Herold Tele Media, s.r.o. and Others v Slovakia - 46190/99 [2010] ECHR 1614 (28 September 2010)

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Application no. 46190/99
by Herold Tele Media, s.r.o. and Others
against Slovakia

The European Court of Human Rights (Fourth Section), sitting on 28 September 2010 as a Chamber composed of:

Nicolas Bratza, President,
Lech Garlicki,
Ljiljana Mijović,
David Thór Björgvinsson,
Ján Šikuta,
Päivi Hirvelä,
Mihai Poalelungi, judges,
and Lawrence Early, Section Registrar,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,

1. The applicants, whose particulars appear in the appendix, claimed to be creditors of the State-owned company Slovenské telekomunikácie, š.p. They were represented before the Court by Mr J. Kotlík, a lawyer practising in Bratislava. The Government of the Slovak Republic (“the Government”) were initially represented by Mr P. Kresák, their Agent, who was succeeded by Mrs A. Poláčková and then by Mrs M. Pirošíková in the exercise of that function.

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

3. The company Slovenské telekomunikácie, š.p. was established by the Ministry of Transport, Telecommunications and Public Works on 1 January 1993. It was a State-owned company. Its director, or deputy director in his or her absence, was authorised to act and sign documents on behalf of the company.

4. According to the register of companies available on the Internet, Mr P.V. had been the company's director between 9 June 1995 and 26 February 1998. He had been the company's managing director from 27 February 1998 to 2 February 1999. Mr F.D. had been the deputy managing director between 27 February 1998 and 2 February 1999.

5. A different section of the register of companies concerning Slovenské telekomunikácie, š.p. was entitled “Further legal issues”. It comprised an entry covering the period from 28 January 1997 to 31 March 1999, which read as follows:

“Decision no. 47/96 by the managing director of Slovenské telekomunikácie, š.p. of 2 November 1996. For the period of the settlement negotiations the council of creditors suspended, within the meaning of section 4e(2)(a) of the 1991 Bankruptcy Act, the exercise of functions of the persons authorised to act on behalf of the company under its articles listed in the register, and appointed Mr F. Eke as manager. During the period of the settlement proceedings, the director thus appointed shall represent the company and sign documents on its behalf. [The proceedings] were discontinued by a decision of the Bratislava City Court of 24 October 1996 ... in accordance with Act no. 292/1996. The Supreme Court upheld the Bratislava City Court's decision by its decision no. 1 Obo 2/97 of 26 March 1997.”

6. On 23 December 1998 the Minister of Transport and Telecommunications decided to dissolve Slovenské telekomunikácie, š.p. The company was transformed into a joint stock company, Slovenské telekomunikácie, a.s., which succeeded to all the rights and obligations of its predecessor. On those grounds, the company Slovenské telekomunikácie, š.p. was deleted from the register of companies on 1 April 1999.

7. Under a contract of 18 July 2000 the Fund of National Property, with the agreement of the Ministry of Transport, Post and Telecommunications, sold 51% of the shares of Slovenské telekomunikácie, a.s. to Deutsche Telekom AG, which had its registered office in Bonn, Germany. Point 6 subjected the transaction to several conditions with suspensive effect. They included the absence of any binding decision, delivered by a court or other public authority, prohibiting the transaction agreed upon in the contract.

8. An annex to the contract lists the court proceedings in which the company was involved at that time. It includes a lawsuit with the first applicant's predecessor, referred to as the “Yellow Pages Dispute”. The annex indicates that the dispute concerned a contract, concluded in 1990 and amended in 1992, on the publishing of telephone directories. In 1995 the first applicant's predecessor claimed damages amounting to several billion Slovak korunas (SKK) for the alleged failure by Slovenské telekomunikácie, š.p. to comply with the contract. The latter put an end to the contract on 3 April 1997. Slovenské telekomunikácie, š.p. initiated proceedings, claiming that the company had no contractual relationship to the second applicant's predecessor. The first-instance court granted the claim and the proceedings were pending before the court of appeal at the relevant time.

9. Subsequently, the company Slovenské telekomunikácie, a.s. was twice renamed. Its current business name is Slovak Telekom, a.s.

