Information Note on the Court’s case-law 19

June 2000

Oliveira Modesto and Others v. Portugal - 34422/97

Judgment 8.6.2000 [Section IV]

Article 6

Civil proceedings

Article 6-1

Reasonable time

Length of civil proceedings: violation

Facts : All 122 applicants were employed by the limited company “F.C.M.E. S.A.”, which from 1985 was unable to pay its staff their wages. In October 1986 the company applied to t he courts to be placed in judicial administration. The judicial administrator appointed in the administration proceedings delivered his report on the company’s situation and recognised the applicants’ claims in respect of their unpaid wages. The creditors’ meeting took place in February 1988; at that meeting the applicants’ claims were recognised by the other creditors. In March 1988 an agreement on the reorganisation of the company was concluded. None the less, the company experienced difficulties in imple menting that agreement. The courts initially dismissed the claims of certain creditors, including some of the applicants, that the company should be declared insolvent. On appeal by these creditors, however, the Court of Appeal finally declared the company insolvent in October 1994. In May 1995 an order was made for seizure of the company’s assets and the creditors were called upon to prove their claims. In March 1996 the administrator was requested to submit his report on the creditors’ claims, which he di d in November 1997 after the period initially set had been extended a number of times. In March 2000 the judge delivered a decision determining the rank of several creditors; the judge declared admissible the appeals against that decision lodged by three o f the creditors. Some of the assets have still not been put up for sale and the proceedings are still pending.

Law : Article 6 § 1: Civil rights, in particular the right to remuneration, were at stake in the reorganisation proceedings at least from February 1988, the date on which all the creditors approved the applicants’ claims against the company. The two stages of the proceedings therefore had to be considered together. While some periods of inactivity are not attributable to the authorities, others are. Thus, the administrator did not submit his report on the creditors’ claims until one year and eight months after the court had requested him to do so. Furthermore, the decision determining the rank of several creditors was not delivered until after two ye ars and five months; however, special diligence was required in the light of what was at stake in the dispute. Finally, five years after the company’s assets were seized, some of them have still not been put up for sale.

Conclusion : violation (unanimous).

Article 41: The Court awarded each of the applicants 900,000 escudos (PTE) for non-pecuniary damage and awarded the first applicant costs of 313,840 escudos.

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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