company had not shown in any detail what specific consequences the
interference with its property rights had allegedly caused. In
addition, the interference had been largely caused by a fundamental
lack of clarity as to the ownership of the majority of its shares.
The dispute over this issue had arisen purely between private
entities, without any influence from the State. The State could not
be fairly required to assume overall responsibility for the impact of
the interference, which it did not cause.
2. The Court’s assessment
With
reference to its established case-law (see Immobiliare Saffi
v. Italy [GC], no. 22774/93, § 44, ECHR 1999-V), the
Court notes that the interim measures had the effect of denying the
applicant company the full use and enjoyment of its property, such as
distributing its profits among shareholders or concluding certain
contracts (see paragraph 30 above). Consequently, the interim
measures constituted control of the use of property and paragraph 2
of Article 1 of Protocol No. 1 is applicable.
The
Court notes that the applicant company disputed the legality of the
interim measures without further elaboration. On the other hand, the
domestic courts found them to be legal. The Court, mindful of the
fact that it has limited power to review compliance with domestic law
(see Beyeler v. Italy [GC], no. 33202/96, § 108,
ECHR 2000 I), is therefore unable to reach a conclusion that the
interim measures would be contrary to the domestic law.
In
respect to a legitimate aim in the general interest pursued by the
interim measures (see Immobiliare Saffi, cited above, §
48), the Court notes that they were adopted in the context of the
dispute between two private parties on the ownership of over ninety
percent of the applicant company’s shares aiming to prevent
what could have caused irreparable damage to the rights of one of the
parties to the proceedings.
The
imposition of an interim measure is a standard means across States
Parties of securing the effectiveness of court decisions on the
merits. The Court itself recognises the importance of interim
measures for ensuring that proceedings remain effective in practice
(see Mamatkulov and Askarov v. Turkey [GC], nos. 46827/99 and
46951/99, §§ 100-129, ECHR 2005 I). Accordingly, the
interim measures in the present case fell within the general interest
under Article 1 of Protocol No. 1. This finding is not altered by the
fact they were to the benefit of company P. alone. The mere fact that
a measure benefits a private person does not mean that it cannot
have pursued a public interest and a legitimate aim (see, mutatis
mutandis, Kohlhofer and Minarik v. the Czech Republic,
nos. 32921/03, 28464/04 and 5344/05, § 98, 15 October 2009).
Lastly,
an interference must strike a “fair balance” between the
demands of the general interest and the requirements of the
protection of the individual’s fundamental rights. The Court
notes that in the present case, there is a dispute over the ownership
of more than ninety percent of the applicant company’s shares.
The domestic courts adopted a series of interim measures resulting in
the inability of the applicant company to hold general meetings since
November 2005. According to the domestic courts, the interim measures
were aimed at preventing the adoption of fundamental decisions
concerning the applicant company without the claimant, who alleged to
be a majority shareholder, being able to influence those decisions.
Bearing in mind that the domestic courts are certainly in a better
position than the Court to assess the necessity of imposing such an
interim measure, the Court must only ascertain whether the
interference complained of is not manifestly unreasonable (see,
mutatis mutandis, BENet Praha, spol. s r.o.,
cited above, § 105).
The
Court notes that the dispute is over a considerable portion of the
applicant company. The rights of the claimant could therefore be
seriously hampered if a general meeting took place and some
irreversible decisions were taken in its absence. At the same time,
the action brought by the claimant does not appear arbitrary and the
domestic courts could have legitimate doubts about the ownership of
the shares.
At
the same time the applicant company is not in any way limited in its
day-to-day business activities. It has not specified in any detail
how the running of its business was negatively affected but only
recited the powers of a general meeting from the Commercial Code. No
difficulties are apparent from the documents in the case file and the
applicant company has generated profit in the years 2006 to 2009.
Moreover, the applicant company’s argument that it could be
wound up at any time is wholly unsubstantiated because this type of
proceedings have never been instituted. The threat is thus only
hypothetical.
The
Court finally adds that the length of the interference is an
important factor in assessing the proportionality (see, e.g.,
Forminster Enterprises Limited v. the Czech Republic, no.
38238/04, § 77, 9 October 2008). It finds that the period of
five and a half years during which the applicant company has been
unable to hold general meetings cannot be considered as a manifestly
unreasonable length of time, especially as it has received no
information as to why the proceedings to determine ownership of the
shares have not yet been concluded.