2. Proceedings under the 1991 Bankruptcy Act (Bratislava City Court file no. 38 K 10/96)

10. On 16 January 1996 private company HBD Slovakia, spol. s r.o. (of which the first applicant is the legal successor) requested the Bratislava City Court to start settlement proceedings (dohodovacie konanie), within the meaning of sections 4 et seq. of the 1991 Bankruptcy Act, in respect of the State-owned company Slovenské telekomunikácie, š.p. The plaintiff claimed that the debtor had failed to comply with its contractual obligations in respect of four creditors including the plaintiff and the fourth applicant.

11. According to the petition, the debts of Slovenské telekomunikácie, š.p., in respect of the four creditors amounted to
SKK 22,413,247,354.20^¹ and thus clearly exceeded its assets, which amounted to SKK 10,755,766,000. The debt in respect of the first applicant's predecessor stemmed from the defendant's failure to meet its obligations under a contract of 1990 concerning the production of telephone directories.

12. Finally, the plaintiff claimed that the defendant company had to submit a list of its creditors within three days, to convene a meeting of creditors within thirty days and to abstain from alienating or mortgaging its property.

13. On 28 March 1996 HBD Slovakia, spol. s r.o. asked Slovenské telekomunikácie, š.p. to convene a meeting of its creditors.

14. On 4 April 1996 an advocate informed HBD Slovakia, spol. s r.o. that Slovenské telekomunikácie, š.p. did not consider that company as its contractual partner and that Slovenské telekomunikácie, š.p. therefore refused to start settlement proceedings and to convene a meeting of creditors. A copy of the letter was sent to Bratislava City Court.

15. On 20 August 1996 the Government of the Slovak Republic decided, following an inquiry addressed to it by the City Court, not to authorise an adjudication on the bankruptcy of Slovenské telekomunikácie, š.p. Such an authorisation was a prerequisite for declaring that company bankrupt as it fell under section 67(4)(c) of the 1991 Bankruptcy Act. The Minister of Justice notified the Bratislava City Court of that decision on 9 September 1996.

16. On 24 October 1996 the Bratislava City Court discontinued the proceedings. Reference was made to section 2 of Law no. 292/1996 and to the fact that the defendant fell under section 67(3) of the 1991 Bankruptcy Act, as it was a State-owned company of strategic importance within the meaning of the relevant law. According to the decision, the proceedings in question concerned the adjudication of the company's bankruptcy.

17. On 19 November 1996 the first applicant's predecessor appealed, stating that the first-instance decision had been served on 5 November 1996. Its representative referred to the fact that a group of members of parliament had challenged Act no. 292/1996 before the Constitutional Court and requested that the appeal proceedings be stayed pending the Constitutional Court's decision.

18. On 11 December 1996 a meeting of creditors of Slovenské telekomunikácie, š.p. was held on the premises of a notary public in Bratislava. The four participants elected a council of creditors, within the meaning of section 4a(5) of the 1991 Bankruptcy Act. On the same day the council of creditors suspended the exercise of functions of the managers of Slovenské telekomunikácie, š.p. during the period of the settlement proceedings, with reference to section 4e(2) of the 1991 Bankruptcy Act. The council of creditors further appointed Mr F. Eke as “director of Slovenské telekomunikácie, š.p. in settlement proceedings”. No representative of Slovenské telekomunikácie, š.p. was present (for further details concerning the action taken in that context see also Slovenské telekomunikácie, š.p. and Herold Tele Media, s.ro. v. Slovakia (dec.), no. 47097/99, 28 September 2010).

19. On 26 March 1997 the Supreme Court upheld the City Court's decision of 24 October 1996. A stamp on the Supreme Court's decision of
26 March 1997 indicates that it became final on 24 July 1998.

20. On 24 April 1998 the first applicant lodged an appeal against the Bratislava City Court's decision of 24 October 1996. In the appeal the plaintiff stated that the City Court's decision had been duly served on
9 April 1998 and pointed out that section 2 of Law no. 292/1996 had been invalidated as a result of the Constitutional Court's finding of 4 March 1998 (see paragraph 52 below).

21. On 7 May 1998 the Ministry of Transport, Post and Telecommunications submitted an opinion on the matter. It indicated that the creditors had never directly contacted the Ministry following their initiative to start settlement proceedings, nor had they invited its representative to a meeting of creditors, notwithstanding that it was provided for by section 4d(3) of the 1991 Bankruptcy Act. The Ministry had not been informed of any re-stabilisation project within the meaning of section 4f of that Act.

