AS TO THE ADMISSIBILITY OF

                      Application No. 29010/95

                      by the Credit and Industrial Bank

                      and Antonín MORAVEC

                      against the Czech Republic

     The European Commission of Human Rights (Second Chamber) sitting

in private on 20 May 1998, the following members being present:

           MM    J.-C. GEUS, President

                 M.A. NOWICKI

                 G. JÖRUNDSSON

                 J.-C. SOYER

                 H. DANELIUS

           Mrs   G.H. THUNE

           MM    F. MARTINEZ

                 I. CABRAL BARRETO

                 J. MUCHA

                 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 4 May 1995 by the

Credit and Industrial Bank and Antonín MORAVEC against the Czech

Republic and registered on 31 October 1995 under file No. 29010/95;

     Having regard to :

-    the reports provided for in Rule 47 of the Rules of Procedure of

     the Commission;

-    the observations submitted by the respondent Government on

     4 November 1996 and the observations in reply submitted by the

     applicants on 17 January 1997 and 25 September 1997;

     Having deliberated;

     Decides as follows:

THE FACTS

     The first applicant is a bank, a joint stock company with a

registered office in Prague ("the bank").  The second applicant, a

Czech citizen born in 1945, was the President of the bank's Board of

Directors and a majority shareholder of the bank ("Mr Moravec").

Before the Commission, the applicants are represented by Mr Oldrich

Chodera, a lawyer practising in Prague.

     The facts of the case as submitted by the parties may be

summarised as follows.

A.   The particular circumstances of the case

     On 27 September 1993 the Czech National Bank (Ceská národní

banka), pursuant to Section 26(1)(a) of the Banks Act No. 21/1992

(Zákon o bankách) ("the Banks Act"), took the bank into compulsory

administration with effect from 30 September 1993 to 31 March 1994, due

to its repeatedly unsatisfactory financial situation.  At the same

time, a compulsory administrator was appointed to act in place of the

bank's statutory organ.  The decision (rozhodnutí) on compulsory

administration contained a notice that the provisions of administrative

procedure did not apply to it and that no appeal lay against it.

     On 29 September 1993 the compulsory administration decision was

published in the Commercial Bulletin (Obchodní vestník).

     By ruling (usnesení) of 30 September 1993 of the Prague 1

District Court (Obvodní soud) the compulsory administration decision

and the appointment of the compulsory administrator were entered in the

Companies Register (Obchodní rejstrík).  The bank was not served with

the ruling.

     On the same day, the compulsory administrator and a

representative of the Czech National Bank came to the bank and informed

all employees that the bank had been taken into compulsory

administration.  The representative of the Czech National Bank notified

Mr Moravec of the decision of the Czech National Bank of

27 September 1993.

     On 4 October 1993 the Prague 1 District Court approved the ruling

by issuing a legal validity clause.

     On 18 March 1994 the Czech National Bank extended the compulsory

administration until 30 June 1994.  On 30 March 1994 the extension was

published in the Commercial Bulletin.  By ruling of 30 March 1994 of

the Prague 1 District Court the extension was entered in the Companies

Register.  On the same day the Prague 1 District Court approved the

ruling by a legal validity clause.  The bank was not served with the

ruling.

     On 1 and 6 April 1994 respectively, the bank, having become aware

of the existence of the rulings of 30 September 1993 and 30 March 1994,

appealed against them to the Prague Municipal Court (Mestsky soud).

It claimed that it should have been considered as a party to the

proceedings by which the compulsory administration was ordered and

contended that the rulings had not been served on the bank.  It also

claimed that the decision of the Czech National Bank of

27 September 1993 could not be reviewed and, therefore, the bank was

not able to say whether the compulsory administration had been imposed

in accordance with the law or not, and that it contained an incorrect

notice about impossibility to appeal.  The bank added that when it

would be served with the rulings, it would make more complete

submissions.

     In its ruling of 17 May 1994, rejecting the appeals, the Prague

Municipal Court stated inter alia:

     "... the Czech National Bank's decisions in question were

     adopted in accordance with Section 25 of [the Banks Act].

      ... In view of the decision of 27 September 1993, the

     compulsory administration was imposed due to the repeatedly

     unsatisfactory financial situation ... of the bank.

     Section 26(4) of [the Banks Act] expressly states that

     administrative law applies to the procedure concerning the

     imposition of penalties ...  Accordingly, the

     administrative law does not apply to other decisions taken

     in accordance with Section 26 of this Act ...  It is true

     that the appellant did not receive the court's rulings.

     However, it is apparent from the appeals which the

     appellate court dealt with as introduced in time, that the

     Credit and Industrial Bank has got familiar with both of

     them ..."

