Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 14807/89

by AGROTEXIM HELLAS S.A., BIOTEX S.A.,

HYMOFIX HELLAS S.A., KYKLADIKI S.A.,

MEPEX S.A. and TEXEMA S.A.

against Greece

The European Commission of Human Rights sitting in private on

12 February 1992, the following members being present:

MM.C.A. NØRGAARD, President

J.A. FROWEIN

F. ERMACORA

G. SPERDUTI

G. JÖRUNDSSON

A.S. GÖZÜBÜYÜK

J.-C. SOYER

H. DANELIUS

Mrs.G. H. THUNE

SirBasil HALL

MM.F. MARTINEZ RUIZ

C.L. ROZAKIS

Mrs.J. LIDDY

MM.L. LOUCAIDES

M.P. PELLONPÄÄ

Mr. J. RAYMOND, Deputy Secretary to the Commission

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 29 November 1988

by AGROTEXIM HELLAS S.A., BIOTEX S.A., HYMOFIX HELLAS S.A., KYKLADIKI

S.A., MEPEX S.A. and TEXEMA S.A., against Greece and registered on 21

March 1989 under file No. 14807/89;

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

of Procedure of the Commission;

Having regard to the observations submitted by the respondent

Government on 16 May 1990 and to the applicants' observations in reply

presented on 4 July 1990;

Having regard to the parties' submissions in view of and at the

oral hearing on the admissibility and merits of the application;

Having deliberated;

Decides as follows:

THE FACTS

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

summarised as follows.

The applicant companies are shareholders of the company "Karolos

Fix Brewery S.A." registered in Athens. They own 295,783 of the total

576,000 shares of the said company, i.e. 51.35 %. In the proceedings

before the Commission they were initially represented by Mr. Prodromos

Dagtoglou, Attorney at Law, and subsequently by Mr.Panagiotis

Bernitsas, Attorney at Law.

In 1976 the Karolos Fix Brewery S.A. decided to negotiate

development projects for two of its properties in Syngrou Avenue and

Patission Road in Athens, where two of its discontinued factories were

situated. The company expected these projects to enable it to overcome

its financial difficulties. The negociations concerned in particular

a project for building a complex of offices and shops on the Syngrou

Avenue plot, which project appeared to be supported by the National

Bank of Greece, a State controlled bank and the main creditor of the

company.

On 9 September 1979 the Municipal Council of the City of Athens

(Dioikitiko Symvoulio Dimou Athineon), by its decision (praxi) 595/1979

concerning town planning, designated the property in Patission Road as

an area to be turned into a public park. A similar decision was issued

on 28 April 1980 (No. 355/1980) with regard to the property in Syngrou

Avenue. As a result of the above the entreprises negotiating with the

company retracted. Moreover, the National Bank of Greece stopped the

financing of the company's projects.

On 22 February 1981 the Municipality of Athens occupied the site

in Syngrou Avenue and turned part of it into a public park. Signposts

were also erected with the words "Area to be expropriated". Similar

signposts were placed later on the site in Patission Road. The company

requested in vain that these signposts be removed. The Mayor of Athens

declared in speeches and to the press that the said signposts

emphasised the will of the City of Athens to acquire the land.

Upon request by the company, the Prosecutor of the Athens Court

of Appeal (Eisageleas ton en Athinais Efeton), ruling provisionally,

on the occupation of the Syngrou Avenue plot, ordered, on 3 November

1981, the Municipality of Athens and any other third party to cease the

occupation of the litigious site. However the occupation did not cease.

On 18 December 1982 the company appealed against the

Municipality's implicit refusal of a building permit for the property

on Patission Road. This appeal is now pending before the Council of

State (Symvoulio tis Epikrateias).

The company's commercial operations went on declining. On 10

August 1983 the General Meeting of the Shareholders decided the winding

up of the company and appointed a liquidator.