22. On 3 September 1998 the Supreme Court discontinued the proceedings. The decision stated that the plaintiff had earlier admitted that the first-instance decision had been served on 5 November 1996 and had been appealed on 19 November 1996. Even assuming that the service of the first-instance decision on 5 November 1996 had not been formally compliant with the applicable law, that appeal had been legally relevant as, in accordance with the relevant practice, an appeal lodged prior to the service of a court's decision had the effects of an appeal lodged in accordance with the law.

23. The Supreme Court concluded that the matter had become res judicata on 24 July 1998 following the service of its decision of 26 March 1997.

24. On 4 August 1998 the fourth applicant filed a petition with the Constitutional Court. He alleged a violation of his constitutional right to judicial protection in that the Bratislava Regional Court (which had taken over the case list of the former Bratislava City Court) had failed to proceed with the settlement proceedings initiated by the first applicant's predecessor on 16 January 1996.

25. On 20 May 1999 the Constitutional Court declared the petition manifestly ill-founded (decision no. I. ÚS 33/99). The decision stated, inter alia, that the plaintiff was free to claim the sum which the debtor owed to him before a court pursuant to the relevant provisions of the Commercial Code. His right to judicial protection had therefore not been breached.

26. On 29 April 1999 the first applicant filed a petition with the Constitutional Court. Its representative alleged a violation of Article 6 § 1 of the Convention in that the Bratislava Regional Court had failed to proceed with the settlement proceedings which the legal predecessor of the company had initiated on 16 January 1996.

28. On 6 July 2000 the first applicant withdrew its petition with the explanation that there existed no guarantee that the proceedings before the Constitutional Court would be in conformity with Article 6 § 1 of the Convention. On 13 July 2000 the Constitutional Court discontinued the proceedings with reference to the first applicant's request. It found no special circumstances justifying further examination of the case.

29. On 24 March 1999 the Bratislava Regional Court's judge involved in the above-mentioned proceedings under the 1991 Bankruptcy Act submitted observations on the applicants' complaint and stated that, inter alia, no formal decision had been delivered to end the settlement proceedings initiated under the 1991 Bankruptcy Act.

30. The judge expressed the view that settlement proceedings within the meaning of the 1991 Bankruptcy Act had never actually started. In particular, the creditors had not shown that they had sent the petition to the debtor for settlement proceedings to be brought, and the latter had neither submitted a list of creditors nor convoked a meeting of creditors. The requirements of section 4a(2) of the 1991 Bankruptcy Act had thus not been met. Settlement proceedings had not been brought by the court as no request had been made to Slovenské telekomunikácie, š.p. to convoke a meeting of creditors within the meaning of sections 4a(3) and 4(1) of the
1991 Bankruptcy Act.

(b) Government material on lawsuits concerning Slovenské telekomunikácie, a.s. and its predecessor

31. The second applicant submitted a document which the Minister of Transport, Post and Telecommunications had presented in 2001. It contained information about lawsuits concerning claims by Mr I. Matušík, the second applicant, and companies on behalf of which he had been authorised to act. The document indicated that the claims had stemmed from the alleged breach of a contract concerning the production of telephone directories, including commercial ones, which had been concluded with the predecessor of Slovenské telekomunikácie, š.p. in 1990 for a period of seven years. In 1992, following an arbitration decision and a claim for damages lodged by Mr Matušík, the contract was amended to include a contractual fine. The penalty due was to increase by 500% quarterly. According to the Government document, the amount claimed, calculated on the basis of the penalty clause, reached SKK 400,000,000,000. Neither Slovenské telekomunikácie, a.s. nor its legal predecessor had acknowledged such claims.

32. The material further refers to different proceedings, including those under the 1991 Bankruptcy Act described above, as putting the proper functioning of the company in danger.

33. In 1997 the representatives of Slovenské telekomunikácie, š.p. lodged criminal complaints in the context of the above-mentioned facts. By 2001 no relevant decision had been taken by the authorities involved.

34. Finally, the document indicated that the Slovakian authorities had undertaken vis-à-vis the foreign investor to take action, as far as the applicable law permitted, with a view to denying the claims in the context of the “Yellow Pages Dispute”. The document concluded that immediate measures were required, with a view to resolving the matter while respecting the legal order in force. Among other things, an acceleration of the proceedings pending before civil courts and prosecution authorities was necessary.

