CASE OF MELTEX LTD AND MOVSESYAN v. ARMENIA
Violation of Art. 10;Remainder inadmissible;Non-pecuniary damage - award
Alvina Gyulumyan;Elisabet Fura;Ineta Ziemele;Josep Casadevall;Luis López Guerra
4. The applicant company was established in 1995 and has its registered office in Yerevan. The second applicant was born in 1950 and lives in Yerevan. 5. The second applicant first became involved in TV broadcasting in January 1991 when he established the A1+ television company, the first independent television company in Armenia. Initially, A1+ operated as a collector, producer and disseminator of news and information. Information was gathered from and sent to all districts of Armenia, as well as foreign television broadcasting companies via satellite communication. 6. In 1994 A1+ acquired a State television licensed frequency on which it broadcast during assigned periods. According to the second applicant, in 1995 A1+ experienced difficulties with the State regarding its broadcasts: telephone calls were received from public officials on a daily basis threatening to deprive A1+ of its assigned broadcasting hours and criticising the contents of A1+ programmes perceived to be directed against Government policy. A1+ was informed that the broadcast frequencies were granted by the State in order to defend and further State interests rather than to criticise State authorities. During the run-up to the presidential election, A1+ refused to broadcast only pro-Government material. As a result, its State broadcasting operation was suspended in May 1995. 7. In 1995 the second applicant established and registered the applicant company. The applicant company was set up as an independent broadcasting company outside State control. Later the second applicant created the A1+ television company within the structure of the applicant company. On 1 January 1996, in preparation for broadcasting, the applicant company opened a school to train personnel, such as journalists, cameramen and technicians, who were later employed by the applicant company and other television companies. On 25 August 1996 the applicant company started television broadcasting, sharing capacity and content with Moscow “REN” TV, a Russian television company. Over time, the volume of the content produced by the applicant company increased significantly. 8. On 22 January 1997 the applicant company was granted a licence by the then Ministry of Communication (ՀՀ կապի նախարարություն) permitting it to install a television transmitter in Yerevan and to broadcast within the decimetric wave band via its A1+ television channel. The licence was granted for a period of five years. 9. In September 1999 the applicant company established “Hamaspyur”, a network of nine private licensed regional television companies, broadcasting 24 hours a day. According to the applicants, the television network was widely recognised as one of the few independent voices in television broadcasting in Armenia. The primary focus was upon the dissemination of independent, well-processed news information and analysis. The content of the broadcasts included international and domestic news analysis (30%), advertising (32%) and various entertainment programmes. 10. In 2000-2001 legislative changes were introduced in the sphere of television and radio broadcasting. The Television and Radio Broadcasting Act («Հեռուստատեսության և ռադիոյի մասին» ՀՀ օրենք – “the Broadcasting Act”), passed in October 2000, established a new authority, the National Television and Radio Commission (Հեռուստատեսության և ռադիոյի ազգային հանձնաժողով – “the NTRC”), which was entrusted with regulating the licensing and monitoring the activities of private television and radio companies. The NTRC was a public body composed of nine members appointed by the President of Armenia. The Broadcasting Act also introduced a new licensing procedure, according to which a broadcasting licence was granted on the basis of a call for tenders conducted by the NTRC in respect of the list of available frequencies. 11. During 2001 all existing broadcasting licences were temporarily re-registered by the NTRC until the relevant calls for tenders were announced. 12. On 3 September 2001 the NTRC replaced the applicant company's licence with a new licence. The new licence was granted for band 37 and was due to expire on 22 January 2002. 13. On 23 November 2001 the NTRC decided to postpone the call for tenders for band 37 until the adoption of relevant rules and regulations and to permit the applicant company to continue to operate on band 37 for an indefinite period of time until such call for tenders was announced. 14. On 28 December 2001 the National Television and Radio Commission Regulations Act («Հեռուստատեսության և ռադիոյի ազգային հանձնաժողովի կանոնակարգ» ՀՀ օրենք – “the NTRC Regulations Act”) was passed. 15. On 24 January 2002 the NTRC adopted Decision no. 4 approving the Tendering Rules for Television and Radio Broadcasting Licences (ՀՀ հեռուստատեսության և ռադիոյի ազգային հանձնաժողովի որոշում Հեռուստառադիոհաղորդումների հեռարձակման լիցենզավորման մրցույթի կարգը հաստատելու մասին – “the Tendering Rules”). 