European Court of Human Rights

 

 

 

THIRD SECTION

 

 

 

 

 

 

CASE OF PSMA, SPOL. S.R.O. v. SLOVAKIA

 

(Application no. 42533/11)

 

 

 

 

 

 

 

 

JUDGMENT

 

 

 

 

STRASBOURG

 

9 June 2015

 

 

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 PSMA, spol. s.r.o. v. Slovakia,

The European Court of Human Rights (Third Section), sitting as a Chamber composed of:

          Josep Casadevall, President,
          Luis López Guerra,
          Ján Šikuta,
          Kristina Pardalos,
          Johannes Silvis,
          Valeriu Griţco,
          Branko Lubarda, judges,
and Stephen Phillips, Section Registrar,

Having deliberated in private on 19 May 2015,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1.  The case originated in an application (no. 42533/11) against the Slovak Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 6 July 2011 by a private limited company established under the laws of Slovakia, PSMA, spol. s r.o. (“the applicant company”).

2.  The applicant company was represented by Mr J. Mészáros, a lawyer practising in Bratislava.

The Government of the Slovak Republic (“the Government”) were represented by their Agent, Ms M. Pirošíková.

3.  The applicant company alleged, in particular, that the quashing of a final and binding judgment in its favour following an extraordinary appeal on points of law lodged by the Prosecutor General further to a petition by the other party to the proceedings had breached its rights under Articles 6 § 1 of the Convention.

4.  On 11 June 2013 the application was communicated to the Government.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

5.  The applicant company was established in 1995 and has its registered office in Bratislava.

A.  Contract

6.  On 17 March 1995 the applicant company concluded a contract with Slovak Radio (Slovenský rozhlas), Slovakia’s national public-service radio broadcaster, a publicly funded institution with its own legal personality, the status of which is regulated by law (at that time Law no. 619/2003 Coll., as amended, presently Law no. 532/2010 Coll., as amended).

7.  Under the contract, in return for a fee, the applicant company agreed to act as exclusive agent for Slovak Radio as the principal (“the principal”) for the sale of broadcasting time for the purposes of advertising.

8.  The venture worked well and the contract was amended several times. The amended contract was valid until 31 December 2007.

9.  However, in 2004 the relationship between the applicant company and the principal began to sour because the principal was not content with the amount of business acquired by the applicant company in 2003.

10.  The principal had accordingly issued the applicant company with a bill for the difference between the estimated profit and the real profit from such business.

11.  As the applicant company did not pay the bill, the principal served the applicant company with a notice of termination of the contract, considering the applicant company’s failure to pay the bill to be a fundamental breach of the contract.

12.  The notice period expired on 30 September 2005, following which the principal arranged for the sale of its broadcasting time by other means.

13.  On 20 October 2005 the applicant company challenged the validity of the principal’s notice of termination of the contract in court, but later withdrew the action.

14.  The principal, for its part, sued the applicant company for payment of the difference between the estimated profit and the real profit. No information has been made available about the current state and outcome of those proceedings.

B.  Action

15.  On 5 December 2006 the applicant company demanded that the principal pay it the equivalent of some 693,000 euros (EUR), according to the exchange rate applicable at that time, by way of indemnity for termination of the contract.

With reference to the contract, the amount of the indemnity had been calculated as the applicant company’s average yearly commission for the preceding five years, taking into account both financial and non-financial transactions between the principal and third parties, the latter being referred to as barter transactions.

16.  As the principal did not satisfy the applicant company’s claim, on 1 June 2006 the applicant company sued it for the above-mentioned amount and late-payment interest.

17.  On 29 March 2007 a copy of the action was served on the principal for observations. Hearings were scheduled for 13 and 27 April and 14 May 2007, in the course of which the Bratislava I District Court (Okresný súd) examined complex documentary evidence and heard the statutory representative of the applicant company and four witnesses.

18.  However, the principal submitted no written observations and appeared at none of the hearings. The circumstances of its absence were disputed (see below).

19.  On 14 May 2007 the Bratislava I District Court (Okresný súd) granted the action in full. It observed that despite having been represented by a lawyer, the principal had failed to submit any observations or to present a good excuse for its failure to appear at any of the hearings. It therefore proceeded to examine the case under Article 101 § 2 of the Code of Civil Procedure (Law no. 99/1963 Coll., as amended - “the CCP”), which in the event of a party’s unjustified failure to cooperate, allows for the examination of the case on the basis of the elements available.

As a preliminary issue, the District Court examined the question of validity of the notice of termination of the contract issued by the principal. It observed that the notice had not been contested and concluded that it was valid. There were no reasons disqualifying the applicant company from being eligible for the indemnity, and the barter transactions had rightly been taken into account in its calculation.

20.  The principal appealed (odvolanie) to the Bratislava Regional Court (Krajský súd).

In terms of form, it contested the first-instance judgment in its entirety. Nevertheless, in terms of substance, it acknowledged the existence of the legal basis of the applicant company’s entitlement to indemnity, disputing solely its scope, in so far as the barter transactions were concerned. Without those transactions, the acknowledged amount of the indemnity was equivalent to some EUR 526,000, according to the exchange rate applicable at that time.

In support of its challenge to the claim exceeding that amount, the principal pointed out that, in the proceedings in its action for payment of the difference between the estimated profit and the real profit (see paragraph 14 above), the applicant company had lodged a counter-claim for compensation for the barter transactions.

The principal also contended that the decision to determine the action in its absence had been arbitrary.

