CASE OF REISNER v. TURKEY
Remainder inadmissible;Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions;Article 1 para. 2 of Protocol No. 1 - Control of the use of property);Violation of Article 6 - Right to a fair trial (Article 6 - Administrative proceedings;Article 6-1 - Access to court);Just satisfaction reserved (Article 41 - Just satisfaction)
András Sajó;Egidijus Kūris;Helen Keller;Jon Fridrik Kjølbro;Nebojša Vučinić;Robert Spano
5. The applicant was born in 1961 and lives in Schrobenhausen, Germany. Through the German stock market, he purchased six hundred and fifty German Certificates in Demirbank, which at the time was identified as the fifth largest private bank in Turkey. 6. By a decision dated 6 December 2000 (no. 123), the Banking Regulation and Supervision Board (Bankalar Düzenleme ve Denetleme Kurulu, hereinafter referred to as “the Board”) decided to transfer the management and control of Demirbank to the Savings Deposit Insurance Fund (Tassarruf Mevduat Sigorta Fonu – hereinafter “the Fund”), pursuant to section 14 (3) of the Banking Activities Act (Law no. 4389). In its decision the Board held that the assets of Demirbank were insufficient to cover its liabilities and that the continuation of its activities would threaten the security and stability of the financial system. Accordingly, Demirbank’s management and control, and the privileges of its shareholders except for dividends, were transferred to the Fund. The Fund also confiscated all properties belonging to Demirbank. 7. On 31 January 2001 all equities of the bank were removed from its account at the Istanbul Stock Exchange and were transferred to the account of the Fund. Subsequently, on 20 September 2001 the Fund entered into an agreement with the HSBC bank, and sold Demirbank to the latter for 350,000,000 United States dollars (USD). As a result, on 14 December 2001 Demirbank’s legal personality was extinguished and it was struck off the commercial register. 8. On 2 February 2001, the main shareholder of Demirbank, namely Cıngıllı Holding A.Ş., brought administrative proceedings against the Banking Regulation and Supervision Agency (Bankalar Düzenleme ve Denetleme Kurumu – hereinafter referred to as “the Agency”) before the Ankara Administrative Court, seeking the annulment of the decision of 6 December 2000 regarding the transfer of Demirbank to the Fund. 9. The Ankara Administrative Court found that it lacked jurisdiction, and transferred the case to the Supreme Administrative Court. 10. In its submissions before the Supreme Administrative Court, the plaintiff claimed that its property rights had been violated. It also raised a plea of unconstitutionality under section 14 of the Banking Activities Act. The company further stated that prior to November 2000 Demirbank had never encountered major financial problems. It was pointed out that pursuant to section 14 (2) of the Act, a bank with financial difficulties should first be given a warning to strengthen its financial structure and be allowed time to take specific measures. However, no such warning had been given in the instant case. Secondly, the Board had not claimed that Demirbank’s financial situation was so weak that it could not be strengthened even if specific measures were taken. Lastly, the company stated that following the transfer of the bank to the Fund, a General Assembly composed of the Fund’s officials had exonerated the former managers of Demirbank, holding that they had not been at fault in the incident leading to the bank’s transfer. 11. After examining the file, on 3 June 2003 the Supreme Administrative Court dismissed the case. It held that the takeover of the bank by the Fund had been in accordance with section 14 (3) of the Banking Activities Act. 12. On 18 December 2003 the Joint Administrative Chambers of the Supreme Administrative Court decided to quash the decision of 3 June 2003. In its judgment, the court held that prior to ordering the transfer of Demirbank to the Fund, the Board should have carried out an objective evaluation of the bank’s financial situation. The court also concluded that the Board should first have ordered Demirbank to take specific measures in accordance with section 14 (2) of the Banking Activities Act before applying section 14 (3) of the Act. 13. On 29 April 2004 a request for rectification lodged by the Agency was refused. 14. The case was remitted to the Supreme Administrative Court, which delivered its decision on 5 November 2004, upholding the decision of the Joint Administrative Chambers of the Supreme Administrative Court. It accordingly annulled the Board’s decision of 6 December 2000 ordering the transfer of Demirbank to the Fund, holding that the takeover had been illegal. A further appeal and a request for rectification lodged by the Agency were rejected on 14 April 2005 and 15 December 2005 respectively. 