KAPITAL INWESTYCYJNY SP. Z O. O v. POLAND
Inadmissible
Nicolas Bratza
The applicant, Kapitał Inwestycyjny Sp. Z O. O, is a limited liability company incorporated in Poland, with its registered seat in Warsaw. It is represented before the Court by Mr Zenon Wieczorek, its director. The respondent Government were represented by Mr Jakub Wołąsiewicz, of the Ministry of Foreign Affairs. The facts of the case, as submitted by the parties, may be summarised as follows. On 6 April 1994 the applicant company instituted civil proceedings against a co-operative “P”. It claimed damages resulting from contractual obligations between the parties. On 27 April 1994 the Warsaw District Court issued a payment order against the co-operative “P”. On 22 June 1994 and 17 August 1994 the bailiff seized the co-operative’s bank account. On 23 June 1994 the defendant co-operative filed a defence against the payment order (zarzuty przeciwko nakazowi zapłaty). It requested that the applicant’s claims be dismissed on account, inter alia, of the invalidity of the contract. On 24 August 1994 the co-operative filed pleadings entitled “complaint regarding the bailiff’s acts”. In the pleadings it requested that the enforcement proceedings be stayed, that the security order be altered and its bank accounts freed. On 17 October 1994 the court also dismissed the complaint regarding the bailiff’s acts as such. On 10 September 1994 the court dismissed the defendant’s motions of 23 June 1994 and 16 August 1994. The court ruled that since no enforcement proceedings were pending the motion was purposeless and it had to be dismissed. On 21 October 1994 the applicant appealed against that decision. A further complaint by the defendant co-operative, lodged on 19 October 1994, about the bailiff’s acts concerning the scope of the security order and, in particular in respect of the seizure of bank accounts, was dismissed on 5 November 1994 and the defendant’s subsequent appeal was dismissed on 19 January 1995. On 30 November 1994 the Warsaw Regional Court allowed the defendant’s appeal of 21 October 1994 and stayed the enforcement of the payment order. On 30 November 1995 and 12 January 1996 hearings were held before the Warsaw Regional Court. On 16 April 1996 that court decided to stay the proceedings for payment as requested by the co-operative P. on the grounds that the proceedings to declare the contract null and void were pending. On 30 April 1996 the applicant company appealed but to no avail. Its appeal was dismissed by the Warsaw Court of Appeal on 12 July 1996. On 13 May 2004 the Warsaw Regional Court dismissed the applicant’s claim for payment and quashed the payment order of 27 April 1994. On 14 November 1995 the defendant co-operative instituted a parallel action against the applicant company challenging the validity of the contract on which its claims were based. It also requested that the original proceedings be stayed until the issue of the validity of that contract had been adjudicated. On 7 February 1996 the applicant company filed its pleadings in the new case. It argued that the claim should be rejected as inadmissible since the issue of the validity of the contract would in any event be considered in the proceedings for payment which had been instituted earlier. On 29 June 1999 the first-instance judgment was delivered. The court found the contract between the parties to be null and void. On 14 September 1999 the applicant company filed an appeal. On 4 April 2000 a hearing was held before the Warsaw Court of Appeal and the appellate court dismissed the appeal. On 5 July 2000 the applicant company filed a cassation appeal. On 5 February 2002 the Supreme Court rejected the cassation appeal, finding that no issue of legal importance justified its examination on the merits. Articles 417 et seq. of the Civil Code (Kodeks cywilny) provide for the State’s liability in tort. In the version applicable until 1 September 2004, Article 417 § 1, which lays down a general rule, read as follows: “1. The State Treasury shall be liable for damage caused by a State official in the course of carrying out the duties entrusted to him.” Article 418 of the Civil Code, as applicable until 18 December 2001 (see “Constitutional Court”s judgment of 4 December 2001 below) provided for the following exception in cases where damage resulted from the issue of a decision or order: “1. If, in consequence of the issue of a decision or order, a State official has caused damage, the State Treasury shall be liable only if a breach of the law has been involved in the issue of the decision or order and if that breach is the subject of prosecution under the criminal law or of a disciplinary investigation, and the guilt of the person who caused the damage in question has been established by a final conviction or has been admitted by the superior of that person. 2. The absence of the establishment of guilt by way of a criminal conviction or in a decision given in disciplinary proceedings shall not exclude the State Treasury’s liability for damage if such proceedings cannot be instituted in view of the [statutory] exception to prosecution or disciplinary actions.” On 1 September 2004 the Law of 17 June 2004 on amendments to the Civil Code and other statutes (Ustawa o zmianie ustawy – Kodeks cywilny oraz niektórych innych ustaw) (“the 2004 Amendment”) entered into force. While the relevant amendments have in essence been aimed at enlarging the scope of the State Treasury’s liability for tort under Article 417 of the Civil Code – which included adding a new Article 4171 and the institution of the State’s tortious liability for its omission to enact legislation (the so-called “legislative omission”; “zaniedbanie legislacyjne”) – they are also to be seen in the context of the operation of a new statute introducing remedies for the unreasonable length of judicial proceedings (see paragraphs 38-41 below). Following the 2004 Amendment, Article 4171, in so far as