21.  Having examined the appeal, the Regional Court upheld the first-instance judgment on 28 November 2007.

It considered that, except for the part related to the barter transactions, the applicant company’s claim had been acknowledged by the principal.

As to those transactions, it observed that the applicant company had offset a claim for compensation for them against the claims asserted by the principal in its above-mentioned action. The claim for compensation for those transactions was however a different matter from a claim for indemnity for the termination of the contract, which was asserted in the present proceedings, and which the Regional Court found to be well-founded.

Lastly, as regards the principal’s absence from the first-instance proceedings, the Regional Court observed (i) that the principal had requested the adjournment of the hearing of 13 April 2007; (ii) that the summons for the hearing of 27 April 2007 had not been deliverable to the principal’s lawyer prior to that hearing; and (iii) that on 11 May 2007 the principal’s new lawyer had requested that the hearing of 15 May 2007 be adjourned so as to allow him to study the case file, although the summons for that hearing had already been served on the principal on 3 May 2007 at the latest. In those circumstances, the District Court’s assessment that the principal had been “absolutely passive” in the proceedings was right and the examination of the case in the principal’s absence had been justified.

22.  As no ordinary appeal lay against the Regional Court’s judgment, following its service on the parties, the matter was resolved with the force of a final and binding decision (právoplatnosť) on 9 January 2008.

On the expiry of a period of grace for voluntary payment, the judgment became enforceable (vykonateľnosť) on 12 January 2008.

C.  Principal’s constitutional complaint

23.  On 10 March 2008 the principal challenged the Regional Court’s judgment by way of a complaint under Article 127 of the Constitution (Constitutional Law no. 460/1992 Coll., as amended). Asserting its rights of access to a court and to a fair hearing, it contended that the impugned judgment was grossly arbitrary and contrary to European Union law. In the latter respect, the Regional Court had arbitrarily refused to ask the Court of Justice of the European Union for a preliminary ruling.

24.  On 3 July 2008 the Constitutional Court (Ústavný súd) declared the complaint inadmissible. It held that an unjustified refusal to ask for a preliminary ruling may in certain circumstances give rise to a ground for appealing on points of law (dovolanie) under Article 237 (g) of the CCP. As that remedy had not been exhausted, the Constitutional Court lacked jurisdiction to deal with the complaint.

D.  Extraordinary review

25.  On 25 April 2008 the principal filed a petition with the Office of the Prosecutor General (“the PG”) requesting the latter to exercise his discretionary power to challenge the above-mentioned judgments by way of an extraordinary appeal on points of law (mimoriadne dovolanie - “extraordinary appeal”).

26.  The PG decided to accede to the request and on 23 October 2008 challenged the contested judgments in the Supreme Court (Najvyšší súd).

He argued primarily that the courts had erred in finding the notice of termination of the contract valid because it had not been disputed by the parties. This was a point of law and it could not have been resolved simply with reference to the lack of disagreement of the parties over it. The courts therefore should have examined that question independently and properly. As for the substance, in his view, had the notice been invalid, there would have been no reason for an indemnity. On the other hand, had the notice been valid, the indemnity could have been refused, because it had been based on a breach of contract by the applicant company.

Moreover, the PG pointed out that the contract had neither provided for nor excluded compensation for barter transactions. In such circumstances, the contract should have been interpreted in terms of the parties’ subsequent practice, which had not involved the payment of compensation for such transactions. They should accordingly not have been taken into account for the purpose of calculation of the indemnity.

27.  Simultaneously, the PG applied for a ruling to suspend the enforceability of the impugned judgments pending the outcome of the extraordinary appeal. The Supreme Court acceded to that request on 8 December 2008.

28.  Meanwhile, on 26 November 2008, the applicant company had submitted observations in reply; it submitted further observations on 3 February and 3 September 2009.

The latter observations were not submitted until after the Supreme Court had determined the extraordinary appeal (see paragraph 30 below), as the applicant company did not know of its decision at the time.

29.  In its observations, the applicant company raised numerous arguments, including the following.

There was no justification for protecting the principal’s rights by way of an extraordinary appeal because it had failed to protect its own rights with due diligence in the lower courts and because, even at the cassation level, it had left the protection of its rights to the public authorities.

In that regard, it had been open to the principal to assert its rights before the Supreme Court directly by way of an appeal on points of law. It had not done so simply in order to avoid incurring court fees for such an appeal.

Moreover, under Article 243e § 1 of the CCP, the availability of an indirect remedy, an extraordinary appeal (on points of law), was excluded by the availability of a direct remedy, an (ordinary) appeal on points of law.

At the appellate level, the only point in dispute had been the part of the applicant company’s claim concerning the barter transactions.

The PG’s challenge to the ordinary courts’ findings as regards the validity of the notice to terminate the contract therefore exceeded the grounds of the principal’s petition for an extraordinary appeal. Indeed, it was contrary to it because the principal had not challenged the notice but rather had relied on it. In any event, the PG’s challenge was ill-founded because there was no correlation between the validity of the notice and the fact that it had been based on the applicant company’s refusal to pay the bill submitted by the principal.

Lastly, with reference to Convention case-law, the applicant company submitted that the extraordinary appeal as a remedy against a final and binding judgment in its favour was incompatible with the principles of the rule of law and legal certainty.

30.  On 12 August 2009, sitting in chambers, the Supreme Court allowed the extraordinary appeal. It quashed the judgments of both the District Court and the Regional Court and remitted the matter to the former for a new examination.

