FOURTH SECTION

DECISION

Application no. 332/05 by Teuvo S Ö DERVALL and Heikki HUHTANEN against Finland

The European Court of Human Rights (Fourth Section), sitting on 4 January 2008 as a Chamber composed of:

Nicolas Bratza , President , Josep Casadevall , G iovanni Bonello , Kristaq Traja , Stanislav Pavlovschi , Jan Šikuta , Pä ivi Hirvelä , judges , and Lawrence Early , Section Registrar ,

Having regard to the above application lodged on 20 December 2004,

Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together,

Having regard to the formal declarations accepting a f riendly settlement of the case,

Having deliberated, decides as follows:

THE FACTS

The applicants, Mr Teuvo S ö dervall and Mr Heikki Huhtanen , are Finnish nationals who were born in 1942 and 1950, respectively . The first applicant l ive s in Lemp äälä and the second applicant in Kiviranta . They were represented before the Court by Mr Aimo Tervahauta , a lawyer practising in Kemi . The Finnish Government (“the Government”) were represented by their Agent, Mr Arto Kosonen of the Ministry for Foreign Affairs.

The circumstances of the case

The facts of the case, as submitted by the applicants, may be summarised as follows.

On 31 December 1993 the Finnish Savings Bank – SSP Oy (which later became the Property Management Corporation Arsenal ( Omaisuuden - hoitoyhtiö Arsenal – SSP Oy , Egendomsfö rvaltningsbolaget Arsenal – SSP Ab ; hereinafter “Arsenal”) instituted civil proceedings against 19 defendants, including the applicants, before the Tornio District Court ( käräjäoikeus , tingsrätten , which later became the Kemi -Tornio District Court).

The plaintiff sought damages amounting to some 111 million Finnish marks (FIM; equivalent to 18.66 million euros (EUR)) plus 16 per cent interest for allegedly granting credit negligently between 1988-1991 and for subsequent credit losses allegedly caused by the defendants in their capacity as managing directors, managers, members of the Board or other delegates in the management of the Tornionjokilaakso Savings Bank (which later merged into the Finnish Savings Bank – SSP Oy , later replaced by Arsenal). Both applicants were managers in the bank.

O n 11 January 1994 t he first summons was served on the applicants.

Upon the plaintiff ’ s request, the District Court seized the applicants ’ assets in the amount of FIM 111 million (EUR 18.66 million) on 18 January 1994. The applicants appealed in vain against the seizure to the Rovaniemi Court of Appeal ( hovioikeus , hovrätten ).

In May 1994 the applicants submitted their response to the first-instance court, denying all the claims for damages. It was served on the plaintiff on 9 December 1994.

At the beginning of 1995 the criminal proceedings against three of the bank ’ s managers, but not the applicants, began before the same District Court. These proceedings were based on the same facts as the civil claims. It appears that the District Court decided to discontinue the preparation of the civil case until the criminal proceedings had come to an end. However, it did not ask the applicants ’ or the other defendants ’ opinion, nor did it issue any formal decision to that effect.

On 3 December 1998 the first applicant complained to the Parliamentary Ombudsman that the civil proceedings against him had been stayed since 1994. In his response of 26 February 1999, the Parliamentary Ombudsman considered that the District Court should have heard the defendants before it discontinued the preparation of the case and, further, that the court should have issued a decision on its adjournment.

On 25 November 1999 the applicants were informed that the first preparatory hearing would be held on 12 January 2000. Subsequently, the court held ten preparatory hearings up until 25 February 2002, and six main hearings between 25 February 2002 and 19 June 2002. In the main hearing the plaintiff adjusted its claims to EUR 483,217 and EUR 422,532, respectively.

On 28 February 2003 the District Court gave judgment ( running to over 300 pages). It ordered the first applicant to pay damages jointly with two other defendants in the amount of EUR 22,650 and the second applicant in the amount of EUR 18,219, and held both of them partly liable for the plaintiff ’ s legal costs.

The applicants, among others, appealed to the Court of Appeal, which held preparatory oral hearings from 7 to 10 October 2003 and an oral hearing from 27 October to 11 December 2003.

By its judgment of 19 March 2004 the appellate court further adjusted the applicants ’ joint liability to pa y damages to EUR 11,773 and EUR 8,409, respectively.

On 12 July 2004 the Supreme Court ( korkein oikeus , högsta domstolen ) refused the applicants leave to appeal.

COMPLAINT

The applicants complained under Article 6 § 1 of the Convention about the length of the civil proceedings.

THE LAW

T he Court received the following d eclaration from the Government:

“ I, Arto Kosonen , Agent of the Government of Finland, declare that the Government of Finland offer to pay ex gratia EUR 18,300 [1] (eighteen thousand three hundred euros ) to Mr Teuvo Södervall and Mr Heikki Huhtanen jointly, with a view to securing a friendly settlement of the above-mentioned case pending before the European Court of Human Rights.

This sum, which is to cover any non-pecuniary damage as well as costs and expenses, will be free of any taxes that may be applicable. It will be payable within three months from the date of notification of the decision taken by the Court pursuant to Article 37 § 1 of the European Convention on Human Rights. In the event of failure to pay this sum within the said three-month period, the Government undertake to pay simple interest on it, from expiry of that period until settlement, at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points. The payment will constitute the final resolution of the case. ”

T he Court received the following declaration signed by the applicants ’ representative:

“ We, Mr Teuvo Södervall and Mr Heikki Huhtanen , the applicants in the above-mentioned case, note that the Government of Finland are prepared to pay us, jointly, ex gratia the sum of EUR 18,300 (eighteen thousand three hundred euros ) with a view to securing a friendly settlement of the above-mentioned case pending before the European Court of Human Rights.

This sum, which is to cover any non-pecuniary damage as well as costs and expenses, will be free of any taxes that may be applicable. It will be payable within three months from the date of notification of the decision taken by the Court pursuant to Article 37 § 1 of the European Convention on Human Rights. From the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points.

We accept the proposal and waive any further claims against Finland in respect of the facts giving rise to these applications. We declare that this constitutes a final resolution of the case. ”

The Court takes note of the friendly settlement reached between the parties. It is satisfied that the settlement is based on respect for human rights as defined in the Convention and its Protocols and finds no reasons to justify a continued examination of the application (Article 37 § 1 in fine of the Convention). In view of the above, it is appropriate to discontinue the application of Article 29 § 3 and to strike the case out of the list.

For these reasons, the Court unanimously

Decides to strike the application out of its list of cases.

Lawrence Early Nicolas Bratza Registrar President

[1] This sum includes non-pecuniary damage EUR 8,000 per applicant and a total amount of EUR 2,300 costs and expenses (inclusive of VAT).