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FIRST
SECTION
CASE OF LB INTERFINANZ A.G. v. CROATIA
(Application
no. 29549/04)
JUDGMENT
STRASBOURG
27
March 2008
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 LB Interfinanz A.G. v. Croatia,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Christos
Rozakis,
President,
Nina
Vajić,
Anatoly
Kovler,
Elisabeth
Steiner,
Khanlar
Hajiyev,
Giorgio
Malinverni,
George
Nicolaou,
judges,
and Søren Nielsen, Section
Registrar,
Having
deliberated in private on 6 March 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 29549/04) against the Republic
of Croatia lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Swiss company, LB Interfinanz A.G. (“the
applicant company”), on 8 July 2004.
- The
applicant company was represented by Mr D. Štivić, a
lawyer practising in Zupanja. The Croatian Government (“the
Government”) were represented by their Agent, Mrs Š.
StaZnik.
- On
19 March 2007 the Court decided to communicate the complaint
concerning the applicant company's right to a fair trial to the
Government. Under the provisions of Article 29 § 3 of the
Convention, it decided to examine the merits of the application at
the same time as its admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant is a company based in Zurich, Switzerland.
- Following
the institution of bankruptcy proceedings before the Osijek
Commercial Court (Trgovački sud u Osijeku) against the
Zupanjska Bank, d.d. Zupanja, on 3 May 1999, creditors were invited
to lodge their claims against the said bank. Pursuant to that
invitation, the applicant company lodged its claim. On 9 September
1999 a notice was placed on the court's public noticeboard informing
all interested persons that a list of claims to be examined in the
bankruptcy proceedings could be consulted in the court's registry.
The list included a claim submitted on behalf of the State Agency for
the Insurance of Savings Deposits (DrZavna agencija za osiguranje
štednih uloga – hereinafter the “Agency”).
- The
applicant company's representative was present at an examination
hearing (ispitno ročište) held on 15 September
1999 where the bankruptcy administrator assigned to the case
(stečajni upravitelj) was to accept or reject each of the
claims. No objections were raised as to the accepted claims. The
relevant parts of the transcript of the hearing read as follows:
“It is established that the following creditors'
representatives are present at today's hearing:
... attorney DraZen Štivić for LB
Interfinanz Switzerland ... Maja Špoljarić for DABA
[short for DrZavna agencija za osiguranje štednih uloga]
...
After having announced the subject matter of the case,
the president of the bankruptcy panel informs the creditors in
attendance that a list of creditors' claims available to everyone
exists and after that [the creditors] agree that there is no need to
write down individual claims since the amount of each claim is going
to be announced orally by the bankruptcy administrator and the
creditors will be able to comment on it.
...
After that the claims are examined under sections 155
and 157 of the Bankruptcy Act and the bankruptcy administrator
presents the amounts of the claims of the creditors in attendance in
the order established in the list of claims.
...
At the bankruptcy president's inquiry whether the
creditors wish to contest any of the claims examined today no
objections are raised.
...
The hearing is concluded.
A decision on the creditors' claims examined today will
be issued in writing.”
- Immediately
afterwards a report hearing was also held (izvještajno
ročište), where the applicant company's
representative was appointed as a representative of all foreign
creditors in the board of creditors. The Agency, being the creditor
claiming the highest sum, was also included in the board of
creditors, a body designed to represent the creditors' interests in
the bankruptcy proceedings. In the subsequent course of the
proceedings two meetings of the board of creditors were held, on 27
September 1999 and 20 June 2000 respectively, the applicant
company's representative being present at both.
- A
decision concerning the claims examined at the hearing of
15 September 1999 was subsequently issued where, inter alia,
the claim submitted on behalf of the Agency was accepted.
- In
its submission of 26 February 2001 the applicant company opposed the
claim filed by the Agency, arguing that although the Agency's claim
had been listed in the decision of 15 September 1999 it had not been
subject to examination at the hearing held on the same day as the
claim in question had not yet become due. On 25 April 2001 the Osijek
Commercial Court declared the applicant company's submission
inadmissible. It held that creditors' claims in the context of
bankruptcy proceedings could only be opposed at the examination
hearing and that the contested claim had been accepted by the
bankruptcy administrator as stated in her decision of 15 September
1999.