It concluded that the courts had erred in that, firstly, they had omitted to examine the validity of the contract itself and secondly, depending on the outcome of that examination, they had failed properly to examine the validity of the notice. In view of those errors it had not been possible to deal in concreto with the questions of the basis and scope of the applicant company’s claim.

31.  The Supreme Court’s decision was served on the applicant company’s lawyer on 22 September 2009. As a result, the case was remitted to the first instance, where it has been pending ever since.

D.  Constitutional complaint

32.  On 20 November 2009 the applicant company lodged a complaint with the Constitutional Court, contesting the Supreme Court’s decision of 12 August 2009. It relied on its rights to access to a court, equality of arms, adversarial proceedings, legal certainty and a fair hearing.

The applicant company argued that the admissibility requirements for the extraordinary appeal had not been met, and that the extraordinary appeal had not only been belated but had exceeded the scope of the principal’s petition. In addition, by the mere fact of admitting the extraordinary appeal, the Supreme Court had set at naught the entire preceding judicial process, in violation of the principle of legal certainty.

The applicant company further argued that in view of the Supreme Court’s decision, a brand new hearing of the case had been called for, even though no procedural irregularities of the previous hearing had been established. In addition, the contested decision was biased in favour of the principal and was not amenable to review on account of lack of reasoning.

The applicant company also contended that the Supreme Court had completely ignored its observations in reply to the extraordinary appeal.

Lastly, the applicant company complained that it had been denied access to the Supreme Court’s case file in the extraordinary appeal.

33.  On 25 November 2010 the Constitutional Court declared the applicant company’s complaint inadmissible as being manifestly ill-founded.

In so far as the applicant company had sought to contest the extraordinary appeal in principle, the Constitutional Court observed that the statutory framework for examination of individual complaints did not allow it to examine the compliance of statutes with the Constitution and international instruments as such.

To the extent that the applicant company might be understood as wishing to object to any action on the part of the PG, no such objection could be considered because the applicant company had only identified the Supreme Court as the defendant of its complaint.

As for the remainder of the complaint, which concerned the Supreme Court, the Constitutional Court found that the applicant company had failed to show any constitutionally relevant arbitrariness in the interpretation and application of the relevant rules.

As regards the applicant company’s argument that the extraordinary appeal had been lodged belatedly, it was based on the premise that the principal had appealed against the first-instance judgment only in so far as it concerned the barter transactions. That premise was however mistaken because the principal had defined the target of its appeal as the first-instance judgment as a whole (see paragraph 20 above).

As to the Supreme Court’s failure to give a specific answer to the applicant company’s arguments, the Constitutional Court considered that the right to an answer to submitted arguments was related not to a person but to substance. The Supreme Court had thus been under a duty not to reply to the arguments submitted by the applicant company as such, but rather to address the relevant aspects of the case. On the latter point, the applicant company had failed to show that any of the relevant aspects of the case had gone unanswered.

Lastly, the Constitutional Court accepted that it had been a mistake to deny the applicant company access to the Supreme Court’s case file. However, it held that that had no constitutional significance because, in view of the character of the extraordinary appeal proceedings, access to the case file or the lack of it would have had no impact on the outcome of the proceedings.

34.  A copy of the Constitutional Court’s decision was served on the applicant company on 21 January 2011.

II.  RELEVANT DOMESTIC LAW AND PRACTICE

A.  Code of Civil Procedure

1.  Various provisions

35.  Under Article 159 § 3, as soon as a matter has been resolved by force of a final and binding decision or a judgment, it may not give rise to new proceedings.

2.  Appeals on points of law

36.  The relevant provisions concerning appeals on points of law are summarised, for example, in the Court’s decision in Ringier Axel Springer Slovakia, a.s. v. Slovakia (no. 35090/07, §§ 65-68, 4 October 2011, with further references). Appeals on points of law have no automatic suspensive effect, as the power to suspend the enforceability of the impugned decision is entrusted to the Supreme Court (Article 243).

3.  Extraordinary appeals

37.  Extraordinary appeals on points of law are regulated by the provisions of Articles 243e et seq.

38.  The PG has the power to challenge a decision of a court by means of an extraordinary appeal. He or she may do so following the filing of a petition by a party to the proceedings or another person concerned or injured by the decision, provided that the PG concludes that: the final and binding decision has violated the law; the protection of the rights and legitimate interests of individuals, legal entities or the State requires that such an appeal be brought; such protection cannot be achieved by other means; and the matter at hand is not excluded from judicial review (Articles 243e § 1 and 243f § 2).

39.  An extraordinary appeal may only be lodged against a ruling in a decision which has been contested by the party to the proceedings or the person concerned or injured by that decision (Article 243e § 2). Unless a statute provides otherwise, the PG is bound by the scope of the petition for an extraordinary appeal (Article 243e §§ 3 and 4).

40.  Further conditions of admissibility of an extraordinary appeal are listed in Article 243f § 1. They comprise (a) major procedural flaws within the meaning of Article 237 (see, for example, Ringier Axel Springer Slovakia, a.s. v. Slovakia, no. 41262/05, § 62, 26 July 2011), (b) other errors of procedure resulting in an erroneous decision on the merits, and (c) wrongful assessment of points of law.

41.  An extraordinary appeal is to be lodged with the Supreme Court within one year of the contested judicial decision becoming final and binding (Article 243g).

42.  At the relevant time, under Article 243i § 2 in conjunction with Article 243, the extraordinary appeal had no “automatic suspensive effect”, as the power to suspend the enforceability of the impugned decision was entrusted to the Supreme Court.