(c) Bankruptcy proceedings initiated in 1999 (Bratislava Regional Court, file no. 5 K 179/99)

35. In 1999 several creditors, including the first and the second applicants, initiated bankruptcy proceedings in respect of Slovenské telekomunikácie, a.s.

36. On 29 January 2002 the Bratislava Regional Court dismissed the petition. It held that the plaintiffs' claims had not been reliably established and that separate proceedings were pending with a view to determining their justification.

38. On 24 March 2004 the cassation division of the Supreme Court dismissed the plaintiffs' appeal on points of law.

39. Those proceedings are the subject-matter of application no. 57238/00 pending before the Court.

40. On 6 July 2002, at the request of the Government's Agent, the Vice President of Slovak Telecom, a.s. submitted a statement according to which in the settlement proceedings initiated under the 1991 Bankruptcy Act no meeting of creditors had been convoked in compliance with the relevant provisions, namely sections 4a(2) and (4). The action taken by several persons in the context of proceedings 38 K 10/96 before the Bratislava City Court had therefore been irrelevant from the point of view of the 1991 Bankruptcy Act.

41. Pursuant to Article 130 § 3 of the Constitution, as in force until 30 June 2001, the Constitutional Court could commence proceedings upon a petition (podnet) presented by any individual or a corporation claiming that their rights had been violated.

42. In accordance with the Constitutional Court's practice under
Article 130 § 3 of the Constitution (as in force at the relevant period), the Constitutional Court lacked jurisdiction to interfere with the ordinary courts' jurisdiction or to quash or to substitute the ordinary courts' decisions in civil or criminal matters. It further lacked jurisdiction to draw legal consequences from the finding of a violation of a petitioner's rights. It could neither award damages to the person concerned nor impose a sanction on the public authority liable for the violation found.

43. The purpose of the 1991 Bankruptcy Act (Zákon o konkurze a vyrovnaní, Law no. 328/1991 Coll.) is to settle the proprietary situation of a debtor who has become insolvent or, in the case or legal persons, over-indebted (section 1).

44. The second part of the 1991 Bankruptcy Act is entitled “Bankruptcy”. Between 1 June 1993 and 31 January 1998 it comprised sections 4 and 4a-g, which provided for settlement proceedings. Such proceedings were to follow a bankruptcy petition and preceded the declaration of a person as bankrupt. The relevant provisions read as follows:

1. A bankruptcy petition can be filed by a debtor, debtor's creditor, liquidator of a legal person or a different person where the law so provides. A declaration of bankruptcy is preceded by settlement proceedings. A court shall start settlement proceedings of its own initiative where a debtor or the debtor's domestic creditor does not initiate settlement proceedings within ten days of the date when the bankruptcy petition was filed. Prior to the end of the settlement proceedings a court shall not examine a composition scheme and it shall not decide on declaration of bankruptcy.

2. A creditor's bankruptcy petition is to be supported by documents indicating that the debtor owes a sum to the creditor ... and [the petition shall] set out facts indicating that the debtor is insolvent ...

3. The aim of settlement proceedings is to allow the debtor to resolve the insolvency and to allow the creditors to have their claims satisfied ...

2. A creditor who initiates settlement proceedings is obliged to submit a copy of the relevant petition to the debtor without delay. The debtor is obliged to submit to the court, within three days from the receipt of such petition, a list of creditors indicating the amounts due. The debtor is further obliged to convene a meeting of creditors within thirty days.

3. Where a petition for settlement is not filed by the debtor or its domestic creditor within the period set out in section 4(1), a court shall ask the debtor to convene a meeting of creditors within fifteen days. In such case settlement proceedings start on the date of service of the court's request.

4. A meeting of creditors, convened pursuant to sub-sections 1-3, shall be held within thirty days from the moment when it was convened.

(c) approves the council of creditors' proposal to put an end to settlement proceedings for non-compliance with the re-stabilisation project ...

7. Debtors included in the register of companies ... shall initiate, within seven days from the start of settlement proceedings, a relevant entry in the register of companies and the land register ...

1. After settlement proceedings have started, a debtor can carry out business activities as defined in the relevant register.