     On 21 June 1994 the bank filed a cassation appeal with the Court

of Cassation (Vrchní soud) against the Prague Municipal Court's ruling

of 17 May 1994, pursuant to Sections 237(f) and 241(3)(d) of the Code

of Civil Procedure.

     On 22 June 1994 the bank lodged a constitutional appeal with the

Constitutional Court against the Prague Municipal Court's ruling of

17 May 1994.

     On 23 June 1994 the Czech National Bank extended the compulsory

administration until 31 December 1994.  On 29 June 1994 the extension

was published in the Commercial Bulletin.  By ruling of 30 June 1994

of the Prague 1 District Court the extension was entered in the

Companies Register.  On the same day the Prague 1 District Court

approved the ruling by a legal validity clause.  The ruling was sent,

as a private mail, to the bank's legal representative's office.  On

21 July 1994 the bank appealed against the ruling to the Prague

Municipal Court.

     In the meantime, on 29 June 1994, the Constitutional Court had

declared the bank's constitutional appeal inadmissible finding that the

ruling of 17 May 1994 had not been served on the parties to the

proceedings and, therefore, had not become final.

     On 29 July 1994 Act No. 156/1994, which amended the Banks Act in

particular as to the procedure on compulsory administration, came into

force.  According to Article IV, the Act has become retroactively

applicable to all compulsory administrations imposed before that date.

     On 30 August 1994 the ruling of the Prague Municipal Court of

17 May 1994 was served on the bank and thereby became final.

     On 15 September 1994 the bank filed another cassation appeal

against the Prague Municipal Court's ruling of 17 May 1994 asking the

Court to stay the proceedings on the first cassation appeal which had

been lodged before the notification of the ruling.

     On 15 September 1994 the bank introduced a second constitutional

appeal against the Prague Municipal Court's ruling of 17 May 1994.  It

pointed out that the ruling had became final by its notification and

was, therefore, subject to appeal before the Constitutional Court.  The

bank submitted that it should have been a party to the proceedings on

registration in the Companies Register and should have been served with

all decisions relating to these proceedings.  It further challenged an

allegedly wrong interpretation of Section 26(4) of the Banks Act by the

Prague Municipal Court and suggested that the provision together with

Section 41(2) of the Banks Act should be repealed.

     On 13 October 1994 the Prague Municipal Court dismissed the

bank's appeal against the Prague 1 District Court's ruling of

30 June 1994 as being introduced by an unauthorised person.  The Court

found that the bank's statutory organ, pursuant to Section 29(2) of the

Banks Act as amended, had been replaced by the compulsory

administrator, who alone could represent the bank or authorise a legal

representative.

     On 1 December 1994 the Czech National Bank decided that the

compulsory administration would not finish on 31 December 1994, but it

would terminate for one of the reasons indicated in Section 33 of the

Banks Act as amended.  On 7 December 1994 the decision was entered in

the Companies Register.

     In the meantime, on 6 December 1994 the bank had lodged a third

constitutional appeal, this time against the Prague Municipal Court's

ruling of 13 October 1994.  It complained in particular that the Prague

Municipal Court had violated the bank's right to be protected by a

court in that it considered its appeal as being introduced by an

unauthorised person.  It claimed that Act No. 156/1994 entered into

force after the compulsory administration had been imposed and,

therefore, could not be applied to this case.

     On 13 December 1994 the Constitutional Court declared

inadmissible the bank's second constitutional appeal against the Prague

Municipal Court's ruling of 17 May 1994.  The Court held that when the

constitutional appeal had been lodged, the Prague Municipal Court was

dealing with the bank's appeal and the cassation appeal (dovolání)

introduced in the meantime was still being dealt with.  Accordingly,

there was no final decision at all.

     On 31 January 1995 the Constitutional Court dismissed the bank's

third constitutional appeal as being unsubstantiated and as being

introduced by an unauthorised person.  The Court stated in particular:

     "... the Prague Municipal Court founded its decision

     expressly on Section 29(2) of [the Banks Act] ... according

     to which a compulsory administrator replaces the statutory

     organ of a bank during compulsory administration.  ...

     [the bank's legal representative] was not authorised by the

     compulsory administrator of the bank to make an appeal or

     lodge a constitutional appeal.

     It is not true that, as of the date of the entry into force

     of Act No. 156/1994, the compulsory administration was not

     in force as against the bank.  The Constitutional Court

     found from the case file of the Prague 1 District Court

     that the decision imposing the compulsory administration

     ... was ordered by the Czech National Bank on 27 September

     1993 ...  The compulsory administration became effective,

     in accordance with Article 29(1) of [the Banks Act], by its

     registration in the Companies Register, pursuant to the

     Prague 1 District Court's ruling of 30 September 1993 which

     became final on 4 October 1993. ...

