THIRD SECTION

Application no. 13143/08 Robert Jan VAN GALEN and others against the Netherlands lodged on 14 March 2008

STATEMENT OF FACTS

THE FACTS

A. The circumstances of the case

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

2. The first applicant, Mr R.J. van Galen, is a lawyer by profession; he practises in Amsterdam .

3. The remaining applicants, Interforce Holding B.V., Interforce Properties B.V. and Interforce Property Development B.V. (“the applicant companies”), are limited liability companies ( besloten vennootschappen met beperkte aansprakelijkheid , “B.V.”) with legal personality under Netherlands law.

4. Interforce Holding B.V. and Interforce Properties B.V. were declared bankrupt on 17 November 1992, as was Interforce Property Development B.V. on 15 June 1993. A receiver ( curator ) was appointed, Mr N.; the first applicant succeeded Mr N. in that capacity on 18 December 1996.

1. Background to the case

5. The three applicant companies were part of a conglomerate also including, amongst others, four other limited liability companies, namely S. V., I. B.V., M. B.V. and W. B.V. The shares and voting rights in these latter companies were held, variously, by one or more of the applicant companies.

6. On various dates in 1989 and 1990 a bank, S. (hereafter “the Bank”), granted loans to companies of the conglomerate to finance real estate transactions.

7. Financial difficulties led the Bank and the various companies of the conglomerate to enter into an agreement, called the Restructuring Agreement, under which the various debts were renegotiated whereas the shares in I. B.V. and the voting rights in I. B.V., M. B.V. and W. B.V. were transferred variously to the Bank and to an entity under its control.

8. On 16 July 1993, after the three applicant companies were declared bankrupt, the receiver, Mr N., in a move known in domestic law by its Roman-law name actio Pauliana (section 42 of the Bankruptcy Act ( Faillissementswet ), as in force at the time, see paragraph 40 below), made a statement reversing the restructuring agreement with the intention to prevent the removal of assets from the estate ( boedel ) into the control of the Bank. On 7 October 1993 he did the same in the name of I. B.V., M. B.V. and W. B.V., taking the view that as a result of the reversal of the Restructuring Agreement the shares and voting rights in those companies had reverted to the estates of the three bankrupt companies.

2. Initiation of the main proceedings

9. On 22 March 1994 Mr N., in his capacity of receiver of the three corporate applicants and also in the name of I. B.V., M. B.V. and W. B.V., summoned the Bank (including the entity under its control, which for present purposes can be identified with the Bank) before the Regional Court ( arrondissementsrechtbank ) of Rotterdam seeking confirmation of the nullity of the Restructuring Agreement and damages for mismanagement.

10. The Bank contested these claims.

11. The receiver, a lawyer practising in Amsterdam , appointed the Rotterdam lawyer Mr P. as his procurator litis ( procureur ).

12. The Bank, which took the position that it had validly appointed the management of I. B.V., M. B.V. and W. B.V., appointed Mr D. as its procurator litis to act on its behalf and that of the three companies.

3. The incident of procedure

13. The summons begged the question which party had control of the shares and voting rights in I. B.V., M. B.V. and W. B.V. The receiver based his position on the nullity of the Restructuring Agreement and accordingly claimed control of these companies through the reversion of their shares into the estates of the three bankrupt companies. Conversely, the Bank based its position on the continued validity of the Restructuring Agreement and therefore on its direct controlling interest.

14. On 3 February 1995 I. B.V., M. B.V. and W. B.V. ’ s Bank-appointed management, in a move known in domestic law as désaveu (“disavowal” – Article 263 of the Code of Civil Procedure ( Wetboek van Burgerlijke Rechtsvordering ), as in force at the time, see paragraph 39 below), issued a statement disavowing the actions of Mr P.

15. On 16 November 1995 the Receiver, also in the name of I. B.V., M. V. and W. B.V., in a disavowal move of his own issued a statement denying the actions of Mr D.

