Published on 2 October 2023

SECOND SECTION

Application no. 58236/21 BLT ENERJI ELEKTRIK ENERJISI TOPTAN SATIÅž SAN. VE TIC. A.S. against Croatia lodged on 24 November 2021 communicated on 12 September 2023

STATEMENT OF FACTS

The applicant, Blt Enerji Elektrik Enerjisi Toptan Satiş San. ve Tic. A.S. (hereafter “the applicant company”), is a commercial company incorporated under Turkish law and having its registered office in Gaziantep, Türkiye. It is represented before the Court by Mr T. Sadrić and Mr L.W. Vuchetich, both lawyers practising in Zagreb with the law firm Batarelo Dvojković Vuchetich.

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

The applicant company invested into a geothermal power plant in Croatia operated by the Croatian company Geoen d.o.o. and thereby acquired an 80% share in that company. The remaining 20% was owned by the Croatian company Geothermal Solutions d.o.o.

On 12 June 2020 the representatives of Geothermal Solutions convened a general meeting of Geoen, without informing the applicant company in a timely manner. The general meeting adopted several resolutions, including the appointment of a new board of directors which did not include any representative of the applicant company.

Following a request by the applicant company, on 16 July 2020 the Zagreb Commercial Court issued an interim measure whereby it suspended the application of the resolutions adopted at the general meeting until the court decided on their validity in ordinary civil proceedings instituted by the applicant company.

In the ensuing civil proceedings, by a judgment of 2 July 2022, the Zagreb Commercial Court declared those resolutions invalid finding that the applicant company had not been properly informed of the meeting at which those resolutions had been adopted. The civil proceedings in question are currently pending before the High Commercial Court following an appeal by Geoen.

Meanwhile, the representatives of Geothermal Solutions convened a series of general meetings of Geoen, none of which the applicant company was informed of in time. A number of resolutions were adopted at those meetings, including a resolution establishing that the applicant company had not fulfilled all its obligations undertaken under Geoen’s Articles of Association.

On 31 July 2020 the applicant company instituted civil proceedings to declare that resolution invalid, and on 7 September 2020 obtained an interim measure whereby the Zagreb Commercial Court ordered that it should be temporarily considered that the applicant company had fulfilled all its obligations to Geoen, until the conclusion of the civil proceedings in question. Those civil proceedings are still pending before the first-instance court.

At the general meeting held on 12 October 2020, of which the applicant company was again not informed in time, a resolution was adopted whereby the applicant company was excluded as a shareholder of Geoen for non ‑ fulfilment of its obligations undertaken under the Articles of Association.

Shortly afterwards the new management of Geoen applied to have the effects of that resolution recorded in the register of commercial companies. On the basis of that application, on 19 October 2020 the Zagreb Commercial Court issued a decision removing the applicant company from the list of shareholders of Geoen in the register of commercial companies, even though the applicant company had informed the court beforehand of the above ‑ mentioned interim measure of 7 September 2020.

The applicant company then instituted civil proceedings to have that entry in the register declared invalid. Those proceedings are still pending.

On 27 October 2020 the new management of Geoen asked the Zagreb Commercial Court to lift the interim measure of 7 September 2020.

While that court refused that request, its decision was overturned on appeal by the High Commercial Court on 21 February 2021 which lifted the measure because the applicant company was no longer a shareholder of Geoen.

On 11 May 2021 the Constitutional Court declared inadmissible the applicant company’s subsequent constitutional complaint. It held that under its longstanding case-law decisions concerning interim measures were not open to constitutional review.

However, on 26 January 2022 the Supreme Court granted leave to the applicant company to lodge an appeal on points of law ( revizija ). The applicant company lodged that remedy on 1 June 2022. The proceedings are currently pending before the Supreme Court.

On 13 April 2021 Geoen and a newly established company Geo Power Energy Solutions d.o.o. (hereinafter “Geo Power”) entered into a transfer ‑ of ‑ undertaking agreement whereby the entire business and all the assets of the former was transferred to the latter.

The applicant company then instituted civil proceedings contesting the validity of that agreement.

Following a request by the applicant company, on 5 January 2022 the Zagreb Commercial Court issued an interim measure whereby it suspended the legal effects of the agreement until the court decided on its validity in the civil proceedings. However, on 15 February 2022 the High Commercial Court quashed that interim measure.

The civil proceedings in question are still pending.

Meanwhile, on 26 April 2021 by a merger between Geoen and Geothermal Solutions the former was integrated into the latter. Since Geoen thereby ceased to exist as a legal entity, on 2 July 2021 it was removed from the register of commercial companies.

The applicant company then instituted civil proceedings contesting that merger. On 18 January 2023 the High Commercial Court set aside the decision whereby the Zagreb Commercial Court recorded that merger in the register of commercial companies. The applicant company then requested the Zagreb Commercial Court to restore Geoen in that register, but the court has not yet done so.

COMPLAINTS

The applicant company complains that it was deprived of its shareholding in Geoen, that is, of its property, which domestic courts had failed to protect, contrary to the States’ positive obligations under Article 1 of Protocol No. 1 to the Convention in disputes between private parties.

Under that Article and Article 6 of the Convention the applicant company also complains, in particular: (i) of its removal from the list of Geoen’s shareholders in the register of commercial companies, which was contrary to the interim measure of 7 September 2020; and (ii) of the lifting of that interim measure on 21 February 2021.

QUESTIONS TO THE PARTIES

1. Did the domestic courts comply with the State’s positive obligations under Article 1 of Protocol No. 1 to the Convention arising in cases of an interference with the right of property by private parties, namely did those courts ensure that adequate remedies were provided whereby the applicant company could effectively protect its shareholding in Geoen (see Shesti Mai Engineering OOD and Others v. Bulgaria , no. 17854/04, §§ 79-92, 20 September 2011; Theo National Construct S.R.L. v. the Republic of Moldova , no. 72783/11, §§ 66-81, 11 October 2022; and Nikolay Kostadinov v. Bulgaria , no. 21743/15, §§ 53-76, 8 November 2022)?

2. Was the applicant company’s removal from the list of shareholders of Geoen in the register of commercial companies contrary to the interim measure of 7 September 2020? If so, was that removal and the subsequent lifting of that interim measure on 21 February 2021 contrary to the applicant company’s right to have a domestic decision in its favour enforced, guaranteed by Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 (see Burdov v. Russia (no. 2) , no. 33509/04, §§ 65-70, ECHR 2009), or to its right to an effective remedy, guaranteed by Article 13 of the Convention taken in conjunction with Article 1 of Protocol No. 1 (see Skokandić v. Croatia , no. 43714/02, § 49, 31 July 2007, and Kaić and Others v. Croatia , no. 22014/04, § 40, 17 July 2008)?