43.  Under the amended legislation (Law no. 484/2008 Coll.), which entered into force on 28 November 2008, if the extraordinary appeal is accompanied by a request that that the enforceability of the contested decision be suspended, its enforceability must be suspended following the lodging of the extraordinary appeal with the Supreme Court (amended Article 243ha § 1).

The duration of such a suspension is regulated by amended Article 243ha § 2, pursuant to which the suspension ceases (a) when the request is dismissed or (b) with a decision on the extraordinary appeal, unless extended by the Supreme Court no later than one year from the lodging of the extraordinary appeal with it.

44.  Under the same amendment, if the PG concludes, following the filing of a petition by a party to the proceedings or another person concerned or injured by the impugned decision, that there is a risk of considerable economic loss or other serious irreparable consequences, the extraordinary appeal may be lodged without stating the reasons for appeal. The reasons must then be stated within sixty days of the lodging of the extraordinary appeal with the Supreme Court, failing which the proceedings will be discontinued (amended Article 243h §§ 3 and 4).

45.  A copy of an extraordinary appeal is to be sent to the parties to the proceedings for observations. The decision on the extraordinary appeal must be sent to the parties to the proceedings and to the PG (Article 243i § 1 and Article 243j).

4.  Reform of the CCP

46.  The results of the ongoing work to re-codify the rules on civil procedure are summarised in a 2013 green paper (Návrh legislatívneho zámeru rekodifikácie civilného práva procesného) of the re-codification commission under the auspices of the Ministry of Justice.

The green paper envisaged abolishing extraordinary appeals on the grounds that there are doubts as to their compatibility with the Convention, especially as regards the principles of equality of arms, legal certainty and res judicata. Extraordinary appeals are retained, albeit in a modified form, in the final text of the new Code of Civil Contentious Procedure (Civilný sporový poriadok).

B.  The Constitutional Court’s practice concerning extraordinary appeals

47.  In a decision (uznesenie) of 19 July 2000 in an unrelated case (no. PL. ÚS 57/99), the Constitutional Court dismissed a motion by the Supreme Court that certain provisions of the CCP concerning extraordinary appeals were contrary to the Constitution. That motion was lodged by the Supreme Court in the context of extraordinary appeal proceedings instituted by the PG concerning the review of an administrative decision on a restitution claim (see Veselá and Loyka v. Slovakia (dec.), no. 54811/00, 23 November 2004).

In its decision, the Constitutional Court observed, inter alia, that the extraordinary appeal was an extraordinary means for ensuring that judicial decisions were not only formally final but also substantively correct. A clear discrepancy between the degrees of respect shown for those two principles in an individual case could justify an interference with the former principle for the benefit of the latter. However, that would be so only in instances of a striking violation of constitutional principles of procedure, the principle of a fair trial or a denial of justice, which were not amenable to correction by other means.

According to the Constitutional Court, for an extraordinary appeal to be acceptable its use had to be limited to instances of the most serious errors in procedure or the outcome of the procedure (linked to either factual or legal assessment), and to instances where other available legal remedies had been exhausted.

Moreover, the Constitutional Court held that by virtue of the power to lodge an extraordinary appeal, the PG was a statutory intermediary for ensuring protection of the rights of the parties and other persons concerned or injured by the contested decision.

48.  In a decision of 29 October 2003 in an unrelated case (no. IV. ÚS 197/03) concerning an individual complaint, the Constitutional Court held, inter alia, that in extraordinary appeal proceedings before the Supreme Court the PG did not have the standing of a party to the proceedings as such, but rather had a sui generis standing, similar to that of the parties. In such proceedings, the PG had no subjective interest of his or her own. Rather, the protection from unlawful final and binding decisions pursued in those proceedings served the general interest.

49.  In a decision of 3 June 2008 in another unrelated case (no. IV. ÚS 180/08) concerning an individual complaint, the Constitutional Court observed, among other things, that individuals and legal entities that had petitioned the PG to lodge an extraordinary appeal had no legal claim to have such an appeal lodged and that, conversely, the PG was under no legal duty to accommodate the request. It was within the PG’s entire discretion to decide whether or not to lodge an extraordinary appeal. The extraordinary appeal was an extraordinary remedy. There was no legal right to have it lodged on one’s behalf. A petition for an extraordinary remedy did not enjoy constitutional protection and was not covered by the catalogue of fundamental rights.

C.  Supreme Court’s practice concerning extraordinary appeals

50.  In its decision of 27 September 2012, in an unrelated case (no. 1 M Obdo V 2/2011), the Supreme Court rejected an extraordinary appeal lodged by the PG concerning a property dispute. It held that an extraordinary appeal was not admissible in circumstances where it was open to the party concerned to pursue its rights directly by way of an appeal on points of law.

III.  Relevant European texts

A.  Venice Commission’s Report on the Independence of the Judicial System

51.  The report was adopted by the European Commission for Democracy through Law (“the Venice Commission”) at its 82^nd Plenary Session (12-13 March 2010).

52.  In section III 9. entitled “Final character of judicial decisions”, the report refers to Principle I(2)(a)(i) of Recommendation No. R (94) 12 of the Committee of Ministers of the Council of Europe on the Independence, Efficiency and Role of Judges, which provides:

“decisions of judges should not be the subject of any revision outside the appeals procedures as provided for by law”.

The relevant part of the report continues:

“It should be understood that this principle does not preclude the re-opening of procedures in exceptional cases on the basis of new facts or on other grounds as provided for by law.