     Moreover, according to [the Banks Act], administrative law

     was not applicable to the proceedings concerning compulsory

     administration, with the exception of cases explicitly

     stated by this Act (Sections 26(4) and 41). The

     administrative law became applicable only after the entry

     into force of Act No. 156/1994 (Section 26(4)). In this

     respect, an administrative complaint could be lodged

     against a decision given by the Czech National Bank

     (Section 26(8)).  An administrative complaint could also be

     made under Section 41(1) of [the Banks Act].  However, only

     by Section 26(7) of the Banks Act as amended, did the Czech

     National Bank become obliged to notify its decision on

     compulsory administration to [the bank]. ..."

     On 15 June 1995, pursuant to Section 33(1) of the Banks Act as

amended, the Czech National Bank withdrew the bank's business licence

(povolení pusobit jako banka) and on 15 August 1995, upon the bank's

appeal, it confirmed this decision.

     On 23 August 1995 an application form with a form of authority

dated 10 August 1995 and made on behalf of Mr Moravec was submitted to

the Commission.

     On 2 October 1995 the Prague Regional Commercial Court (Krajsky

obchodní soud) instituted bankruptcy proceedings against the bank.

     On 5 January 1996 a second form of authority dated

29 November 1995 on behalf of Mr Moravec was sent to the Commission by

his representative.

     By letter of 12 June 1996 the bank's and Mr Moravec's

representative confirmed that the application had been introduced on

behalf of both applicants.

     On 7 January 1997 the Prague Regional Commercial Court, to which

the bank's cassation appeal had been transferred, stayed the

proceedings on the ground that the bank had not paid the court fees

although it was ordered to do so by the Court's ruling of 22 May 1995

(amended on 10 July 1996 and served on the bank on 12 August 1996).

B.   Relevant domestic law

     Until 29 July 1994 the compulsory administration proceedings were

regulated by the Banks Act No. 21/1992 ("the Banks Act").

     According to Section 26(1), compulsory administration is a

measure which the Czech National Bank, as an administrative authority

under Section 1(3) of the Czech National Bank Act No. 6/1993, can

impose upon a bank if it does not respect the conditions laid down in

its business licence and/or if it infringes the law (i.e. if its

financial situation and solvency considerably or repeatedly fail to

satisfy the conditions laid down in the law, and prior measures have

not remedied the situation).

     According to Section 26(4), administrative law applied to

proceedings concerning the imposition of penalties.  The Act did not

oblige the Czech National Bank to notify its decision concerning the

imposition of compulsory administration to the bank concerned.  It did

not specify the parties to the proceedings and did not indicate any

remedy against a decision imposing compulsory administration.

     According to Section 29(1), compulsory administration became

effective on the day of its registration in the Companies Register.

Before registration, the decision of compulsory administration had been

published in the Commercial Bulletin.

     Compulsory administration proceedings were modified by Act

No. 156/1994 ("the Banks Act as amended") which entered into force on

29 July 1994 and which was retroactively applied to all compulsory

administrations imposed before this date.  According to this Act,

administrative law does now apply to the proceedings concerning

imposition of compulsory administration.  It determines the obligation

for the Czech National Bank to notify its decision to the bank

concerned and specifies the parties to the proceedings.  A defendant

bank can lodge an administrative complaint (rozklad) against such a

decision.

     Section 14 of the Code of Administrative Procedure (Act

No. 71/1967) recognises as a party to proceedings any person whose

rights, obligations or interests protected by law are to be dealt with,

or, whose rights, obligations or interests protected by law may be

directly affected by an administrative decision.

     According to Section 61 of the Code of Administrative Procedure,

any administrative decision taken by a central state administrative

authority at first instance can be contested by an administrative

complaint lodged within 15 days from the date on which the

administrative decision was served.

     The following sections of the Code of Civil Procedure were

applied in the present case:

     Section 167 provides inter alia that "Unless provided by law

otherwise, the court decides by a ruling.  Where it is not stated

otherwise, the provisions relating to judgments shall be deemed to

apply to such rulings".

     Section 159(1) provides that "a judgment which is not subject to

appeal shall become final as soon as it has been served".

     According to Section 161(2), "if a judgment does not create an

obligation, it becomes enforceable when it becomes final".

     Section 168(2) provides inter alia that "a ruling is served on

the parties where it cannot be appealed".

     Section 171(2) provides inter alia that "if a ruling does not

create an obligation, it becomes enforceable on the day on which it is

served".

