Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 30417/96

by Tadeusz OLCZAK

against Poland

The European Commission of Human Rights (Second Chamber) sitting

in private on 8 July 1998, the following members being present:

MM J.-C. GEUS, President

M.A. NOWICKI

G. JÖRUNDSSON

A. GÖZÜBÜYÜK

J.-C. SOYER

H. DANELIUS

Mrs G.H. THUNE

MM F. MARTINEZ

I. CABRAL BARRETO

D. SVÁBY

P. LORENZEN

E. BIELIUNAS

E.A. ALKEMA

A. ARABADJIEV

Ms M.-T. SCHOEPFER, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 7 February 1996

by Tadeusz Olczak against Poland and registered on 11 March 1996 under

file No. 30417/96;

Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The applicant, a Polish citizen residing in Stoczek Lukowski is

an engineer.

The facts of the case, as submitted by the applicant, may be

summarised as follows:

Particular circumstances of the case

On 8 April 1992 the applicant bought shares of the Lublin First

Commercial Bank (Pierwszy Komercyjny Bank S.A. w Lublinie), a public

company. His shares represented in total 45 per cent of the company's

share capital.

By a decision No. 2/93 of 6 February 1993 the President of the

National Bank of Poland, who had regard to the difficult situation of

the bank and the danger of its insolvency, with a view to improving its

financial standing appointed a Board of Receivers (Zarz*d Komisaryczny)

which replaced the existing governing and supervisory bodies of the

company.

On 23 October 1993 the Board of Receivers adopted a resolution

by virtue of which the company's memorandum of association was amended.

The nominal value of the bank's share capital was reduced from old PLZ

50 billion to PLZ 1,098,000,000 by cancelling 31,350 "Series A" shares

of PLZ 1,000,000. The value of 27,450 remaining shares of Series A was

reduced from PLZ 1,000,000 to PLZ 40,000. The sum of PLZ

57,702,000,000 thus generated was to be used in its entirety for

covering the bank's losses. At the same time the share capital of the

bank was increased by old PLZ by 250,000,000,000 by the issue of

6,250,000 new "Series B" non-transferable shares with extra voting

rights of PLZ 40,000 each. These new shares were all acquired by the

National Bank of Poland. All the existing shareholders were excluded

from the right to acquire new shares, in order to protect the company's

interests. It was further established that on 8 April 1992 the

applicant had purchased from D.B., a former owner of 100 per cent share

capital, 25,650 "Series A" shares of PLZ 1,000,000 and that thereby the

applicant had acquired 45 per cent of the share capital. As a result

of these operations, the applicant's part in the company's share

capital decreased to 0.4 per cent. On the same day the Board adopted

another resolution by which it repealed the provision of the bank's

memorandum of association which prohibited cancellation of shares and

introduced a provision to the effect that the shares could be cancelled

by reducing share capital.

a) Proceedings relating to the annulment of the resolution taken by

the Board of Receivers of the Lublin First Commercial Bank

On 25 November 1993 the applicant lodged a civil action with the

Lublin Regional Court (S*d Wojewódzki) against the above-mentioned

resolution, seeking its annulment. He submitted that the resolution

had arbitrarily lowered the value of his shares, deprived him of the

right to acquire new shares and, consequently, he had sustained a

severe financial loss. He also submitted that the resolution was in

breach of the applicable laws, in particular banking laws and the

Commercial Code.

On 10 December 1993 the Lublin Regional Court ordered that the

pleadings be returned to the applicant on the ground that he had not

complied with the relevant formal requirements, by failing to indicate

the value of the litigation. The court considered that the applicant's

claim was clearly of a pecuniary character. The value of his claim was

equivalent to the value of the loss which he had sustained as a result

of the resolution of 23 October 1993. Thus it was necessary to

establish the value of the claim, in pursuance of the provisions of the

Code of Civil Procedure concerning the value of litigation.

On 23 December 1993 the applicant appealed against this order,

submitting that pursuant to the regulation on court fees, a fixed fee

was only to be paid to commence an action for annulment of resolutions

of organs of companies. Thus, it was redundant for him to indicate the

value of litigation in his pleadings. On 27 January 1994 the Lublin

Regional Court dismissed the applicant's appeal, considering that the

lower court was right in its conclusion that his claim was of

a pecuniary character, since his aim was to obtain compensation of his

alleged loss resulting from the litigious resolution.

On 16 February 1994 the applicant again lodged a civil action

with the Lublin Regional Court, seeking the annulment of the resolution

of 23 October 1993. He submitted that the value of the litigation was

PLZ 30,690.

