KAVEKO INTERNATIONAL S.R.O. AND OTHERS v. SLOVAKIA
Inadmissible
Nicolas Bratza
The three applicants are identified below. The respondent Government were represented by Ms A. Poláčková, their Agent, who was succeeded in that function by Ms M. Pirošíková. The facts of the case, as submitted by the parties, may be summarised as follows. The first applicant, KAVEKO INTERNATIONAL spol.s r.o. Košice, is a private commercial limited liability company having its head office in Košice and a separate legal personality under Slovakian law, distinct from that of its owners. The second and third applicants, Mr Vladimír Kamarič and Ms Helena Kamaričová, are Slovakian nationals who were born in 1958 and 1956 respectively and live in Košice. In 1997 the second applicant and the third applicant acquired jointly 75% of the shares in the first applicant. The second applicant is the first applicant’s statutory representative. The second applicant at the same time holds shares in and is one of the statutory representatives of another commercial limited liability company (“company K”). Company K was the founder of and held shares in the first applicant. In the early 1990s company K made a credit arrangement with a bank in order to pay for the lease of machinery from a private lessor. In 1992 the bank entered the leasing arrangement in that it obtained an option to buy the machinery at the end of the lease term for a residual value. In 1994 the first applicant took over the debt owed to the bank on the condition that, at the end of the lease term, the bank would exercise its option and obtain and subsequently transfer the ownership of the machinery to the first applicant. The bank did not exercise the option, as a result of which the lessor was free to sell and did in fact sell the machinery to a third party. Company K thus lost a substantial component of its operations. In 1996 the bank brought several actions against the first applicant claiming that it was in default of payment of the bank credit. The bank claimed damages. The actions were subsequently stayed pending the outcome of insolvency proceedings in respect of the first applicant (see below). The proceedings have still not been resolved. On 17 June 1998 the bank petitioned for an insolvency order against the first applicant. It was argued that the first applicant was in default of payment of the debt owed to the bank; that it had several creditors; and that it would be unable to meet its obligations in the near future. On 3 August 1998 the Košice Regional Court (Krajský súd) made the order, appointed an insolvency administrator and invited creditors to register their claims within sixty days. The order was upheld on the first applicant’s appeal by the Supreme Court (Najvyšší súd) on 4 June 1999, and became final and binding on 3 August 1999. By virtue of the insolvency order, pursuant to Article 14 § 1 (a) and (h) of the Insolvency Code, the capacity to make dispositions in respect of the insolvent estate and to exercise rights and duties related to the making of dispositions in respect of the estate was transferred to the insolvency administrator and all powers of attorney granted by the first applicant automatically ceased to exist. The bank’s claims against the first applicant were contested and, as a result, the bank had to seek their judicial recognition by way of a separate action (incidenčná žaloba). The action was allowed at first instance on 25 March 2003, but the judgment was quashed on appeal on 29 April 2005 and is still pending. By decisions (opatrenie) of 25 October 1999 and 25 June 2001 the Regional Court authorised a direct sale without a public auction by the administrator of various movable and immovable items from the assets of the first applicant. The authorisation was not subject to appeal. Further items from the insolvent estate of the first applicant have been sold off in the course of the proceedings. The applicants maintain that the sales were based on manifestly unfavourable terms and that they were contrary to both substantive law and procedural rules. They complained on numerous occasions to the Regional Court that the actions of the insolvency administrator in connection with the sale were illegal and contrary to their interests. All their complaints were to no avail. The insolvency proceedings as such are still pending. Under Article 8 § 5 of the Insolvency Code, an insolvency court can replace the insolvency administrator on the motion of the insolvent person or the trustee provided there are important reasons. On 24 October 2000 the first applicant, acting through a lawyer, lodged a petition (podnet) under Article 130 § 3 of the Constitution with the Constitutional Court (Ústavný súd) contesting the insolvency order of 3 August 1998. On 28 June 2001 the Constitutional Court declared the petition inadmissible as being manifestly ill-founded. The first applicant’s objections were held to be of a fourth-instance nature and, as such, fell outside the scope of the Constitutional Court’s review. On 6 May 2003 the second applicant lodged a fresh complaint (sťažnosť) under Article 127 of the Constitution with the Constitutional Court. He sought to contest, in the name of the first applicant, the length of the proceedings in the bank’s civil actions and asserted that those proceedings had been marked by the violation of a variety of procedural rights. On 18 June 2003 the Constitutional Court declared the complaint inadmissible ratione personae. It observed first of all that the complaint was intended to be brought in the name of the first applicant. However, by virtue of the insolvency order, the capacity to act in the name of the first applicant had passed to the administrator (Article 14 § 1 (a) of the Insolvency Code), civil actions against it had been ex lege stayed (Article 14 § 1 (d) of the Insolvency Code) and could be resumed solely on motion by the administrator (Article 14 § 5 of the Insolvency Code) and any new proceedings could commence only on motion by the administrator (Article 14 § 1 (c) of the Insolvency Code). The present complaint had however not been brought by the administrator or her lawful agent and, therefore, could not be accepted as having been lodged in the name of the first applicant.