THIRD SECTION

Application no. 27903/10 ZIPP BRATISLAVA spol . s r.o . against Slovakia lodged on 10 May 2010

STATEMENT OF FACTS

1. The applicant, ZIPP BRATISLAVA spol . s r.o ., is a private limited company, which was established under Slovakian law in 1993, and has its registered office in Bratislava . It is represented before the Court by Ms E. Ľalíková , a lawyer practising in Bratislava .

A. The circumstances of the case

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

1. Enforcement title

2. By force of a judgment of the Bratislava Regional Court ( Krajský súd ) of 18 April 2002, which was upheld on appeal ( odvolanie ) by the Supreme Court ( Najvyšší súd ) on 23 May 2003, the applicant company was ordered to pay an amount of money (“the order”) to another private company (“the creditor”).

3. It was then incumbent upon the Regional Court to ensure service of the Supreme Court ’ s judgment on the parties, which was a prerequisite for the order to become final and binding ( právoplatnosť ) and, on the expiry of the period allowed for voluntary compliance with the order, enforceable ( vykonateľnosť ).

4. As it would later turn out, the service of the Supreme Court ’ s judgment on the applicant company had not been effected. Nevertheless, by what would later turn out to have been a mistake (see paragraph 8 below), on 11 August 2003 the Regional Court issued a certificate ( doložka ) to the effect that the order had become final and binding on 27 July 2003, and enforceable on 13 August 2003.

2. Enforcement proceedings

5. On 13 August 2003 the creditor filed a petition against the applicant company for having the order enforced. In response, on 20 August 2003, the Bratislava III District Court (“the Enforcement Court ”) authorised a judicial enforcement officer (“JEO”) to carry out the enforcement.

6. On 25 August 2003 the JEO issued a notice of enforcement ( upovedomenie o začatí exekúcie ), by which he notified the applicant company that enforcement proceedings had commenced against it. The notice specified the amount to be enforced as being equivalent to some 134,500 euros (EUR), of which the equivalent of some EUR 28,600 were to be the costs of the enforcement. At the same time, the JEO ordered ( príkaz na začatie exekúcie ) the applicant company ’ s bank to freeze the applicant company ’ s bank accounts.

7. On 16 September 2003 the applicant company challenged the notice of enforcement by way of a protest ( námietky ) to the Enforcement Court .

The principal line of argument was that the judgment of the Supreme Court of 23 May 2003 had not been served on the applicant company. The order thus could not have and had not become final, binding and enforceable. The prerequisites for ordering its enforcement had thus not been met and the enforcement should be brought to an end.

8. On 14 November 2003 the Enforcement Court dismissed the applicant company ’ s protest. It acknowledged that, prior to the commencement of the enforcement proceedings, the Supreme Court ’ s judgment had not been served on the applicant company and that, consequently, the certificate of 11 August 2003 (see paragraph 4 above) was erroneous. Nevertheless, the Regional Court had meanwhile corrected the flaw by ensuring service of the Supreme Court ’ s judgment on the applicant company and by issuing a new certificate on 24 September 2003 to the effect that the order had become final and binding on 16 September 2003, and enforceable on 2 October 2003. The flaws had thus been corrected and the enforcement could proceed.

9. On 28 November 2003 the JEO issued a warrant for enforcement ( exekučný príkaz ) of the order pursuant to which - on the same day - the entire amount to be enforced, that is to say including the costs of the enforcement (see paragraph 6 above), was actually taken from the bank account of the applicant company.

10. On 20 January 2004 the JEO reported to the Enforcement Court that the enforcement had successfully been completed. In consequence, the Enforcement Court terminated the enforcement proceedings.

3. Unlawfulness of the enforcement

11. However, meanwhile, the Prosecutor General acceded to the applicant company ’ s request that he exercise his discretionary power to challenge the Enforcement Court ’ s decision of 14 November 2003 by way of an extraordinary appeal on points of law ( mimoriadne dovolanie ).

It was argued, inter alia , that by the mistakes acknowledged above, the applicant company had been deprived of the possibility of complying with the order voluntarily.

12. On 24 February 2005 the Supreme Court allowed the extraordinary appeal, quashed the contested decision, and remitted the matter to the Enforcement Court for a new determination.

13. The Supreme Court held in general terms that an authorisation of enforcement of an order for payment of an amount of money by freezing bank accounts necessitated that the order must have become final, binding and enforceable by the time of the authorisation. In other words, if the order had not become enforceable by the time of the petition for enforcement, the petition ought to be dismissed.

14. The Supreme Court further held, specifically, that:

“The Enforcement Court [was] liable for the lawfulness of the unfolding of the legal relations concerning the enforcement proceedings, which [had led] to the effective commencement of the enforcement proceedings.”

and that:

“By [their] unlawful actions the [JEO] and the Enforcement Court had prevented [the applicant company] from paying its debt to the creditor in the grace period envisaged by the [order], whereby financial damage [had been] caused to [the applicant company] consisting of the costs of the enforcement proceedings paid.”

