TRANSPETROL, A.S., v. SLOVAKIA
Inadmissible
Alvina Gyulumyan;Corneliu Bîrsan;Ján Šikuta;Josep Casadevall;Luis López Guerra;Mihai Poalelungi;Nona Tsotsoria
1. The applicant, TRANSPETROL, a.s. (“the applicant company”), is a joint-stock company established in 1993 under the laws of Slovakia with its head office in Bratislava. At various stages of the proceedings before the Court the applicant company was or has been represented by Mr J. Drgonec, Ms E. Csekes, Mr Ľ. Novák, Mr O. Korec and Mr M. Krivák, lawyers practising in Bratislava. 2. The Government of the Slovak Republic (“the Government”) were represented by their Agent, Ms M. Pirošíková. The facts of the case, as submitted by the parties, may be summarised as follows. 3. The applicant company specialises in transporting, storing, buying and selling oil. It has a registered capital of 100,843,372 euros. 4. In the past, including at the time of the contested judgment (nález) of the Constitutional Court (see paragraphs 21 and 55 below), the State, in the person of the Ministry of the Economy (“the Ministry”), owned 51% of the shares in the applicant company. The remaining shares were owned by private parties. 5. At present all of the shares in the applicant company are owned by the State, in the person of the Ministry. 6. The status and functioning of the applicant company are subject to provisions of the Commercial Code (see paragraph 50 in the “Relevant domestic law” section below). It is subject to the jurisdiction of the ordinary courts. 7. Under the Securing of State Interests on the Privatisation of Strategically Important State-owned Enterprises and Joint-stock Companies Act (“the Strategic Interests Act” – see paragraph 48 in the “Relevant domestic law” section below), the shares in applicant company which were held or owned by the State could not be subject to privatisation. 8. Under the Large-scale Privatisation Act (“the Privatisation Act” – see paragraph 49 in the “Relevant domestic law” section below), the applicant company is listed among a list of entities having the character of a natural monopoly (prirodzený monopol). 9. Since 1998 a number of companies and individuals have claimed that they have obtained title to 34% of the shares in the applicant company by way of purchase in the context of a forced sale, carried out pursuant to the enforcement of an adjudicated claim for damages by a third party company against the State. One such company is a limited liability company, A. 10. The ownership, possession and other rights in respect of the abovementioned shares have been subject to numerous private-law transactions and a large amount of litigation of various kinds. 11. Various persons involved in the transactions mentioned above, including the representative of company A, a judicial enforcement officer and an advocate, were put on trial on charges of money laundering and fraud. The proceedings appear to be still pending, following a judgment convicting the defendants at first instance. 12. More details are summarised in the Court’s decision of 13 November 2003 in the application of Šándor and Others v. Slovakia (no. 52567/99). 13. On 4 November 2002 company A. lodged a petition with the Bratislava I. District Court (Okresný súd) arguing that it was the owner of 5.78% of the shares in the applicant company, which was above the statutory 5% threshold for being entitled to have an extraordinary general meeting (“EGM”) of shareholders in the applicant company called. Company A. argued that the applicant company had ignored a previous request it had made to call an EGM and sought judicial authorisation to do so itself. The applicant company was the defendant in those proceedings. 14. On 18 November 2004 the District Court allowed the petition and authorised company A. to call an EGM, having found it established that company A. was the owner of 110 shares in the applicant company. 15. On 27 July 2005, exercising his discretionary power, the Prosecutor General challenged the decision of 18 November 2004 in the Supreme Court (Najvyšší súd) by way of an extraordinary appeal on points of law (mimoriadne dovolanie). 16. Relying on Articles 4 and 20 § 2 of the Constitution (see paragraphs 44 and 45 in the “Relevant domestic law” section below) and on the relevant provisions of the Strategic Interests Act and the Privatisation Act – see paragraphs 48 and 49 in the “Relevant domestic law” section below), the Prosecutor General argued, inter alia, that at the relevant time the acquisition of shares in the applicant company by company A. had been excluded by law. Company A. was accordingly not a shareholder in the applicant company and had no power to call an EGM of its members. 17. On 28 June 2006 the Supreme Court determined the extraordinary appeal for the first time (see below) by allowing it, quashing the decision of 18 November 2004 and remitting the case to the District Court for reexamination. 18. Company A. subsequently challenged the judgment of the Supreme Court of 28 June 2006 by way of a complaint under Article 127 of the Constitution (see paragraph 46 in the “Relevant domestic law” section below). The Supreme Court was named as the defendant in this complaint. The applicant company had no standing in the constitutional proceedings. 19. On 19 August 2006 the proceedings on the merits of the 2002 petition of company A. (see paragraph 13 above) were terminated following the withdrawal by company A. of its petition on the grounds that the EGM had already taken place and that, consequently, the petition had become moot. 20. The further course of the proceedings, as described below, thus merely concerned the extraordinary appeal of the Prosecutor General (see paragraph 15 above) and the constitutional complaints of company A. (see the preceding paragraph and paragraphs 26 and 30 below). 