FIRST SECTION

Application no. 60818/10 VERLAGSGRUPPE NEWS GMBH against Austria lodged on 14 October 2010

STATEMENT OF FACTS

The applicant company, Verlagsgruppe News GmbH , is a limited liability company based in Vienna. It is represented before the Court by Mr H. Simon , a lawyer practising in Vienna .

A. The circumstances of the case

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

The applicant company is the owner and publisher of the weekly news magazine Profil . In its issue of 10 April 2006, the applicant company published an article dealing with the investigations into losses incurred by the Hypo Alpe-Adria Bank. The cover page of Profil announced the article as follows: “Carinthian Hypo affair - How much did Haider know?” (“K ä rntner Hypo-Aff ä re – Wie viel wusste Haider” ).

The article with the headline “Heavy mortgage” (“Schwere Hypothek” ) ran to nine pages. It reported on the enormous losses incurred by the Hypo Alpe-Adria Bank in 2004 which reached some 328 million euros and dealt with the question who was responsible for the damage and whether there were deficiencies in the bank ’ s risk management. It accused the bank ’ s executive board of having failed to inform the supervisory board, the bank ’ s financial accountants and the Financial Market Authority ( Finanzmarkt - aufsicht , the “FMA”), having tried instead to hide the losses by manipulating the balance sheets for 2004, which the result that the full damage was only discovered by the financial accountants when examining the balance sheets for 2005. The latter then informed the FMA. Furthermore, the article featured an interview with Mr Kulterer, chief executive of the bank, confronting him with these accusations. Mr Kulterer was quoted accusing the bank ’ s treasury manager Mr Rauscher of having disregarded internal guidelines in his foreign currency transactions.

The incriminated passages of the article read as follows:

“By the time the warning system was triggered the disaster had already long since run its course. On Wednesday 17 November 2004 the risk management and control software programme in the head offices of the Hypo Alpe-Adria Bank in Klagenfurt showed, in all the relevant departments of the bank, precisely the kind of figures which bring the managers of credit institutions out in a cold sweat: staggering losses on investment operations. In the treasury division, which manages the bank ’ s liquidity and for that purpose trades, among other things, in interest rate and currencies, there was a shortfall of more than 100 million euros. ‘ At that point we immediately called a halt ’ said CEO Wolfgang Kulterer. However, as several similar operations were in progress simultaneously, it was impossible ‘ to close the floodgates at once ’ . When that was eventually done, the losses stood at 328 million euros, several times above the self-imposed threshold of 100 million.

Treasury manager Christian Rauscher, who was responsible for authorising the transactions, was immediately told to clear his desk. (The son of the former SPÖ regional finance chief Max Rauscher was not available for comment). However, the consequences of the orgy of speculation, which lasted just two weeks, continue to occupy the bank ’ s management. And they are not the only ones: in particular, the manner in which Kulterer and his colleagues dealt with the loss-making transactions has also come to the attention of the authorities in recent days. Last Wednesday the financial markets supervisory authority (FMA) even saw fit to lodge a criminal complaint against the entire executive board. Rauscher is the subject of a preliminary investigation (file no. 3 St 79/06x) before the Klagenfurt Regional Court on suspicion of fraudulent conversion. The executive board faces charges of misrepresenting the end-of-year accounts, in other words, falsifying the balance sheets.

...

The transactions in question were all performed between 20 September and 5 October 2004. According to Hypo boss Kulterer, Rauscher – in breach of internal regulations – gambled, by means of so-called swaps, on the occurrence of a highly explosive combination of two trends on the financial markets: on the one hand a fall in interest rates and on the other hand a rise in the dollar and the yen against the euro. A few weeks later, on 17 November 2004, the perfect storm hit.

...

Lack of controls. Rapid growth rates motivate not just the boss, but also the employees – including the now ex-treasury manager Christian Rauscher. According to inside sources, Rauscher may have set the stakes so high precisely because he wanted to make his mark as a candidate for the vacant post of department manager. After all, high stakes mean correspondingly high profits if all goes according to plan. A marked surplus on his account would undoubtedly have boosted his chances of securing the post.”

The article continued with an overview of the history of the Hypo Alpe-Adria Bank which had advanced from a regional bank to an international investment bank within fifteen years. Finally, the article examined the relationship between the bank ’ s management and the political sphere and asked the question how much and as of when Mr Haider, the then Regional Governor of Carinthia, knew of the losses. It noted that the Land of Carinthia was the 49.4% owner of the bank which had financed a number of projects in Carinthia, in particular Mr Haider ’ s “Future Fund” designed to run infrastructure and other large scale projects.