In
light of these considerations, the Court finds that the balance
between the competing interests is not manifestly unreasonable.
Consequently,
there has been no violation of Article 1 of Protocol No. 1 to the
Convention.
IV. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION
The
applicant company complained that the interim measures had been
ordered in proceedings to which it was not a party and was,
therefore, unable to challenge them and had no effective remedies
against them. It relied on Articles 6, 8 and 13 of the Convention.
The
Court considers it appropriate to examine the present complaints
under Article 6 of the Convention only (see De Geouffre de la
Pradelle v. France, 16 December 1992, § 37, Series A
no. 253 B), which, in so far as relevant, reads as follows:
“In the determination of his civil rights and
obligations ... everyone is entitled to a fair and public
hearing ... by an independent and impartial tribunal established by
law.”
A. Admissibility
1. Arguments of the parties
The
Government considered that because of the many differences between
the present case and that of Micallef v. Malta ([GC], no.
17056/06, ECHR 2009-...), it could not reach a clear-cut conclusion
on the applicability of Article 6 § 1 of the Convention and left
the decision to the Court. They noted that unlike in Micallef,
the interim measure proceedings in the present case concerned the
prohibition of general meetings, while the share surrender
proceedings related to the dispute over the ownership and disposal of
the majority shareholding. The outcome of the interim measure
proceedings did not predetermine or resolve, on an interim basis, the
questions that were raised in the share surrender proceedings. In
addition, the parties to these proceedings were different.
As
regards the importance of the object of the interim measure
proceedings and its impact on the applicant company’s property
rights, the Government referred to their submissions under Article 1
of Protocol No. 1 that the impact had been limited. Moreover, the
applicant company had also failed to prove that the interim measures
had caused it irreversible consequences that could not be redressed
in the proceedings on the merits, or following the conclusion of
these proceedings.
The
Government further maintained that even though the applicant company
was not a party to the share surrender proceedings, it was considered
a party in the following stages of the proceedings concerning the
interim measures. It could have lodged an appeal upon learning of the
existence of the interim measure, and these proceedings could have
resulted in the quashing of the interim measure. At the appellate
stage, the applicant company’s complaint was therefore heard by
a court under circumstances that met the standards of Article 6 of
the Convention in all respects.
Another
relevant factor according to the Government was the fact that certain
aspects of the imposition of interim measures were or had been the
subject matter of proceedings before the Plzeň Regional Court,
which is a fact that should also be taken into account in assessing
whether the applicant company’s case had been duly heard before
a court.
The
applicant company in its turn first argued that the consequences of
the interim measures had been more serious than in Micallef.
It
also maintained that even though the appellate court had at first
upheld the decisions on interim measures it had later adopted a
practice of dismissing the appeals. As a consequence, the proceedings
had in effect only been dealt with at one level of jurisdiction and
the applicant company had not been a party to those proceedings.
2. The Court’s assessment
The
Court reiterates that Article 6 of the Convention in its civil “limb”
applies only to proceedings determining civil rights or obligations.
It notes that in the Micallef judgment (§§ 79-80),
the Court held that the exclusion of interim measures from the ambit
of Article 6 was no longer justified by the fact that they do not in
principle determine civil rights and obligations. However, it
considered that not all interim measures determined such rights and
obligations and the applicability of Article 6 would depend on
whether certain conditions were fulfilled. First, the right at stake
in both the main and the injunction proceedings should be “civil”
within the autonomous meaning of that notion under Article 6 of the
Convention. Second, the nature of the interim measure, its object and
purpose as well as its effects on the right in question should be
scrutinised. Whenever an interim measure could be considered
effectively to determine the civil right or obligation at stake,
notwithstanding the length of time it is in force, Article 6 was
applicable (§§ 84-85). The Court found that Article 6 was
applicable because the purpose of the injunction was to determine,
albeit for a limited period, the same right as the one being
contested in the main proceedings, and which was immediately
enforceable (§ 87).
Subsequently,
the Court also applied Article 6 of the Convention to proceedings,
considered preliminary, not related to any main proceedings, because
the outcome of the preliminary proceedings was determinative of civil
rights (Udorovic v. Italy, no. 38532/02, § 37, 18 May
2010), and to an interim measure that did not provisionally rule on
the merits of the main proceedings but which had “a direct
effect on the civil right at stake” (Kübler v. Germany,
no. 32715/06, § 48, 13 January 2011). Accordingly, the “right
at stake” referred to in the Micallef judgment does not
necessarily imply that the interim measure must determine the same
right as is the subject of the main proceedings.