15. The applicant company subsequently filed a complaint under Article 127 of the Constitution (Constitutional Law no. 460/1992 Coll., as amended) with the Constitutional Court ( Ústavný súd ).

Relying, inter alia , on Article 6 § 1 of the Convention, the applicant company contended that the Enforcement Court had failed to abide by the Supreme Court ’ s judgment of 24 February 2005 in so far as it had been ordered to re-examine the applicant company ’ s protest against the notice of enforcement of 25 August 2003.

16. On 19 September 2007 the Constitutional Court declared the complaint inadmissible as being manifestly ill ‑ founded. It observed that the enforcement proceedings had been terminated at the latest on 20 January 2004 (see paragraph 10 above) and that, by operation of Article 61 of the Enforcement Code (Law no. 233/1995 Coll., as amended), restitutio in integrum in enforcement proceedings was not permissible.

The enforcement of the order had thus been consumed and, notwithstanding the Supreme Court ’ s conclusions in its judgment of 24 February 2005, in the given situation the Enforcement Court could not be liable to re ‑ examine the matter.

4. Claim for damages

17. On 29 December 2005 the applicant company lodged an action against the State, in the person of the Ministry of Justice, under the 1969 State Liability Act (Law no. 58/1969 Coll., as applicable at the relevant time).

It submitted that the enforceability certificate of 11 August 2003 and the decision of 14 November 2003 (see paragraphs 4 and 8 above) had amounted to, respectively, a wrongful official action ( nesprávny úradný postup ) and unlawful decision ( nezákonné rozhodnutie ).

Relying on the Supreme Court ’ s conclusions (see paragraphs 13 and 14 above), the applicant company further submitted that the impugned wrongful official action and unlawful decision had caused it pecuniary damage consisting of the costs of the enforcement proceedings, which the applicant company could have avoided, had it had at its disposal the grace period allowed to it in the order. As a result of the impugned action and decision, however, the applicant company had been deprived of the grace period and had been forced into enforcement proceedings.

In concrete terms, the applicant company submitted that on 25 August 2003, pursuant to the notice of enforcement of the same day, its bank accounts had been frozen and it no longer could make any dispositions with its funds, including a voluntary compliance with the order, for which it otherwise had sufficient funds at its disposal.

The costs of the enforcement proceedings thus generated and forced upon the applicant company amounte d to the equivalent of some EUR 28,600 (see paragraph 6 above), and the applicant company sought an order for payment of that amount by way of damages.

18. On 2 October 2006 the Bratislava III District Court dismissed the action. It observed that, under section 3 of the 1969 State Liability Act, except for “cases worthy of particular consideration”, a claim for damages related to an unlawful decision could only be allowed if that decision had been challenged by way of the appropriate legal remedy. It further observed that the applicant company ’ s claim for damages concerned costs of the enforcement, which had been determined in the notice of enforcement of 25 August 2003 (see paragraph 6 above) by way of a separate ruling. This ruling could and should have been challenged by way of a separate protest. The applicant company ’ s protest of 1 6 September 2003 (see paragraph 7 above) had however concerned the admissibility of the enforcement as such, and not its costs. Consequently, the impugned decision of 14 November 2003 (see paragraphs 8 above) had nothing to do with the costs of the enforcement.

In sum, the requirement of exhaustion of the appropriate remedy had not been met and, in so far as the applicant company ’ s claim for damages concerned the decision of 14 November 2003, it had to be dismissed.

19. As to the wrongful official action inherent in the certificate of 11 August 2003, the District Court found that it had no direct link to the costs of the enforcement. The remainder of the applicant company ’ s claim was thus short of the legal requirement of c ausal nexus, and had equally to be dismissed.

20. On 13 February 2007 the applicant company appealed, reiterating its previous arguments and relying specifically on the Supreme Court ’ s judgment of 24 February 2005. It added that it had been nothing but the impugned decision of 14 November 2003, which ultimately allowed the commencement of the enforcement without an enforceable title, and which had eventually permitted for such a flawed enforcement to unfold and to be completed, including the unnecessary costs of the enforcement.

21. On 17 February 2009 the Regional Court upheld the first-instance judgment, fully endorsing the findings and conclusions of the District Court. By what may appear to be a clarification, it pointed out that the required causal nexus was missing both in respect of the wrongful official action and the unlawful decision. The applicant company ’ s inability to comply with the order voluntarily had been caused by the freezing of its bank accounts on 25 August 2003, which preceded the unlawful decision of 14 November 2003. As to the wrongful official action, the Regional Court observed that it was not the erroneous certificate of 11 August 2003 alone, which permitted and caused the costs of the enforcement at stake. In addition, the Regional Court observed that a representative of the applicant company had been present at the hearing, at which the Supreme Court pronounced its judgment of 23 May 2003 (see paragraph 2 above). The applicant company therefore could not claim that it had no knowledge of that judgment and that it had been deprived of the possibility to comply with the order voluntarily. Lastly, the Regional Court observed that, following the quashing of the unlawful decision of 14 November 2003 by the Supreme Court on 24 February 2005, the matter had been remitted to the Enforcement Court for a new determination, which had not taken place by then. Therefore, another condition for the claim to be granted had not been met, namely that under section 4(1) of the 1969 State Liability Act, which provided that a claim under the Act could not be made out as long as the final and binding unlawful decision had not been quashed.

