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FIFTH
SECTION
CASE OF RODINNÁ ZÁLOZNA, SPOŘITELNÍ A
ÚVĚRNÍ DRUZSTVO AND OTHERS v. THE CZECH REPUBLIC
(Application
no. 74152/01)
JUDGMENT
(Just
satisfaction)
STRASBOURG
19 January
2012
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Rodinná záloZna, spořitelní
a úvěrní druZstvo and Others v. the Czech
Republic,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Dean Spielmann, President,
Karel
Jungwiert,
Boštjan M. Zupančič,
Mark
Villiger,
Ann Power-Forde,
Angelika
Nußberger,
André Potocki, judges,
and
Claudia Westerdiek,
Section Registrar,
Having
deliberated in private on 13 December 2011,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 74152/01) against the Czech
Republic lodged with the Court under Article 34 of the Convention for
the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) on 14 September 2001 by Rodinná záloZna,
spořitelní a úvěrní druZstvo, a
credit union (“the applicant credit union”) and
Mr Drahoslav Honek, Mr Jiří Halberštát,
Mr Václav Vaněrka and Mr Jan Zivný,
members of the credit union and of its management and supervisory
organs.
- The
applicants were represented by Mr M. Nespala, a lawyer practising in
Prague. The Czech Government (“the Government”) were
represented by their Agent, Mr V.A. Schorm, and Deputy Agent,
Mr J. Kmec, of the Ministry of Justice.
- In a judgment delivered on 9 December 2010 (“the
principal judgment”), the Court held that there had been a
violation of Article 6 of the Convention and Article 1 of Protocol
No. 1 in respect of the applicant credit union. It further held that
it was not necessary to rule on the allegation of a violation of
Article 13 of the Convention and declared all the complaints of the
individual applicants inadmissible (Rodinná záloZna,
spořitelní a úvěrní druZstvo and
Others v. Czech Republic, no. 74152/01, 9 December 2010, “the
principal judgment”).
- Under
Article 41 of the Convention the applicants sought just satisfaction
in the form of restitutio in integrum or compensation
for pecuniary and non-pecuniary damage sustained and reimbursement of
costs and expenses incurred.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it and invited the
Government and the applicant credit union to submit, within three
months, their written observations on that issue and, in particular,
to notify the Court of any agreement they might have reached (ibid.,
§ 74, and point 5. of the operative provisions). The limit for
filing observations was later extended for another three months.
- The
parties did not reach an agreement on the question of just
satisfaction.
- The
applicant credit union and the Government each filed observations.
THE LAW
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Pecuniary Damage
- The
applicant credit union requested 1,059,030,000 Czech korunas (CZK)
(44,126,250 euros (EUR)) in respect of pecuniary damage. The amount
consisted of the value of its property at the time it was placed
under receivership as calculated in a submitted expert report. It
argued that the principal judgment differed from the judgment in the
case of DruZstevní záloZna Pria and Others v. the
Czech Republic (no. 72034/01, 31 July 2008) and that therefore
the Court should award damages, in contrast to that case.
- The
Government on their part asked the Court to follow the example of
DruZstevní záloZna Pria and Others, cited above,
to which the present case was identical, and to find no causal link
between the violation found and the damages claimed. Moreover, they
noted that in any case the expert opinion submitted by the applicant
credit union contained such serious deficiencies that its conclusion
could not be considered relevant for the purpose of the proceedings
before the Court.
- The
Court notes that in its principal judgment it found a violation of
Article 1 of Protocol No. 1 on the ground that the applicant credit
union was denied access to its business and accountancy documents and
that it lacked access to court to challenge the imposition of
receivership, which resulted in the interference with the applicant
credit union’s possessions not being surrounded by sufficient
guarantees against arbitrariness and thus not being lawful within the
meaning of Article 1 of Protocol No. 1 (see the principal judgment,
§§ 52-54). The inability of the applicant credit union to
challenge the imposition of the receivership before a court was also
found to be in violation of Article 6 of the Convention (§ 67 of
the principal judgment). At the same time the Court did not find a
violation of the Convention in the issuing of the receivership order
as such, and indeed expressly found that the take-over of the
applicant credit union by the interim receiver could in itself be
regarded as compatible with that margin of appreciation in so far as
the applicant credit union had failed to establish that the State’s
suspicions that its financial situation required its placement in
interim receivership had been unreasonable (see the principal
judgment, § 51).
- Consequently,
the Court does not see any difference between the violations found in
the present case and those in the case of DruZstevní
záloZna Pria and Others, cited above. It follows that for
the purposes of the Convention no causal link has been established
between the violations of Article 6 § 1 of the Convention and
Article 1 of Protocol No. 1 found in the present case and any damage
caused by the imposition of receivership (see DruZstevní
záloZna Pria and Others v. the Czech Republic (just
satisfaction), no. 72034/01, § 9, 21 January 2010). This
conclusion is without prejudice to any possible reparation that the
applicant credit union might be entitled to at the domestic level.