Turning
to the present case the Court firstly notes that the applicant
company was not a party to the main proceedings in which the interim
measures were ordered, nevertheless, the Court has already found
above that these measures interfered with the applicant company’s
right to property, which is a civil right for the purposes of Article
6 (see, e.g., Credit and Industrial Bank v. the Czech Republic,
no. 29010/95, § 67, ECHR 2003 XI (extracts), where the
concerned decisions affected the applicant bank’s ability to
administer its property and assets). Therefore the first Micallef
criterion has been met in the present case.
Regarding
the second criterion, the Court notes that as a result of the interim
measures the applicant company was not permitted to hold general
meetings for several years. The consecutive interim measures
effectively determined the applicant company’s ability to
administer its own property by prohibiting it from taking certain
decisions concerning it (see § 30 above).
The
Court notes that it has found under Article 1 of Protocol No. 1 that
the impact of the measures on the day-to-day business of the
applicant company has been limited. Yet the fact still remains that
the applicant company has been prevented from taking some strategic
decisions. In any case, the Court considers that the seriousness of
an interference with a civil right plays no role in determining the
applicability of Article 6 of the Convention.
The
Court further considers that the present case differs from the cases
of Štokalo and Others v. Croatia ((dec.), no. 22632/07,
3 May 2011) and Imobilije Marketing d.o.o. and Ivan Debelić
v. Croatia ((dec.), no. 23060/07, 3 May 2011) where Article
6 was not applicable because the provisional measures were only of a
protective nature. Their purpose was to safeguard the future
satisfaction of a creditor’s claim but they led to neither the
complete nor the partial satisfaction of the creditor’s claim.
It is true that the present interim measures also had a certain
protective aim in the sense of safeguarding rights of the claimant in
the main proceedings. However, the effects of the interim measures in
the present case are much broader in scope and cannot be considered
to have the sole aim of protecting the possible satisfaction of the
claim in the main proceedings. Even if the applicant company were
allowed to convene a general meeting and adopt decisions in it, it
would not have any bearing on the claimant’s chances of having
its claim for surrender of the shares satisfied in the main
proceedings. It could merely have a negative impact on the value of
the shares or other interests of the shareholder.
Moreover,
in contrast to Štokalo and Others, where the applicants
were both parties to the main proceedings and requested the
provisional measure, for the applicant company the property rights
interfered with by the interim measures is the “right at stake”
because for it there are no main proceedings to which the interim
measures could relate. It cannot, therefore, be said that the
applicant company would not be prejudiced by the interim measures
which, on the contrary as found above, did interfere with its
property rights.
In
sum, the interim measures decided a civil right of the applicant
company and Article 6 of the Convention is therefore applicable in
the present case.
The
Court, referring to its well established case-law (Golder v. the
United Kingdom, 21 February 1975, § 36, Series A no. 18;
Ashingdane v. the United Kingdom, 28 May 1985, § 57,
Series A no. 93; Mercieca and Others v. Malta, no. 21974/07, §
35, 14 June 2011, and RTBF v. Belgium, no. 50084/06,
§ 74, 29 March 2011), observes that the applicant
company’s complaints arise from the fact that the interim
measures were imposed on it in the proceedings to which it was not a
party. It tried to have them reviewed on appeal but allegedly without
success. There is therefore an issue of the right of access to court.
The
Court concludes that the complaint of lack of access to court is not
manifestly ill-founded within the meaning of Article 35 § 3 (a)
of the Convention. It further notes that it is not inadmissible on
any other grounds. It must therefore be declared admissible.
B. Merits
1. Applications nos. 12266/07 and 40059/07
The
Court notes that the applicant company’s appeals were reviewed
by the High Court, which upheld the imposition of the interim
measures. Its decisions were substantively reasoned on the merits of
the case.
Accordingly,
there has been no violation of Article 6 § 1 of the Convention.