Between 1 and 6 April 2006, i.e. before the publication of the article in Profil a number of daily newspapers had published reports on these investigations and had also mentioned Mr Rauscher by name.

On 14 June 2006 Mr Rauscher brought proceedings against the applicant company for disclosure of his identity in breach of section 7a of the Media Act ( Mediengesetz ). He submitted that he was not a public figure and his position in the bank had not been such as to justify the disclosure of his name. He asserted that when authorising the transactions at issue he had acted in accordance with his instructions and with the approval of his superiors. The publication of his name had had negative repercussions on his professional advancement and had not been justified by any public interest.

On 19 August 2008 the Vienna Regional Criminal Court ( Landesgericht f ü r Strafsachen ) dismissed Mr Rauscher ’ s action.

The Regional Court found that the following facts were established: the article had provided a comprehensive report on the losses of the Hypo Alpe ‑ Adria Bank. At the time of the publication of the article the bank had been owned to 49.4% by the Land of Carinthia. The claimant ’ s father had been a member of the Carinthia Regional Government responsible for finances and had also been a member of the bank ’ s supervisory board until April 2003. The claimant had been the head of the bank ’ s treasury department since 1999. He had not been active in politics nor had he entered the public scene in connection with his professional activity. The Regional Court noted that the task of a bank ’ s treasury was to carry out the liquidity and finance planning of the bank. The Hypo Alpe-Adria ’ s treasury department had been directly answerable to the executive board. The transactions which subsequently led to the enormous losses had been carried out between the end of September and the beginning of October 2004 under the main responsibility of the claimant. On 5 April 2006 the FMA had sent a criminal information to the Klagenfurt Public Prosecutor ’ s Office concerning three members of the executive board who were suspected of having manipulated the bank ’ s balance sheets and the claimant, who was suspected of embezzlement by carrying out non-authorised foreign currency transactions. Following the receipt of the information the Public Prosecutor ’ s Office had started investigations. From 24 May 2006 preliminary inquiries were conducted by the Regional Court. The criminal proceedings against the claimant were discontinued in 2008. After accusations against the claimant had been published in various media, his employment contract was terminated. He had not been able to find a similar position in another bank.

The Regional Court noted that section 7a(1) of the Media Act required a weighing of the claimant ’ s interest in the protection of his identity, and the public interest in its disclosure. As a rule, adults who were suspected of having committed a crime were protected against a disclosure of their identity only if the disclosure disproportionately affected their professional advancement.

It observed that at the material time that Hypo Alpe-Adria Bank was owned to almost 50% by the Land of Carinthia. That fact alone demonstrated an increased public interest, as the taxpayer had a right to learn who was responsible for the bank ’ s enormous losses. The applicant had been a senior employee of the bank, and had been suspected of embezzlement. Although the criminal proceedings were still in their early stages, the Financial Market Authority ( Finanzmarktaufsicht ), i.e. the competent controlling authority, had laid a criminal information against the claimant. Moreover, the chief executive of the bank, Mr Kulterer, had raised similar accusations against him. Having regard to the function of the press as a “public watchdog” and the circumstances of the case, the Regional Court found that the public interest to receive information outweighed the claimant ’ s interest in the non-disclosure of his name.

On 20 April 2009 the Vienna Court of Appeal ( Oberlandesgericht ) granted the claimant ’ s appeal and ordered the applicant company to pay him 3,000 euros (EUR) in compensation and to reimburse his procedural costs.

The Court of Appeal found that the Regional Court had wrongly weighed the conflicting interests at issue. Given the fact that the Land was the almost 50% owner of the Hypo Alpe-Adria Bank there was a public interest in knowing who was responsible for the enormous losses. However, the article should have limited itself to mentioning the head of the bank ’ s treasury without disclosing the claimant ’ s name. The interest in reporting on the criminal offences at issue did not in itself suffice to justify the disclosure of the claimant ’ s identity. In the present case, the fact that the claimant though having an important position in the bank was answerable to the executive board and that the criminal proceedings against him were still in their early stages, led to the result that the claimant ’ s interest in the protection of his identity outweighed the public interest in the disclosure of his name.

The applicant company, lodged an application under Article 363a of the Code of Criminal Procedure ( Strafproze ß ordnung ) with the Supreme Court ( Oberster Gerichtshof ). It submitted in particular that the Vienna Court of Appeal ’ s judgment violated Article 10 of the Convention, as there had been an overriding public interest in the reporting including the disclosure of Mr Rauscher ’ s identity.