On 8 August and 9 November 1983 the company, through its

liquidator appointed by the General Meeting of the Shareholders, lodged

with the First Instance Civil Court of Athens (Polymeles Protodikeio)

two actions against the Greek State, the Municipality of Athens and the

Mayor of Athens personally. It claimed compensation for the damage it

had suffered from the activities and declarations of the Municipality

and of the Mayor.

On 8 November 1983 the Minister of National Economy ordered by

Decree No. 1802/1983 the winding up of the company under the provisions

of Articles 7 para. 3 and 9 Law 1386/1983 on "ailing" companies. As a

result of this decision the company's administration was taken over by

the State agency "Organisation for the Redressment of Undertakings"

("Organismos Anasyngrotissis Epicheirisseon", OAE). On 28 June 1984 two

liquidators were appointed by decision (No. 6552/1984) of the Athens

Court of Appeal (Efeteio Athinon) which replaced the liquidator

appointed by the General Meeting of the Shareholders. The Court of

Athens found in particular that, having regard to the importance of the

company's property and of the amount of its debts, the appointment of

two liquidators, one on the side of the National Bank of Greece - the

main creditor of the company - and one on the side of the company

itself was required. The Court of Appeal ruled that the liquidators

should act in common.

On 21 November 1983 the Municipal Council of the City of Athens

decided to maintain its projects as to the property on Syngrou Avenue.

However, no expropriation proceedings started.

On 13 July 1984 the First Instance Court (Polymeles Protodikeio)

of Athens gave two judgments (Nos 10848/1984 and 10849/1984) concerning

the two civil actions lodged by the company in August and November

1983. The court found that the various actions complained of could not

be regarded as final administrative acts capable of causing damage to

the company's property rights. The liquidators appointed on 28 June

1984 did not pursue any remedies against the above judgments of the

First Instance Court.

In an interview published on 11 November 1985 the Mayor of Athens

confirmed that the placement and maintainance of the signposts

indicated the City's will to acquire these properties. The Mayor

mentioned that representatives of foreign companies had negotiated

projects for the building of a multi-purpose commercial centre and

asked for building permits. He had refused and the Fix company had

sued him personally claiming compensation for the damage it had

suffered.

On 18 July 1986 two of the applicant shareholders, namely TEXEMA

S.A. and KYKLADIKI S.A., summoned the liquidators to take action in

order to safeguard the value of the properties.

In March 1988 a building prohibition concerning the company's

property was enacted by the administrative board and published on 24

March 1988 in the Official Gazette (FEK 254/td/24.3.88).

A subsequent decision (No. 1317/88) provided that expropriation

proceedings should be instituted. However, on 26 September 1988 the

Prefecture of Athens (Nomarchia Athinon), which was the supervising

authority of the Municipality of Athens, declared this decision null

and void.

On 8 June 1988 the liquidators requested the City to remove the

signposts.

By letter of 5 October 1988 the Mayor answered as follows:

"The Municipality of Athens has aimed for years at acquiring the

areas of the old factories in order to give them to the public

use for the benefit of the city and its inhabitants. For this

reason the Municipal Council has passed since 1979 a series of

resolutions.

...

In view of the above, the desire of the Municipality of Athens

to acquire and develop the areas is apparent and it is this very

desire that is indicated by the signposts which have been

placed."

On 8 April 1989 public work services of the Municipality of

Athens occupied the company's plot in Patission Road and demolished the

walls of the old factory building.

The liquidators requested the Prosecutor of the Athens Court to

order provisional mesures against the occupation of the plot by the

Municipality of Athens. On 9 May 1989 the Prosecutor ordered the

Municipality of Athens to restore the previous status of the site and

prohibited any future disturbance. This order was confirmed by the

Prosecutor of the Court of Appeal on 22 November 1989. However the

situation remained unchanged.