On 25 October 1994 the Lublin Regional Court requested the

applicant to pay the court fee of PLZ 1,000,000,000.

On 1 November 1994 the applicant requested exemption from the

whole of the court fees. He submitted that his property had been

seized by a bailiff in the context of enforcement proceedings against

him which had been instituted by the Lublin First Commercial Bank on

31 May 1993.

On 28 December 1994 the Lublin Regional Court refused to grant

the applicant an exemption from the court fees, considering that he had

failed to submit detailed information as regards his financial

situation and property to the court. The applicant lodged an

interlocutory appeal against this decision.

On 11 January 1995 the Lublin Court of Appeal (S*d Apelacyjny)

dismissed the applicant's appeal. The Court examined the documents

submitted by the applicant in support of his appeal and considered that

in view of his significant assets, and in particular of the fact that

he owned two companies and certain real property, he did not satisfy

the requirements for an exemption from court fees.

b) Proceedings relating to the applicant's appeal against the

decision to make an entry in the Commercial Register reflecting the

results of the Board of Receivers' resolution of 23 October 1993

On 30 December 1993 the Lublin District Court (Commercial

Division) ordered that entries be made in the Register of Companies,

reflecting the results of the Board of Receivers' resolution of

23 October 1993.

On 20 January 1994 the applicant lodged an appeal.

On 10 June 1994 the Lublin Regional Court referred a question on

points of law to the Supreme Court (S*d Najwyzszy). The Supreme Court

was requested to rule on the correct interpretation of the scope of the

Board of Receivers' competence to adopt resolutions on matters reserved

for the company's shareholders' general meeting, in particular in

respect of reducing the value of share capital and shares.

On 22 July 1994 the Supreme Court, by a resolution III CZP 92/94,

stated that the Board of Receivers was competent to take resolutions

on all matters reserved by statutes or by the company's memorandum of

association for decision by company's shareholders in a general

meeting. The Court considered that, with regard to banks, the

provisions of the Banking Act, which was a lex specialis, took

precedence over the provisions of the Commercial Code which contained

certain limitations on the Board of Receivers' competence.

On 23 September 1994 the Lublin Regional Court dismissed the

applicant's appeal.

c) Proceedings relating to the claim against the First Commercial

Bank for annulment of the resolution of 23 October 1993 which the

applicant joined as a co-plaintiff

On 7 October 1994 the Lublin Regional Court dismissed the action

brought by the Lublin Forestry Enterprise LAS (Lubelskie

Przedsi*biorstwo Produkcji Lesnej LAS) against the Lublin First

Commercial Bank. The plaintiff, who had been a shareholder in the

Bank, sought the annulment of the resolution of 23 October 1993. The

plaintiff company argued that the resolution should be annulled in

pursuance of Article 414 of the Commercial Code which allowed

shareholders to claim annulment of the resolutions of the shareholders'

in general meeting, if taken deliberately to their detriment.

On 9 November 1994 the applicant requested the Lublin Regional

Court's permission to join these proceedings as a co-plaintiff. On the

same date he lodged an appeal against the judgment of 7 October 1994.

The applicant contended in his appeal that the impugned judgment was

in breach of substantive law in that the Court had wrongly held that

the provisions of the Banking Act took precedence over the provisions

of the Commercial Code concerning shareholders' competence to contest

before the courts certain resolutions of a shareholders' meeting. The

applicant further submitted that the court had failed to draw

reasonable conclusions from the evidence, in particular in that it had

not established that the impugned resolution had been taken

deliberately to the shareholders' detriment.

On 23 June 1995 the Lublin Court of Appeal dismissed the

applicant's appeal. The Court established that the National Bank of

Poland had appointed the Board of Receivers in view of the heavy losses

which the First Commercial Bank had sustained in 1992, mostly as a

result of bad loans. The purpose of the resolution of 23 October 1993

was to improve the financial standing of the Bank in the interest of

its clients and in order to prevent it from insolvency. The Court

further referred to the resolution of the Supreme Court of 22 July

1994. The Court considered that in the light thereof the judgment

under appeal was in conformity with the law. As regards the

applicant's appeal, the Court held that the applicant had not shown

that the resolution had been taken deliberately to the shareholders'

detriment, under Article 414 of the Commercial Code. The Court

recalled that it was not the damage suffered by the shareholders which

would constitute a sufficient reason for annulling the resolution of

a shareholders' meeting, but the deliberate intention to prejudice the

shareholders' interests. The applicant had not shown that the

resolution of 23 October 1993 had been taken with such an intention,

as in the circumstances of the case it was clear that the National Bank

of Poland had acted solely with a view to protecting the interests of

the Lublin First Commercial Bank's clients.