21. On 11 December 2007 the Constitutional Court (Ústavný súd) found that the Supreme Court had violated the right of company A. to a fair trial. Consequently, the Constitutional Court quashed the judgment of 28 June 2006 and remitted the case to the Supreme Court for re-examination of the Prosecutor General’s extraordinary appeal. 22. In its reasoning, the Constitutional Court held that “[company A.] had obtained the shares and had done so in the course of enforcement proceedings” and that “it was justified and lawful for [company A.] to assume that it had legitimately become the owner of the shares, which had provided a basis for it to have the power to call the general meeting”. 23. The Constitutional Court also held that it had been wrong for the Supreme Court to have reexamined the question of the lawfulness of the acquisition by company A. of the shares in question. To that end, the Constitutional Court observed that, in the case at hand, the Supreme Court had dealt with proceedings concerning the calling of an EGM and that the acquisition in question had taken place in the course of enforcement proceedings falling within the jurisdiction of the enforcement courts and having been concluded with final and binding effect. 24. On 28 May 2008 the Supreme Court ruled on the extraordinary appeal by the Prosecutor General for the second time. It again quashed the decision of 18 November 2004 and remitted the case to the District Court for re-examination. 25. The Supreme Court disagreed with the legal views of the Constitutional Court and considered that, thereby, the Constitutional Court had unconstitutionally interfered with its jurisdiction. 26. Company A. then challenged the judgment of the Supreme Court of 28 May 2008 by way of a complaint under Article 127 of the Constitution. 27. On 15 January 2009 the Constitutional Court quashed the judgment of 28 May 2008 and remitted the case to the Supreme Court for a fresh determination of the extraordinary appeal by the Prosecutor General. The Constitutional Court found the contested judgment to be arbitrary, devoid of adequate reasoning and contrary to the Supreme Court’s being bound by legal reasoning expressed by the Constitutional Court (see paragraph 47 in the “Relevant domestic law” section below). 28. On 23 November 2009 the Supreme Court ruled on the extraordinary appeal by the Prosecutor General for the third time. It again quashed the decision of 18 November 2004 and remitted the case to the District Court for reexamination. 29. The Supreme Court considered the judgment of the Constitutional Court of 15 January 2009 to be incomprehensible and pointed out that the handling of the petition at first instance had been chaotic and riddled with numerous irregularities. 30. Company A. challenged the Supreme Court’s judgment of 23 November 2009 under Article 127 of the Constitution. Its complaint (registered under file no. IV. ÚS 161/2010) was declared admissible on 8 April 2010 but the proceedings were eventually discontinued on 3 June 2010 further to the withdrawal by company A. of its complaint. 31. On 4 February 2008 company A. again sought judicial authorisation to call an EGM of the applicant company’s members. 32. On 30 March 2009 the District Court allowed a fresh petition, following which company A. called the EGM for 29 April 2010. 33. The applicant company was the defendant in those proceedings, being assisted by the State in the person of the Ministry, acting as an intervenor for the defendant (vedľajší účastník). 34. In its decision, the District Court relied, inter alia, on the judgment of the Constitutional Court of 11 December 2007 (see paragraph 21 above). 35. On 23 April 2009, upon motion of the State in the guise of the Ministry of the Economy, the Prosecutor General challenged the decision of 30 March 2009 in the Supreme Court by way of an extraordinary appeal on points of law. At the same time, the Prosecutor General requested that the legal effect of the challenged decision be suspended pending the outcome of the proceedings on the merits. 36. On 27 April 2009 the Supreme Court suspended the legal effect of the decision of 30 March 2009 pending the outcome of the proceedings. 37. Nevertheless, on 29 April 2009, the EGM took place. 38. On 20 May 2009 the Supreme Court quashed the decision of 30 March 2009 and remitted the matter to the District Court for reexamination. 39. The Supreme Court held, inter alia, that the legal views expressed by the Constitutional Court in its judgment of 11 December 2007 (see paragraph 21 above) had no directly binding legal effect upon the District Court. 40. On 9 September 2010, upon a complaint under Article 127 of the Constitution by company A., the Constitutional Court found a violation of the complainant’s right to a fair trial under Article 6 § 1 of the Convention, quashed the judgment of the Supreme Court of 20 May 2009 and remitted the matter to the Supreme Court for a new determination of the extraordinary appeal by the Prosecutor General. 41. The Constitutional Court found that there had been irregularities related to the serving of a copy of the Prosecutor General’s extraordinary appeal on company A. and that, in consequence, the Supreme Court could not be said to have ensured service of that appeal on company A. for observations, to the detriment of the latter’s procedural rights. 