Published on 2 October 2023

SECOND SECTION

Application no. 4593/22 Tomislav BORKOVIĆ and Nevenka BORKOVIĆ against Croatia lodged on 17 January 2022 communicated on 12 September 2023

SUBJECT MATTER OF THE CASE

The application concerns an award of costs to the applicants’ opponent in civil proceedings, a company that went bankrupt, even though the same claim for costs submitted beforehand by the company’s advocates in the bankruptcy proceedings had been denied.

In 2008 the applicants instituted civil proceedings for damages against the company U. On 28 September 2012 bankruptcy proceedings were opened against the company. Therefore, on 31 May 2013 the applicants withdrew their civil action whereupon, on 7 June 2013, the first-instance commercial court issued a decision establishing that the action had been withdrawn. However, at the request of the bankruptcy administrator on 28 October 2013 the commercial court issued a decision on costs ordering the applicants to pay HRK 229,053.50 to the company U. The applicants appealed arguing that the same claim for costs, submitted by the advocates which had represented the company, had on 11 December 2012 been dismissed in the bankruptcy proceedings. However, the High Commercial Court dismissed their appeal but reduced the amount of costs to HRK 192,362.50, i.e. EUR 25,876.30. It rejected the applicants’ argument that the same claim for costs had previously been denied in the bankruptcy proceedings by merely stating that it was ill ‑ founded and of no relevance for the outcome of the case.

Before the Court the applicants complain under Articles 6 § 1 of the Convention and under Article 1 of Protocol No. 1 to the Convention that the domestic courts’ decision on costs was arbitrary and about the length of those proceedings.

QUESTIONS TO THE PARTIES

1. Did the High Commercial Court give sufficient reasons for its decision of 4 March 2019, as required by Article 6 § 1 of the Convention (see Jaćimović v. Croatia , no. 22688/09, §§ 46-53, 31 October 2013; and Atanasovski v. the former Yugoslav Republic of Macedonia , no. 36815/03, §§ 36-39, 14 January 2010)? In particular, did it adequately reply to the applicants’ argument that the claim for costs they had been ordered to pay had previously been dismissed in the bankruptcy proceedings?

2. Was the issue of costs of the civil proceedings in question determined with the force of res judicata in the bankruptcy proceedings against the company U. and was that determination binding for the parties to those civil proceedings, having regard to section 181(1) of the 1996 Bankruptcy Act? If so, was the domestic courts’ decision ordering the applicants to pay the costs of the civil proceedings arbitrary or in breach of the principle of res judicata and, consequently, in breach of the principle of legal certainty inherent in Article 6 § 1 of the Convention (see Brletić v. Croatia , no. 42009/10, §§ 37-51, 16 January 2014)?

3. If the domestic courts’ decision ordering the applicants to pay the costs of the civil proceedings in question was in breach of the principle of res judicata , has there also been a violation of Article 1 of Protocol No. 1 to the Convention (see, for example, Kehaya and Others v. Bulgaria , nos. 47797/99 and 68698/01, §§ 71-77, 12 January 2006)?

4. Was the length of the civil proceedings in the present case in the period between 28 October 2013 and 22 September 2021, in which the courts determined the issue of costs, in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?