FOURTH SECTION

FINAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 28863/95 by A.K. & T.K. against Poland

The European Court of Human Rights (Fourth Section) , sitting on 15 June 2000 as a Chamber composed of

Mr G. Ress, President , Mr A. Pastor Ridruejo, Mr L. Caflisch, Mr J. Makarczyk, Mr V. Butkevych, Mrs N. Vajić, Mr M. Pellonpää, judges ,

and Mr V. Berger, Section Registrar ,

Having regard to the above application introduced with the European Commission of Human Rights on 30 November 1994 and registered on 5 October 1995,

Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,

Having regard to the Commission’s partial decision of 1 July 1998,

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 applicants are Polish national s , born in 1950 and 1946 respectively. They are a married couple and live in Olsztyn , Poland.

A. The circumstances of the case

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

On 10 May 1988 the applicants bought for cash 3 shares in a joint stock company ( spółka akcyjna ) “C”. On 23 May 1989 the shareholders of the company decided that the share capital would be increased to 25,000,000 million old zlotys (PLZ) and approved a private placement of a new issue of shares. On 30 November 1989 the applicants signed before a notary a deed in which they agreed to acquire 500 shares in the “C” company in exchange for a contribution in kind. Their contribution consisted of an industrial estate situated in the Barczewo county. On the same date the company was registered as the owner of the property in the Olsztyn District Court real property register ( Sąd Rejonowy Wydział Ksiąg Wieczystych ).

On 15 June 1990 the second applicant joined the company management board. Subsequently, he became unhappy with certain decisions of other company directors. As a result, on 6 April 1992 the applicants requested the company that their contribution in kind be returned to them.

On 28 May 1992 the Olsztyn District Court allowed the company’s request and registered in the commercial register an increase in the share capital to PLZ 25,000,000.

On 29 May 1992 the shareholders of the company adopted a resolution obliging the management board to conclude an agreement under which the property contributed by the applicants would be transferred back to them and they would return the company shares. At the same time, the shareholders approved the second applicant’s resignation from the board. Subsequently, the applicants requested the prosecution service to initiate criminal proceedings against certain members of the management board. In addition, they were involved in court proceedings concerning the property record in a real property register and bankruptcy proceedings relating to the “C” company.

On 16 June 1993 the applicants lodged with the Olsztyn District Court an application under Section 21 of the Commercial Code. They requested the court to strike out two entries in the commercial register concerning the “C” company. The first contested entry stated that the share capital of the company amounted to PLZ 25,000,000. The second entry confirmed changes in the company by-laws. The applicants claimed that the entries had been based on untrue statements and inaccurate information and had been inadmissible in law.

On 8 February 1994 the court held a hearing and took evidence from the parties.

On 23 January 1995 the applicants complained to the Supreme Court ( Sąd Najwyższy ) about the inactivity of the Olsztyn District Court. They claimed that the proceedings in their case disclosed unreasonable delay even though their request could have been decided at the first hearing.

On 24 February 1995 the Supreme Court notified the President of the Olsztyn District Court that the above complaint had been lodged and instructed the court of first instance to take further action in respect of it.

On 23 March 1995 the Olsztyn District Court held a hearing during which it allowed the applicants' request of 16 June 1993. In particular, the court struck out two entries in the commercial register concerning an increase of the share capital and amendments of the by-laws. The court also ordered the management board that the amendments to the company by-laws be made to ensure their compliance with domestic legislation. In addition, it instructed the board to take several other measures required by the Commercial Code in relation to the increase in the share capital.

B. Relevant domestic law

The 1934 Commercial Code provides that a joint-stock company should be registered in the District Court commercial register. The Register contains records concerning inter alia a company name, registered office, business, officers, share capital, number of shares and contributions. A company is required to notify within 2 weeks any changes in the records.

Section 21 of the Commercial Code, insofar as relevant, provides:

"1. (...) where an application is made to rectify or strike an entry out of the commercial register on the grounds that it is  unjustified, the court may order that a warning ( wzmianka ) [about the application] be made in the register. (…)”

COMPLAINT

The applicants complain under Article 6 § 1 of the Convention that the proceedings relating to their application to the Olsztyn District Court to strike out entries from the commercial register were not concluded within a reasonable time.

PROCEDURE

The application was introduced on 30 November 1994 before the European Commission of Human Rights and registered on 5 October 1995.

On 1 July 1998 the Commission decided that notice should be given to the respondent Government of the application and that they should be invited to submit written observations on the admissibility and merits of the applicants’ complaint that the proceedings relating to their application to the Olsztyn District Court to strike out entries from the commercial register disclosed unreasonable delay. The Commission declared inadmissible the remainder of the application.

On 1 November 1998, by operation of Article 5 § 2 of Protocol No. 11 to the Convention, the case fell to be examined by the Court in accordance with the provisions of the Convention.

On 2 October 1998 the Government submitted their observations. The applicants replied on 5 December 1998.

THE LAW

The applicants complain under Article 6 § 1 of the Convention that the proceedings relating to their application to the Olsztyn District Court to strike out entries from the commercial register were not concluded within a reasonable time. Article 6 § 1 provides, in so far as relevant:

“In the determination of his civil rights and obligations (…) everyone is entitled to a (…) hearing within a reasonable time (…).”

a) The Government invite the Court to declare the application inadmissible as incompatible ratione materiae with the Convention. In this connection, they submit that Article 6 § 1 is not applicable to the proceedings concerning the commercial register, as they do not involve two adversary parties. Moreover, in certain cases such proceedings can be initiated ex officio by a court and can be concluded on the basis of written and oral evidence without holding a hearing. The Government also point out that a court does not decide about the rights and obligations but merely confirms their existence. Finally, they refer to legal writers who consider that the proceedings concerning the commercial register are similar to administrative proceedings.