16. On 19 February 2002 the NTRC announced calls for tenders for various broadcasting frequencies, including band 37. 17. The applicant company and two other companies, Sharm Ltd and Dofin TV Ltd, submitted bids for band 37. The applicant company alleged that Sharm Ltd had never previously operated in the field of television broadcasting and its main focus had been as the organiser of entertainment shows for young people and students. None of its employees had a background in professional journalism and the company had no premises, equipment or financial or technical infrastructure to commence broadcasting at the time of its bid. It further alleged that Dofin TV Ltd had been registered less than a month before the tender process took place and had had no previous experience of any sort in the field of broadcasting. 18. On 1 April 2002, before the winner of the tender process was announced, the applicant company instituted proceedings against the NTRC before the Commercial Court (ՀՀ տնտեսական դատարան), claiming that the NTRC had violated a number of legal provisions when announcing the call for tenders. 19. On 2 April 2002 the NTRC held a points-based vote and recognised Sharm Ltd as the winner of the call for tenders for band 37. 20. On 3 April 2002 the A1+ television channel ceased to broadcast. 21. On 16 April 2002 the applicant company lodged an additional claim with the Commercial Court seeking, inter alia, to annul the decision of 2 April 2002. 22. On 25 April 2002 the Commercial Court rejected the applicant company's claims. 23. On an unspecified date the applicant company lodged an appeal on points of law with the Court of Cassation (ՀՀ վճռաբեկ դատարան). 24. On 14 June 2002 the Court of Cassation dismissed that appeal. Those proceedings are the object of application no. 37780/02 before the Court, examined separately. 25. According to the applicants, due to their lack of broadcasting experience and sufficient resources, Sharm Ltd never managed to commence broadcasting and, after only nine months, sold a controlling interest in the company to another legal entity. 26. On 27 May 2003 the NTRC put out a call for tenders for band 25. The applicant company and another company, Armenia TV, submitted tenders. 27. The bidding was held on 7 June 2003. The bidders were allowed 30 minutes each to make their presentations and a further 15 minutes each were allotted for questions from the NTRC. 28. On 11 June 2003 the NTRC held a points-based vote and recognised Armenia TV as the winner of the tender process. A copy of that decision was sent to the applicant company on 12 June 2003. It stated: “Based on sections 37 and 50 of [the Broadcasting Act], sections 30, 31 and 63 of [the NTRC] Regulations Act and Paragraph 19 of Decision no. 4 of [the NTRC] of 24 January 2002 approving [the Tendering Rules], and taking into account the results of the call for tenders for television broadcasting on decimetric band 25 in the area of Yerevan, [the NTRC] decides (1) to recognise Armenia TV CJSC as the winner of the call for tenders for television broadcasting on decimetric band 25 in the area of Yerevan, and (2) to grant a television broadcasting license to Armenia TV CJSC.” 29. On 24 June 2003 the second applicant submitted a letter to the Head of the NTRC requesting the latter to give reasons for the refusal of its bid. 30. By a letter of 1 July 2003 the NTRC informed the second applicant that: “...when granting a licence through a tendering procedure, [the NTRC] only takes a decision recognising the best organisation as the winner and granting or refusing a broadcasting licence. [The applicant company] was not selected as the best organisation in the call for tenders for band 25.” 31. On 15 October 2002 the NTRC announced a new call for tenders for five other bands. 32. The applicant company submitted bids for three of the five bands, namely bands 31, 39 and 51. 33. On 18 November 2002 the tender process was suspended in connection with court proceedings instituted against the NTRC by some other participants in the call for tenders. 34. On 18 July 2003 the NTRC held points-based votes and recognised the winners of the call for tenders: band 31 was assigned to ArmenAakob TV, band 39 to TV 5 and band 51 to Yerevan TV. The NTRC's decisions were identical in wording to its decision of 11 June 2003. Copies of these decisions were sent to the applicant company on 19 July 2003. 35. On an unspecified date, the second applicant submitted a letter to the Chairman of the NTRC requesting the latter to inform him of the reasons for the refusal of a licence in accordance with section 51 of the Broadcasting Act. The second applicant also requested the NTRC to adopt a decision refusing a licence following its consideration of the applicant company's bid, as required by sections 63 and 67 of the NTRC Regulations Act. He further requested the NTRC to provide the results of the examination of the applicant company's bid, the minutes of its hearings and the separate opinions of its members. 