On 23 October 1989 the Municipality of Athens decided to amend

the town planning concerning the property in Patission Road. The

relevant decision was published in the Official Gazette on 5 December

1989. As regards the Syngrou Avenue property the Municipality decided,

besides the amendment of the town planning, to expropriate that land.

This decision was published in the Official Gazette on 9 November 1989.

The company appealed, through its liquidators, to the Council of State

against the decisions relating to the property in Syngrou Avenue. No

appeal was lodged against the decision concerning the Patission Road

land.

On 21 October 1991 the Court of Appeal replaced the two

liquidators by another liquidator, representing the interests of the

Bank of Greece.

COMPLAINTS

The applicants submit that the activities of the Municipality of

Athens in the last ten years hinder the exercise of their right to

peaceful enjoyment of their possessions as shareholders of the Karolos

Fix Brewery S.A. Referring to the Sporrong and Lönnroth case (Eur.

Court H.R. judgment of 23.9.1982, Series A no. 52), they submit that

they are kept in a complete uncertainty as to the fate of their

property over a period of ten years. In this respect the applicants

note that the Karolos Fix Brewery S.A. is since 1983 administered by

liquidators and that they are not entitled to participate in the

company's administration. They consider, nevertheless, that they have

a legitimate interest in seeking legal protection, since the measures

affecting the company's property also affect the value of their own

shares.

The applicants submit that as a result of the non-exploitation

of the company's property in the last ten years, its debt increased and

this was reflected in the decline of its shares. The applicants submit

that since 1979 the share value of the Karolos Fix Brewery S.A. slid

from 1,200 to 40 Drachmas.

The applicants moreover note that pursuant to the constant

case-law of the Court of Cassation (Areios Pagos) the protection of

property under Greek law is confined to rights in rem, excluding the

rights of shareholders. They submit that a complaint to the Greek

courts that their property rights as shareholders are violated by the

situation created by the activities of the City of Athens would be

futile.

The applicants invoke Article 1 of Protocol No. 1 and Articles

6 and 13 of the Convention.

PROCEEDINGS BEFORE THE COMMISSION

The application was introduced on 29 November 1988 and registered

on 21 March 1989.

On 13 February 1990 the Commission decided to bring the

application to the notice of the respondent Government and to invite

them to submit written observations on the admissibility and merits of

the application.

The Government submitted their observations on 16 May 1990.

The applicants submitted observations in reply on 4 July 1990.

On 8 July 1991 the Commission decided to invite the parties to

a hearing on the admissibility and merits of the application. At the

hearing, which took place on 12 February 1992, the parties were

represented as follows:

For the Government

Mr. Fokion Georgakopoulos, Assistant Legal Adviser of the Legal

Council of the State, acting

Agent of the Government

Mr. Vassilios Kontolaimos, Assistant Legal Adviser of the Legal

Council of the State, Counsel

For the applicant

Mr. Panayiotis Bernitsas, Lawyer at the Athens Bar,

Representative of the applicants

Mrs. Domna Mirasyesi, Lawyer at the Athens Bar,

Counsel

Mr. George Tsironis, Ex-director general of the

Karolos Fix Brewery S.A., Counsel

THE LAW

The applicant companies complain, in their capacity of

shareholders of the Karolos Fix Brewery S.A., that the various measures

taken by the Municipality of Athens constitute an interference with

their right to peaceful enjoyment of their possessions contrary to

Article 1 of Protocol No 1 (P1-1) which reads as follows:

1. 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.

2. 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.

Furthermore the applicants allege that the Greek legal order

prevents them from having access to a court in order to seek judicial

protection of their rights as shareholders. They are also deprived of

any remedy against the acts or omissions complained of which allegedly

violate their rights under Article 1 of Protocol No 1 (P1-1). The

applicants invoke in this respect Articles 6 para. 1 and 13

(Art. 6-1, 13) of the Convention.

i) As to the Commission's competence ratione temporis

The Government first submit that the measures the applicants

complain of were taken before 20 November 1985, the date on which the

Commission's competence to examine individual applications against

Greece took effect. They point out in particular that the public

declaration of the Municipality's intention to expropriate the Karolos

Fix company's land was made in 1979 and that the occupation of part of

the Syngrou Avenue property and the placement of the litigious

signposts took place in 1981. The Government submit that the

application is incompatible ratione temporis with the provisions of the

Convention.