2. Applications nos. 36038/09 and 47155/09
The
Court observes that the appellate court dismissed the applicant
company’s appeals without deciding on the merits. It held that
since the interim measures had already lost any effect because the
date of the prohibited general meeting had passed, any review of them
would have been immaterial. These appeal proceedings did not
therefore fulfil the applicant company’s right of access to a
court that would hear their civil claim.
Admittedly,
in application no. 36038/09 the High Court noted obiter dictum
that even assuming that the appeal had been admissible it would have
had to uphold the interim measure. Yet, the Court does not consider
this fact decisive because the operative part of the decision
declared the appeal as inadmissible (see paragraph 17 above).
Regarding the proceedings before the Plzeň
Regional Court on the nullity of the decisions of the general
meetings held in spite of the interim measures prohibiting them (see
paragraph 23 above), the Court notes that these were not instituted
by the applicant company. Moreover, this avenue of achieving access
to a court regarding the interim measure essentially means that the
applicant company must first act illegally and conduct a prohibited
general meeting. Lastly, the Supreme Court ruled that the courts
could not decide on the merits in these proceedings, holding that the
general meetings held in spite of being prohibited could not have
been legally considered as general meetings and thus courts could not
have decided on their legality. It also explicitly agreed with the
High Court that it could not review the interim measures adopted in
these proceedings. Accordingly, these proceedings cannot be
considered as satisfying the applicant company’s right of
access to court in respect of the interim measures.
Accordingly,
there has been a violation of Article 6 § 1 of the Convention on
account of lack of access to court.
V. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
In
applications nos. 12266/07 and 40059/07 the applicant company also
complained that its constitutional appeals had been wrongly
dismissed. In applications nos. 40059/07, 36038/09 and 47155/09 it
complained that it had doubts about the impartiality of the judges of
the Prague Municipal Court and Prague High Court. In application no.
12266/07 it complained that decisions of the Municipal Court had not
been reasoned. It relied on Article 6 of the Convention.
Having
regard to all the material in its possession, and in so far as the
matters complained of are within its competence, the Court finds that
they do not disclose any appearance of a violation of the rights and
freedoms set out in the Convention or its Protocols.
This
part of the applications is therefore manifestly ill-founded and must
be rejected in accordance with Article 35 §§ 3 (a) and 4 of
the Convention.
VI. APPLICATION OF ARTICLE 41 OF THE CONVENTION
Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
The
applicant company claimed 100,000 euros (EUR) in respect of
non-pecuniary damage. It argued that the prohibition on holding
general meetings had damaged its reputation and caused it
difficulties in dealing with its customers, business partners,
authorities and local government. It added that its reputation
vis-à-vis the domestic courts had also been damaged
owing to the numerous sets of proceedings arising from the interim
measures.
The
Government maintained that the finding of a violation would
constitute in itself sufficient just satisfaction.
The
Court has already held that a commercial company may be awarded
pecuniary compensation for non-pecuniary damage. In this context
account should be taken of the company’s reputation,
uncertainty in decision making, disruption to the management of the
company (for which there is no precise method of calculating the
consequences) and lastly, albeit to a lesser degree, the anxiety and
inconvenience caused to the members of the management team
(Comingersoll S.A. v. Portugal [GC], no. 35382/97, § 35,
ECHR 2000-IV; Forminster Enterprises Limited v. the Czech Republic
(just satisfaction), no. 38238/04, § 25,
10 March 2011).
The
Court notes that the applicant company based its claim on its loss of
reputation arising out of its inability to convene general meetings.
It observes, however, that it has found only partly a violation of
Article 6 of the Convention, not having considered the interim
measures as violating the Convention. There is therefore no causal
link between the alleged damage to the applicant’s company’s
reputation and the violation found.
The
Court, deciding in equity, considers that the finding of a violation
constitutes in itself sufficient just satisfaction for any
non-pecuniary damage that the applicant company may have suffered.
B. Costs and expenses
The
applicant company also claimed 158,297 Czech korunas (CZK) for the
costs and expenses incurred in relation with convening and holding
general meetings and CZK 310,000 for those incurred before the
domestic courts and the Court in respect of applications nos.
40059/07, 36038/09 and 47155/09.
The
Government argued that only claims for services connected with the
Convention claims could be reimbursed and that the amounts claimed
were generally rather excessive.
According
to the Court’s case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and are
reasonable as to quantum. Regarding the costs and expenses incurred
in domestic proceedings, only those that were essentially aimed at
remedying the violations of the Convention found before the Court may
be taken into account (Scordino v. Italy (no. 1) [GC], no.
