FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 2788/02 by KAVEKO INTERNATIONAL s . r . o . and Others against Slovakia

The European Court of Human Rights ( Fourth Section), sitting on 6 November 2007 as a Chamber composed of:

Sir Nicolas Bratza , President , Mr J. Casadevall , Mr S. Pavlovschi , Mr L. Garlicki , Ms L. Mijović , Mr J. Šikuta , Mrs P. Hirvelä, judges , and Mr T.L. Early , Section Registrar ,

Having regard to the above application lodged on 27 December 2001 ,

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 observations submitted by the respondent Government and the observations in reply submitted by the applicants,

Having deliberated, decides as follows:

THE FACTS

The three applicants are identified below. The respondent Government were represented by Ms A. Pol áčková , their Agent, who was succeeded in that function by Ms M. Piro šíková .

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

1. Applicants

The first applicant, KAVEKO INTERNATIONAL spol.s r.o. Košice, is a private commercia l limited liability company having its head office in Košice and a separate l egal personality under Slovakian law , distinct from that of its owners . The second and third applicants, Mr Vladimír Kamarič and Ms Helena Kamaričová, are Slovakian nationals who were born in 1958 and 1956 respectively and l ive in Košice.

In 1997 the second applicant and the third applicant acquired jointly 75% of the shares in the first applicant . The second applicant is the first applicant ’ s statutory representative. The second applicant at the same time holds shares in and is one of the statutory representatives of another commercial limited liability company (“company K”). Company K was the founder of and held shares in the first applicant.

2 . T r ansaction

In the ea rly 1990s company K made a credit arrangement with a b ank in order to pay for the lease of machinery from a private lessor. In 1992 the bank entered the leasing arrangement in that it obtai ned an option to buy the machinery at the end of the lease term for a residual value.

In 1994 the first appl icant took over the debt owed to the bank on the condition that, at the end of the lease term, th e bank would exercise its option and obtain and subsequently transfer the ownership of the machinery to the first applicant.

The bank did not exercise the option, as a result of which the lessor was free to sell and d id in fact sell the machinery to a third party. Company K thus lost a substantial component of its operations.

3 . Civil actions

In 1996 the bank brought several actions against the first applicant claiming t hat it was in default of payment of the bank credit . The bank claimed damages.

The actions were subsequently stayed pending the outcome of insolvency proceedings in respect of t he first applicant (see below). The proceedings have still not been resolved.

4 . Insolvency proceedings and related civil action

On 17 June 1998 the bank petitioned for an insolvency order against the first applicant. It was argued that the first applicant was in default of payment of the debt owed to the bank ; that it had several creditors; and that it would be unable to meet its obligations in the near future .

On 3 August 1998 the Ko šice Regional Court ( Krajsk ý súd ) made the order, appointed an insolvency administrator and invited creditors to register their claims within sixty days. The order was upheld on the first applicant ’ s appeal by the Supreme Court ( Najvyšší súd ) on 4 June 1999 , and became final and binding on 3 August 1999.

By virtue of the insolvency order, pursuant to Article 14 § 1 (a) and (h) of the Insolvency Code, the capacity to make dispositions in respect of the insolven t estate and to exercise rights and duties related to the making of dispositions in respect of the estate was transferred to the insolvency administrator and all powers of attorney granted by the first applicant au tom atically ceased to exist.

The bank ’ s claims against the first applicant were contested and, as a result, the bank had to seek their judicial recognition by way of a separate action ( incidenčná žaloba ). The action was allowed at first instance on 25 March 2003 , but the judgment was quashed on appeal on 29 April 2005 and is still pending.

By decisions ( opatrenie ) of 25 October 1999 and 25 June 2001 the Regional Court authorised a direct sale without a public auction by the administrator of various movable and immovable items from the assets of the first applicant. The authorisation was not subject to appeal.

Further items from t he insolvent estate of the first applicant have been sold off in the course of the proceedings . The applicants maintain that the sale s w ere based on manifestly unfavourable terms and that t hey w ere contrary to both substantive law and procedural rules. They complained on numerous occasions to the Regional Court that the actions of the ins olvency administrator in connection with the sale were illegal and contrary to their interests. All their complaints were to no avail. The insolvency proceedings as such are still pending.