66.  While the [Consultative Council of European Judges] concludes in its Opinion No. 1 (at 65), on the basis of the replies to its questionnaire, that this principle seems to be generally observed, the experience of the Venice Commission and the case law of the [Court] indicate that the supervisory powers of the Prokuratura in post-Soviet states often extend to being able to protest judicial decisions no longer subject to an appeal.

67.  The Venice Commission underlines the principle that judicial decisions should not be subject to any revision outside the appeals process, in particular not through a  protest of the prosecutor or any other state body outside the time limit for an appeal.”

B.  Recommendation CM/Rec(2012)11 of the Committee of Ministers to member States on the role of public prosecutors outside the criminal justice system

53.  The Recommendation was adopted by the Committee on 19 September 2012 and its relevant part reads as follows:

“Recalling also that every member of the Council of Europe has accepted the principle of the rule of law and of the enjoyment by all persons within its jurisdiction of the human rights set out in the Convention for the Protection of Human Rights and Fundamental Freedoms (ETS No. 5);

...

2. Where the national legal system provides public prosecutors with responsibilities and powers outside the criminal justice system, their mission should be to represent the general or public interest, protect human rights and fundamental freedoms, and uphold the rule of law.

C.  Common principles

3  The responsibilities and powers of public prosecutors outside the criminal justice system should in all cases be established by law and clearly defined in order to avoid any ambiguity.

4. As in the criminal law field, public prosecutors should exercise their responsibilities and powers outside the criminal justice system in full accordance with the principles of legality, objectivity, fairness and impartiality.

...

11. Where the public prosecutor is entitled to make a decision affecting the rights and obligations of natural and legal persons, such powers should be strictly limited, defined by law and should not prejudice the parties’ right to appeal on points of fact and law to an independent and impartial tribunal. The public prosecutor should act independently from any other power and his or her decisions should be reasoned and communicated to the persons concerned.

...

In relation to the principles of legal certainty and res judicata

22. In order to comply with the principles of legal certainty and res judicata, the grounds upon which the public prosecutor may seek a review of the final decision of a court should be limited to exceptional cases and the review processed within a reasonable time limit. Except in cases where the review does not concern the rights and obligations of the parties, as set out in the decision under review, the parties to the original proceedings should be informed of the review and, should they so wish, given the opportunity to be joined to the proceedings.”

C.  Opinion No. 3 (2008) of the Consultative Council of European Prosecutors (CCPE) on “The role of prosecution services outside the criminal law field”

54.  The Opinion was adopted by the CCPE at its 3^rd plenary meeting (15-17 October 2008). In addition to the matters mentioned above, the relevant part of the summary of recommendation reads as follows:

“The CCPE is of the opinion that States where prosecution services have non criminal competences should ensure that these functions are carried out in accordance with the principles governing a democratic state under the rule of law and in particular that:

a. the principle of separation of powers is respected in connection with the prosecutors’ tasks and activities outside the criminal law field and the role of courts to protect human rights;

b. the respect of impartiality and fairness characterises the action of prosecutors acting outside the criminal law field as well;

c. these functions are carried out ‘on behalf of society and in the public interest’, to  ensure the application of law, respecting fundamental rights and freedoms and within the competencies given to prosecutors by law, as well as the Convention and the case-law of the Court;

d. such competencies of prosecutors are regulated by law as precisely as possible;

e. no undue intervention in the activities of prosecution services occurs;

f. when acting outside the criminal law field, prosecutors enjoy the same rights and obligations as any other party and do not enjoy a privileged position in the court proceedings (equality of arms);

g. the action of prosecution services on behalf of society to defend public interest in non criminal matters does not violate the principle of binding force of final court decisions (res judicata) with some exceptions established in accordance with international obligations including the case-law of the Court;

h. the obligation of prosecutors to motivate their actions and to make these motivations open for persons or institutions involved or interested in the case;

...

j. the developments in the case-law of the Court concerning prosecution services’ activities outside the criminal law field is followed closely in order to ensure that the legal basis for such activities and the corresponding practice are in full compliance with the relevant judgments;”.

THE LAW

I.  PRELIMINARY ISSUES

55.  The Government argued that, in so far as the applicant company had sought to challenge the existing statutory framework for extraordinary appeals, its constitutional complaint had not been an effective remedy for the purposes of Article 35 § 1 of the Convention and, consequently, its complaint before the Court had been lodged belatedly.

They also submitted that, following the quashing of the original judgments by the Supreme Court, the proceedings in the applicant company’s action were still pending before the first-instance court. A complaint about their outcome was thus premature. In that connection, they referred to the Court’s decision in Michaela Huserová, Administrator in Bankruptcy of Union banka, a.s. in liquidation and Stroden Management Limited v. Slovakia ((dec.), no. 760/04, 9 November 2010).

56.  The applicant company disagreed and submitted that its application was not only concerned with the existing statutory framework but also with the way in which it had been applied in the present case. As to the latter part of the application, it contended that it had been within the jurisdiction of the Supreme Court and the Constitutional Court to deal with, respectively, its objections against the extraordinary appeal and its constitutional complaint. Had they done so, those instances could have prevented the ultimate quashing of the final and binding judgment in its favour. Submitting the application to the Court without resorting to those remedies or while they were pending would have been premature and incompatible with the requirement of exhaustion of domestic remedies. In sum, in the applicant company’s submission, the application had been submitted following the proper exhaustion of effective domestic remedies and in time.