42. The further course and outcome (if any) of the proceedings in this matter have not been made known to the Court. 43. The above-mentioned pronouncements of the Constitutional Court, and in particular those in its judgment of 11 December 2007 (see paragraph 22 above), had been relied on by various parties in a number of transactions and lawsuits concerning shares in the applicant company. These include purported transfers of the litigious shares from company A. and the other alleged shareholders (see paragraph 9 above) to company B., incorporated in the Czech Republic, and then to company C., incorporated in the United States of America, and proceedings before the Bratislava Regional Court file nos. 27 Cb 77/2002, 7Cbs 86/2005, 7Cbs 84/05 and before the Košice Regional Court file no. 2Cb 1272/2002. 44. Article 4 provides that: “Mineral resources, caves, underground waters, natural healing sources and streams are the property of the Slovak Republic.” 45. The relevant part of Article 20 § 2 reads as follows: “An Act of Parliament shall determine which property other than that indicated in Article 4 of this Constitution, which is necessary for the safeguarding of the needs of society, development of the national economy and public interest, may only be owned by the State, a municipality or a specified legal entity.” 46. Under Article 127: “1. The Constitutional Court shall decide complaints by natural or legal persons alleging a violation of their fundamental rights or freedoms ... unless the protection of such rights and freedoms falls within the jurisdiction of a different court. 2. If the Constitutional Court finds a complaint justified, it shall deliver a decision stating that a person’s rights or freedoms as set out in paragraph 1 have been violated by a final decision, specific measure or other act and shall quash such a decision, measure or act. If the violation that has been found is the result of a failure to act, the Constitutional Court may order [the authority] which has violated the rights or freedoms to take the necessary action. At the same time it may remit the case to the authority concerned for further proceedings, order that authority to refrain from violating the fundamental rights and freedoms ... or, where appropriate, order those who have violated the rights or freedoms set out in paragraph 1 to restore the situation to that existing prior to the violation. 3. In its decision on a complaint the Constitutional Court may grant appropriate financial compensation to a person whose rights under paragraph 1 have been violated.” 47. Details concerning the status, structure and functioning of the Constitutional Court and procedures before it are defined in the Constitutional Court Act. Pursuant to its section 56(6): “Should the Constitutional Court quash a final and binding decision, measure or other interference and remit the matter for further proceedings, the body which issued the decision, decided on the measure or carried out other interference shall be bound to e-examine the matter and to decide anew. In such proceedings or process that body shall be bound by the legal view expressed by the Constitutional Court. 48. The Strategic Interests Act (Zákon o zabezpečení záujmov štátu pri privatizácii strategicky dôležitých štátnych podnikov a akciových spoločností) was adopted with effect from 14 September 1995 and remained in force until 12 October 1999. In the relevant part of section 2(3) it provides that: “Shares in [the applicant company], which are held or owned by the State or [the National Property Fund] cannot be subject to privatisation.” 49. The Privatisation Act (Zákon o podmienkach prevodu majetku štátu na iné osoby) regulates the conditions for transfer of property of the State to legal entities and individuals. Under its section 10(2) the privatisation of enterprises or their parts as well as of proprietary interests in legal entities having the character of “natural monopolies” must always be decided upon by the cabinet after the matter has been debated in Parliament. The applicant company is recognised as having the character of a “natural monopoly” (section 10(2)(i)). 50. The status, structure, organisation and functioning of joint-stock companies is regulated by the Commercial Code (Law no. 513/1991 Coll., as amended), in particular by sections (Oddiel) 1 and 5, chapter (Hlava) 1 of its Part (Časť) 2. 51. On 18 November 2008 and 20 April 2009 the Ministry of the Economy of the Slovak Republic lodged two applications with the Court, which were registered under application numbers 57425/08 and 22213/09 respectively. 52. In applications numbers 57425/08 and 22213/09 the Ministry was represented by Mr M. Krivák, a lawyer practising in Bratislava (for comparison see paragraph 1 above). 53. Relying on Article 34 of the Convention, the Ministry complained that the course and outcome of the proceedings leading up to the Constitutional Court’s judgment of 11 December 2007 (see paragraph 21 above) and a decision of 22 May 2008, by which the Constitutional Court had rejected the Ministry’s complaint against the judgment of 11 December 2007, were contrary to its rights under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1. 54. On 9 June 2009 the Court, sitting in the formation of a Committee under former Article 28 of the Convention, declared applications numbers 57425/08 and 22213/09 inadmissible as being incompatible ratione personae with the provisions of the Convention, within the meaning of Article 34.