Under Article 8 § 5 of the Insolvency Code , an insolvency court can replace the insolvency administrator on the motion of the insolvent person or the trustee provided there are important reasons.

5 . Constitutional proceedings

On 24 October 2000 the first applicant, acting through a l awyer, lodged a petition ( podnet ) under Article 130 § 3 of the Constitution with the Constitutional Court ( Ústavný súd ) contesting the insolvency order of 3 August 1998 .

On 28 June 2001 the Constitutional Court declared the petition inadmissible as being manifestly ill-founded. The first applicant ’ s objecti ons were held to be of a fourth-instance nature and, as such, fell outside the scope of the Constitutional Court ’ s review.

On 6 May 2003 the second applicant lodged a fresh complaint ( sťažnosť ) under Article 127 of the Constitution with the Constitutional Court . He sought to contest, in the name of the first applicant, the length of the proceedings in the bank ’ s civil action s and asserted that those proceedings had been marked by the violation of a va riety of procedural rights .

On 18 June 2003 the Constitutional Court declared the complaint inadmissible ratione personae . It observed first of all that the complaint was intended to be brought in the name of the first applicant. However, by virtue of the insolvency order , the capacity to act in the name of the first applicant had passed to the administrator (Article 14 § 1 (a) of the Insolvency Code), civil actions against it had been ex lege stayed (Article 14 § 1 (d) of the Insolvency Code) and could be resumed solely on motion by the administrator (Article 14 § 5 of the Insolvency Code) and any new proceedings could commence only on motion by the administrator (Article 14 § 1 (c) of the Insolvency Code). The present complaint had however not been brought by the administrator or her lawful agent and, therefore, could not be accepted as having been lodged in the name of the first applicant.

COMPLAINTS

1. The applicants complained under Article 6 § 1 of the Convention (i) that the length of the proceedings in the civil actions taken by the bank in 1996 were excessive; (ii) that the insolvency order of 3 August 1998 had not been served on the m, had been a rbitrary , had l acked adequate reasoning and had been e r r on eously based on claims that had been a matter of dispute; (iii) that their right of access to a court had been impeded as a consequence of the insolvency order in that it had left them without any legal means to de fend their interests in connection with the first applicant (the capacity to act in its name being ex lege vested in the administrator) and in that it had prevented the first applicant from adequately asserting its interests through a lawyer of its choice (all powers of attorney cancelled).

2. Relying on Article 1 of Protocol No. 1 the applicants also complained that the insolvency order had been unlawful and had led to an un just deprivation of their property. Under the same provision they also complained that they ha d no legal means of asserting their property interests in the insolvency proceedings and aga in st the bank ’ s civil actions.

3. Lastly, the applicants complained that, contrary to Article 13 of the Convention, they ha d no effective remedy at their disposal in respect of the above complaints.

THE LAW

The applicants complained about the length of the civil proceedings in the actions brought by the bank in 1996; about the insolven cy order of 3 August 1998 ; and about lack of access to a court. They relied on Article 6 § 1 of the Convention , the relevant part of which provides:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by [a] ... tribunal ...”

(a) As for the complaint concerning the length of the proceedings in the bank ’ s actions, in so far as it had purportedly been brought by the first applicant, the Government argued that this complaint could not be considered as having been duly lodged in the name and on behalf of the first applicant. They pointed out that by virtue of the insolvency order against the first applicant its statutory representation had lost the power to act for the first applicant and that such power was vested in the insolvency administrator. The application had however not been lodged by the latter.

The applicants submitted that the insolvency order did not mean that the first applicant ’ s statutory representative, the second applicant, had lost all powers to act in the name of the first applicant. In their view, the limitation concerned exclusively the actions in connection with the i nsolvent estate and did not prevent the second applicant from making a case on behalf of the first applicant under the Convention, which he had properly done.