     According to Section 206, "if an entitled person makes, in time,

an appeal against a ruling, the ruling becomes final only after an

appeal court has decided on the appeal".

     According to Section 200a, the proceedings concerning entries

into the Companies Register shall be instituted upon a request of a

natural or legal person concerned or a person entitled by law to do so.

     According to Section 200b, the court shall decide on the contents

of an entry into the Companies Register by a ruling, without a hearing.

     According to Section 236(1), any decision of the court of appeal,

which has become final, may be challenged by a cassation appeal

(dovolání) in cases provided by law [the Code of Civil Procedure].

     According to Section 237(1)(f), a cassation appeal may be lodged

against a decision of the court of appeal if a party to the proceedings

was prevented from acting before the court due to a wrong court

procedure.

     According to Section 240, a party to the proceedings can lodge

a cassation appeal within one month from the date on which the decision

of the court of appeal which decided at first instance became final.

     Section 241(3)(d) provides that a cassation appeal can be lodged

against a decision based on incorrect legal examination of the matter.

     The administrative appeal (správní zaloba) is governed by the

following sections:

     Under Section 247, any person who claims to have been affected

by a decision taken by an administrative authority may challenge the

lawfulness of that decision before the court.

     According to Section 250i(1) the facts at the time when the

decision in question was given are decisive.  No examination of

evidence takes place.

     Section 250j(1) provides that the court, upon finding that the

decision in question has been made in accordance with law, rejects the

administrative appeal.

     Section 250j(2) provides that the court, upon finding that the

decision in question has not been made in accordance with law, may

quash the decision and return the matter to the indicated

administrative authority for further proceedings.  The court may also

quash a decision when it appears during the course of the proceedings

that the decision cannot be reviewed for lack or confusion of reasons.

     The relevant provision of the Commercial Code (Act No. 513/1991),

Section 27(2), provides that the facts entered in the Companies

Register become effective with respect to everyone from the date on

which the entry was made.

     The powers of the Constitutional Court and proceedings before it

are governed by Constitutional Court Act No. 182/1993.

     According to Section 72(2), a constitutional appeal shall be

lodged within a period of 60 days from the date on which the decision

on the last domestic remedy available to the applicant under law became

final.  According to Section 75(1), the constitutional appeal shall be

inadmissible where the applicant has not exhausted all remedies

available to him under the law.

     The Constitutional Court of the Czech Republic in a judgment of

3 February 1994 in case No. III. ÚS 40/93 ruled on the principles of

the exhaustion of a cassation appeal before introduction of a

constitutional appeal.  The Court held in particular:

     "In cases where the law [Code of Civil Procedure] does not admit

     a cassation appeal, the latter cannot be regarded as a procedural

     remedy available under the law for protecting the rights and

     freedoms recognised in a constitutional law or an international

     treaty within the meaning of Article 10 of the Constitution of

     the Czech Republic.  In these cases, the time-limit for

     introducing a constitutional appeal starts running on the day on

     which the decision of the court of appeal becomes final.  A

     decision by which the cassation appeal was declared inadmissible

     must be regarded as a decision of declaratory character

     confirming the non-existence of a right - in this case the right

     to lodge a cassation appeal against the final decision of the

     court of appeal. ..."

COMPLAINTS

1.   The applicants complain that they were not considered to be

parties to the proceedings on registration of the compulsory

administration in the Companies Register.  Therefore, neither the

ruling on the registration of the compulsory administration nor the

rulings on its two extensions were communicated to them.  They also

allege that their right of access to court guaranteed by Article 6

para. 1 of the Convention was breached in that their appeal against the

registration of the second extension of the compulsory administration

was rejected as being introduced by an unauthorised person.

2.   They further maintain that during the period of the compulsory

administration they were deprived of their right to participate in the

financial administration of the bank.  They claim that the measures

taken by the Czech National Bank constituted an unlawful interference

with their right to the peaceful enjoyment of their possessions

contrary to Article 1 of Protocol No. 1 to the Convention.  They submit

that the compulsory administrator was appointed on the basis of

unlawful legal acts which have never come into effect.

PROCEEDINGS BEFORE THE COMMISSION

     The application was introduced on 4 May 1995 and registered on

31 October 1995.

     On 4 September 1996 the Commission decided to communicate the

application to the respondent Government, pursuant to Rule 48

para. 2(b) of the Rules of Procedure.

     The Government's observations were submitted on 4 November 1996.

The applicants replied after an extension of the time-limit fixed for

that purpose on 17 January 1997.  They complemented their observations

on 25 September and 8 October 1997.

