Information Note on the Court’s case-law 57

October 2003

Crédit industriel v. the Czech Republic - 29010/95

Judgment 21.10.2003 [Section IV]

Article 6

Civil proceedings

Article 6-1

Access to court

Impossibility for company management to contest decision to place the company under compulsory administration: violation

Facts : The applicant is a bank which was placed under compulsory administration by the Czech Na tional Bank (CNB) on the ground of its unsatisfactory financial situation and liquidity. The compulsory administration, and its subsequent extension, were entered in the Companies Register following rulings of the District Court, which were not served on t he applicant. The applicant bank, through its former chairman (and majority shareholder) appealed to the Municipal Court, claiming that it should have been treated as a party to the proceedings in which the District Court had approved the entries in the Co mpanies Register, and that these decisions should have been served on it. The Municipal Court rejected the appeals without a hearing or a review of the merits. The applicant’s further appeals to the Supreme Court and the Constitutional Court were unsuccess ful, partly because the courts considered that they had been lodged by an unauthorised person, as they had not been authorised by the appointed administrator, who alone could represent the bank or authorise a legal representative as from the date on which the relevant entries had been made in the Companies Register.

Law : Article 34 – The Government raised a preliminary objection that only the administrator and not the former chairman or his lawyer was entitled to represent the bank and lodge an application with the Court. The Court considered that although the bank was under compulsory administration, it had not ceased to exist as a legal person. In view of the essence of the applicant’s complaint, which concerned the lack of access to a court to oppose the appointment of a compulsory administrator, to hold that the administrator alone was authorised to represent the bank would render the right of individual petition theoretical and illusory. This represented an exception to the ruling in the case Agrotexim and Others v. Greece (Series A, no. 330-A), where the Court had observed that only in exceptional circumstances could a company’s legal personality be disregarded. There were exceptional circumstances in the present case which entitled the bank’s former ch airman and majority shareholder to lodge a valid application on the bank’s behalf: preliminary objection rejected.

Article 6 – This provision was applicable to the decision placing the bank in compulsory administration and to the subsequent proceedings ext ending this decision, as a disagreement clearly existed, the applicant bank having sought to contest the decisions. Even assuming that the CNB decision was liable to be judicially reviewed and courts would have had the jurisdiction to review the grounds on which the compulsory jurisdiction had been imposed, the bank had no practical possibility of pursuing such proceedings, since from the date the CNB decision was entered in the Companies Register, its statutory management body was no longer empowered to ac t on the bank’s behalf. Moreover, the appeal which it lodged against the entries was dismissed without an examination of the merits. In these circumstances, the applicant had no effective access to a court to obtain a review of the CNB decision.

Conclusio n : violation (unanimously).

Article 1 of Protocol 1 – It was not necessary to examine this complaint separately, as it was based essentially on the same lack of procedural protection which was found to give rise to a violation of Article 6.

Conclusion : not necessary to examine (unanimously).

Article 41 – The Court found that the finding of a violation constituted sufficient just satisfaction in respect of any non-pecuniary damage. It made an award in respect of costs and expenses.

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

Click here for the Case-Law Information Notes