16. The Regional Court considered the disavowal proceedings together at the request of the parties, though without formally joining them.

17. On 13 June 1996 the Regional Court gave an interlocutory judgment finding that the receiver had not validly annulled the Restructuring Agreement since it had been notified only to the Bank (and the entity controlled by it) but not to I. B.V., M. B.V. and W. B.V. It then adjourned the case until 11 July 1996 so as to allow Mr P. to respond in writing to certain arguments made by Mr D.

18. The receiver – by this time the first applicant, who had replaced Mr N. – lodged an appeal against this judgment with the Court of Appeal ( gerechtshof ) of The Hague , issuing a summons on 10 September 1996. Although the appeal concerned both sets of disavowal proceedings, from this point onwards the disavowal proceedings against the receiver ’ s procurator litis Mr P. were actively pursued.

19. On 12 November 1998 the Bank requested an oral hearing. The Court of Appeal scheduled it for 8 July 1999. It was subsequently postponed, first on the initiative of the Court of Appeal itself (until September 1999), then – with the applicants ’ acquiescence – at the request of the Bank and Mr D. On 5 April 2000 the Court of Appeal announced that the hearing would be held on 13 July 2000. This was done.

20. The applicants state that the Court of Appeal postponed the delivery of its judgment fourteen times between September 2000 and 27 December 2001.

21. On 10 January 2002 the Court of Appeal gave an interlocutory judgment holding that the annulment of the Restructuring Agreement could only be valid if the statement to that effect had reached all the parties to that agreement in due time. It then adjourned the case to allow Mr P. to demonstrate that such a statement had been validly made to I. B.V., M. B.V. and W. B.V.

22. On 20 February 2003 Mr P. submitted a statement on this subject.

23. On 14 August 2003 the Bank and Mr D. again requested an oral hearing. On 19 September 2003 the Court of Appeal set the case down for hearing on 24 June 2004. Eventually, at the request of the parties, pleadings were submitted in writing instead; two written rounds were held on 5 and 19 August 2004.

24. On 18 November 2004 the Court of Appeal announced that judgment would be delivered on 29 September 2005. The Bank and Mr D. asked the Court of Appeal to do so sooner; they were met with a refusal, the reason given being the Court of Appeal ’ s existing backlog and the case ’ s lack of priority.

25. On 7 January 2005 the first applicant wrote to the President of the Court of Appeal invoking Article 6 of the Convention.

26. The President of the Court of Appeal replied by letter of 20 January 2005, again pointing to his court ’ s backlog and stating that the policy decision had been made to favour quality over speed.

27. The applicants state that the delivery of judgment was postponed ten times between September 2005 and August 2007.

28. The Court of Appeal delivered a second interlocutory judgment on 20 September 2007. It identified a company that was a party to the Restructuring Agreement but to whom no statement of annulment of that agreement had been addressed, namely a Belgian company; this deprived the receiver ’ s annulment of the Restructuring Agreement of its validity. It further held that in any event Mr P. had failed to prove that the Restructuring Agreement was likely to prejudice the interests of the creditors. Mr P. was however offered an opportunity to prove that the transfer of shares to the Bank had been null and void on different, unrelated grounds.

29. Mr P. sought, and was granted, permission to lodge an appeal on points of law ( cassatie ) with the Supreme Court ( Hoge Raad ) against this interlocutory judgment even though no judgment had yet been delivered in the main proceedings. He did not make use of it.

30. Mr P. died on an unknown date and was replaced by Mr G.

31. Mr D., the Bank ’ s procurator litis , resigned from the Bar and was replaced by Mr B.

32. On 10 July 2008 the Court of Appeal delivered another interlocutory judgment offering Mr G. an opportunity to disprove the validity of the transfer of shares to the Bank.