2. After settlement proceedings have started, a debtor is not allowed to alienate or mortgage its real property ... or carry out any activity capable of causing prejudice to creditors unless the council of creditors decides otherwise ...

1. At a meeting held pursuant to section 4a, the domestic creditors shall elect members of the council of creditors for the purpose of protecting their rights and interests ...

3. Where the debtor is a State-owned company ... [a representative of] the authority by which it was established shall participate at meetings of creditors and the creditors' council ...

1. Debtors included in the register of companies ... shall initiate, within seven days of the election of the council of creditors, a corresponding entry in the register of companies and the land register ...

(a) suspend the exercise by the debtor's managers of their functions and appoint managers for the period of the settlement proceedings;

(b) entrust a person with control over the debtor's business activities during the period of the settlement proceedings;

(f) control the implementation of the re-stabilisation project, obtain all relevant information in the context of its elaboration and implementation; ...

1. The re-stabilisation project is intended to improve the debtor's financial situation with the aim of avoiding bankruptcy and ensuring the debtor's future effective development.

(b) the council of creditors in collaboration with the debtor and, where the latter is a State-owned enterprise, the authority by which it was established ...

4. The council of creditors is obliged to submit an approved re-stabilisation project to a court within sixty days of its election.

(a) a notary public informs it that a meeting of creditors was not convened within the period set out in section 4a(4);

(b) the council of creditors fails to submit an approved re-stabilisation project within the period set out in section 4f(4);

(c) the council of creditors fails to inform the court of the implementation of the re-stabilisation project more than three months after the settlement proceedings started;

(d) the council of creditors, in accordance with a decision adopted at a meeting of creditors, informs it that the re-stabilisation project has not been implemented. ...”

45. According to the explanatory report to a draft amendment to the 1991 Bankruptcy Act proposing to repeal the provisions governing settlement proceedings in the context of adjudication on a person's bankruptcy, settlement proceedings had turned out to be ineffective in practice. In particular, projects of re-stabilisation adopted in the context of such proceedings were not legally binding so that debts could be enforced in parallel, councils of creditors did not represent all creditors and their activities could not be controlled by the courts. As a result, the property of debtors was sold.

46. The remaining provisions of Part Two (sections 5-45) deal with the declaration of bankruptcy and bankruptcy proceedings.

49. Pursuant to section 67(3), the 1991 Bankruptcy Act is not applicable to State bodies financed by the State budget, to municipalities and to legal persons established by virtue of law.

50. Pursuant to section 1 of Law no. 292/1996, section 67(3) of the 1991 Bankruptcy Act was amended, with effect from 16 October 1996, in that the provisions of that Act were not applicable in respect of State-owned companies listed in Law no. 192/1995.

51. Under section 2 of Law no. 292/1996, the courts were obliged to discontinue bankruptcy proceedings in respect of debtors listed in section 67(3) of the 1991 Bankruptcy Act, where the person concerned had not been declared bankrupt at the moment of the entry into force of Law no. 292/1996 on 16 October 1996.

52. In a judgment of 4 March 1998 the Constitutional Court found that section 1 of Law no. 292/1996 was contrary to the Constitution to the extent that it excluded the commencement of bankruptcy proceedings in respect of legal persons established by law (judgment PL. ÚS 11/96). The Constitutional Court further found that section 2 of Law no. 292/1996 was contrary to Article 1 of the Constitution which provides, inter alia, that the Slovak Republic is a State of law. In particular, the obligation to discontinue bankruptcy proceedings which were pending breached the principle of legal certainty in respect of creditors who had brought such proceedings in accordance with the law then in force. The judgment became effective upon its publication in the Collection of Laws on 3 April 1998.

53. Section 67(4)(c) of the 1991 Bankruptcy Act, as in force from 1 June 1993 and throughout the relevant period, read:

“This Act shall not apply, with the exception of sections 4a-g and sections 46-66 in respect of ...

(c) debtors in the area of transport and telecommunications with an essential strategic economic importance for the State; an exemption from this rule can be granted by the Government of the Slovak Republic upon the proposal of the authority which established the company in issue.”

54. Law no. 192/1995 was adopted with a view to safeguarding the interests of the State in the context of denationalisation of State-owned companies of strategic importance. It lost effect on 12 October 1999.