- On
10 May 2001 the applicant company appealed against the above decision
contending that during the examination hearing held on 15 September
1999 the bankruptcy administrator had not stated whether she accepted
or rejected the Agency's claim and that therefore it had had no
opportunity of contesting that claim.
- On
12 June 2001 the High Commercial Court (Visoki trgovački sud
Republike Hrvatske) dismissed the appeal, finding that the
contested claim had been accepted in the bankruptcy administrator's
decision of 15 September 1999 and that the applicant company
could have filed an appeal against that decision. Since the applicant
company had failed to file a timely appeal it had no right to oppose
the contested claim at a later stage.
- The
applicant company then filed a constitutional complaint whereby it
argued that the Agency's claim had not been subject to examination at
the hearing held on 15 September 1999 as it had not yet become due at
that time. Furthermore, it contended that the decision of
15 September 1999 had not been served on it. On 14 May 2004 the
Constitutional Court dismissed the applicant's complaint, finding
that it did not concern the merits of the case.
- The
applicant company submitted a letter of the Osijek Municipal Court of
5 February 2007 whereby it replied to its enquiry and stated that the
decision of 15 September 1999 had been filed in the court's registry
the same day and kept there for a further fifteen days. In their
further letter of 8 February 2007 it was stated that the former
bankruptcy administrator in the proceedings had informed the court
that a notice had been posted on the court's public noticeboard
informing all interested parties that the decision of 15 September
1999 could be consulted in the court's registry within the following
fifteen days. There was no mention of the date when this notice had
been posted on the court's noticeboard and for how long it had stayed
there. The decision itself had not been posted on the noticeboard
because it had comprised eighty-two pages.
II. RELEVANT DOMESTIC LAW
- The
Bankruptcy Act (Stečajni zakon, Official Gazette nos.
44/96, 29/99, 129/00, 123/03, 197/03, 187/04 and 82/06) in its
relevant part provides as follows:
Section
8 allows for court decisions addressed to a large number of persons
to be placed on a court's public noticeboard. These decisions are
considered as being served on parties three days after they are
posted on the noticeboard. The courts are to maintain registers of
documents placed on their public noticeboards, containing, inter
alia, the date of the posting of each decision on the
noticeboard.
Sections
297 and 350 impose on commercial courts a duty to furnish
supplementary registers, including a list of documents posted on
their public noticeboards.
Section
175 provides for an examination hearing before the competent
commercial court at which the bankruptcy administrator shall either
accept or reject each of the reported claims. Likewise, a creditor
can oppose a claim reported by another creditor.
Section
177 provides that a claim is deemed to have been accepted if no
objection has been raised by either the bankruptcy administrator or
another creditor. The commercial court shall prepare a schedule of
examined claims on the basis of which it shall issue a decision
(rješenje) showing which claims were accepted and which
were rejected, and setting out the amount and priority of each claim.
Section
181(1) provides that a final decision establishing the claim and its
priority, or establishing that a claim does not exist, shall be
effective against the bankrupt and all its creditors.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the principle of adversarial hearing was
violated in so far as it had been unable to contest the claim
submitted on behalf of the State Agency for the Insurance of Savings
Deposits in the bankruptcy proceedings conducted against the
Zupanjska Bank in the Osijek Commercial Court, contrary to Article 6
§ 1 of the Convention, which reads as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair ... hearing ... by
[a] ... tribunal...”
- The
Government contested that argument.
A. Admissibility
- The
Government argued that Article 6 § 1 of the Convention was not
applicable in the present case because the bankruptcy proceedings had
not involved a dispute and that in such proceedings the courts did
not adjudicate on confronted claims submitted by the parties, but
only established the debtor's assets. They contended that the
applicant company's contestation of the claim submitted by another
creditor in the bankruptcy proceedings had represented an actio
popularis, since the applicant company had challenged the other
creditor's position under the then valid laws.
- The
applicant company disagreed with these arguments.
- The
Court reiterates at the outset that the applicability of Article 6
§ 1 to bankruptcy proceedings is beyond doubt (see S.p.r.l.