On 7 August 1995 the judgment was served on the applicant. The

applicant requested the Minister of Justice to lodge an extraordinary

appeal on his behalf. By a letter of 20 December 1995 the Minister of

Justice refused to do so, considering that the impugned judgment was

in conformity with the law.

Relevant domestic law

Article 76 of the Code of Civil Procedure provides that any

person who has a legal interest in the judgment in a case being in

favour of one or other of the parties, may join the proceedings as

a co-plaintiff or as a co-defendant at any stage of the proceedings,

until the hearings before the second-instance court are finished.

COMPLAINTS

1. The applicant complains under Article 1 of Protocol No. 1 to the

Convention that he was expropriated by the resolution of the Board of

Receivers of 23 October 1993 which, by first increasing and then

reducing the Bank's share capital and by cancelling 5,040 shares owned

by him, deprived him of his shares. He submits that this was in breach

of Article 1 of Protocol No. 1.

He asserts that the resolution was in violation of Article 105

para. 2 of the Banking Act which merely allowed, in proceedings to

improve a company's financial standing, shareholders' voting rights to

be suspended, but not their rights to participate in taking decisions

on all matters reserved for decision in a shareholders' meeting.

He further maintains that the Commercial Code permits shares to

be cancelled only if the company's memorandum of association allows for

this, whereas the Bank's memorandum of association expressly excluded

this possibility. He challenges the lawfulness of the resolution,

submitting that the Board of Receivers did not have the power to adopt

it. He finally submits that the National Bank of Poland could have

improved the Bank's financial standing by purchasing its shares, but

that it chose instead to expropriate the shareholders.

2. The applicant complains under Article 6 para. 1 of the Convention

that he was deprived of access to court for the determination of his

civil rights as the amount of the court fees demanded by the courts was

obviously disproportionate, and because the courts disregarded the fact

that his property had been seized by a bailiff.

THE LAW

1. The applicant complains under Article 6 para. 1 (Art. 6-1) of the

Convention that he was deprived of access to court for the

determination of his civil rights as the amount of the court fees which

the courts requested from him in relation to the proceedings concerning

his claim to have the resolution of 23 October 1993 annulled was

obviously disproportionate.

Article 6 (Art. 6) of the Convention, insofar as relevant, reads:

"1.In the determination of his civil rights and obligations ...

everyone is entitled to a fair hearing ... by (a) ... tribunal

..."

The Commission observes that the final decision by which the

applicant's request for an exemption from the court fees was dismissed

was taken by the Lublin Court of Appeal on 11 January 1995. Therefore

the Commission is not required to decide whether the facts submitted

by the applicant in this respect disclose any appearance of a violation

of the Convention, as he has not lodged his application within the six-

month time-limit provided for in Article 26 (Art. 26) of the

Convention. The Commission further notes that, in any event, this

complaint would have to be declared inadmissible as manifestly ill-

founded. The Commission observes in this respect that the applicant

later submitted a claim identical with that which he had sought the

determination of in the first set of proceedings. He did so by

requesting the Lublin Regional Court to permit him to join, as a co-

plaintiff, the proceedings in which the Lublin Forestry Enterprise LAS

sought the annulment of the resolution of 23 October 1993. The Court

granted him such permission and later, by the judgment of 23 June 1995,

dismissed his appeal and upheld the judgment of the first-instance

court, considering that it was in conformity with the applicable laws.

Therefore the Commission observes that the applicant's claim was in

fact examined on the merits.

It follows that this part of the application is inadmissible

within the meaning of Article 27 para. 3 (Art. 27-3) of the Convention.

2. The applicant further complains under Article 1 of Protocol No. 1

(P1-1) to the Convention that he was expropriated by the resolution of

the Board of Receivers of 23 October 1993 which deprived him of his

shares in the Bank.

The Commission considers that int cannot, on the basis of the

file, determine the admissibility of this complaint and that it is

therefore necessary, in accordance with Rule 48 para. 2 (b) of the

Rules of Procedure, to give notice of this complaint to the respondent

Government.

For these reasons, the Commission,

DECIDES TO ADJOURN the examination of the applicant's

complaint concerning the alleged interference with his

property rights;

unanimously,

DECLARES INADMISSIBLE the remainder of the application.

M.-T. SCHOEPFER J.-C. GEUS

Secretary President

to the Second Chamber of the Second Chamber

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OLCZAK v. POLAND

OLCZAK v. POLAND

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