The applicants submit that Article 6 § 1 of the Convention is applicable to the proceedings concerning the commercial register. They assert that the proceedings concerned their civil rights. In addition, the applicants point out that commercial law used to be a part of civil law.

The Court recalls that the applicability of Article 6 § 1 under its “civil head” requires the existence of a dispute over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious; it may relate not only to the existence of a right but also to its scope and to the manner of its exercise. Furthermore, the outcome of the proceedings must be directly decisive for the right in question (see, among other authorities, the Rolf Gustafson v. Sweden judgment of 1 July 1997, Reports of Judgments and Decisions 1997-IV, p. 1160, § 38).

Turning to the facts of the present case, the Court notes that the applicants were involved in a dispute concerning a title to a property situated in the Barczewo county. They contested the increase in the share capital of the “C” company to PLZ 25,000,000, which covered the transfer of the property from the applicants to that company. In order to obtain a title to the property, they inter alia requested the Olsztyn District Court to strike out an entry in the commercial register, which had been recorded at the company’s request and which confirmed that it was the owner of the property. These considerations lead the Court to the conclusion that, in the particular circumstances of the case, Article 6 § 1 is applicable to the proceedings before the Olsztyn District Court in which the applicants requested a strike out of entries in the commercial register.

b) The Government further submit that, should the Court consider that Article 6 § 1 is applicable to the impugned proceedings, the applicants’ complaint is inadmissible as manifestly ill-founded. They claim that the case was complicated. The application lodged by the applicants with the Olsztyn District Court alleged that the entries in the commercial register had been based on untrue statements and inaccurate information and had been inadmissible in law. In order to assess those submissions the District Court had to subject them to scrutiny and acquaint itself with the circumstances of the dispute. In addition, the applicants’ involvement in the court proceedings relating to the amendments of the property record in the real property register complicated the proceedings relating to the commercial register.

Furthermore, the Government assert that the applicants did not suffer any material prejudice as a result of the impugned proceedings, since a warning about their application, entered in the commercial register under Section 21 of the Commercial Code, protected their interests. As to the conduct of the national authorities, the Government observe that the case was decided almost immediately after the Supreme Court had instructed the Olsztyn District Court to deal with the applicants’ complaint about the proceedings. In addition, they point out that the transition from a state-controlled to a free-market system resulted in a dramatic increase in the number of applications submitted to courts by private businesses. Despite additional funding, courts still did not have adequate facilities and experienced certain difficulties in coping with this situation. Finally, the Government consider that the applicants contributed to the delay in the proceedings, as they initiated court proceedings concerning the real property register and submitted to the Ombudsman complaints alleging that domestic courts misconstrued the law and misinterpreted the facts.

The applicants submit that the length of the proceedings exceeded a reasonable time in breach of Article 6 § 1 of the Convention. In addition, they contest the Commission’s decision of 1 July 1998 declaring a part of their application inadmissible.

The Court firstly recalls that the reasonableness of the length of proceedings must be assessed in the light of the particular circumstances of the case and having regard to the criteria laid down in the Court’s case-law, in particular the complexity of the case, the conduct of the applicant and of the relevant authorities, and the importance of what was at stake for the applicant in the litigation (see, among other authorities, Humen v. Poland , no. 26614/95, 15.10.1999, § 60).

Turning to the facts of the present case, the Court notes that the impugned court proceedings began on 16 June 1993 and ended on 23 March 1995. Accordingly, they lasted 1 year, 9 months and 7 days. The proceedings took place in the context of an on-going dispute between the applicants and the “C” company, which concerned inter alia the title to the industrial estate situated in the Barczewo county. The applicants requested the Olsztyn Regional Court to strike out certain entries in the commercial register alleging that they had been based on untrue statements and inaccurate information and had been inadmissible in law. The court’s assessment of these allegations resulted in a decision of 23 March 1995 in which it allowed the applicants’ request and gave several instructions to the company management board. The instructions referred not less than 13 times to the provisions of the Commercial Code and showed that in numerous instances the management board failed to comply with the requirements of corporate law. Therefore, the proceedings involved a degree of complexity.

Furthermore, the Court considers that there is no indication that the applicants contributed to the length of the proceedings or that what was at stake for them called for an expeditious decision on their claim. As to the Government’s submission that courts did not have adequate facilities to cope with the increase in the number of applications submitted by private businesses, the Court recalls that Article 6 § 1 imposes on Contracting States the duty to organise their judicial systems in such a way that their courts can meet each of its requirements, including the obligation to decide cases within a reasonable time (see, among other authorities, the Duclos v. France judgment of 17 December 1996, Reports 1996-VI, pp. 2180-2181, § 55 in fine ). Accordingly, the lack of adequate facilities in the judicial system cannot justify the length of the proceedings.

In sum, having regard to the complexity of the case and the overall length of the proceedings, the Court considers that the impugned proceedings do not disclose an unreasonable delay within the meaning of Article 6 § 1 of the Convention. It follows that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court, unanimously,

DECLARES THE APPLICATION INADMISSIBLE .

Vincent Berger Georg Ress Registrar President