ANCA and Others v. Belgium, no. 10259/83, Commission decision of
10 December 1984, Decisions and Reports 40, p. 170; Interfina and
Christian della Faille d'Huysse v. Belgium, no. 11101/84,
Commission decision of 4 May 1987, unreported; Ceteroni v. Italy,
judgment of 15 November 1996, Reports of Judgments and Decisions
1996-V; Bassani v. Italy, no. 47778/99, §§ 13 and
14, 11 December 2003; Capital Bank AD v. Bulgaria,
no. 49429/99, § 86, ECHR 2005 ... (extracts); and
Sukobljević v. Croatia, no. 5129/03, § 37,
2 November 2006). Furthermore, the Court notes that under
Croatian law if bankruptcy proceedings are opened against a bank its
creditors are entitled to realise their claims against it only in
bankruptcy proceedings where a bankruptcy administrator, at the
examination hearing in the bankruptcy proceedings, either accepts or
rejects the claims reported by the creditors.
- The
Court therefore considers that in the bankruptcy proceedings
conducted before the Osijek Municipal Court against the Zupanjska
Bank the applicant company, being one of the creditors of the said
bank, had its civil rights and obligations determined within the
meaning of Article 6 § 1 of the Convention, and the Government's
objection must consequently be dismissed.
- The Court notes that this complaint is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It further notes that it is not inadmissible on any other
grounds. It must therefore be declared admissible.
B. Merits
- The
applicant company admitted that its representative had known about
the Agency's claim being submitted, but not that it had been accepted
by the bankruptcy administrator, and thus had had no opportunity of
contesting that claim. It further argued that the claim at issue
could not have been accepted since it had not become due at the time
of the hearing held on 15 September 1999.
- The
Government submitted that the applicant company's representative had
been present at a hearing held on 15 September 1999 when the
bankruptcy administrator had accepted the Agency's claim and that the
applicant company's representative had hence been in a position to
contest the claim.
- The
Court reiterates that according to its case-law the principle of
equality of arms requires that each party should be afforded a
reasonable opportunity to present his case under conditions that do
not place him at a substantial disadvantage vis-à-vis
his opponent (Dombo Beheer B.V. v. the Netherlands, judgment
of 27 October 1993, Series A no. 274, p. 19, § 33, and Ankerl
v. Switzerland judgment of 23 October 1996, Reports
1996-V, pp. 1567-68, § 38). The right to adversarial
proceedings means in principle the opportunity for the parties to
have knowledge of and to comment on all the evidence adduced or
observations filed with a view to influencing the court's decision
(see Lobo Machado v. Portugal, judgment of 20 February 1996,
Reports 1996-I, § 31; Nideröst-Huber v.
Switzerland, judgment of 18 February 1997, Reports
1997-I, p. 108, § 24; and K.S. v. Finland, no. 29346/95,
§ 21, 31 May 2001).
- Article
6 § 1 is intended above all to secure the interests of the
parties and those of the proper administration of justice (Acquaviva
v. France, judgment of 21 November 1995, Series A no. 333-A,
p. 17, § 66, and Nideröst-Huber, cited above, p.
109, § 30). What is at stake is the litigants' confidence in the
workings of justice, which is based on, inter alia, the
knowledge that they have had the opportunity to express their views
on every document in the file (Nideröst-Huber, cited
above, p. 108, § 29, and Beer v. Austria,
no. 30428/96, § 18, 6 February 2001).
- The
Convention does not lay down rules on evidence as such. It is for the
national courts to assess the evidence they have obtained and the
relevance of any evidence that a party wishes to have produced. The
Court has nevertheless to ascertain whether the proceedings
considered as a whole, including the way in which the evidence was
taken, were fair as required by Article 6 § 1 (see Schenk v.
Switzerland, judgment of 12 July 1988, Series A no. 140, p. 29,
§ 46).
- As
to the present case, the Court firstly notes that the applicant
company admitted that it had knowledge of the claim submitted by the
Agency in the bankruptcy proceedings opened against the Zupanjska
Bank before the Osijek Commercial Court. The applicant company
complained, however, that it had had no knowledge that the claim at
issue had been accepted by the bankruptcy administrator and thus had
been prevented from contesting that claim.
