Information Note on the Court’s case-law 69

November 2004

O.B. Heller, a.s. and Československá obchodní banka, a.s. v. the Czech Republic (dec.) - 55631/00 and 55728/00

Decision 9.11.2004 [Section II]

Article 6

Civil proceedings

Article 6-1

Civil rights and obligations

Private company acting as guarantor for customs debts: Article 6 applicable

Public hearing

Lack of public hearing before the Const itutional Court: inadmissible

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Possessions

Obligation to pay third party’s debts

Peaceful enjoyment of possessions

Obligation of company to pay third party’s debts, of unforeseeable amount, having voluntarily undertaken to act as global guarantor: inadmissible

In 1996 the two applicant companies had both drawn up a letter of guarantee with regard to customs duties. In so doing, they each undertook to settle any sums owned to the customs authorities by an import company, up to a certain maximum amount. The customs authorities subsequently claimed reimbursement of all the customs debts owed by the respective importing com panies for the period concerned, as a result of which the applicant companies were required to settle a total sum which exceeded the maximum amount provided for in the letters of guarantee. Taking the view that those guarantees had committed them only up t o the maximum amount provided for in the letters of guarantee, the applicant companies brought proceedings. The administrative court stated that, under the Customs Code, a letter of guarantee which secured debts up to a maximum amount guaranteed not merely a single debt but each of the debtor’s customs debts arising during the guarantee’s period of validity, since, according to the relevant texts, such a guarantee was in fact a so-called comprehensive customs guarantee. In a leading judgment, the Constituti onal Court upheld the lawfulness of the authorities’ interpretation of the Customs Code.

Inadmissible under Article 6: applicability – The Government contested the applicability of Article 6 to the proceedings. They considered that the dispute concerned customs issues, an area which, like tax proceedings, remained within the irreducible core of public-law prerogatives. For its part, the Court found that the decisions against the applicant comp anies with regard to the payment of customs debts had not had the consequence of transferring a liability to “tax” in the strict sense of the term, but rather an obligation to settle. The applicant companies did not have debtor status, since they had not s ubmitted the customs declarations (this having been done by the import companies) and were involved in the proceedings solely by virtue of a secondary relationship as guarantors. The proceedings concerned the content of letters of guarantee contracted betw een the applicant companies, private-law companies, and the import companies. In that respect, the proceedings concerned a “civil” dispute within the meaning of Article 6 § 1.

Public hearing –The applicant companies complained that there had been no heari ng before the Constitutional Court. However, the failure to hold a hearing before the Constitutional Court could be compensated by the public hearings held at the decisive stage of those proceedings in which a ruling was given on the merits of the applican t companies’ complaint. In the present case, the lower courts had held at least one hearing at which the parties had been able to submit their arguments, which were valid for the dispute in its entirety: manifestly ill-founded (see Houfova , (dec.), 1 July 2003 and, a contrario , Malhous , 2001, Case-Law Report No. 32).

Inadmissible under Article 1 of Protocol No. 1: The obligation to pay numerous amounts owed by debtors, using previously-acquired financial resources, represented an interference in the right t o the peaceful enjoyment of one’s possessions. The courts dealing with the case had not applied the legal provisions in question manifestly erroneously or so as to reach arbitrary conclusions. The mere fact that the applicable legislation was open to more than one interpretation could not in itself lead to the conclusion that the interference in question was unforeseeable or arbitrary, and consequently incompatible with the requirement of lawfulness. Admittedly, the comprehensive-guarantee system imposed a significant burden on the applicant companies. However, the applicant companies had voluntarily entered into those commitments in the course of their professional activities and they had enjoyed sufficient opportunities during the proceedings to put their case to the relevant authorities. In addition, the applicant companies had not demonstrated in what way they would have suffered an excessive burden; indeed, it seemed that, unlike the debtor companies, which had gone bankrupt, the applicant companies had not been ruined and continued to operate. Consequently, and having regard to the margin of appreciation enjoyed by the States in this area, the requirement of the proportionality of the interference had been satisfied in this case.

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

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