The Commission notes the following:

It is true that the applicants' complaints refer to a series of

measures which originated in 1979 and 1981. Some of the decisions

ordering these measures are, as such, outside the Commission's

competence ratione temporis, since they were taken before the above-

mentioned date.

However, the Commission notes that the measures complained of

continued after 20 November 1985. It emphasises in this respect that

the applicants do not complain of any "instant" effect of these

measures on their rights but of a continuing situation created by the

said measures and still existing. Moreover, the repeated public

declarations of the intention to expropriate, the maintainance of the

signposts with the indication "Area to be expropriated" and the

occupation of the plots occurred or persisted after 20 November 1985.

Consequently, the Commission finds that it is competent to

examine the application and that the Government's objection in this

respect must be rejected.

ii) As to the question whether the applicants can claim to be

"victims" of a violation

The Government submit that the applicant companies cannot claim

to be victims of the measures affecting the Karolos Fix Brewery S.A.

They observe that the natural or legal persons which are shareholders

of a company do not "own" the company's property, which belongs to and

is administered by the company itself. The legal person of the company

being clearly distinct from its shareholders, it is not possible to

consider that measures which allegedly affect the property of the

Karolos Fix Brewery S.A. also affect the property rights of the

shareholders. The fact that the interests of the shareholders may be

affected by the situation of the company does not enable them to claim

that their personal property rights are directly interfered with. The

effect of the measures taken with regard to the property of the company

on the rights of the shareholders is indirect and distant and does not

suffice to enable them to claim that they themselves are "victims".

The Government note in this respect that the Commission's case-

law clearly indicates that minority shareholders cannot complain of the

measures affecting the company. Moreover, the cases in which the

situation of a company has been taken into account in order to examine

its effects on the rights of the shareholders, were cases in which the

applicant shareholder held a substantial majority and was also the

manager and the general director of the company. The applicants in the

present case, taken separately, are minority shareholders and are

excluded from the administration of the company since 1983. Moreover,

they could in their capacity as shareholders request the liquidators

of the company to take action against the various measures complained

of. They could also lodge an action against the liquidators insofar as

the latter's alleged inactivity would have damaged their own rights.

Having omitted to take such steps the shareholders cannot claim that

they suffered damage from the measures taken by the Municipality of

Athens. The devaluation of their shares is not established and,

assuming that such devaluation actually took place, it is not

established that it was due to the measures complained of.

The applicants contend that Article 25 (Art. 25) of the

Convention, as it has been interpreted by the organs of the Convention,

enables them to bring an application before the Commission and to

complain of the measures taken against the company. They insist on the

fact that they detain the majority of the shares of the Karolos Fix

Brewery S.A. and that they represent the interests of the Karolos Fix

company.

The applicants also emphasise that the company is under

liquidation and that its legal personality is maintained only for the

purpose of its winding up. The rights of the shareholders are

consequently limited. Moreover, the special liquidation regime to

which the company is submitted leads to an even further limitation of

their rights.

The Commission recalls that the term "victim" in Article 25

(Art. 25) of the Convention denotes the person directly affected by the

act or omission which is at issue (cf. Eur. Court H.R., Eckle judgment

of 15 July 1982, Series A No 51, p. 30, para. 66). The Commission has

held that an individual who held a substantial majority shareholding

in a company could, under certain circumstances, claim to be victim of

measures directed against the company (No 1706/62, Dec. 4.10.66,

Collection 21, p. 26 and No 7598/76 Kaplan v. United Kingdom, Comm.