THE LAW

     The applicants complain that during the period of the compulsory

administration they were deprived of their right to participate in the

financial administration of the bank, and claim that the measures taken

by the Czech National Bank constituted an illegal interference with

their right to the peaceful enjoyment of their possessions contrary to

Article 1 of Protocol No. 1 (P1-1) to the Convention.  They further

claim that neither the ruling on the registration of the compulsory

administration nor the rulings on its two extensions were communicated

to them.  They also allege that their right of access to court under

Article 6 para. 1 (Art. 6-1) of the Convention was breached in that

their appeal against the registration of the second extension of the

compulsory administration was rejected as being introduced by an

unauthorised person.

Article 25 (Art. 25) of the Convention

     The respondent Government first submit that the application was

not presented on behalf of the bank as a legal person, but only on

behalf of Mr Moravec as a natural person, whose rights are not involved

notwithstanding that he is a shareholder of the bank.  The Government

refer to the application form of 23 August 1995 which was completed in

the name of Mr Moravec only.

     The applicants maintain that according to a basic legal

principle, any legal act must be interpreted according to its contents

and the intention of the person concerned, and not according to the

form of the legal act.  The applicants emphasise that from the text of

the application it is clear that the Credit and Industrial Bank was a

party to the compulsory administration proceedings.  Therefore, the

claim of Mr Moravec that the compulsory administration proceedings to

which the bank was a party, were incompatible with the Convention,

should be accepted as a statement of intention on the part of the bank

to bring an application.  The applicants further refer to the extract

from the Companies Register of 7 October 1997 from which it appears

that Mr Moravec as the President of the bank's Board of Directors was

entitled to represent the bank and to commence proceedings in domestic

law when the compulsory administration came into effect.

     The Commission recalls that under Article 25 para. 1 (Art. 25-1)

of the Convention, it may receive petitions from any person, non-

governmental organisation or group of individuals claiming to be the

victim of a violation by one of the High Contracting Parties of the

rights set forth in this Convention.

     The bank was affected by the compulsory administration in that

it prevented the bank from managing its affairs.  It is therefore clear

that the bank has an interest in the subject-matter of the application.

The Commission finds that even though the application form was formally

completed in Mr Moravec's name only, it appears from the substance of

the application that the bank through Mr Moravec wished to introduce

an application.  Therefore, the forms of authority submitted by

Mr Moravec can be accepted as sufficient to introduce the application

on behalf of the bank.

     In these circumstances, the Commission finds that the bank lodged

an application with the Commission within the meaning of Article 25

(Art. 25) of the Convention and the Commission has competence to

examine it.  In this respect the Commission recalls that not only

substantive rights under Section I of the Convention or its Protocols

but also Article 25 (Art. 25) of the Convention, which confers upon

individuals and non-governmental organisations a right of a procedural

nature, must be interpreted as guaranteeing rights which are practical

and effective as opposed to theoretical and illusory (see Eur. Court

HR, Cruz Varas and Others v. Sweden judgment of 20 March 1991, Series

A no. 201, p. 36, para. 99).

     It follows that the Government's objection on this point must be

rejected.

     As to Mr Moravec in his personal capacity, the Commission

observes that it is not contested by the Government that he validly

introduced a petition with the Commission.  However, the Commission

finds that as a shareholder of the bank, albeit a majority shareholder,

he may not claim to be a victim of an alleged violation of the bank's

rights under the Convention (see Eur. Court HR, Agrotexim and Others

v. Greece of 24 October 1995, Series A no. 330, pp. 25-26, paras. 68-

71).

     It follows that, insofar as the application has been lodged by

Mr Moravec as a majority shareholder of the bank, it must be rejected

as incompatible ratione personae with the provisions of the Convention,

under Article 27 para. 2 (Art. 27-2) thereof.

Article 26 (Art. 26) of the Convention

     To the extent that the bank is an applicant before the

Commission, the Government object that the application is inadmissible

for failure to exhaust all domestic remedies.

     The Government submit that on 30 September 1993, when the bank

was informed about the compulsory administration and received the Czech

National Bank's original decision of 27 September 1993, it had no

objections. Only seven months later did the bank appeal,

unsuccessfully, against three rulings of the Prague 1 District Court

concerning the registration in the Companies Register of the compulsory

administration and its two extensions.

     The Government also maintain that two constitutional appeals

lodged against the Prague Municipal Court's ruling of 17 May 1994, by

which the appeals made by the bank against the registrations of the

imposition of the compulsory administration and of its first extension

were dismissed, were declared inadmissible by the Constitutional Court

on the grounds that there was no final decision.  The Government stress

that no other constitutional appeal against this ruling, after it

became final, was lodged by the bank although it was informed by the

Constitutional Court about this remedy.  They note that on

6 December 1994 the bank filed another constitutional appeal, this time

against the Prague Municipal Court's ruling of 13 October 1994, by

which the bank's appeal against the registration of the second

extension of the compulsory administration was dismissed.  The

Constitutional Court, having regard to the registrations in the

Companies Register of the compulsory administration and of its first

extension, considered only the extension of the compulsory

administration and rejected the constitutional appeal as being

manifestly ill-founded.  The Government add that the bank never invoked

Article 6 para. 1 (Art. 6-1) of the Convention in any of its

constitutional appeals.