5. Final domestic decision

22. On 19 June 2009 the applicant company challenged the Regional Court ’ s judgment of 17 February 2009 by way of a constitutional complaint, alleging a violation of its rights under Articles 6 § 1 of the Convention (access and fairness) and 1 of Protocol No. 1. It considered the dismissal of its action for damages grossly arbitrary, on a number of factual and legal grounds, including that the Enforcement Court had been ignoring the Supreme Court ’ s order for re-examination o f the matter (see paragraphs 12 and 15 above). In addition, the applicant company also contended that the length of the proceedings had been excessive.

23. On 13 October 2009 the Constitutional Court declared the complaint inadmissible as being manifestly ill ‑ founded.

The Constitutional Court cited in extenso the reasoning of the ordinary courts, observed that it was no court of further appeal against decisions of the ordinary courts, and found no constitutionally relevant unfairness, arbitrariness or irregularity in the impugned judgment.

As to the length of the proceedings, the Constitutional Court observed that, at the time of the introduction of the constitutional complaint, the proceedings had already been completed. The examination of their length could thus no longer serve to expedite them. Therefore, in line with the Constitutional Court ’ s established practice, the applicant company no longer held any interest in having the complaint examined.

The decision was served on 12 November 2009.

B. Relevant domestic law

State Liability Act of 1969

24 . Until 30 June 2004 State liability for damage was governed by the Act on State Liability for Damage Caused by a State Body ’ s Decisions or Erroneous Official Action of 1969 ( Zákon o zodpovednosti za škodu spôsobenú rozhodnutím orgánu štátu alebo jeho nesprávnym úradným postupom ).

25. Under the Act, the State was liable for damage caused by unlawful decisions (Part ( Časť ) One) and wrongful official action (Part Two).

26. The general scope of the State liability for damage caused by unlawful decisions was defined in section 1(1). Pursuant to this provision, the State was liable for damage caused by unlawful decisions of its bodies and agencies inter alia in civil proceedings, administrative proceedings, criminal proceedings (with the exception of decisions concerning detention and penalties) and proceedings before notaries. This liability was conceived as an objective one (section 1(2)).

27. The right to be compensated for damage caused by unlawful decisions was vested in those parties to the proceedings, who had been injured by an unlawful decision in those proceedings (section 2).

28. The conditions for making out a claim for compensation for damage caused by unlawful decisions were set out in sections 3 and 4 of the Act.

With the exception of cases worthy of particular consideration, a claim for damages related to an unlawful decision could only be allowed if that decision had been challenged by way of the appropriate legal remedy (section 3).

Under section 4(1), a claim for damages related to an unlawful decision could be brought only if the impugned decision had been quashed by the competent authority for being unlawful.

29. Section 18(1) rendered the State liable for damage caused in the context of carrying out functions vested in public authorities resulting from wrongful official action of persons entrusted with the exercise of those functions. This liability was likewise conceived as an objective one (section 18(2)).

30. Unless specifically provided for otherwise, the matters regulated by the Act were subject to regulation by the Civil Code as a lex generalis (section 20). An award of compensation under the Act could be made when the claimant showed that he or she had suffered damage as a result of the unlawful decision or the wrongful official action, quantified its amount, and showed that there was a causal link between the damage and the unlawful decision or wrongful action in question.

31. As from 1 July 2004, the State Liability Act of 1969 was replaced by the State Liability Act of 2003 (Law n o. 514/2003 Coll., as amended ‑ Zákon o zodpovednosti za Å¡kodu spôsobenú pri výkone verejnej moci ). Under its section 27, liability under that Act applies to damage caused by decisions issued and wrongful official action taking place after the day of its entry into force (sub-section 1). Liability for damage caused by decisions issued and wrongful official conduct having taken place before the entry into force of that Act is be governed by the hitherto applicable statute, that is to say the State Liability Act of 1969 (sub-section 2).

COMPLAINTS

32. The applicant company complains under Article 1 of Protocol No. 1 that its claim against the State for damages, which was acknowledged by the Supreme Court in its judgment of 24 February 2005, has been arbitrarily dismissed.

33. The applicant company also complains under Article 13 of the Convention that it has not had an effective remedy in respect of its complaint under Article 1 of Protocol No. 1.

34. Relying on Article 6 § 1 of the Convention, the applicant company further complains that the dismissal of its claim against the State for damages has been contrary to its rights of access to a court and to a fair hearing, and that the length of the proceedings on this claim was excessive.

QUESTIONS TO THE PARTIES

1. Did the dismissal of the applicant company ’ s claim against the State for damages amount to an interference with the applicant company ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1?

In particular, can the applicant company ’ s claim be considered as an asset which it could “legitimately expect” to see realised (for recapitulation of the applicable principles, see for example Kopecký v. Slovakia [GC], no. 44912/98, § 35, ECHR 2004 ‑ IX)?

2. If so, was that interference compatible with the requirements of that provision?