Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 19314/92

by Erich NOLD

against Germany

The European Commission of Human Rights (Second Chamber) sitting

in private on 31 March 1993, the following members being present:

MM. S. TRECHSEL, President of the Second Chamber

G. JÖRUNDSSON

A. WEITZEL

J.-C. SOYER

H.G. SCHERMERS

H. DANELIUS

Mrs. G.H. THUNE

MM. F. MARTINEZ

J.-C. GEUS

M. NOWICKI

Mr. K. ROGGE, Secretary to the Second 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 18 November 1991

by Erich NOLD against the Federal Republic of Germany and registered

on 7 January 1993 under file No. 19314/92;

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 is a German citizen born in 1928 and living in

Darmstadt. He is represented by Mr. Heinrich Rodrian, a lawyer

practising in Bad Homburg.

The facts of the case, as agreed by the parties, may be

summarised as follows.

The applicant brought an action on 24 January 1991 against

Metallgesellschaft A.G., a public limited company, contesting the

validity of decisions taken at the company's general meeting. The

applicant is a minority shareholder of the company.

On 3 June 1991 the Regional Court (Landgericht) in Frankfurt

fixed the value of claim (Streitwert) at 1,310,000 DM in the matter

against Metallgesellschaft A.G. The Court stated in the decision that

in view of the importance of the matter and the fact that the success

of the action inter alia depended on it being lodged within a certain

time-limit it would be served on the defendant party even before the

required advance on court fees was paid by the plaintiff.

The decision of 3 June 1991 was taken in accordance with Section

247, para. 1, 2nd sentence, of the Act on Stock Companies

(Aktiengesetz).

The relevant part of Section 247 reads as follows:

[Translation]

"Value of claim.

(1) The value of claim is fixed by the trial court which

determines it according to equity taking due account of all

circumstances of the case at issue, in particular the importance

of the matter for the parties. It may not exceed 1/10 of the

stock capital (Grundkapital) or, if 1/10 corresponds to more than

1,000,000 DM, it may only exceed this amount to the extent that

this is justified by the importance of the matter for the

plaintiff.

(2) If a party can show (glaubhaft machen) that having to bear

costs calculated on the basis of the value of claim as determined

in accordance with para. 1 would seriously endanger its economic

situation the trial court may, on request, order that court costs

are to be calculated on the basis of a value of claim adjusted

to that party's economic situation. In consequence of such an

order the fees due to the lawyer of that party are likewise

calculated on the basis of the adjusted value of claim. Where

that party has to bear the costs of the proceedings ... it has

to reimburse the costs advanced by the other party and its

lawyer's fees only to the extent corresponding to the adjusted

value of claim. ..."

The applicant lodged an appeal (Beschwerde) without relying on

paragraph 2 of Section 247, i.e. without arguing that his economic

situation required an adjustment of the value of claim. He only argued

that if the decisions taken at the defending company's general assembly

were not annulled the company would suffer losses in the amount of some

17,000,000 DM which, however, would affect him only in the amount of

some 15 DM as he held only a few shares.

On 11 July 1991 the appeal was rejected by the Court of Appeal

(Oberlandesgericht) in Frankfurt/Main which considered that the

Regional Court had not misused its discretionary powers.

The applicant then lodged a constitutional complaint which was

rejected by the Federal Constitutional Court (Bundesverfassungsgericht)

on 30 October 1991 as being partly inadmissible and partly clearly ill-

founded. The Federal Constitutional Court found that the

constitutional complaint was not sufficiently substantiated.

Furthermore the decisions complained of did not constitute a denial of

access to court. It was justified that a State recovered costs of

court proceedings from those who institute such proceedings. The fixing

of the value of claim which determines the calculation of the costs

could violate the right of access to court only where in practice it

meant that judicial review was virtually impossible. The fixing of the

value of claim in accordance with Section 247 of the Stock Companies

Act did not have such an effect as on the one hand the Section in

question provided for limitations (Höchstgrenzen) and paragraph 2 of

the Section allowed for a reduction taking into account the economic

possibilities of the shareholder. The applicant had not made use of

this possibility. Furthermore it had to be taken into account that the

proceedings which the applicant intended to bring would, by their

result, not only affect him personally but all other shareholders.

Therefore it was not arbitrary that the Stock Companies Act allowed to

take into account the interests of the company and its shareholders.