Moreover, the applicant company contested the Government’s prematurity argument by submitting that the subject matter of the reopened proceedings was the merits of its compensation claim, which was a different matter from that examined before the Supreme Court and the Constitutional Court, namely the principles of the rule of law, legal certainty, equality of arms and fairness in connection with the PG’s attempt to have a final and binding judgment in its favour quashed.

57.  The Court observes that part of the present application concerns the mere existence of the concept of the extraordinary appeal, which in the applicant company’s view was as such incompatible with the guarantees of legal certainty. It considers that, with regard to that part of the application, the Government’s inadmissibility objection does not need to be dealt with separately because complaint is in any event inadmissible on the following grounds.

58.  The Court reiterates that in proceedings originating in an application lodged under Article 34 of the Convention it has to confine itself, as far as possible, to the examination of a concrete case before it. Its task is not to review domestic law and practice in abstracto, but to determine whether the manner in which they were applied to or affected the applicant gave rise to a violation of the Convention. Accordingly, Article 34 does not provide individuals with a remedy in the nature of an actio popularis (see, for example, Klass and Others v. Germany, 6 September 1978, § 33, Series A no. 28; Slivková v. Slovakia (dec.), no. 32872/03, 14 December 2004; and Fruni v. Slovakia, no. 8014/07, § 133, 21 June 2011).

59.  The Court notes that there is an ongoing process of reform of the procedural rules in Slovakia, with particular attention being paid to extraordinary appeals.

It is also aware of the particular sensitivity in Convention terms of the extraordinary appeal in certain specific types of proceedings in Slovakia (see López Guió v. Slovakia, no. 10280/12, §§ 66 and 108, 3 June 2014).

However, in view of the above-mentioned parameters of its jurisdiction, the Court will confine its examination of the present case to the applicant company’s specific situation and the concrete repercussions of the impugned legislative provisions and their implementation on the applicant company only.

60.  Conversely, in so far as the applicant company may be understood to be challenging the existing legislative framework in abstracto, the relevant part of the application is incompatible ratione personae with the provisions of the Convention and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

61.  As to the remainder of the application, and in particular the Government’s specific argument that it is premature, the Court observes that the proceedings on the merits of are still pending at first instance, following the Supreme Court’s ruling of 12 August 2009.

However, the Court also observes that that remainder of the application is not concerned with the outcome of the proceedings as such, but rather with the precise fact that a final and binding judgment in the applicant company’s favour was quashed, with the effect that a judicially resolved matter was remitted to the first-instance stage.

In so far as the Government sought to compare the present case with another case referred to by them (see paragraph 55 above), the Court observes that, in that other case, the part of the application which was declared inadmissible for being premature concerned a complaint which had been phrased in general terms under Article 1 of Protocol No. 1, that complaint having been submitted by one of the applicants, who had acquired the property in question only after a final and binding judgment concerning that property had been quashed.

62.  It thus appears that the Government’s aforementioned argument is unrelated to the facts of the present case and that their prematurity plea is not applicable, as a result of which it must be dismissed.

II.  ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION

63.  The applicant company complained that the PG’s extraordinary appeal and the Supreme Court’s decision on it had been incompatible with the guarantees of a fair hearing, as provided for in Article 6 § 1 of the Convention, the relevant part of which reads as follows:

 “In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

A.  Admissibility

64.  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. It must therefore be declared admissible.

B.  Merits

1.  The parties’ arguments

65.  The applicant company contended that an extraordinary appeal was not directly available to the parties and that its use fell within the exclusive discretion of the PG without any judicial supervision. The effects of such an appeal in the applicant company’s case had been incompatible with the rule of law and the principle of legal certainty because the extraordinary appeal had been an ordinary appeal in disguise on behalf of the principal without any acceptable justification. It had not been admissible on any of the statutory admissibility grounds. No such grounds had even been invoked by the appellant and the appeal had had no motivation except the conflicting views on the substance of the dispute. By allowing that appeal and not even acknowledging the existence of the applicant company’s observations in reply, let alone giving them any consideration, the Supreme Court had sealed the violation of the applicant company’s right to a fair hearing, in particular its component of access to a court and equality of arms, and the principles of adversarial proceedings and legal certainty as an element of the rule of law.

66.  In reply, the Government summarised the applicable procedural framework and considered that the extraordinary appeal had been lodged and decided on within the parameters of the Court’s case-law. In that regard, they argued that the ordinary courts had committed a fundamental error that was incompatible with the principle of legal certainty in that they had failed to examine properly the validity of the notice given by the principal. They considered that the applicant company itself had been unclear on the point of the validity of the notice, and that the courts had failed in their duty to clarify it. Their conclusions were therefore themselves contradictory and untenable. More precisely, like the PG at the domestic level, the Government were of the view that if the notice for the termination of the contract had been invalid, there would have been no reason for an indemnity and, if it had been valid, the indemnity could have been refused.

67.  The applicant company disagreed and reiterated its arguments, emphasising that the law had prevented it from lodging an extraordinary appeal on account of the fact that the principal had had at its disposal an (ordinary) appeal on points of law. Moreover, there had been no valid reasons for quashing the final and binding judgment in its favour; the principal’s failure to pursue the case properly at first instance had been its own responsibly and risk. The principal had acknowledged the legal basis for the applicant company’s claim and had also accepted a major part of the amount claimed. However, the PG and the Supreme Court had handled the extraordinary appeal in an arbitrary fashion.