The Court observes that in the domestic legal order the first applicant has a separate legal identity, distinct from those of its owners. On 3 August 1998 the first applicant was declared insolvent and the insolvency order was upheld on appeal. It became final and binding, on 3 August 1999. By virtue of that order, in conjunction with the relevant provisions of Article 14 § 1 of the Insolvency Code, the capacity to act in the name of the first applicant i n connection with the insolvent estate was transferred to the insolvency administrator and any official proceedings in connection with the estate were stayed and could continue or, as the case may be, be initiated exclusively by the administrator. In its decision of 18 June 2003 the Constitutional Court relied on these rules and held that the second applicant had no standing to complain of the length of the bank ’ s actions in the name of the first applicant. The Constitutional Court supported its conclusion by comprehensive reasoning which does not appear manifestly arbitrary or wrong and the Court finds no reasons for departing from it.

The present application has not been submitted by the first applicant ’ s insolvency administrator. It therefore cannot be considered as having been lawfully lodged by the first applicant (Rule 45 § 1 of the Rules of Court).

It follows that in so far as the complaint under Article 6 § 1 of the Convention has been intended to be brought in the name and on behalf of the first applicant, it is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

(b) As for the complaint concerning the length of the proceedings in the actions by the bank, in so far as it was lodged by the second applicant and the third applicant, the Government emphasised that they were not parties to the proceedings in question and considered that, therefore, they had no standing to complain of their length.

The applicants accepted the Government ’ s argument.

Notwithstanding the parties ’ arguments, the Court observes that in the present situation a general question arises as to whether the second applicant and the third applicant, being jointly majority shareholders of the first applicant, could claim in their own name to be victims of a violation of the Convention rights of the first applicant (see Agrotexim and Others v. Greece , judgment of 24 October 1995, Series A no. 330-A, pp. 22-26, §§ 59-72 ; G.J. v. Luxembourg no. 21156/93, § 24, 26 October 2000; and Olczak v. Poland (dec.), no. 30417/96, ECHR 2002-X (extracts)). However, the Court considers that it is not necessary to rule on this question separately as, in any event, the relevant part of the application is inadmissible for the following reason.

The Court observes that the constitutional complaint of 6 May 2003 concerning the proceedings in the actions brought by the bank against the first applicant was lodged, unsuccessfully, by the second applicant for the first applicant. There is however no indication that the second applicant and the third applicant asserted their rights in relation to the first applicant and the proceedings involving the first applicant before the Constitutional Court under Article 127 of the Constitution in their own names.

It follows that, even assuming that the second applicant and the third applicant can claim in their own names to be victims of a violation of the Convention rights of the first applicant, their complaint of the length of the proceedings in the bank ’ s actions must be rejected under Article 3 5 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

(c) As regards the insolvency order against the first applicant, the Government pointed out that it had been issued more than six months before the introduction of the application. They further submitted that, moreover, and in any event, the insolvency order was lawful, duly reasoned and well justified in the circumstances.

The applicants disagreed and repeated the complaint.

The Court observes that the insolvency order became final and binding on 3 August 1999, after having been upheld on appeal. This was more than six months before the introduction of the application on 27 December 2001 . This conclusion is not affected by the petition of 24 October 2000 to the Constitutional Court under Article 130 § 3 of the Constitution, as applicable at the relevant time, which the Constitutional Court declared inadmissible on 28 June 2001 , because this petition was not considered a remedy to be exhausted for the purposes of Article 35 § 1 of the Convention (see Báno š ová v. Slovakia (dec.), no. 38798/97 , 27 April 2000 ).

The complaint under Article 6 § 1 of the Convention in rel ation to the insolvency order has therefore been introduced out of time and must in any event be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

(d) As to the complaint of lack of access to a court, the Government submitted that by virtue of the insolvency order the authority to act in the name and on behalf of the first applicant was vested in the insolvency administrator who had the full range of means for asserting the first applicant ’ s interests. Had the second applicant and the third applicant been of the view that the insolvency administrator had been acting against their interests, they could have asserted their rights by way of an application, by the second applicant in the name of the first applicant, for a replacement of the insolvency administrator under Article 8 § 5 of the Insolvency Code. Finally, the insolvency proceedings were still pending.

The applicants argued that the whole insolvency proceedings were an unfair profit-oriented attack on their business enterprise in which the insolvency administrator and the courts acted in a coordinated manner against which they could not raise any meaningful defence.