33. Witnesses were heard on 12 January 2009 and 8 April 2009.

34. On 15 September 2009 the Court of Appeal announced that judgment would be delivered on 16 March 2010.

35. On 16 October 2009 a lawyer acting on the applicants ’ behalf wrote to the President of the Court of Appeal asking for delivery of judgment to be brought forward, since the incident of procedure had been pending in the Court of Appeal for thirteen years already and the main proceedings had remained in abeyance for fifteen and a half years.

36. The President of the Court of Appeal replied on 3 November 2009, stating that he expected judgment to be delivered before the end of the year.

37. The Court of Appeal handed down its judgment on 29 December 2009. It held, as relevant to the case before the Court, that Mr P. had not validly represented I. B.V., M. B.V. and W. B.V. in the proceedings concerning the annulment of the Restructuring Agreement, so that his actions in those proceedings were invalid, but that the transfer of certain shares to the Bank was invalid on other grounds.

4. Resumption of the main proceedings

38. It appears that the main proceedings are still pending at first instance.

B. Relevant domestic law

1. The Code of Civil Procedure

39. At the relevant time, the relevant provisions of the Code of Civil Procedure provided as follows:

“ Article 263

1. If in the course of civil proceedings any offers have been done and accepted in the name of one of the parties, admissions have been made, any permission has been granted and accepted, and that party has not given specific and definite authority in writing therefor , then that party shall be entitled to disavow such actions in court, and by a simple document, notified both to the procurator litis of the opposing party and to the procurator litis whose actions are disavowed, request the court to consider those actions not done, and all consequent procedural acts and judgment given to prepare the case for final judgment shall be declared void.

2. The notification to the procurator litis shall count as a summons to contest the denial.

3. [The notification] shall state the appointed day for appearance in court.

Article 266

1. The main proceedings shall remain suspended until judgment is given in the matter of the disavowal, on pain of nullity.

2. The court may, however, order that the disavowing party continue the disavowal proceedings within a certain time-limit, failing which judgment will be given ( of dat anders zal worden regt gedaan ).”

2. The Bankruptcy Act

40. At the relevant time, section 42 of the Bankruptcy Act provided as follows:

“1. The receiver may, in the interest of the estate, by an extrajudicial statement annul any transaction ( rechtshandeling ) which the debtor performed voluntarily ( onverplicht ) before being declared bankrupt and which, as the debtor knew or ought to have known, would result in prejudice to the creditors. ...

2. A transaction for consideration ( een rechtshandeling anders dan om niet ) that is either multilateral or unilateral and directed towards one or more particular persons can only be annulled for causing prejudice if those with whom or for whom the debtor performed the transaction knew or ought to have known that it would result in prejudice to the creditors. ... ”

This move, which has its origins in Roman law [1] , is known in domestic law as the actio Pauliana .

3. Ministerial Rules

41. The Rules set out below post-date the introduction of the application.

42. On 22 April 2009, the Deputy Minister of Justice ( Staatssecretaris van Justitie ) adopted “Rules of the Deputy Minister of Justice, no . 5599506/09, giving the High Council for the Judiciary mandate and authority as regards requests for compensation for failure to decide within a reasonable time” ( Regeling van de Staatssecretaris van Justitie van 22 april 2009, nr. 5599506/09, houdende verlening van mandaat en machtiging aan de Raad voor de rechtspraak inzake verzoeken tot schadevergoeding wegens overschrijding van de redelijke termijn ), Official Gazette ( Staatscourant ) 2009, no. 81 . In their relevant part, they provided as follows:

“ Section 1

The High Council for the Judiciary ( Raad voor de rechtspraak ) shall have mandate and authority to decide on behalf of the Minister of Justice and standing to act in cases in which the Minister of Justice is called by a tribunal to submit a defence against a request for compensation for failure by one or more tribunals in judicial proceedings to decide within a reasonable time.”