     The applicants dispute the Government's submission concerning the

second constitutional appeal.  They note that the constitutional appeal

was dismissed because, in the meantime, they had lodged a cassation

appeal.  However, according to the applicants, they used this remedy

as a matter of procedural prudence because the Code of Civil Procedure

provides for very strict conditions of its access.  They submit that,

according to Section 72(2) of the Constitutional Court Act, a

constitutional appeal shall be lodged within a 60 days' time-limit from

the date on which the decision regarding the last admissible remedy

became final.  Therefore, if the applicants had delayed their

constitutional appeal until the decision on the cassation appeal became

final, they might have run the risk of being outside the prescribed

time-limit.  In their view, the Constitutional Court should either have

discontinued the proceedings until the applicants' cassation appeal had

been considered, or it should have made a preliminary ruling of its

own.  Finally, the applicants declare that, contrary to the

Government's allegation, they received no indication from the

Constitutional Court that it would deal with their constitutional

appeal.

     The applicants also object to the Government's submission that

having failed to exhaust all remedies upon the imposition of the

compulsory administration, they could not subsequently challenge the

decisions on its extension as it was only the compulsory administrator

who was authorised to do so after the compulsory administration had

come into effect.  In the applicants' view this opinion violated the

fundamental principles of a democratic legal state.  Indeed, there

existed an obvious collision of two opposing interests: one can hardly

expect a remedy to be requested by someone whose function would be put

at risk thereby.  The applicants conclude that the statutory organ of

the bank should have continued to enjoy limited competence even after

the imposition of compulsory administration.

     The Commission recalls that under Article 26 (Art. 26) normal

recourse should be had by an applicant to remedies which are available

and sufficient to afford redress in respect of the breaches alleged.

The existence of the remedies in question must be sufficiently certain

not only in theory but also in practice, failing which they will lack

the requisite accessibility and effectiveness.  Article 26 (Art. 26)

also requires that the complaints intended to be made subsequently at

Strasbourg should have been submitted to the appropriate domestic body,

at least in substance and in compliance with the formal requirements

and time-limits laid down in domestic law and, further, that any

procedural means that might prevent a breach of the Convention should

have been used.  Moreover, it is incumbent on the Government claiming

non-exhaustion to satisfy the Court that the remedy was an effective

one available in theory and in practice at the relevant time, that is

to say, that it was accessible, was one which was capable of providing

redress in respect of the applicant's complaints and offered reasonable

prospects of success.  However, once this burden of proof has been

satisfied it falls to the applicant to establish that the remedy

advanced by the Government was in fact exhausted or was for some reason

inadequate and ineffective in the particular circumstances of the case

or that there existed special circumstances absolving him or her from

the requirement (see Eur. Court HR, Akdivar and Others judgment of

16 September 1996, Reports of Judgments and Decisions 1996-IV, p. 1210-

1211, paras. 66-68).

     The Commission observes that the constitutional appeal was

pursued in the present case.  It is true that the first constitutional

appeal was declared inadmissible on the ground that the ruling of

17 May 1994 of Prague Municipal Court against which the appeal was

directed had not become final.  However, on 30 August 1994 this ruling

became final and on 15 September 1994 the bank lodged the second

constitutional appeal within the 60 days' time-limit under Section

72(2) of the Constitutional Court Act.  In this regard, the Commission

cannot agree with the Government's submission that "no other

constitutional appeal against this ruling after it became final has

been lodged".

     Even if the Government considered that the above mentioned ruling

was not a final decision at the relevant time as the Court of Cassation

had not decided on the bank's cassation appeal, the Commission must

consider whether this appeal can be regarded as a remedy to be

exhausted under Article 26 (Art. 26) of the Convention in the present

case.

     The Commission notes that according to Section 75(1) of the

Constitutional Court Act, a constitutional appeal is inadmissible where

the applicant has not exhausted all remedies available to him under

national law except for a request for re-opening of the trial.