36. In another letter, the second applicant requested the Chairman of the NTRC to provide copies of the bids submitted by the companies which submitted the winning tenders for bands 25, 31, 39 and 51. 37. By two letters, both dated 11 August 2003, the NTRC replied to the second applicant in terms identical to its letter of 1 July 2003. The letters added that the second applicant could familiarise himself with the minutes of the hearings and the relevant bids at the NTRC's office, where he could also make photocopies of the bids with his own technical means. 38. On an unspecified date, the NTRC announced a call for tenders for bands 3 and 63. 39. The applicant company and two other companies, AR TV and Cinemax, submitted bids for both bands. 40. On 13 October 2003 the NTRC held points-based votes and selected the winning tenders: band 3 was assigned to AR TV and band 63 went to Cinemax. The NTRC's decisions were identical in wording to its previous decisions. Copies of these decisions were sent to the applicant company on 14 October 2003. 41. On 21 October 2003 the NTRC replied to the second applicant's request for a reasoned decision in the same manner as before. 42. On 19 November 2003 the NTRC put out a call for tenders for the last vacant band, namely band 56. 43. The applicant company and three other companies submitted their bids. 44. On 29 December 2003 the NTRC held a points-based vote and awarded the licence to Yerkir Media TV. The NTRC's decision was identical in wording to its previous decisions. A copy was sent to the applicant company on 30 December 2003. 45. On 22 January 2004 the NTRC replied to the second applicant's request for a reasoned decision in the same manner as before. 46. On 29 September 2003 the applicant company lodged two applications with the Commercial Court complaining about the NTRC's inaction. In particular, the applicant company submitted that the NTRC was obliged under Section 51 of the Broadcasting Act to notify in writing the reasons for the refusal of a licence in the calls for tenders for band 25 and bands 31, 39 and 51 within ten days after taking the relevant decisions, and under section 63 of the NTRC Regulations Act to take a decision to grant or refuse a licence in respect of each bid submitted. The applicant company sought, inter alia, a declaration that the failure of the NTRC to notify the reasons for the refusals and to take any decision in respect of its bids was unlawful, and an order obliging the NTRC to give reasons for the refusals. 47. On 22 March 2004 the applicant company lodged another application, supplementing the initial two with similar complaints in respect of the calls for tenders for bands 3 and 63 and band 56. 48. On 23 March 2004 the Commercial Court decided to dismiss the applicant company's applications as unfounded. In doing so, having examined the parties' arguments, the Commercial Court found, inter alia, that: “It is understood from section 47 of [the Broadcasting Act], sections 30, 47, 61 and 63 of [the NTRC] Regulations Act, and Paragraphs 18 and 19 of [the Tendering Rules] that [the NTRC] must adopt only one of the decisions envisaged by section 63 of [the NTRC] Regulations Act, and in the cases in question [the NTRC] adopted the decision recognising the winner and granting a television and radio broadcasting licence not in respect of each bid but based on the results of the call for tenders. The above is also directly implied in the wording of section 61 Paragraph 2 of [the NTRC] Regulations Act, according to which decisions to award television and radio broadcasting licences shall be adopted by [the NTRC] based on the results of the tender process and not as a result of the examination of a bid. The law actually distinguishes between cases where licences are awarded on the basis of the results of a tender process and cases where they are awarded without a call for tenders, as in the case of cable broadcasting licences. That being so, [the NTRC], based on the results of the tender process, adopted one of the decisions envisaged by section 63 of [the NTRC] Regulations Act, namely to grant a television and radio broadcasting licence. ... [The NTRC's] decision to grant a licence to the winner of the call for tenders cannot be interpreted other than as a decision refusing a licence to the other participants in the bidding. Following the adoption of a decision by [the NTRC] determining the winner of the call for tenders and awarding a licence to it, there can be no uncertainty for the other participants in the tender process as to whether their bid has or has not been refused, since they are told who the winner is and, consequently, that they have not won. ... It has been established in the court proceedings that [the NTRC], in keeping with the requirements of section 50 of [the Broadcasting Act], section 63 of [the NTRC] Regulations Act and Paragraph 19 of the Rules, adopted decisions granting television broadcasting licences and sent them to [the applicant company] within the period prescribed by section 67 of [the NTRC] Regulations Act and Paragraph 