relevant, reads as follows: “3. If damage has been caused by failure to give a ruling (orzeczenie) or decision (decyzja) where there is a statutory duty to give them, reparation for [the damage] may be sought after it has been established in the relevant proceedings that the failure to give a ruling or decision was contrary to the law, unless otherwise provided for by other specific provisions.” However, under the transitional provisions of section 5 of the 2004 Amendment, Article 417 as applicable before 1 September 2004 (see paragraph 34 above) shall apply to all events and legal situations that subsisted before that date. On 4 December 2001 the Constitutional Court (Trybunał Konstytucyjny) dealt with two constitutional complaints in which the applicants challenged the constitutionality of Article 417 and 418 of the Civil Code. They alleged, in particular, that those provisions were incompatible with Articles 64 and 77 § 1 of the Constitution (see paragraphs 36-37 below). On the same day the court gave judgment (no. SK 18/00) and held that Article 417 of the Civil Code was compatible with Article 77 § 1 of the Constitution in so far as it provided that the State Treasury was liable for damage caused by the unlawful action of a State official carried out in the course of performing his duties. It further held that even though Article 418 of the Civil Code was compatible with Article 64 of the Constitution, it was contrary to Article 77 § 1 since it linked the award of compensation for such damage with the personal culpability of the state official concerned, established in criminal or disciplinary proceedings. On 18 December 2001, the date on which the Constitutional Court’s judgment took effect, Article 418 was repealed. The Constitutional Court’s opinion on the consequences of the repeal read, in so far as relevant: “The elimination of Article 418 of the Civil Code from the legal system ... means that the State Treasury’s liability for an action of a public authority consisting in the issue of unlawful decisions or orders will flow from the general principles of the State liability laid down in Article 417 of the Civil Code. This, however, does not rule out the application in the present legal system of other, not necessarily only those listed in the Civil Code, principles of the State liability laid down in specific statutes.” Article 45 § 1 of the Constitution states: “Everyone shall have the right to a fair and public hearing of his case, without undue delay, before a competent, impartial and independent court.” Article 64 of the Constitution reads: “1. Everyone shall have the right to ownership, other property rights and the right of succession. 2. Everyone, on an equal basis, shall receive legal protection regarding ownership, other property rights and the right of succession. 3. The right of ownership may only be limited by means of a statute and only to the extent that it does not violate the substance of such right.” Article 77 § 1 of the Constitution reads: “Everyone shall have the right to compensation for any harm done to him by any action of an organ of public authority contrary to law.” On 17 September 2004 the Law of 17 June 2004 on complaints about a breach of the right to a trial within a reasonable time (Ustawa o skardze na naruszenie prawa strony do rozpoznania sprawy w postępowaniu sądowym bez nieuzasadnionej zwłoki) (“the 2004 Act”) entered into force. It lays down various legal means designed to counteract and/or redress the undue length of judicial proceedings. A party to pending proceedings may ask for the acceleration of those proceedings and/or just satisfaction for their unreasonable length under Article 2 read in conjunction with Article 5(1) of the 2004 Act. Article 2, in so far as relevant, reads as follows: Article 5 provides, in so far as relevant: “1. A complaint about the unreasonable length of proceedings shall be lodged while the proceedings are pending. ...” Article 16 refers to proceedings that have been terminated and that do not fall under the transitional provision of Article 18 (see paragraph 46 below) in the following terms: “A party which has not lodged a complaint about the unreasonable length of the proceedings under section 5 (1) may claim – under Article 417 of the Civil Code ... – compensation for the damage which resulted from the unreasonable length of the proceedings after the proceedings concerning the merits of the case have ended. Article 442 of the Civil Code sets out limitation periods in respect of various claims based on tort. That provision applies to situations covered by Article 417 of the Civil Code. Article 442, in so far as relevant, reads: “1. A claim for compensation for damage caused by a tort shall lapse 3 years following the date on which the claimant learned of the damage and the persons liable for it. However, the claim shall in any case lapse 10 years following the date on which the event causing the damage had occurred.” Article 18 of the 2004 Act lays down the following transitional rules in relation to the applications already pending before the Court: “1. Within six months after the date of entry into force of this law persons who, before that date, had lodged a complaint with the European Court of Human Rights ... complaining of a breach of the right to a trial within a reasonable time guaranteed by Article 6 (1) of the Convention for the Protection of Human Rights and Fundamental Freedoms ..., may lodge a complaint about the unreasonable length of the proceedings on the basis of the provisions of this law if their complaint to the Court had been lodged in the course of the impugned proceedings and if the Court has not adopted a decision concerning the admissibility of their case. 2. A complaint lodged under subsection 1 shall indicate the date on which the application was lodged with the Court. 3. The relevant court shall immediately inform the Minister of Foreign Affairs of any complaints lodged under subsection 1.”