Report 17.7.80, D.R. 21 pp. 5, 23). In the case of Yarrow and others

(No 9266/81, Dec. 28.1.83, D.R. 30, pp. 155, 185) the Commission held

that the applicants, who did not hold a majority or controlling

interest in the company in question, were not directly and personally

affected by the nationalisation of the company, although this measure

undoubtedly affected the value of their shares. In that case the

Commission found that the applicants could not claim to be victims of

the measure of nationalisation.

The Commission finds that, the question whether a shareholder may

claim to be victim of measures affecting a company cannot be determined

on the sole criterion of whether the shareholder detains the majority

of the company shares. This element is an objective and important

indication but other elements may also be relevant in view of the

circumstances of each particular case. In this respect the Commission

recalls that it has previously taken into account the fact that an

applicant shareholder was carrying out his own business through the

medium of the company and that he had a personal interest in the

subject-matter of the complaint (cf. above-mentioned Applications No

1706/62 and 9266/81). It has also considered whether it was open to the

company itself, being the direct victim, to lodge an application with

the Commission.

In the present case the Commission notes that, although none of

the applicants separately holds the majority of the company's shares,

the group of the applicant companies holds 51,35% of the Karolos Fix

Brewery S.A. shares. It is moreover apparent that the applicant

companies have an interest in the subject-matter of the application.

Furthermore, in the Commission's view, the circumstance that the

company is under liquidation and subject to the special regime of

ailing enterprises is of particular relevance. The Commission notes

in this respect that as a result of the decision of the competent

Minister in 1983 the company has been since administered by the State

agency OAE and subsequently by liquidators and that the shareholders'

rights to participate in the administration and representation of the

company have ceased. The Commission also takes into account the fact

that one of the two liquidators initially appointed by the Court of

Appeal represented the interests of the National Bank of Greece, a

State controlled bank. It also notes that, according to the decision

of the Court of Appeal, the two liquidators should act in common.

Finally, the Commission notes that since 21 October 1991 the Court of

Appeal replaced the two liquidators by a new single liquidator

representing the interests of the National Bank of Greece.

The Commission finds that the company Karolos Fix Brewery S.A.,

has been essentially under effective State control since 1983.

Consequently, this company cannot reasonably be expected to lodge an

application with the Commission against the Greek State. In these

specific circumstances, the Commission finds that the applicant

shareholders are entitled, by lifting the veil of the company's legal

personality, to claim that they are victims of the measures affecting

the company's property, within the meaning of Article 25 para. 1

(Art. 25-1) of the Convention. 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 (cf.

Eur. Court H.R., 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.

iii) As to the requirements of Article 26 (Art. 26) of the

Convention

The Government furthermore object that the applicants have not

exhausted the domestic remedies at their disposal and that they have

not complied with the six months rule. The Government submit that the

application should be declared inadmissible on this ground.

In particular the Government indicate that it was open to any

person who could claim to be injured by the acts or omissions of the

Municipality of Athens to introduce a recourse before the

administrative tribunal seeking the annulment of the allegedly illegal

acts or omissions. It was further open to any injured party to claim

compensation for any damage suffered as a result of the measures

complained of. Actions before civil tribunals against the alleged

interferences with the company's property rights could also be

introduced on the basis of the relevant provisions of the Civil Code.

The Government emphasise that on various occasions the company sought

judicial protection. Thus, in 1983 it claimed damages for the torts due

to the activities of the Municipality of Athens and in 1989 it sought

the annulment of the decisions of the Municipal Council modifying the

town planning and providing for the expropriation of the Syngrou Avenue

property. However, these actions were discontinued or are still pending

before the domestic courts.

The Government conclude that the domestic remedies existing under

Greek law have not been exhausted according to the generally recognised

rules of international law.

Moreover, the Government submit that the applicants, in their

capacity as shareholders, could take various steps, according to the

law on commercial societies, in order to oblige the liquidators to

react against the measures taken by the Municipality of Athens. The

Government refer in particular to the fact that it was open to the

applicant shareholders to ask the Court of Appeal to replace the

allegedly inactive liquidators.