The applicant submitted a copy of a decision of the Court of

Appeal in Celle concerning a similar matter (H. Nold v. Kali-Chemie

AG). In that case the plaintiff had invoked paragraph 2 of Section 247

of the Stock Companies Act and the Court ordered that costs were to be

calculated on the basis of an adjusted value of claim in the amount of

20,000 DM.

COMPLAINTS

The applicant complains that in fixing a value of claim at

1,310,000 DM, the German courts in practice denied him access to

justice as the possible costs of the proceedings which have to be paid

by the losing party are calculated on the basis of the value of claim.

Consequently, the risk for him of having to bear costs in the amount

of some 130,000 DM was too high in relation to the dispute which

related to a sum of 7,92 DM. He submits that he does not qualify for

a request under paragraph 2 of Section 247 of the Stock Companies Act.

PROCEEDINGS BEFORE THE COMMISSION AND FURTHER DEVELOPMENTS

The application was lodged on 18 November 1991 and registered on

7 January 1992. On 2 April 1992 the Commission decided to communicate

the application to the respondent Government for observations on

admissibility and merits. The Government submitted observations on 4

June 1992 and 7 September 1992 and the applicant replied on 16 June

1992 and 23 September 1992.

On 6 June 1992 the applicant withdrew his action as the defendant

company renounced implementing the measures which the action was

designed to prevent. The object of this action had thus been achieved.

The advance of DM 7,000 on court costs claimed from the applicant had

been paid by the defendant company. The applicant states that in view

of the high value of claim he renounced the possibility of having the

court decide which of the parties had to bear the costs of the

proceedings already incurred.

THE LAW

1. The applicant complains that as a minority share-holder he was

deprived of his right of access to a court under Article 6 para. 1

(Art. 6-1) of the Convention as defined by the European Court of Human

Rights (Airey judgment of 9 October 1979, Series A No. 32, p.12, paras.

22 et seq.) in that a very high value of claim was fixed by the

domestic court for an action he had lodged against a company. He had

to take an enormous and unacceptable risk of having to bear very high

costs in case he was the losing party.

The Government submit that the costs would have been

proportionate given the importance of the matter to which the action

in question related. If minority shareholders wanted to safeguard

their interests vis-a-vis a company without taking high cost-risks they

could do so by a joint action. Moreover, the advance on costs was paid

for the applicant by the defendant company and he withdrew his action

stating that its object had been achieved.

The Commission considers that Article 6 para. 1 (Art. 6-1) of the

Convention would only apply if the applicant were still seeking a

determination of a dispute ("contestation" in the French text - cf.

Eur. Court H.R., Fredin judgment of 18 February 1991, Series A no. 192,

p. 32, para.82) over a civil right . It notes that the applicant

withdrew his action as the defendant company renounced implementing the

measures which the action was designed to prevent. There was thus no

longer a "dispute" and the applicant can no longer claim to be a

victim, within the meaning of Article 25 (Art. 25), of the alleged

violation of Article 6 of the Convention.

It follows that this complaint is inadmissible under Article 27

para. 2 (Art. 27-2) of the Convention.

2. The applicant now complains that in view of the risk of having

to bear high costs he was likewise prevented from having the court

decide which of the parties had to bear the cost of the proceedings

already incurred. The Commission, assuming that Article 6 (Art. 6)

applies to the costs claims in question, noting that the advance on

court costs was paid by the defendant company for the applicant, finds

no evidence of a "dispute" as required by Article 6 para 1 (Art. 6-1).

Moreover, the risk of having to bear costs of full proceedings with

pleadings and taking of evidence at two levels of jurisdiction and

possibly a review of legal issues at a third level is not comparable

to the risk which the applicant would have had to take had he requested

a decision on costs after his action had become without object. The

applicant has not shown that this risk was disproportionate in the

circumstances.

In this respect there is consequently no appearance of a

violation of Article 6 para. 1 (Art. 6-1) and this part of the

application is therefore manifestly ill-founded within the meaning of

Article 27 para. 2 (Art. 27-2) of the Convention.

For these reasons, the Commission unanimously,

DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Second Chamber President of the Second Chamber

(K. ROGGE) (S. TRECHSEL)

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NOLD v. GERMANY

NOLD v. GERMANY

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