55. Section 2 enumerates companies which are considered to be of strategic importance for the State and which are exempt from the applicable law on denationalisation. The company Slovenské telekomunikácie, š.p. is included in sub-section 1(b)(2) of this provision.

56. The applicants complained under Article 6 § 1 of the Convention that, as a result of the adoption of Law no. 292/1996 and the ensuing decision to discontinue the proceedings initiated on 16 January 1996, their right to a fair hearing by a tribunal had been breached. In their view, the Supreme Court should have suspended the proceedings on the appeal against the Bratislava City Court's decision of 24 October 1996 pending the outcome of the proceedings before the Constitutional Court concerning the conformity with the Constitution of Law no. 292/1996. They also complained that the courts had decided in camera without having heard the parties.

57. Under Article 1 of Protocol No. l the applicants complained that, as a result of the decision to discontinue the proceedings following the entry into force of Law no. 292/1996, they had been prevented from recovering sums which Slovenské telekomunikácie, š.p. owed them.

58. Finally, the applicants complained under Article 13 of the Convention that they had no effective remedy at their disposal.

59. The applicants complained about the way in which the Slovakian courts had dealt with and decided on the petition for settlement proceedings to be brought in respect of the State-owned company Slovenské telekomunikácie, š.p. which the first applicant's predecessor had filed with the then Bratislava City Court on 16 January 1996. They relied on Articles 6 § 1 and 13 of the Convention as well as on Article 1 of Protocol No. 1. As far as relevant, these provisions read as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing ... by [a] ... tribunal ...”

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

63. The decision to discontinue the proceedings complained of and the preceding action of the courts involved did not affect the applicants' rights under the Convention. It did not prevent the applicants from filing a fresh petition for adjudication on bankruptcy of the company Slovenské telekomunikácie, š.p. The first and second applicants actually did so on 23 June 1999. The Bratislava Regional Court dealt with that petition in proceedings 5 K 179/99.

64. On the basis of the arguments set out above and with reference to the Constitutional Court's decision I. ÚS 33/1999, the Government concluded that the outcome of the proceedings complained of had not been decisive for the determination of the applicants' civil rights and obligations. Those proceedings did not, therefore, attract the guarantees of Article 6 § 1 of the Convention.

65. For similar reasons, the decision to discontinue the proceedings had not interfered with the applicants' right to peacefully enjoy their possessions. In any event, the applicants remained free to have their claims in respect of Slovenské telekomunikácie, š.p. ascertained by the courts. The Government concluded that the first four applicants' complaint under Article 1 of Protocol No. 1 was to be rejected either as being incompatible ratione materiae with the provisions of the Convention and its protocols or for their failure to exhaust domestic remedies.

66. The applicants first argued that Mr P. Kresák, who had submitted observations on behalf of the Government, lacked standing to represent the respondent State in proceedings under the Convention due to lacunae in Slovakian law governing his status. Information which Mr P. Kresák had obtained on the subject-matter of the case from various authorities including courts had been submitted contrary to the law. In their view, the Court should therefore disregard the observations and documents submitted by Mr Kresák. In any event, the applicants considered that the documents submitted on behalf of the respondent State distorted the relevant facts.

67. The applicants further argued that they had been free to choose the legal means to seek the recovery of the sums to which they were entitled. They had opted for proceedings under sections 4 et seq. of the 1991 Bankruptcy Act to have their claims satisfied from the debtor's property. The settlement proceedings under the 1991 Bankruptcy Act had been conducted in accordance with the relevant law. In particular, the council of creditors had been established and acted in conformity with the relevant provisions of the 1991 Bankruptcy Act. The Bratislava I District Court had correctly entered the relevant information in the companies register. No formal decision had been issued to put an end to the settlement proceedings notwithstanding that the law required such a decision to be delivered.

68. In the proceedings complained of the Slovakian courts had acted in an arbitrary and unlawful manner. In particular, the ordinary courts should have examined, on their own initiative, whether the amended provisions of section 67 of the 1991 Bankruptcy Act conformed to the Constitution and they should have stayed the proceedings and submitted the matter to the Constitutional Court on their own initiative. At the time when the Constitutional Court's above-mentioned finding PL. ÚS 11/1996 had been delivered, the Bratislava City Court's decision of 24 September 1996 had not yet become final. The decision to discontinue the proceedings concerning the petition, on the basis of section 2 of Law no. 292/1996, had therefore no basis in Slovakian law and was contrary to the principle of legal certainty.

