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CASE OF FU QUAN, S.R.O. v. THE CZECH REPUBLICJOINT DISSENTING OPINION OF JUDGES KOSKELO AND EICKE

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Document date: March 17, 2022

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CASE OF FU QUAN, S.R.O. v. THE CZECH REPUBLICJOINT DISSENTING OPINION OF JUDGES KOSKELO AND EICKE

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Document date: March 17, 2022

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JOINT DISSENTING OPINION OF JUDGES KOSKELO AND EICKE

1. We have regrettably been unable to agree with the majority in this case. In our opinion, the application is clearly inadmissible owing to a failure to exhaust domestic remedies in so far as the complaint raised under Article 1 of Protocol No. 1 is concerned. As to the complaints under Articles 6 and 13, they are in our opinion inadmissible on the grounds of being manifestly ill-founded.

2. At the outset, we are compelled to note that the description of the applicant’s complaint in the judgment is confused and contradictory; with at least four different characterisations of the complaint being formulated. Initially, at paragraph 43 of the judgment, which begins the Court’s examination of the case, the applicant company’s complaint is described as being that “it had been paralysed in its operations for about five years and wrongfully deprived of its property owing to the acts of the authorities in the criminal proceedings brought against its managing director and associate”. Thereafter, at paragraph 48, which addresses the admissibility of the complaint, the main object of the application is described as the “impossibility of recovering compensation for damage to the merchandise that had lost its value due to its seizure and the passing of time”. At paragraph 57, which introduces the examination of the merits, the applicant company’s complaint is characterised as being that it had been “unlawfully deprived of its property owing to the unlawful prosecution of its only two associates who, having been held in custody for two years, had been adversely affected and ‘paralysed’ in their activities”. Finally, in the context of the assessment of the merits, it is suggested, in paragraph 68, that the complaint concerns the “manner in which the seized merchandise was handled during the criminal proceedings brought against its managing director and associate, and the resulting damage after its protracted storage”.

3. In our view, such discrepancy and confusion are not acceptable in the context of any court of law examining an application before it. In fact, it is evident that this obfuscation and failure to identify clearly the nature of the complaint is a key reason underlying the untenable conclusions reached by the majority.

4. It is also evident, on the material before the Court, that it was the failure by the applicant company to identify properly or accurately the grounds on which it applied to the domestic courts which is at the root of its failure to obtain redress at the domestic level.

5. As a consequence, it therefore seems clear to us that the applicant company had not properly exhausted the available domestic remedies.

6. After all, while it is quite clear under the relevant domestic law that there was no “impossibility” for the company to recover compensation for damage caused to the seized goods, to the extent that such damage arose from “irregular conduct” by the authorities in the manner in which that merchandise was handled by them, the applicant company had failed to claim compensation on these grounds at the domestic level. This is the reason why the company was unsuccessful in the domestic proceedings brought by it. The claims that had been brought were doomed to fail because the decisive factual basis relied upon was mistaken.

7. More specifically, according to the uncontradicted statement of facts by the Government, the applicant company’s action for damages was based on the claim that it, the applicant company, had incurred damage in consequence of the detention of its corporate agent , which in turn paralysed its operations; an outcome suggested to have been “caused by a prosecuting authority’s decision”. Such action would have been based on sections 5(a), 7 and 9 of the State Liability Act and its applicability was “confirmed” by the applicant company’s reliance on section 33 of that Act. However, this action failed because, as stated by the Supreme Court, the company did not have locus standi to sue the State for compensation relating to damage caused by the detention of its corporate agent and member or for compensation relating to damage caused by their criminal prosecution; after all, it had neither been detained nor charged.

8. By contrast, it is – and was at the material time – clear under domestic law that the company would have had a claim for compensation arising from damage caused to its property that was seized in the course of criminal proceedings where such damage arose from “irregular official conduct” in relation to that property. Such an action would have to have been brought, as far as we understand it, under or by reference to section 5(b) and 13 of the State Liability Act. The company, however, never advanced such a claim, neither at the outset nor, after having been unsuccessful at first instance (see paragraph 29), on appeal.