36813/97, §§ 283-284, ECHR 2006-V).
In
the present case, regard being had to the violation found, the Court
considers that the applicant company did not incur any domestic
expenses that were aimed at remedying the lack of access to court,
namely the dismissal of its appeals by the High Court.
Regard
being had to the documents in its possession and the above criteria,
the Court considers it reasonable to award the sum of EUR 3,000 for
the proceedings before the Court.
C. Default interest
The
Court considers it appropriate that the default interest rate should
be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.
FOR THESE REASONS, THE COURT
Decides unanimously to join the applications;
Declares unanimously the complaint under Article
1 of Protocol No. 1 and complaints under Article 6 § 1 of the
Convention relating to the lack of access to court admissible;
Declares unanimously the remainder of the
complaints inadmissible;
Holds unanimously that there has been no
violation of Article 1 of Protocol No. 1;
Holds unanimously that there has been no
violation of Article 6 of the Convention in applications nos.
12266/07 and 40059/07;
Holds by six votes to one that there has been a
violation of Article 6 of the Convention in applications nos.
36038/09 and 47155/09;
7. Holds unanimously that the finding of a violation
constitutes in itself sufficient just satisfaction for the
non-pecuniary damage sustained by the applicant company;
Holds by six votes to one
(a) that
the respondent State is to pay the applicant company, within three
months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention,
EUR 3,000 (three thousand euros), plus any tax that may be chargeable
to the applicant company, in respect of costs and expenses, to be
converted into Czech korunas at the rate applicable at the date of
settlement;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
Dismisses unanimously the remainder of the
applicant company’s claim for just satisfaction.
Done in English, and notified in writing on 12 January 2012, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Dean Spielmann
Registrar President
In accordance with Article 45 § 2 of the Convention and Rule 74
§ 2 of the Rules of Court, the separate opinion of Judge
Angelika Nußberger is annexed to this judgment.
D.S.
C.W.
DISSENTING OPINION OF JUDGE NUSSBERGER
The
majority of the Chamber has found a violation of Article 6 § 1
of the Convention in applications nos. 36038/09 and 47155/09 on
account of lack of access to court, as the appellate court dismissed
the applicant company’s appeals without deciding the case on
the merits.
I
doubt very much whether the findings in the Micallef judgment,
as developed further in Udorovic v. Italy and Kübler
v. Germany, apply in the present case. The interim measure cannot
be considered “to determine effectively a civil right”.
In the main proceedings the “civil right” at issue is the
ownership of the shares. It is clear that the injunction does not
have any bearing on that issue. The subject of the injunction is the
right to hold meetings, which can hardly be considered as a “civil
right” per se; it is rather an intermediary step or a
prerequisite for determining other civil rights. The injunction
therefore has rather to be considered as a protective measure, in
line with the reasoning in Stokalo v. Croatia and Imobilije
Marketing v. Croatia: it is meant to prevent the adoption of
decisions which might have a negative impact on the ownership rights
that are the subject of the main proceedings.
But
even assuming Article 6 were applicable, the specificities of interim
measures have to be taken into account (see Micallef, §
86).
According
to the majority, the appellate High Court’s decisions rendered
on 5 February 2009 and 16 July 2009 violated the applicant company’s
right of access to court. Two aspects are to be distinguished in this
context. First, the High Court’s decisions came too late, as
they were rendered only after the date on which the meeting had been
scheduled. Second, the High Court refused to decide on the merits ex
post facto.
Concerning
the first aspect, regard must be had to the fact that the appeals
were almost certainly lodged a very short time before the date of the
meeting. The exact dates are not known to the Court (see paragraph
16: “on an unspecified date before 30 January 2009”). On
the basis of the ad impossibilia nemo tenetur principle,
courts cannot be expected to always be in a position to decide
immediately. They must be afforded some discretion in prioritising
important issues and postponing less important ones. The applicant
company’s appeals did not concern a matter of utmost urgency,
as the right to hold a meeting was not lost but could still be
exercised at a future point in time.
Concerning
the second aspect, it is important to note that the High Court did
consider the legality of the injunction, even if only in an obiter
dictum. In the context of interim measures this approach should
be acceptable.
I
would therefore argue that there has been no violation of Article 6 §
1 in the present case.