69. Furthermore, following the filing of the creditors' petition the court involved had been obliged to pursue the settlement proceedings and, as the case might have been, instruct the creditors on how to eliminate any formal shortcomings in their petition.

70. In their observations submitted in 2007 the applicants maintained, with reference to a number of documents dated between 2001 and 2007, that the Slovakian authorities had taken co-ordinated action, in bad faith, with a view to preventing the second applicant from obtaining relevant information and discouraging him from availing himself of his or his company's rights. Such action comprised, inter alia, disrespect for his requests under the Free Access to Information Act 2000, numerous criminal complaints lodged in his respect or proceedings brought with a view to restricting his legal capacity to act before public authorities. Furthermore, the intelligence service had been involved with a view to preventing him from establishing the relevant facts, relevant evidence had been forged or destroyed and governmental officials had attempted to influence judicial decisions on the matter in issue.

73. Following an inquiry the Minister of Justice informed the Bratislava City Court, on 9 September 1996, of the Government's decision not to authorise adjudication on bankruptcy of the company Slovenské telekomunikácie, š.p. Such an authorisation was a prerequisite for declaring that company bankrupt, as it fell under section 67(4)(c) of the 1991 Bankruptcy Act.

74. On 24 October 1996 the Bratislava City Court discontinued the proceedings with reference to section 2 of Law no. 292/1996 and section 67(3) of the 1991 Bankruptcy Act. On 26 March 1997 the Supreme Court upheld the decision to discontinue the proceedings. It became final on 24 July 1998. In the meantime, on 4 March 1998, the Constitutional Court in its judgment PL. ÚS 11/96 found that section 2 of Law no. 292/1996 breached the constitutional principle of legal certainty in respect of creditors who had already brought bankruptcy proceedings in accordance with the law then in force.

75. The Court notes that, at the relevant time, settlement proceedings were to precede adjudication on a person's bankruptcy and that they were, as a rule, conducted as a preliminary part of bankruptcy proceedings which were governed by the second part of the 1991 Bankruptcy Act.

76. However, section 67(4)(c) excluded, throughout the relevant period, the application of that Act in respect of debtors in the area of transport and telecommunications with an essential strategic economic importance for the State. The company Slovenské telekomunikácie, š.p. then fell under that provision by virtue of section 2 of Law no. 192/1995. Unless the Government explicitly agreed to adjudication on bankruptcy of such companies, the only provisions of the 1991 Bankruptcy Act which remained applicable in respect of such companies were sections 4a-g governing settlement proceedings and sections 46-66 relating to debtors' composition with creditors.

77. The above-mentioned restriction imposed by section 67(4)(c) was not the subject-matter of the constitutional proceedings on which the applicants relied and which led to judgment PL. ÚS 11/96 of 4 March 1998. The Court is not called upon to examine it in the context of the present application either. It notes, in addition, that the obstacle imposed by that provision was later removed and that the creditors of Slovenské telekomunikácie, š.p. were ultimately able to request adjudication on bankruptcy under the 1991 Bankruptcy Act. The relevant proceedings are the subject-matter of a different application pending before the Court (application no. 57238/00).

78. Accordingly, in the present case the domestic law allowed exclusively for settlement proceedings under sections 4 and 4a-4g of the 1991 Bankruptcy Act in respect of the company of which the applicants claimed to be creditors.

79. The aim of settlement proceedings was to allow a debtor to resolve the insolvency and the creditors to have their claims satisfied, by means of elaboration and implementation of a re-stabilisation project, and thus to prevent an adjudication of a debtor's bankruptcy. In particular, the purpose of a re-stabilisation project was to improve the debtor's financial situation, avoid bankruptcy, and to ensure the debtor's future effective development. The law required a re-stabilisation project to be elaborated by the council of creditors in collaboration with the debtor and, where the latter was a State-owned company, the authority by which it had been established. Furthermore, in such situations, a representative of the authority by which the company had been established was to participate at meetings of creditors and the creditors' council. Accordingly, settlement proceedings gave debtors the possibility of finding an agreement with the creditors, in the form of a re-stabilisation project, on how the latter's claims could be satisfied. Such an agreement could clearly only be reached of both the debtor's and creditors' free will.