9. In the context, we both recall and emphasise that is a fundamental principle of civil procedure that the plaintiff must present the decisive facts on which the claim is based. This is also clearly stated in the Czech Code of Civil Procedure, Article 79 § 1, according to which the plaintiff must explain the decisive facts underlying the claim.

10. Furthermore, it is important to note that this basic requirement has nothing to do with the principle of “ iura novit curia” . In particular, it is not enough for the “decisive facts” to appear somewhere in the case file, they must be presented by the plaintiff when submitting the factual grounds for the claim with a view to establishing the appropriate cause of action.

11. In the present circumstances, it was incumbent on the applicant company to specify the facts which allegedly constituted the “irregular official conduct” in relation to the seized goods that belonged to it. Clearly, neither the detention of the two associates and the prosecutor’s decision to bring charges, nor the seizure of the goods, were as such capable of constituting “irregular official conduct” in this sense. It is also clear that the civil courts were only called upon, and procedurally permitted, to examine the claims on the factual grounds relied upon by the company. Those courts cannot depart from their role as impartial adjudicators of cases brought before them and assume the role of legal assistants of one party to the proceedings for the purpose of amending their claims with a view to improving their chances of success.

12. Having only claimed compensation for damage allegedly incurred in consequence of the detention and/or criminal prosecution of its corporate agent and associate, the company in our view plainly failed to use the proper remedy that was available to it with a view to obtaining compensation for any damage incurred as result of any “irregular official conduct” in relation to the seized goods. This was a strategic procedural error which could not have been remedied by the domestic courts. In this respect, the latter were not “excessively formalistic” but merely adhered to the fundamentals of civil procedure, as they must.

13. Consequently, this is not a situation where the remedy used was merely an alternative “potentially effective” remedy. As domestic law stood, the claim as brought, on the grounds that were relied upon, was clearly doomed to fail from the outset. At the same time, the clearly available remedy, described by the majority as merely “potentially effective”, was not used by the applicant company.

14. This point is very important, not only within the context of domestic proceedings but with a view to the Convention proceedings as well. The requirement to exhaust domestic remedies is a cornerstone of the system, which would be fundamentally distorted if an applicant were allowed to skip the available domestic remedy that corresponds to his or her actual claim and subsequently turn to this Court at first instance to obtain redress for the claim that he or she failed to bring domestically. Unfortunately, this is what the majority have allowed to occur in the present case.

15. We regret that by proceeding in this manner the majority have set aside the need to ensure equal treatment of applicants before the Court. The duty to exhaust domestic remedies must be applied consistently to all applicants. No selective approach in this regard can be justified.

16. As already stated, we consider that for the above reasons, the complaint under Article 1 of Protocol No. 1 should have been declared inadmissible owing to the applicant company’s failure to exhaust the available domestic remedies.

17. Consequently, given that the majority decided to examine the complaint on the merits, we voted against the finding of a violation of Article 1 of Protocol No. 1, and also against the award for pecuniary damage claimed by the applicant before the Court.

18. The majority, having declared the application admissible and having found a violation of Article 1 of Protocol No. 1, held that it was not necessary to examine the complaints under Article 6 § 1 and Article 13. For our part, we consider that the latter complaints were inadmissible on the grounds of being manifestly ill-founded and we therefore voted against admissibility in respect of the entire application.

19. Under Article 6 § 1 and Article 13, the applicant company complained of an excessively formalistic and restrictive interpretation by the domestic courts of the relevant provisions of the State Liability Act. It claimed that, as a result, the domestic courts had denied it any access to a court regarding its claims for compensation for damage caused by the State in the exercise of public authority, resulting in a failure to protect the seized merchandise.

20. We find these complaints manifestly ill-founded for essentially the same reasons as those set out above in relation to the applicant company’s failure to exhaust the available domestic remedies. In the present case, there was no excessively formalistic or restrictive interpretation by the domestic courts of the relevant provisions of national law. Instead, there was a failure on the part of the applicant company and its representatives to correctly set out the decisive facts in relation to the applicable cause of action, on the basis of which it wished to claim, and was entitled to claim, damages for the alleged failure of the competent authorities to ensure the proper care and timely return of the seized goods. The circumstances of the case raised no issue under Article 6 § 1 or under Article 13.

[1] Introduced into the CCP by Act no. 86/2015 with effect from 1 June 2015.

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