European Court of Human Rights

Information Note on the Court’s case-law 187

Cıngıllı Holding A.Ş. and Cıngıllıoğlu v. Turkey - 31833/06 and 37538/06

Judgment 21.7.2015 [Section II] See: [2015] ECHR 720

Article 6

Enforcement proceedings

Article 6-1

Access to court

Authorities’ failure to examine alternative solutions where restitutio in integrum enforcement of a court judgment proved impossible: violation

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Peaceful enjoyment of possessions

Unlawful takeover and sale of a private bank: violation

Facts – The case concerned the transfer and subsequent sale of Demirbank in 2000, Turkey’s fifth largest private bank at the time. The applicants were its main shareholders. In December 2000 the Banking Regulation and Supervision Board (“the Board”) transferred Demirbank’s management and control to the Savings Deposit Insurance Fund (“the Fund”) on the ground that Demirbank’s assets were insufficient to cover its liabilities and that the continuation of its activities would threaten the security and stability of the financial system. In a judgment of 5 November 2004, the Supreme Administrative Court annulled the takeover of the bank by the Fund finding that the takeover without investigating any further options had been unlawful. In 2001, while the proceedings were pending, the Fund sold Demirbank to the HSBC Bank. The agreement to sell the Demirbank was annulled by the Turkish courts in 2004. The applicants requested the Banking Regulation and Supervision Agency (“the Agency”) to enforce the court judgments and return Demirbank to its previous owners. In 2006 the Agency informed them that this would be impossible as, following its sale to HSBC, Demirbank had been struck off the commercial register.

Law – Article 6 § 1 of the Convention: A situation might exceptionally arise where the restitutio in integrum enforcement of a court judgment, declaring administrative acts unlawful and void, might, as such, prove objectively impossible due to insurmountable factual or legal obstacles. However, in such situations and in accordance with the right of access to court, a member State had, in good faith and on its own motion, to examine other alternative solutions that could remedy the unlawful effects of its acts, in particular the awarding of compensation. The Government had not demonstrated that any actions had been taken by the authorities in an attempt to remedy the applicants’ situation in the light of the judgments annulling the transfer of Demirbank and its sale to HSBC. In separate proceedings, which were the source of a related application to the Court (see Reisner v. Turkey, 46815/09, 21 July 2015), the Supreme Administrative Court had held in a judgment of 16 March 2009 that the enforcement of the judgment of 5 November 2004 could be secured by the return of the supervisory and executive rights to Demirbank’s shareholders, and had not required the restitution of the actual shares which would, in any event, be impossible. The complete inaction by the authorities in responding to the request for the enforcement of the Supreme Administrative Court’s judgments had effectively deprived the applicants of their rights of access to court.

Conclusion: violation (six votes to one).

Article 1 of Protocol No. 1: The Board’s decision to takeover Demirbank had been clearly taken as a measure to control the banking sector in the country. Although it involved a deprivation of property, in the circumstances the deprivation formed a constituent element of a scheme for controlling the banking industry. It was therefore the second paragraph of Article 1 of Protocol No. 1 which was applicable (control of the use of property).

The takeover of Demirbank by the Fund and its subsequent sale to the HSBC bank had been annulled as unlawful by the domestic courts. The interference with the applicants’ right to enjoyment of their possessions could not therefore be considered as lawful within the meaning of Article 1 of Protocol No. 1.

Conclusion: violation (unanimously).

Article 41: reserved.

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This summary by the Registry does not bind the Court.

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