However, this provision does not specify whether the applicant must

exhaust other extraordinary remedies; in Czech law these are a

cassation appeal in civil matters and an appeal by the Minister of

Justice to the Supreme Court against a decision contravening a

statutory provision in criminal matters.  The Constitutional Court has

clarified this problem in civil matters by its case-law, according to

which in cases where the cassation appeal is not admissible, it cannot

be regarded as a procedural remedy before introducing the

constitutional appeal.  Accordingly, the 60 days' time-limit begins

from the date on which the judgment of the court of appeal became final

(cf. III. ÚS 94/93).

     The case-law of the Constitutional Court has not, however,

resolved the situation where the admissibility of a cassation appeal

is not clear, in particular when the cassation appeal is lodged, as in

the present case, under Section 237 of the Code of Civil Procedure

because its admissibility depends on the findings of the Court of

Cassation.  Moreover, according to Section 240 of the Code of Civil

Procedure, the cassation appeal is available only to the parties to the

proceedings.  However, in the instant case, this was a disputed point

and subject of the proceedings before the national courts.  The

Commission finds, therefore, that the cassation appeal did not offer

the bank reasonable prospects of success and cannot be said to be

effective for the purposes of the present case.

     Accordingly, the application cannot be declared inadmissible for

non-exhaustion of domestic remedies.

Article 6 para. 1 (Art. 6-1) of the Convention

     The applicants complain that they were not considered to be

parties to the proceedings on registration of the compulsory

administration in the Companies Register.  Therefore, neither the

ruling on the registration of the compulsory administration nor the

rulings on its two extensions were communicated to them.  They also

allege that their right of access to a tribunal guaranteed by Article 6

para. 1 (Art. 6-1) of the Convention was breached in that their appeal

against the second extension of the compulsory administration was

rejected as introduced by an unauthorised person.

     Article 6 para. 1 (Art. 6-1) of the Convention, insofar as

relevant, reads as follows:

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

     everyone is entitled to a fair and public hearing within a

     reasonable time by an independent and impartial tribunal

     established by law. ..."

     The Government contend that the right of the bank to access to

a court under Article 6 para. 1 (Art. 6-1) of the Convention was not

violated.

     The Government first submit that the bank could have, under

Section 247 of the Code of Civil Procedure, filed an administrative

appeal to a court against the Czech National Bank's original decision

and claimed that the latter breached its property rights guaranteed by

Article 11 of the Charter of Fundamental Rights and Freedoms.  Invoking

Article 36 para. 2 of the Charter of Fundamental Rights and Freedoms,

the bank could have insisted on examination by the court of the Czech

National Bank's decision as it concerned the bank's fundamental rights

and freedoms.

     As to the registration of the imposition of compulsory

administration and of its first extension which were then objected to

before the Constitutional Court, the Government submit that the

constitutional appeals had to be dismissed without decision on the

merits because the bank did not follow the instructions of the

Constitutional Court.  Consequently, the Constitutional Court refused

also the third constitutional appeal concerning the registration of the

second extension.

     The Government further contend that the bank's submission that

this right was breached by the fact that the appeal against the second

extension of the compulsory administration was rejected by the Prague

Municipal Court as being introduced by an unauthorised person, is

unsubstantiated.  In the Government's view, the main issue is not that

the Prague Municipal Court denied justice to the bank, but that the

latter disposed of an effective domestic remedy (a constitutional

appeal) to challenge the decision in question but failed to exhaust it.

The Government add that in the course of the proceedings before the

national courts, the bank never invoked Article 6 para. 1 (Art. 6-1)

of the Convention which is a part of the Czech legal order.

     The applicants emphasise that they did not wish to challenge the

merits of the imposition of the compulsory administration which

evaluation is a matter for administrative deliberation.  For this

reason they did not introduce an administrative appeal under

Section 247 of the Code of Civil Procedure as the Government submit.

They claim that upon this appeal, an administrative decision may only

be attacked on grounds of legality.  According to Section 250(j)(2) of

the Code of Civil Procedure, the court may quash an administrative

decision only for (i) incorrect legal evaluation, (ii) inconsistency

between the established facts and the content of documents, (iii)

impossibility to verify the facts or (iv) insufficient evidence.  The

question of necessity or inevitability of the compulsory administration

cannot be,  therefore, the subject of an administrative appeal.  The

applicants submit that the extent of the necessity can be evaluated

only by an administrative authority and within the framework of

administrative proceedings.  The decision of the Czech National Bank

should therefore have contained information indicating the

admissibility of a remedy in order to maintain the principle of two

levels of jurisdiction in administrative proceedings.  This should have

entailed an administrative complaint in accordance with Section 61 of

the Code of Administrative Procedure.  Moreover, the applicants did not

lodge an administrative appeal because the compulsory administration

came into effect by the registration in the Companies Register.