On 17 March 2010 the Supreme Court dismissed the applicant company ’ s request. Examining in detail the reasons given by the Court of Appeal, the Supreme Court found that the latter had correctly weighed the conflicting interests of the claimant under Article 8 on the one hand and of the applicant company under Article 10 on the other hand.

The Supreme Court ’ s judgment was served on the applicant company ’ s counsel on 15 April 2010.

B. Relevant domestic law and practice

Section 7a of the Media Act, so far as material, provides as follows:

“(1) Where publication is made, through any medium, of a name, image or other particulars which are likely to lead to the disclosure to a larger not directly informed circle of people of the identity of a person who

1. has been the victim of an offence punishable by the courts or

2. is suspected of having committed, or has been convicted of, a punishable offence, and where legitimate interests of that person are thereby injured and there is no predominant public interest in the publication of such details on account of the person ’ s position in society, of some other connection with public life, or of other reasons, the victim shall have a claim against the owner of the medium (publisher) for damages for the injury suffered. ....”

(2) Legitimate interests of the victim shall in any event be injured if the publication

1. in the case of subsection (1)1 is such as to give rise to an interference with the victim ’ s strictly private life or to his or her exposure,

2. in the case of subsection (1)2 relates to a juvenile or merely to a lesser indictable offence or may substantially prejudice the victim ’ s advancement.

...”

Pursuant to section 41 of the Media Act the provisions of the Code of Criminal Procedure apply to proceedings under the Media Act, unless provided otherwise.

Article 363a of the Code of Criminal Procedure reads as follows:

“1. If it is established in a judgment of the European Court of Human Rights that there has been a violation of the Convention for the Protection of Human Rights and Fundamental Freedoms (Official Gazette [ Bundesgesetzblatt ] no. 210/1958) or of one of its Protocols on account of a decision or order of a criminal court, a retrial shall be held on application in so far as it cannot be ruled out that the violation might have affected the decision in a manner detrimental to the person concerned.

2. All applications for a retrial shall be decided by the Supreme Court. The application may be lodged by the victim of the violation or by the Attorney-General.”

This provision was introduced in 1996 with the aim of creating a possibility of conducting fresh criminal proceedings following the finding of a violation of the Convention by the European Court of Human Rights.

In a leading judgment of 1 August 2007 (13Os 135/06m), the Supreme Court has extended the scope of application of Article 363a, allowing its use also without a prior finding of a violation of the Convention by the Court. Meanwhile this approach has become established case-law of the Supreme Court, which has also clarified the conditions for lodging an application under Article 363a of the Code of Criminal Procedure without a prior finding of a violation of the Convention by the Court (for instance the time-limit to be observed and the requirement to have exhausted other available remedies). A number of the judgments given by the Supreme Court in the context of the extended application of Article 363a Article concerned alleged violations of Article 10 of the Convention.

COMPLAINT

The applicant company complains under Article 10 of the Convention that the Vienna Court of Appeal ’ s judgment of 20 April 2009 and the Supreme Court ’ s judgment of 17 March 2010 violated its right to freedom of expression . It submits in particular that the interference with that right was not necessary: the article reported on an issue of public interest, namely the enormous losses incurred by a bank which was in part owned by the Land of Carinthia. The publication of Mr Rauscher ’ s name was required in order to report in a meaningful manner on the events. Moreover, Mr Rauscher ’ s name had already been publicly mentioned by the chief executive of the Hypo Alpe-Adria Bank in the context of the losses incurred and had been disclosed by a number of daily newspapers which reported on the banking scandal in the days before the publication in the weekly magazine Profil . Finally, the proceedings were not in their very early stages: the competent controlling authority, namely the Financial Market Authority, had initiated an investigation and had submitted a criminal information against Mr Rauscher to the Public Prosecutor ’ s Office, which had opened investigations on 5 April 2006. In sum, the domestic courts had failed to weigh the conflicting interests correctly.

QUESTIONS TO THE PARTIES

1. Has the applicant company complied with the six-month time-limit laid down in Article 35 § 1 of the Convention?

In particular, was the application to the Supreme Court under Article 363a of the Code of Criminal Procedure an effective remedy within the meaning of Article 35 § 1 in respect of the applicant company ’ s complaint under Article 10 ?

2. Has there been a violation of the applicant company ’ s right to freedom of expression, in particular its right to impart information, contrary to Article 10 of the Convention (see, in particular, Standard Verlags GmbH v. Austria (no. 3) , no. 34702/07 , 10 January 2012 ) ?