- No
award is therefore made under this head.
B. Non-pecuniary Damage
- The
applicant credit union claimed EUR 35,000 in respect of non-pecuniary
damage.
- The
Government maintained that the finding of a violation of the
Convention was itself sufficient satisfaction for the applicant
credit union.
- The
Court reiterates its case-law that awarding compensation in respect
of non-pecuniary damage to commercial companies is governed by
specific criteria. In this context account should be taken of the
company’s reputation, uncertainty in decision making,
disruption to the management of the company (for which there is no
precise method of calculating the consequences) and lastly, albeit to
a lesser degree, the anxiety and inconvenience caused to the members
of the management team (see Comingersoll S.A. v. Portugal
[GC], no. 35382/97, § 35, and Forminster Enterprises Limited
v. the Czech Republic (just satisfaction), no. 38238/04, §
23 and 25, 10 March 2011).
- Turning
to the present case, the Court firstly notes that a credit union is
an entity sui generis under the domestic law undertaking
business activities of a banking nature for its members. It considers
that it is a commercial company within the meaning of its
above-mentioned case-law.
- The
Court next notes that the applicant credit union did not specify at
all on what ground it was seeking non-pecuniary damage. It is unable
to conclude on its own that the applicant credit union suffered any
non pecuniary damage based on any of the above-mentioned
specific grounds.
- No
award is therefore made under this head and the Court considers that
the finding of a violation constitutes in itself sufficient just
satisfaction for any non-pecuniary damage that the applicant credit
union might have suffered.
C. Costs and expenses
- The
applicant credit union claimed CZK 1,316,364.45 (EUR 54,849) for
costs and expenses before the Court, including: CZK 839,261.45 for
legal services before the Court, including expert opinions; CZK
10,931 for an unspecified separate account maintenance; CZK 198,172
for travel expenses; CZK 46,500 for telephone costs; CZK 169,800 for
postage, copying and other office costs including unspecified minor
translations; and CZK 51,700 for translations of the Court’s
decisions in the present case into Czech and translations of the
application and observations into English.
- It
further claimed CZK 608,000 for costs and expenses in the domestic
proceedings, including: CZK 98,000 for the constitutional appeal; CZK
89,000 for the appeal on points of law; CZK 78,000 for an appeal; CZK
166,000 for postage, copying and other office costs including
unspecified translations and expert opinions; and CZK 177,000 for
telephone costs and unspecified travel expenses.
- The
Government argued that the applicant credit union had not properly
corroborated all its claims.
- According
to the Court’s settled case-law, costs and expenses will not be
awarded under Article 41 unless it is established that they were
actually and necessarily incurred and are also reasonable as to
quantum. Furthermore, legal costs are only recoverable in so far as
they relate to the violation found (see Scordino v. Italy (no. 1)
[GC], no. 36813/97, § 283, ECHR 2006-V). Moreover, the Court
cannot award those costs and expenses that are not supported by any
documents (see Husák v. the Czech Republic, no.
19970/04, § 63, 4 December 2008).
- Regarding
the costs and expenses in the domestic proceedings, the applicant
credit union failed to submit any supporting documents. Accordingly
they cannot be reimbursed.
- Regarding
the costs and expenses before the Court, the Court considers that
some of them are not linked to the violations found (costs of the
expert reports), some are not corroborated or specified (costs for
the separate account maintenance and costs for telephone, postage and
other office costs save for CZK 369 for postage) and some were not
necessarily incurred (travel expenses to Strasbourg and translation
costs of the application into English because according to Rule 34 of
the Rules of Court valid at that time applications could have been
sent in an official language of a Contracting Party). Therefore these
expenses cannot be reimbursed.
- The
Court agrees with the applicant credit union that the present case
was of certain complexity. Nevertheless, it considers the amount
claimed for legal services excessive. Regard being had to the
documents in its possession and the above criteria, the Court
considers it reasonable to award the sum of EUR 20,000 under this
head.
D. Default interest
- The
Court considers it appropriate that the default interest rate should
be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Holds that the finding of a violation
constitutes in itself sufficient just satisfaction for the
non-pecuniary damage sustained by the applicant credit union;
2. Holds
(a) that
the respondent State is to pay the applicant credit union, within
three months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention, EUR 20,000
(twenty thousand euros) in respect of costs and expenses, plus any
tax that may be chargeable to the applicant credit union; the amount
to be converted into Czech korunas at the rate applicable at the date
of settlement;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant credit
union’s claim for just satisfaction.
Done in English, and notified in writing on 19 January 2012, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Dean Spielmann
Registrar President