     The applicants further submit that the compulsory administration

infringed their rights and obligations.  They maintain that even during

the compulsory administration, the statutory organ of the bank should

have retained limited competence regarding the acts of public

administration.  They submit that they were not notified about the

registration of the compulsory administration and of its first

extension and that their appeal against the registration of the second

extension of the compulsory administration was dismissed as being

introduced by an unauthorised person.  Thus, the statutory organ of the

bank was deprived of any means of redress.

     The applicants contend that the decision of the Czech National

Bank concerning the imposition of the compulsory administration

instructed them that no remedy was admissible.  In their view, this

violated the principle of two levels of jurisdiction in administrative

proceedings.  They recall that it was impossible to lodge an

administrative appeal because, within the framework of administrative

jurisdiction, only the legality of the decision could be examined, not

the administrative review itself.

     The applicants also object to the Government's submission that

having failed to exhaust all remedies upon the imposition of the

compulsory administration, the applicants could not subsequently

challenge the decisions on its extension as it was only the compulsory

administrator who was authorised to do so after the compulsory

administration had come into force.  The applicants conclude that they

had not sufficient access to a court with sufficient powers or review.

     The Commission considers, in the light of the parties'

submissions, that this part of the case raises complex issues of law

and of facts under the Convention, the determination of which should

depend on an examination of the merits of the application as a whole.

The  Commission concludes, therefore, that this part of the

application is not manifestly ill-founded, within the meaning of

Article 27 para. 2 (Art. 27-2) of the Convention.  No other grounds for

declaring it inadmissible have been established.

Article 1 of Protocol No. 1 (P1-1) to the Convention

     The applicants maintain that during the period of the compulsory

administration, they were deprived of their right to participate in the

financial administration of the bank.  They claim that the measures

taken by the Czech National Bank constituted an unlawful interference

with their right to the peaceful enjoyment of their possessions

contrary to Article 1 of Protocol No. 1 (P1-1) to the Convention.  They

submit that the compulsory administrator was appointed on the basis of

unlawful legal acts which have never come into effect.

     Article 1 of Protocol No. 1 (P1-1) to the Convention provides:

     "Every natural or legal person is entitled to the peaceful

     enjoyment of his possessions.  No one shall be deprived of his

     possessions except in the public interest and subject to the

     conditions provided for by law and by the general principles of

     international law.

     The preceding provisions shall not, however, in any way impair

     the right of a State to enforce such laws as it deems necessary

     to control the use of property in accordance with the general

     interest or to secure the payment of taxes or other contributions

     or penalties."

     The Government maintain that all measures of the Czech National

Bank were performed in accordance with the national law and the second

paragraph of Article 1 of Protocol No. 1 (P1-1) to the Convention. The

Government state that the purpose of compulsory administration is to

prevent the current management of a bank from continuing to perform its

economic activities which are in breach of legal regulations and which

lead to the bankruptcy of the bank.  In the present case, it was

therefore relevant that during the compulsory administration the

management of the bank did not have the right to participate in the

financial management of the bank.

     The Government further submit that it was necessary to impose the

compulsory administration on the bank in the general interest as well

as in the interest of keeping the stability of the banking system in

the Czech Republic and in the interest of third persons who deposited

their financial means in the bank which used them in variance with

legal regulations and rules of care, which resulted in its bankruptcy.

     The applicants submit that the compulsory administration

constitutes, in the name of public interest, a limitation of property

rights.  However, when the compulsory administration is imposed in a

procedurally erroneous way, the rights of the persons affected are

themselves breached, irrespective of whether there are reasons for the

imposition or not.  The applicants state that they had no opportunity

to express themselves concerning the reasons for the limitation of

their property rights as they had no opportunity to present their case

to an appellate authority for an examination of these reasons.

Therefore, their rights under Article 1 of Protocol No. 1 (P1-1) to the

Convention were not violated in isolation, but in relation to the

violation of their rights guaranteed by Article 6 para. 1 (Art. 6-1)

of the Convention.

     The Commission considers, in the light of the parties'

submissions, that this part of the case raises complex issues of law

and of fact under the Convention, the determination of which should

depend on an examination of the merits of the application as a whole.

The Commission concludes, therefore, that this part of the application

is not manifestly ill-founded, within the meaning of Article 27 para. 2

(Art. 27-2) of the Convention.  No other grounds for declaring it

inadmissible have been established.

     For these reasons, the Commission,

     unanimously,

     DECLARES THE APPLICATION INADMISSIBLE as regards Mr Moravec, a

     majority shareholder of the bank;

     by a majority,

     DECLARES THE APPLICATION ADMISSIBLE, without prejudging the

     merits of the case, as regards the bank.

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

        Secretary                                 President

   to the Second Chamber                     of the Second Chamber