The Court observes that the insolvency proceedings are still pending. Complaints relating to their outcome are therefore premature (see , for example, Kuráková v. Slovakia (dec.), no. 37895/97, 1 February 2001 ).

The Court further observes that Article 6 does not imply that under the national law of the Contracting States shareholders in a limited company should have the right to bring an action seeking an injunction or damages in respect of an act or omission that is prejudicial to “their” company (see Agrotexim and Others , cited above, § 73). Nevertheless, as for the conduct of the administrator, it is to be noted that it could be challenged under Article 8 § 5 of the Insolvency Code. Furthermore, as from 1 January 2002, any human-rights related issues which do not fall within the jurisdiction of other courts can be brought to the Constitutional Court . There is no indication that these remedies were resorted to and pursued in accordance with the applicable formal requirements (see, for example, Akdivar and Others v. Turkey , judgment of 16 September 1996, Reports of Judgments and Decisions 1996 ‑ IV, p. 1210 , § 66) .

In view of the above considerations the Court finds that, to the extent that the issues complained of fall within the its competence ratione materiae and that domestic remedies have been exhausted, there is no appearance of a violation of the rights of the second applicant and the third applicant under Article 6 of the Convention. It follows that the relevant part of their Article 6 complaint and must be rejected in accordance with Article 35 §§ 1, 3 and 4 of the Convention.

2. The applicants also complained about the insolvency order and the alleged lack of means of asserting their property interests in the insolvency proceedings and in the bank ’ s civil actions. They relied on Article 1 of Protocol No. 1 , which reads as follows:

“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.”

(a) As regards the insolvency order, under Article 1 of Protocol No. 1 the Government raised similar objections as under Article 6 § 1 of the Convention.

The applicants emphasised that the second applicant and the third applicant were de facto the owners of the first applicant and that the insolvency order had a direct impact on the value of their shares in the first applicant.

The Court observes that the complaint of the insolvency order made under Article 1 of Protocol No. 1 has the same factual and legal background as that made under Article 6 § 1 of the Convention , which was examined above. It finds no reasons for reaching a different conclusion in respect of it under Article 1 of Protocol No. 1. It follows that the complaint has been in any event introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

(b) As regards the complaint of the alleged lack of means for asserting the applicants ’ proprietary interests in the insolvency proceedings and in the proceedings in the bank ’ s civil actions, the Government submitted similar arguments as i n respect of the analogous complaints under Article 6 § 1 of the Convention.

The applicants emphasised that the conflict between them and the insolvency administrator was not merely a conflict of interests, which is inherent in insolvency proceedings, but that it was predominantly due to the administrator ’ s arbitrary way of realising the insolvency estate.

The Court observes that this complaint has in fact already been examined above under Article 6 § 1 of the Convention and finds no reasons to differ from its conclusions in respect of it under Article 1 of Protocol No. 1.

Therefore, in so far as this complaint has been intended to be brought in the name and on behalf of the first applicant, it is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4. To the extent it has been brought by the second applicant and the third applicant, it must be rejected in accordance with Article 35 §§ 1 , 3 and 4 of the Convention in part for non-exhaustion of d omestic remedies and in part as being manifestly ill-founded.

3. The applicants also alleged a violation of Article 13 of the Convention, which provides that:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

The Government claimed that the complaint was in part incompatible ratione personae with the provisions of the Convention and in part manifestly ill-founded.

The applicants argued that there were no other remedies than those which they had used to no avail.

The Court observes first of all that the applicants ’ complaints under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 were declared inadmissible. I n connection with those complaints the applicant did not have an “arguable claim” and Article 13 is therefore inapplicable to them. Furthermore, the second applicant and the third applicant did have at their disposal the remedy provided under Article 8 § 5 of the Insolvency Code and, since 1 January 2002, also under Article 127 of the Constitution.

It follows that the Article 13 complaint is in any event manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

4. Having regard to the above conclusions, the application of Article 29 § 3 of the Convention to the case should be discontinued.

For these reasons, the Court unanimously

Declares the application inadmissible.

T.L. Early Nicolas B ratza Registrar President