CASE OF MURTIĆ AND ĆERIMOVIĆ v. BOSNIA AND HERZEGOVINA
Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings;Article 6-1 - Access to court);Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)
David Thór Björgvinsson;Lech Garlicki;Ledi Bianku;Nebojša Vučinić;Päivi Hirvelä;Zdravka Kalaydjieva
5. The applicants were born in 1963 and 1959 respectively and live in Velika Kladuša. 6. They were both employed by Agrokomerc (“the company”), an agricultural company based in Velika Kladuša. In August 1991 the workers’ council of the company adopted a decision on the issuance of internal shares to the company’s employees as part of its reorganisation from a socially owned company into a joint-stock company under the applicable regulations. It was decided that one third of the employees’ salaries would be allocated towards instalment payments for the internal shares to be issued to them. On 30 March 1993 the company’s management board issued a series of resolutions authorising retention of earnings that resulted in an increase in the company’s internal share capital. As a result of these board resolutions, the internal share capital amounted to 80.9% of the company’s total share capital (the remainder being held by the State). The reorganisation process continued until August 1994, when the management of the company was taken over by the State following armed conflict in the north-western part of Bosnia and Herzegovina (where Velika Kladuša is located) during the 1992-95 war. Following the State taking control of the company, the applicants were effectively unable to exercise any of their rights as shareholders, although the company continued to state the privately-held internal share capital allotted to its employees on its annual balance sheets, as well as the State-owned capital, until 30 June 1999. 7. On 7 August 1995 the applicants’ employment was suspended, as well as that of many other employees of the company, and they were placed on a waiting list for potential future employment by the new management of the company. However, they were never subsequently offered the opportunity to resume their employment. 8. On 20 June 2000 the applicants complained to the Human Rights Chamber (a domestic human-rights body set up under Annex 6 to the 1995 General Framework Agreement for Peace) in two separate appeals. 9. On 7 March 2001, Revsar, an auditing and consulting company based in Sarajevo, conducted an audit of the transfer of ownership of the company. It held that the measures taken from 1991 until 1994 to establish internal share capital had not been in accordance with the law and that, therefore, such internal share capital had never been formed. Consequently, it concluded that the company was 100% State-owned. 10. On 31 July 2001 the Federation of Bosnia and Herzegovina issued a decree placing the company on the list of the companies under its control on the basis of the State-owned capital. 11. On 8 February 2002 the Human Rights Chamber joined the applicants’ cases (see paragraph 8 above) and those of Mr M. Š. and the Association for the Protection of Unemployed Shareholders of Agrokomerc and adopted a single decision. It was delivered on 8 March 2002. The Human Rights Chamber held that the applicants had acquired possessions, in the form of their paid-up internal shares in the company, which were protected by law and found a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention. The reasons were set out in the decision, the relevant paragraphs of which read as follows: “290. In summary, the Chamber has concluded that the applicants acquired protected “possessions” in their paid internal shares in Agrokomerc for which payment was made on the basis of: (a) permanent deposits; (b) allocation of parts of salaries, either on monthly basis during the period of 1991 to 1994, or on an annual basis for 1992; and (c) distribution of profits for 1992 in proportion to the amount of paid internal shares. The decision on the results of the renewed Revsar audit of 7 March 2001, which cancelled all internal shares in favour of state capital in Agrokomerc, deprived the applicants of these protected possessions. In addition, by exercising effective exclusive control over the management of Agrokomerc, the authorities of the Federation further interfered with the rights of the applicants to participate in the management and to share in the profits of Agrokomerc in relation to their paid internal shares. In these respects the Federation did not act “subject to the conditions provided by law”. Consequently, the Chamber concludes that the Federation has violated the rights of the applicants protected by Article 1 of Protocol No. 1 to the Convention. ... 298. The applicants are correct that they have had no real and effective means to participate in the establishment of the ownership structure of Agrokomerc, as that has been established through the performance of the audit, which was conducted exclusively by the auditor Revsar [...]. There have been no actual or effective proceedings in which the applicants have been invited to participate. Under the law, the only way for the applicants to participate in the establishment of the ownership structure of the company in which they are shareholders has been to challenge the appointment of the auditor and to challenge the results of the audit [...]. This has not proven effective in this case. Moreover, the Chamber considers that this type of process has not been adequate properly to allow the applicants to have access to courts for the determination of their civil rights, as guaranteed by Article 6 of the Convention”. 12. Furthermore, the Human Rights Chamber ordered the Federation of Bosnia and Herzegovina to take all necessary steps to recognise the applicants as holders of internal shares in relation to the amount of their paid-up internal shares and to enable them to exercise their right as shareholders to participate in the management of the company. In particular, the Federation was ordered to: (i) employ, at its own expense, internationally recognised auditors to undertake an audit to determine the complete ownership structure of the company, in compliance with International Accounting Standards and International Auditing Standards; (ii) establish the value of the applicants’ shares and have them formally registered; and (iii) provide them with individual share certificates. Lastly, the Human Rights Chamber ordered interim measures whereby certain procedures and arrangements were put in place as regards the company’s management until the adoption of the final audit report and the convocation of a general meeting of the company’s shareholders. 13. On 28 November 2003 the Prague branch of Deloitte & Touche produced an audit report, which found that 90.33% of the company’s capital was State-owned, the remaining 9.67% being in private ownership. In addition, only 3.34% of the total capital had been assigned to individual private shareholders, whilst the outstanding 6.33% remained unassigned. The value of the applicants’ shares had not been established. Consequently, they could not attend the general meeting of the company’s shareholders which was to be held on 16 March 2004. 14. On 7 May 2004 the Human Rights Commission (the legal successor of the Human Rights Chamber) decided to lift the interim measures indicated in the decision of 8 March 2002 (see paragraph 12 above), after having received the final report on the completed audit from the Federation of Bosnia and Herzegovina and a signed copy of the minutes of the first general meeting of the company’s shareholders. 15. On 12 May 2005 the Bihać Cantonal Court registered the changes in the ownership of the company resulting from its reorganisation. 16. On 14 February 2006 a general meeting of the company’s shareholders adopted a resolution authorising the distribution of the unassigned private share capital to individual shareholders (see paragraph 13 above). 17. On 29 October 2007 the applicants were issued with individual share certificates and their shares were formally registered with the Securities Commission. It was established that the first applicant was entitled to 451 shares with a market value of 4,510 convertible marks (BAM) and the second applicant to 1,086 shares with a market value of BAM 10,000. Consequently, the applicants were also allowed to attend general meetings of the company’s shareholders. 18. On 15 January 2009 the Constitutional Court of Bosnia and Herzegovina (which became responsible for the supervision of the execution of the Human Rights Chamber’s decisions after the Human Rights Commission ceased to exist) concluded that the Human Rights Chamber’s decision of 8 March 2002 had been fully implemented. 19. In accordance with Article 239 of the Criminal Code 2003 (Official Gazette of Bosnia and Herzegovina, nos. 3/03, 37/03, 32/03, 54/04, 61/04, 30/05, 53/06, 55/06, 32/07 and 8/10), non-enforcement of a decision of the Human Rights Chamber is a criminal offence: “An official of the State, the Entities or the Brčko District who refuses to enforce a final and enforceable decision of the Constitutional Court of Bosnia and Herzegovina, the Court of Bosnia and Herzegovina, the Human Rights Chamber or the European Court of Human Rights, or who prevents the enforcement of any such decision, or who frustrates the enforcement of any such decision in some other way, shall be punished by imprisonment for a term of between six months and five years.”