2.  The Court’s assessment

(a)  General principles

68.  The Court notes that the present case raises interrelated issues of access to a court, equality of arms and legal certainty. The problem at the heart of the application is that a final and binding judgment in the applicant company’s favour was quashed following an extraordinary appeal lodged by the PG at the request of the principal.

69.  In that regard, the Court observes that the relevant Convention principles have been summarised in its judgment in the case of Giuran v. Romania (no. 24360/04, §§ 28-32, ECHR 2011 (extracts), with further references) as follows:

- The right to a fair hearing before a tribunal as guaranteed by Article 6 § 1 of the Convention must be interpreted in the light of the Preamble to the Convention, the relevant part of which declares that the rule of law is part of the common heritage of the Contracting States. One of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, among other things, that where the courts have finally determined an issue their ruling should not be called into question.

- That principle does not allow a party to seek the reopening of proceedings merely for the purpose of a re-hearing and a fresh decision on the case. The mere possibility of there being two views on the subject is not a ground for re-examination.

- Departures from that principle are justified only when made necessary by circumstances of a substantial and compelling character. Higher courts’ powers to quash or alter binding and enforceable judicial decisions should be exercised for the purpose of correcting fundamental defects. That power must be exercised so as to strike, to the maximum extent possible, a fair balance between the interests of an individual and the need to ensure the effectiveness of the system of justice.

- The relevant considerations to be taken into account in this connection include, in particular, the effect of the reopening and any subsequent proceedings on the applicant’s individual situation and whether the reopening resulted from the applicant’s own request; the grounds on which the domestic authorities overturned the judgment in the applicant’s case; the compliance of the procedure at issue with the requirements of domestic law; the existence and operation of procedural safeguards in the domestic legal system capable of preventing abuses of this procedure by the domestic authorities; and other pertinent circumstances of the case. In addition, the review must afford all the procedural safeguards of Article 6 § 1 and must ensure the overall fairness of the proceedings.

- In a number of cases the Court, while addressing the notion of “a fundamental defect”, has stressed that merely considering that the investigation in the applicant’s case was “incomplete and one-sided” or led to an “erroneous” acquittal cannot in itself, in the absence of jurisdictional errors or serious breaches of court procedure, abuses of power, manifest errors in the application of substantive law or any other weighty reasons stemming from the interests of justice, indicate the presence of a fundamental defect in the previous proceedings.

70.  On the same matter, the Court has also held that the review of final and binding decisions should not be treated as an appeal in disguise and that the principle of legal certainty may be set aside in order to ensure a correction of fundamental defects or miscarriage of justice (see, for example, Ryabykh v. Russia, no. 52854/99, § 52, ECHR 2003-IX) and to rectify “an error of fundamental importance to the judicial system”, but not for the sake of legal purism (see Sutyazhnik v. Russia, no. 8269/02, § 38, 23 July 2009).

71.  As to the principle of equality of arms, the Court reiterates specifically that, as one of the elements of the broader concept of a fair trial, it requires each party to be given a reasonable opportunity to present his case under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent (see, for example, Nideröst-Huber v. Switzerland, 18 February 1997, § 23, Reports of Judgments and Decisions 1997-I).

(b)  Application of these principles in the present case

72.  The Court notes at the outset that the applicant company’s claims for indemnity were adjudicated with the force of a res judicata and that the final and binding judgment in its favour was quashed following the application of an extraordinary remedy brought by the PG at the request of the other party to the proceedings. It therefore remains to be ascertained whether the interference with the completed proceedings in the present case was compatible with the guarantees of Article 6 of the Convention, in particular with the principles of the rule of law, legal certainty and equality of arms inherent in that provision.

73.  On the count last mentioned, the Court observes that the contested extraordinary appeal was lodged within the procedural framework established primarily by the CCP. Within that framework, under Article 243e § 1, an extraordinary appeal may be available on condition that the protection of the rights and legitimate interests of those concerned cannot be achieved by other means.

In that respect, the Court notes that the applicant company argued in its observations in reply to the extraordinary appeal precisely that it was not admissible under the said provision because the protection of the principal’s rights could have been achieved by other means, in particular by way of a directly available remedy, an (ordinary) appeal on points of law. The applicant company equally argued that the principal’s motivation not to assert its rights by way of an appeal on points of law but rather to have it asserted on its behalf by way of an extraordinary appeal was that the latter strategy was not subject to court fees.

However, neither those arguments nor the legal questions as such appear to have been addressed in any specific way by the domestic courts.

74.  The Court is struck by the Supreme Court’s lack of consideration of these arguments, as well as by the Constitutional Court’s suggestion that the applicant company as a party to the proceedings had no interest in having its arguments answered and by its unqualified proposition that the denial of the applicant company’s access to the case file was of no consequence because in any event it would have had no impact on the outcome of the extraordinary appeal proceedings.

75.  With regard to the scope of the grounds behind the PG’s extraordinary appeal, the Court observes that, as submitted by the applicant company and not disputed by the Government, it exceeded those invoked by the principal in its petition for that remedy. In addition, the Supreme Court’s primary reason for allowing the appeal, the courts’ failure to examine the question of validity of the contract as such, went beyond the reasons invoked by the PG. Moreover, both the PG and the Supreme Court contested aspects of the case which had not been in dispute between the parties.

76.  It may therefore be concluded that the PG and the Supreme Court intervened in the proceedings for the benefit of a party to them even though the proceedings concerned a dispute of an exclusively private-law character (see Tripon v. Turkey (no. 1), no. 36942/03, § 28, 23 September 2008). Such intervention may appear all the more prejudicial to the applicant company’s Article 6 rights that the party it favoured was found by the domestic courts not to have asserted its rights in those proceedings with due diligence (see paragraphs 18 and 21 above).