Finally, the Government submit that if it were to be found that

no remedies were available against the measures complained of, the

applicants' complaints concerning acts or events which occurred more

than six months before the introduction of the application should be

declared to have been submitted out of time.

The applicants submit that no effective remedy was available to

them under Greek law.

The Commission finds that the Government have not shown that the

applicants could, in their capacity as shareholders, exercise the

rights of the Karolos Fix Brewery S.A. and pursue the remedies which

were available, under Greek law, to the said company, i.e. the legal

person directly affected by the litigious measures. The Commission

finds that according to the generally recognised rules of international

law, it should not take into consideration measures which were not open

to the applicants themselves.

Moreover, the Commission finds that the steps the shareholders

could take against the liquidators are not to be considered as

effective remedies, according to the generally recognised rules of

international law. It recalls in this respect that only those remedies

which are capable of remedying the criticised state of affairs

directly, and not merely indirectly, are to be considered as effective

(No 10092/82, Dec. 5.10.84, D.R. 40, p.118). In the present case any

action against the liquidators would be incapable of directly

redressing the situation created by the measures taken by the

Municipality of Athens.

Finally, the Commission has also had regard to the fact that the

orders issued by the Athens prosecutor against the Municipality for

cessation of the trespass of the land in question remained ineffective

and inoperative.

It follows that the Government's objections as to the exhaustion

of domestic remedies must be rejected.

As regards the Government's objection that part of the

application has been introduced out of time, the Commission refers to

its considerations under point i) above. It recalls that the

applicants' complaints relate to a continuing situation and that in

such circumstances the six months period runs from the termination of

the situation concerned (No. 6852/74, Dec. 5.12.78 D.R. 15, p. 5).

Having regard to the fact that the situation complained of is still

continuing, the Commission finds that the Government's objection must

be rejected.

iv) As regards the merits of the application

As regards the merits of the applicants' complaint, the

Government submit that legal procedures have been initiated for the

purpose of expropriating the Karolos Fix Brewery S.A.'s land. Until

termination of these procedures the property of the land remains with

the company. Moreover, the Government observe that the applicants have

not shown that the devaluation, if any, of the value of their shares

is due to the measures taken by the Municipality of Athens.

The Government conclude that in these circumstances no

interference with the applicants' rights can be found.

As regards the merits of the complaints under Articles 6 and 13

(Art. 6, 13) of the Convention, the Government deny that the applicants

are deprived of effective judicial protection.

The applicants submit that the measures complained of constitute

serious hindrances in the exercise of their right to peaceful enjoyment

of their possessions. They are not in the public interest, they have

no legal basis in Greek or international law and are, in any event,

disproportionate to the possible aims pursued.

The applicants conclude that their rights under Article 1 of

Protocol No 1 (P1-1) have been violated.

Moreover, they reiterate their complaints under Articles 6 and

13 (Art. 6, 13) of the Convention.

The Commission examined the parties' submissions and arguments.

It finds that the application raises complex issues of fact and law and

that it cannot be regarded as manifestly ill founded.

The application must, therefore, be declared admissible, no other

ground for declaring it inadmissible having been established.

For these reasons, the Commission by majority

DECLARES THE APPLICATION ADMISSIBLE,

without prejudging the merits.

Deputy Secretary to the Commission President of the Commission

(J. RAYMOND) (C.A. NØRGAARD)

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AGROTEXIM HELLAS S.A., BIOTEX S.A., HYMOFIX HELLAS S.A., KYKLADIKI S.A., MEPEX S.A. AND TEXEMA S.A. v. GREECE

AGROTEXIM HELLAS S.A., BIOTEX S.A., HYMOFIX HELLAS S.A., KYKLADIKI S.A., MEPEX S.A. AND TEXEMA S.A. v. GREECE