15. On 20 September 2001 Ms S. Cıngıllıoğlu, the main shareholder of Cıngıllı Holding A.Ş., brought administrative proceedings against the Fund before the Ankara Administrative Court, seeking the annulment of the agreement to sell Demirbank to HSBC. 16. Given that the transfer of Demirbank to the Fund had been found to be illegal by the Joint Administrative Chambers of the Supreme Administrative Court, on 21 April 2004 the Ankara Administrative Court annulled the agreement entered into by the Fund and HSBC on 20 September 2001. An appeal and a request for rectification lodged by the Fund were rejected on 3 June 2005 and 24 February 2006 respectively. 17. Following the transfer of Demirbank to the Fund, the applicant applied to the Board and claimed compensation. He did not receive any reply. 18. Subsequently, on 31 May 2002, the applicant brought compensation proceedings against the Agency before the Supreme Administrative Court. He argued that he had lost his shares in Demirbank as a result of its transfer to the Fund, and requested the annulment of the Board’s implied rejection of his compensation claim. 19. On 24 June 2003 the Supreme Administrative Court dismissed the applicant’s case. On the basis of a previous judgment it had rendered on 3 June 2003 (see paragraph 11 above), the court found that the takeover of the bank by the Fund had been in accordance with section 14 § 3 of the Banking Act. 20. The applicant lodged an appeal. 21. On 21 October 2004 the Joint Administrative Chambers of the Supreme Administrative Court decided to quash the judgment. It indicated that the previous judgment dated 3 June 2003, which had constituted the basis of the latter, had been quashed on 18 December 2003 (see paragraph 12 above). 22. The Agency’s rectification request was rejected on 26 May 2005. 23. On 20 September 2005 the Supreme Administrative Court held that it lacked jurisdiction ratione materiae, as the applicant’s case merely concerned an implied rejection by the Board, which should be assessed by the Ankara Administrative Court. 24. On 30 December 2005 the Ankara Administrative Court dismissed the case as out of time. The court held that the applicant should have initiated proceedings within sixty days following 31 January 2001, the date on which Demirbank’s equities had been transferred to the Fund’s account at the Stock Exchange (see paragraph 7 above). 25. The Supreme Administrative Court upheld the first-instance court’s judgment on 12 September 2006. 26. Following the annulment of the decision regarding the transfer of Demirbank to the Fund by the domestic courts (see paragraphs 8-14 above), on an unspecified date in 2006 the applicant initiated another set of administrative proceedings. Relying on the restitutio in integrum principle, he claimed that the Agency should enforce the above-mentioned judgment of the Supreme Administrative Court, and that his rights as a shareholder of Demirbank should be reinstated. 27. On 27 September 2007, after indicating the administration’s obligation to execute judgments which are enforceable, the Ankara Administrative Court held that the enforcement of the Supreme Administrative Court judgment in the instant case was legally impossible as, following its sale to HSBC, Demirbank had been struck off the commercial register. 28. On 16 March 2009 the Supreme Administrative Court upheld that judgment. The court indicated that the execution of the judgment dated 5 November 2004 could be secured by the return of the supervisory and executive rights to Demirbank’s shareholders, and did not require the restitution of the actual shares. It maintained that even if that was the case, the judgment could not be executed, as Demirbank’s shares had ceased to exist as a result of the loss of its legal personality following its merger with HSBC. 29. The Supreme Administrative Court rejected the applicant’s request for rectification of the judgment on 17 September 2009. 30. Following the annulment of the agreement to sell Demirbank to HSBC (see paragraphs 15-16 above), on 30 April 2006 the applicant applied to the Fund for compensation for the loss of his shares resulting from the bank’s unlawful sale to HSBC. The Fund rejected that request on 15 June 2006. 31. On an unspecified date in 2006, the applicant accordingly brought a third set of proceedings against the Fund, claiming compensation for his lost shares on the basis of the annulment of Demirbank’s sale to HSBC. 32. On 15 April 2008 the Istanbul Administrative Court dismissed the case as out of time, indicating that the sixty-day time-limit for the initiation of administrative proceedings had started running on 31 January 2001, the date on which Demirbank’s equities had been transferred to the Fund’s account at the Stock Exchange. 33. The judgment of the first-instance court was upheld by the Istanbul Regional Administrative Court on 21 January 2009. The decision is final under national law.