22 of the Rules, as evidenced by [the letters of 12 June, 19 July, 14 October and 30 December 2003]. The above-mentioned letters actually serve as evidence that [the NTRC] informed [the applicant company] that it was not selected as the best organisation in the tender process, and, having been informed of the decisions concerned, [the applicant company] also learnt that it had not won the television broadcasting licences for decimetric bands 25, 31, 39, 51, 56 and 63, and metric band 3 in the Yerevan area, meaning that its bid was rejected, which substantiates the fact that [the applicant company] was informed of the reasons and legal grounds for the above-mentioned decisions of [the NTRC], and in particular that [the NTRC], in adopting its decision, was guided by the requirements of section 50 of [the Broadcasting Act], which establishes the selection criteria for licence holders. Thus, in the light of the above the court concludes that [the second applicant] was informed in a timely and lawful manner about the decisions concerning the results of the television broadcasting licensing tender processes for decimetric bands 25, 31, 39, 51, 56 and 63, and metric band 3 in the Yerevan area, which in substance contained the grounds and reasons for the refusal of [the applicant company's] bids. Consequently, [the NTRC] did not display inaction and did not violate [the applicant company's] rights guaranteed by law, therefore these claims are unfounded and must be dismissed.” 49. On 1 April 2004 the applicant company lodged an appeal on points of law, raising the same arguments as in its initial applications. 50. On 23 April 2004 the Court of Cassation dismissed that appeal, repeating verbatim the relevant findings of the Commercial Court and concluding that: “In such circumstances the arguments raised in the appeal on points of law are unfounded because they are rebutted in detail by the findings contained in the Commercial Court's judgment.” 51. On 11 December 2003 the applicant company instituted proceedings in the Commercial Court against the NTRC, contesting its decision of 13 October 2003 awarding the licence for band 63 to Cinemax Ltd. The applicant company submitted, inter alia, that Cinemax Ltd had provided false, incomplete and misleading information in its tender which the NTRC had ignored when granting the licence. It further submitted that Cinemax Ltd had neither the means nor the intention to broadcast on that frequency and would effectively pass on its broadcasting licence to a company called Armnews TV, which was unregistered as a media entity. 52. In the proceedings before the Commercial Court, the applicant company lodged several requests for the NTRC to be ordered to provide certain documents which it allegedly had in its possession and which, according to the applicant company, were relevant to the outcome of the case, including an agreement signed between Cinemax Ltd and Armnews TV allegedly contained in the former's tender documents. It also requested the court to call Mr S., the head of Armnews TV, as a witness. 53. The Commercial Court examined and dismissed these requests. As to the request to order the provision of certain documents, the Commercial Court found that the applicant company had failed to substantiate its inability to obtain this evidence on its own, as required by the law. Nor was it proven that the evidence in question was actually in the NTRC's possession. As to the request to call Mr S., the Commercial Court found this to be unnecessary because there was sufficient written evidence to decide on the disputed matters. 54. On 21 January 2004 the Commercial Court decided, in a judgment containing two and a half pages of legal reasoning, to reject the applicant company's claims as unfounded. In doing so, having examined the parties' arguments, the Commercial Court found, inter alia, that the relevant tender process had been conducted, and the resulting decision taken, in compliance with the law. 55. On 4 February 2004 the applicant company lodged an appeal on points of law, which it later supplemented on 10 February 2004, raising the same arguments as in its initial application. 56. On 27 February 2004 the Court of Cassation dismissed that appeal, repeating verbatim the relevant findings of the Commercial Court and concluding that: “In such circumstances the arguments raised in the appeal on points of law are unfounded because they are rebutted in detail by the findings contained in the Commercial Court's judgment.” 57. As to the dismissal of the applicant company's requests, the Court of Cassation found that the Commercial Court had examined and dismissed them in reasoned decisions, and that there was therefore no issue of equality of arms. 58. The relevant provisions of the Code, as in force at the material time, read as follows: “Unlawful acts of public authorities, local self-government bodies and their officials can be annulled or their actions (inaction) can be contested (hereafter, annulling the unlawful act) if the act in question contradicts the law and if there is evidence that the applicant's rights and (or) freedoms guaranteed by the Armenian Constitution and laws have been violated.” 