Communicated on 17 May 2017

FIFTH SECTION

Application no. 43203/09 Christian MAVRODIJSKI against Bulgaria lodged on 3 July 2009

STATEMENT OF FACTS

The applicant, Mr Christian Mavrodijski , is a German national, who was born in 1974 and lives in Darmstadt.

A. The circumstances of the case

1. Background

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

In 1996 the applicant and another individual, Mr A., registered in Bulgaria a company, “Royal Centre” Ltd, in which each of them held 50% of the shares. The company was to be managed and represented jointly by the two directors, namely the applicant ’ s father and Mr A.

The company was registered as having its seat at 145 Rakovski Street, Sofia, which was also the address at which the f athers of the applicant and Mr A. had their joint businesses registered. The address for the applicant, indicated in the company ’ s articles of association and in the court ’ s decision registering the company, was his personal address in Germany.

The company had no activities besides owning a plot of land.

In 1998, the joint businesses held by the fathers of the applicant and Mr A. changed office. Mr A. and the applicant ’ s father did not register this change also in respect of “Royal Centre” Ltd as the company had no business activities. There were no changes made to the management or ownership of “Royal Centre” Ltd at that time.

2. Exclusion of the applicant from the company

In December 2003, following a business dispute between the fathers of the applicant and Mr A., a lawyer acting for the former attempted to enforce a judgment in his favour against the latter. In the process, the lawyer learned that on 5 March 2003 the applicant had been expelled from “Royal Centre” Ltd by a decision of Mr A. who had then become the sole owner of the company. That decision had been registered by the Sofia City Court on 13 March 2003. As a result, the applicant had lost his shares in the company. Immediately after that, Mr A., acting as the sole shareholder in “Royal Centre” Ltd, had sold the plot of land to a third party. The plot was further resold a couple of times within the next four months.

The lawyer acting for the applicant ’ s fath er also established that Mr A. had started a process of expelling the applicant form the company as early as October 2002, when he had invited him to a shareholders ’ meeting on 30 October 2002. The invitation was sent by a notary to the court registered address for “Royal Centre” Ltd , namely 145 Rakovski Str. A stamp was placed on the back of the invitation, indicating that it was “duly delivered” while a handwritten note stating that “there was no such company or person at that address” featured next to it.

A shareholders ’ meeting took place on 30 October 2002. The meeting was attended by Mr A. and the notary mentioned above. According to the minutes of the meeting, the applicant was warned that he would be expelled if he did not start to actively work for the company. The applicant was never notified of the shareholders ’ meeting, the minutes or the warning they contained. Instead, notification of that decision was effected by the same notary to the same address at Rakovski Str. The process of notifying the applicant of the meeting on 5 March 2003, at which the applicant was excluded from the company by a decision of the shareholders, followed an identical pattern.

3. Civil proceedings brought by the applicant to vindicate his property rights

Having become aware at the end of 2003 of his exclusion from the company, the applicant brought three separate sets of proceedings to challenge his being deprived of property: one against “Royal Centre” Ltd under section 74 of the Commerce Act 1991, a second one against Mr A. and two other individuals under Article 97 in conjunction with Article 431 of the Code of Civil Procedure (CCP), and a third one against “Royal Centre” Ltd under the same CCP provisions.

In the first proceedings, brought by him on 1 March 2004, he challenged the legality of the shareholders ’ decision of 5 March 2003. Three levels of jurisdiction rejected his claim as inadmissible, finding in particular that it had been submitted out of time and that the applicant had no standing to bring such a claim as he was no longer a shareholder in the company in question.

In the second set of proceedings, brought by the applicant on the same date, he asked the court to declare the nullity of all shareholders ’ decisions of “Royal Centre” Ltd taken on and after 5 March 2003. This claim was rejected as inadmissible by three levels of jurisdiction which found that the applicable procedure was under section 74 of the Commerce Act 1991, and not the CCP, and that the claim could only be brought against a company and not individuals. The final decision was taken by the Supreme Court of Cassation on 14 July 2004.