83. Thus domestic courts' role was limited to providing the framework within which settlement proceeding could be started and concluded. The courts were in no way involved in determining how a settlement should be reached or deciding on any points in dispute between the debtor and the creditors in the context of a settlement, which could only succeed if both parties were in agreement. The relevant provisions of the 1991 Bankruptcy Act did not entitle the courts to decide on any substantive rights or obligations of the debtor or creditors in the context of such proceedings.

84. In the present case the representatives of the company Slovenské telekomunikácie, š.p. informed both the first applicant's predecessor and the Bratislava City Court, on 4 April 1996, that the alleged debtor had refused to convene a meeting of creditors and that it did not consider the petitioner to be its contractual partner. It has not been shown that any re-stabilisation project was elaborated, with the participation of the Ministry of Transport and Telecommunications, with a view to resolving the point in issue.

85. In these circumstances, and irrespective of the conduct of the domestic courts involved and the reasons for which they formally discontinued the proceedings complained of, the Court considers that the outcome of those proceedings cannot be said to have been directly decisive for the determination of the applicants' civil rights and obligations within the meaning of Article 6 § 1 of the Convention. It is therefore not necessary to examine whether all five applicants can claim to be victims of a breach of their rights within the meaning of Article 34 of the Convention.

86. It follows that this complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

87. The Court reiterates that an applicant can allege a violation of Article 1 of Protocol No. 1 only in so far as the impugned decisions related to his or her “possessions” within the meaning of this provision. “Possessions” can be either “existing possessions” or assets, including claims, in respect of which the applicant can argue that he or she has at least a “legitimate expectation” of obtaining effective enjoyment of a property right. The Court has held that the applicants had no “legitimate expectation” where it could not be said that they had a currently enforceable claim that was sufficiently established (for a recapitulation of the relevant case-law see, for example, Kopecký v. Slovakia [GC], no. 44912/98, §§ 35, 49 and 50, ECHR 2004 IX, with further references).

88. In the present case the applicants claimed to be creditors of the company Slovenské telekomunikácie, š.p. They considered that their right to peaceful enjoyment of their possessions had been breached by the way in which domestic courts dealt with the petition, filed by the predecessor of the first applicant, for proceedings under sections 4 et seq. of the 1991 Bankruptcy Act to be brought in respect of that company.

89. The Court has found above that the proceedings in issue could exclusively concern a settlement within the meaning of sections 4a-g of the 1991 Bankruptcy Act. Such a settlement pre-supposed the debtor's willingness to co-operate with the creditors and the role of the courts was limited to setting a framework within such proceedings could be started and concluded.

93. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

94. As to the applicants' complaint about the absence of an effective remedy, the Court reiterates that Article 13 applies only where an individual has an “arguable claim” to be the victim of a violation of a Convention right (see Boyle and Rice v. the United Kingdom, 27 April 1988, § 52, Series A no. 131). The Court has declared the applicants' complaints under Article 6 § 1 of the Convention and under Article 1 of Protocol No. 1 inadmissible. Accordingly, they did not have an “arguable claim” and Article 13 is, therefore, not applicable.

95. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

1. Herold Tele Media, s.r.o., a private limited company with its registered office in Bratislava, represented by Mr I. Matušík (the first applicant).

2. Mr Ivan Matušík, a Slovakian national born in 1956, resides in Láb (the second applicant).

3. Mr Ľubomír Sládek, a Slovakian national born in 1954, resides in Bratislava (the third applicant).

4. Mr Martin Sýkora, a Slovakian national born in 1975, resides in Bratislava (the fourth applicant).

5. Council of Creditors of the State-owned Company Slovenské telekomunikácie, š.p., established at a meeting of creditors held on 11 December 1996 and represented by its President, Mr. I. Matušík (the fifth applicant).

1. The equivalent of approximately 744 million euros.

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You are here: BAILII >> Databases >> European Court of Human Rights >> Herold Tele Media, s.r.o. and Others v Slovakia - 46190/99 [2010] ECHR 1614 (28 September 2010) URL: http://www.bailii.org/eu/cases/ECHR/2010/1614.html Cite as: [2010] ECHR 1614