43. On 26 January 2012 the Deputy Minister ’ s Rules were withdrawn and replaced by the “Rules of the Minister of Security and Justice, no. 5723477/12, giving the High Council for the Judiciary mandate and authority as regards requests for compensation for failure to decide within a reasonable time” ( Regeling van de Staatssecretaris van Justitie , nr. 5723477/12, houdende verlening van mandaat en machtiging aan de Raad voor de rechtspraak inzake verzoeken tot schadevergoeding wegens overschrijding van de redelijke termijn ), Official Gazette 2012, no. 1933 (date of entry into force 2 February 2012) . In their relevant part, they provide as follows:

“ Section 2

1. The High Council for the Judiciary shall have mandate and authority to:

a. decide requests for compensation for failure by one or more tribunals in judicial proceedings to decide within a reasonable time;

b. decide objections ( bezwaarschriften ) against the decisions referred to under a;

c. act in cases where the Minister is called by a tribunal to submit a defence concerning the decisions referred to under a or b.

2. The High Council for the Judiciary shall have mandate and authority and standing to decide and act on behalf of the Minister of Justice in cases in which the Minister of Justice is called by a tribunal to submit a defence against a request for compensation for failure by one or more tribunals in judicial proceedings to decide within a reasonable time. ... ”

4. Complaints procedure of the Court of Appeal of The Hague

44. A uniform complaints procedure for courts was introduced on 1 January 2002. All courts have adopted it.

45. The current version of the “Complaints procedure of the Court of Appeal of The Hague ” ( Klachtenregeling gerechtshof ‘ s-Gravenhage ) was adopted on 23 October 2009. It was published in the Official Gazette of 5 November 2009, no. 16764.

46. In its relevant part, it provides as follows:

“ Section 2. Right of complaint

1. Everyone has the right to complain to the Court of Appeal ’ s Presidency ( bestuur ) about the way in which the Court of Appeal has comported itself towards him or her. No complaints can be made about the content and reasoning of a decision of an officer invested with judicial power ( met rechtspraak belaste rechterlijke ambtenaar ), nor about the adoption of a judicial decision, including decisions of a procedural nature taken in that connection. ...

Section 10. Follow-up

1. The Presidency shall inform the complainant and the person whose behaviour is in issue in writing, giving reasons, of the outcome of its examination of the complaint and any conclusions which it draws from it.

2. If subsequently a further complaint can be lodged with a person or body appointed to consider complaints about the person whose behaviour is concerned by the complaint, the information letter shall so mention.”

47. The 2011 annual report of the Court of Appeal of The Hague on the subject of complaints proceedings ( Jaarverslag klachtenbehandeling gerechtshof Den Haag 2011 ) shows that one complaint about the length of proceedings was received in that year.

COMPLAINTS

48. The applicants complain under Article 6 § 1 of the Convention about the length of the proceedings. They also complain under Article 13 of the Convention that there is no preventive or compensatory remedy which offers reasonable prospects of success.

QUESTIONS TO THE PARTIES

1. Did the applicants at any time have at their disposal an effective domestic remedy for their complaint under Article 6 § 1 of the Convention, as required by Article 13 of the Convention?

2. Have the applicants exhausted all effective domestic remedies, as required by Article 35 § 1 of the Convention?

3. Was the length of the civil proceedings in the present case in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?

[1] From the Digest of Justinian: D. 22 .1. 38 . 4 :

Paulus libro sexto ad Plautium . In fabiana quoque actione et pauliana , per quam quae in fraudem creditorum alienata sunt revocantur , fructus quoque restituuntur : nam praetor id agit , ut perinde sint omnia , atque si nihil alienatum esset : quod no n est iniquum ( nam et verbum ‘ restituas ’ , quod in hac re praetor dixit, plenam habet significationem ), ut fructus quoque restituantur .

Paulus in his sixth book on Plautius . Also pursuant to the Fabian and Paulian actions, in which that which has been alienated so as to cause prejudice to the creditors is claimed back, the fruits are to be handed over, since it is the praetor’s intention to ensure that everything shall be as if nothing had been alienated. It is accordingly not unreasonable (since the expression ‘you must hand over’ which the praetor has used in this connection has this broad meaning) that the fruits should be handed over too.