In the third set of proceedings, brought by the applicant on 25 March 2004 under Article 97 § 3 in conjunction with Article 431 § 2 of the CCP, he challenged the validity of the Sofia City Court ’ s decisions regarding registration of changes in the company, pursuant to which he had been expelled from it, had lost all his shares in it and the company ’ s property had been sold to third parties. This claim was rejected by three levels of jurisdiction. More specifically the first instance court (the Sofia City Court) found that, as the decisions in question were not null and void, they could not be challenged under the said CCP provisions on the basis of their procedural irregularity. The court found that the latter is what the applicant was effectively attempting to do having missed the time-limit under section 74 of the Commerce Act 1991, that Act being the proper legal basis for such a claim. Upon appeal by the applicant the Sofia Court of Appeal upheld the lower court ’ s judgment. The Supreme Court of Cassation took the final decision on 20 January 2009, refusing to allow cassation appeal as it found that there was no ground for it, there being no conflicting practice between the lower court ’ s judgment and an interpretative decision it had relied upon.

4. Criminal proceedings against the applicant ’ s former business partner

Upon a complaint by the applicant, a criminal investigation was opened on 5 March 2004 by the Sofia City Prosecution Office against Mr A. on suspicion of fraud. He was ultimately charged with embezzlement in February 2007.

In April 2008, the applicant brought a civil claim within the context of the criminal proceedings, seeking damages in the amount of half of the value of the plot of land owned by “Royal Centre” Ltd. valued at about 7,500,000 euros (EUR). That claim was brought in accordance with Article 84 § 1 of the Code of Criminal Procedure. The court refused to consider the civil claim for damages, as it found that it would substantially interfere with the criminal trial.

In a final judgment of 19 October 2010 the Supreme Court of Cassation upheld the lower court ’ s judgment convicting Mr A. of embezzlement and sentenced him to a suspended sentence of three years in prison.

The applicant did not bring a parallel claim for damages before the civil courts or a subsequent one after the criminal proceedings ended.

B. Relevant domestic law and practice

The statutory provisions concerning the rights of shareholders in limited liability companies and relating to the register of companies have been set out in the case of Shesti Mai Engineering OOD and Others v. Bulgaria , no. 17854/04, §§ 49-51 and §§ 55-57, 20 September 2011.

At the time of the events, the registration proceedings concerning companies were non-adversarial court proceedings in which only one party requested the court to issue a certain decision. The court ’ s decision granting the request was not subject to appeal (Article 431 § 1 of the CCP then in force). If the decision so adopted affected the rights of a third party, the latter could assert his/her rights in general adversarial proceedings brought under Article 431 § 2 of the CCP. The respondent in those latter proceedings was the one who benefitted from the registration decision. Such claims were examined under the general procedure applicable to civil proceedings through the three levels of the court system. If the courts allowed a claim for a judicial declaration that an entry in the register was inadmissible or void, or that the details registered did not correspond to actions which had in fact been taken, the registering court had to erase the entry of its own motion or pursuant to a request by an interested party (Article 498 of the CCP).

COMPLAINTS

The applicant complains under Article 1 of Protocol No. 1 to the Convention and under Article 13 in conjunction with the previous provision that the State has failed to protect his right to property, given that he had not had procedural guarantees for effective protection of his property claims, nor an effective domestic remedy in this connection.

QUESTIONS TO THE PARTIES

1. Did the applicant exhaust domestic remedies in connection with his complaint under Article 1 of Protocol No. 1 to the Convention?

2. Did domestic law provide protection against arbitrary interference with property rights and did the applicant have access to judicial procedures which offered the necessary procedural guarantees and enabled the domestic courts to adjudicate effectively and fairly on any disputes between private persons (see Shesti Mai Engineering OOD and Others v. Bulgaria , no. 17854/04, § 79, 20 September 2011)?

3. Did the applicant have an effective domestic remedy, as required under Article 13, in connection with his complaint about a breach of his right to protection of his property?