77.  As to whether the points as such on which the extraordinary appeal was lodged and allowed constituted “circumstances of a substantial and compelling character” justifying a departure from the principle of legal certainty in terms of the Court’s case-law, the Court notes the parties’ disagreement.

78.  Reiterating that an intervention by a State body on behalf of a party to a private dispute raises Convention concerns as a matter of principle, the Court observes that no matters were put forward in the extraordinary proceeding in the present case which could not have been put forward in the preceding examination of the case at two lower levels of courts.

79.  In view of the foregoing considerations, the Court concludes that there were no circumstances justifying the interference with the final, binding and enforceable judgment in the applicant company’s favour. That interference was in breach of the principle of legal certainly as well as that of equality of arms.

There has accordingly been a violation of Article 6 of the Convention.

III.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

80.  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.  Pecuniary damage

81.  The applicant company made the following claims in respect of pecuniary damage:

- 868,868.65 euros (EUR) with late-payment interest of 14 % from 9 December 2005 in respect of the indemnity originally awarded by the ordinary courts; and

- EUR 51,863.40 with late-payment interest of 14.25 % from 12 January 2008 in respect of reimbursement of the court fees and legal fees originally awarded by the ordinary courts.

82.  The Government pointed out that the proceedings on the merits of the applicant company’s claim were still pending at the domestic level. They considered that, in any event, there was no causal link between the claims made and the violation of the Convention asserted.

83.  The Court observes that the present application has only been concerned with the applicant company’s rights under Article 6 of the Convention. Thus, the Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim.

B.  Non-pecuniary damage

84.  The applicant company also claimed EUR 20,000 in respect of non-pecuniary damage.

85.  The Government contested the claim as excessive.

86.  The Court considers that the applicant company must have suffered non-pecuniary damage. Making its assessment on an equitable basis, it awards the applicant company EUR 10,000¹, plus any tax that may be chargeable, in respect of non-pecuniary damage.

C.  Costs and expenses

87.  Under this heading, the applicant company made the following itemised claims:

- EUR 8,406.46 in respect of legal fees and associated expenses for its unsuccessful attempts to enforce the above-mentioned adjudicated claims for indemnity, court fees and legal fees;

- EUR 10,311.50 in respect of legal fees and associated expenses for the proceedings in the extraordinary appeal and before the Constitutional Court; and

- EUR 7,801.61 in respect of legal fees and associated expenses for the proceedings before the Court.

88.  The claims were calculated on the basis of the number of “acts of legal assistance” rendered and the payment for every such “act” established under the calculation formula applicable at the national level.

In support of those claims, the applicant company submitted copies of a legal-assistance contract with its lawyer and declarations acknowledging its debt towards its lawyer for the amount claimed for the enforcement proceedings and a part of the amount claimed for the proceedings before the Supreme Court and the Constitutional Court.

89.  The Government contested the claim concerning the enforcement proceedings as unfounded. As regards the claim concerning the proceedings before the Constitutional Court and the Court, they objected that the applicant company had failed to show that it had actually paid the amounts claimed.

90.  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 (see, for example, Iatridis v. Greece (just satisfaction) [GC], no. 31107/96, § 54, ECHR 2000-XI). Furthermore, Rule 60 § 2 of the Rules of Court provides that itemised particulars of any claim made under Article 41 of the Convention must be submitted, together with the relevant supporting documents or vouchers, failing which the Court may reject the claim in whole or in part.

91.  The Court observes that, under the legal-assistance contract, the applicant company agreed to pay its lawyer a fee for representation before the courts, including the Court, calculated under the formula referred to above. The contract also contains a clause that the applicant company would transfer to its lawyer any costs and expenses awarded by the Court. The applicant company’s obligation to pay some of those fees and expenses was specifically acknowledged (see paragraph 88 above).

92.  In so far as the Government’s objection has been substantiated, the Court finds no reason to doubt that the contractual provisions mentioned constitute a legal obligation on the part of the applicant company to pay its lawyer the fees and expenses as reflected in the claims submitted. This applies a fortiori to the fees and expenses specifically acknowledged by the applicant company. Those fees and expenses therefore have to be considered as having been “actually incurred” (see Tebieti Mühafize Cemiyyeti and Israfilov v. Azerbaijan, no. 37083/03, § 106, ECHR 2009).

93.  Regard being had to the documents in its possession and the remaining of the above criteria, the Court considers it reasonable to award the applicant company EUR 18,000, plus any tax that may be chargeable to the applicant company, for the costs and expenses before the Supreme Court, the Constitutional Court and the Court.

D.  Default interest

94.  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, UNANIMOUSLY,

1.  Declares the application inadmissible in so far as it is aimed at challenging the existing legislative framework in abstracto;

 

2.  Declares the remainder of the application admissible;

 

3.  Holds that there has been a violation of Article 6 of the Convention;

 

4.  Holds

(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, the following amounts:

(i)  EUR 10,000 (ten thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 18,000 (eighteen thousand euros), plus any tax that may be chargeable to the applicant company, in respect of costs and expenses;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

 

5.  Dismisses the remainder of the applicant company’s claim for just satisfaction.

Done in English, and notified in writing on 9 June 2015, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

  Stephen Phillips                                                                  Josep Casadevall
       Registrar                                                                              President