- The
Court notes that the decision adopted at the hearing held on
15 September 1999 where the Agency's claim was accepted by the
bankruptcy administrator was not served on the applicant company's
representative, which is not disputed. Moreover, the decision itself
was not posted on the Osijek Commercial Court's public noticeboard.
Arguably, only a notice that the decision could be consulted in the
court's registry was posted on the public noticeboard, although there
is no evidence as to the dates on which it was posted or taken down.
- In
the Court's view such lack of evidence that a notice giving
instructions on consulting the decision of 15 September 1999 was
actually posted on the Osijek Commercial Court's public noticeboard
presents a procedural defect falling under the ambit of Article 6 §
1 of the Convention which might have affected the applicant company's
right to a fair trial as to its opportunity to challenge the Agency's
claim in the bankruptcy proceedings at issue.
- However,
the Court has examined all the relevant facets of the proceedings in
question taken as a whole. In this connection the Court notes that a
list of creditors' claims was available in the Osijek Commercial
Court's registry prior to the hearing scheduled for 15 September 1999
and that everyone could have consulted it. The list contained, inter
alia, the claim submitted by the Agency. Thus, the applicant
company's representative could and should have known about the
Agency's claim, which he does not dispute.
- The
Court notes further that at the examination hearing held before the
Osijek Commercial Court on 15 September 1999 both the applicant
company's and the Agency's representatives were present. The
transcript of the hearing shows that the bankruptcy administrator
accepted all the claims of the creditors in attendance, save for
those that she expressly rejected or those in respect of which a
decision on acceptance was postponed. Since she did not expressly
reject the Agency's claim or state that the decision on it had to be
adjourned, it was clear in the Court's view that the Agency's claim
was accepted. However, the applicant's company representative,
although present, did not challenge the acceptance of the Agency's
claim, nor did he make any other comments in that connection.
- The
Court also notes that the bankruptcy administrator informed the
creditors in attendance that a written decision on the claims
submitted would follow. Thus, all the creditors present at the
hearing, including the applicant company's representative, must have
known about the decision at issue. In these circumstances the Court
finds the fact that the decision itself was not posted on the Osijek
Commercial Court's public noticeboard acceptable since the decision
contained eighty-two pages. In the Court's view, even if there had
been no notice informing the interested parties that the decision
could be consulted in the Court's registry, this would not have
prevented the applicant company's representative from contacting the
registry of the Osijek Commercial Court in person or by telephone in
order to inform himself about the decision in question. In this
connection the Court reiterates that the case concerned a civil law
matter, where the national authorities enjoy greater latitude than in
the criminal sphere (see Dombo Beheer B.V., cited
above, and Levages Prestations Services v. France,
judgment of 23 October 1996, Reports 1996 V, p. 1544,
§ 46).
- In
these circumstances the Court considers that it cannot be said that
the applicant company did not have the opportunity of challenging the
Agency's claim. On the contrary, it could already have done so at the
hearing held on 15 September 1999 and afterwards in a timely appeal
against the decision of 15 September 1999, which its representative
should have known about, since the bankruptcy administrator had
expressly informed the creditors that it would be issued.
- The
foregoing considerations are sufficient to enable the Court to
conclude that the procedural defect in the bankruptcy proceedings
conducted against the Zupanjska Bank in the Osijek Commercial Court
did not prevent the applicant company from challenging the Agency's
claim and thus did not interfere with the applicant company's right
to a fair trial.
There
has accordingly been no violation of Article 6 § 1 of the
Convention.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- The
applicant company also complained under Article 13 of the Convention
that it had had no effective remedy against the decision accepting
the Agency's claim, under Article 14 of the Convention that it had
been discriminated against and also under Article 3 of Protocol No. 7
that it had had no right to compensation for wrongful conviction.
- In
the light of all the material in its possession, and in so far as the
matters complained of are within its competence, the Court considers
that this part of the application does not disclose any appearance of
a violation of the Convention. It follows that this part of the
application is inadmissible under Article 35 § 3 as
manifestly ill-founded and must be rejected pursuant to
Article 35 § 4 of the Convention.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning the alleged
violation of the principle of adversarial hearing admissible and the
remainder of the application inadmissible;
- Holds that there has been no violation of
Article 6 § 1 of the Convention;
Done in English, and notified in writing on 27 March 2008, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos Rozakis
Registrar President