59. The relevant provisions of the Broadcasting Act, as in force at the material time, read as follows: “In Armenia television and radio broadcasting shall be conducted on the basis of a licence.” “Physical or legal persons can be licensed to operate only one television and radio company or one television and/or one radio company having on-air broadcasting in the same coverage area.” “The National Television and Radio Commission (hereafter, the National Commission) is an independent body with the status of a public agency whose activity is regulated by this law, its regulations and the legislation of Armenia. The National Commission deals with licensing and monitoring of only private television and radio companies (television companies or radio companies). The National Commission: (a) shall allocate broadcasting frequencies on a public and competitive basis and ensure the publication of complete information on the results of a call for tenders; ... (c) shall grant licences...” “The National Commission shall have nine members appointed by the President of Armenia for a term of six years, with the exception of the first composition...” “...The Commission shall be composed of eight members.” “The National Commission is an independent regulatory public authority half of whose members shall be elected by the National Assembly for a term of six years and the other half appointed by the President of the Republic for a term of six years with the exception of the first composition.”] “A licence shall be the only legal basis authorising the broadcast of television and radio programmes and the use of a particular frequency or a cable network for broadcasting in the territory of Armenia, except for the cases prescribed by law. A television and radio broadcasting licence shall be granted for a particular available frequency on the basis of a call for tenders...” “When selecting the licence-holder, the National Commission shall take into account: (a) the predominance of programmes produced in-house; (b) the predominance of programmes produced in Armenia; (c) the technical and financial capacity of the applicant; and (d) the professional level of the staff.” “...The National Commission shall give proper reasons for its decisions to select a licence-holder, refuse a licence or invalidate a licence”] “A licence shall not be granted if: (a) the applicant cannot be a licence-holder pursuant to this law; (b) the information contained in the bid is inaccurate; or (c) the technical capacity for television and radio broadcasting is lacking or the declared technical capacity is insufficient. An applicant shall be informed in writing of the reasons for the refusal of a licence within ten days from the date of the decision. The refusal of a licence can be contested before the courts.” “...A licence to broadcast television and radio programmes or to produce and broadcast [such programmes] shall be granted to television and radio companies: (a) ...; (b) for a period of five years for on-air television and radio broadcasting.” 60. The relevant provisions of the NTRC Regulations Act read as follows: “The Commission shall define the procedure, conditions and time-limits of the tender process for television and radio broadcasting licences. Two months before the expiry of a television and radio broadcasting licence or once a vacant (unassigned) frequency becomes available, the Commission shall announce a call for tenders for a licence to broadcast on that frequency.” “The Commission shall: ... (c) grant licences...” “... In order to grant a broadcasting licence, the Commission, at its meeting and within the period prescribed by the tendering rules, shall adopt a decision on the basis of the results of a call for tenders. The Commission shall publish information on the place, time and agenda of its meeting in the press not later than five days before the date of the meeting.” “Following the consideration of a bid, the Commission shall adopt one of the following decisions: (a) to grant a licence; or (b) to refuse a licence.” “A copy of the decision granting or refusing a licence shall be duly sent to the applicant within ten days from its adoption.” 61. The relevant provisions of the Tendering Rules, as in force at the material time, read as follows: “18. The Commission shall hold an open point-based vote in the order in which the bids are examined. The best organisation shall be selected according to the results of the point-based vote. 19. The Commission shall adopt a decision recognising the best organisation as the winner and granting a television and radio broadcasting licence. 20. The Commission shall deliver its decision immediately after its adoption. ... 22. A copy of the Commission's decision shall be duly sent to the participants in the tender process within ten days after its adoption.” 62. On 20 December 2000 the Committee of Ministers of the Council of Europe adopted Recommendation Rec(2000)23 to Member States on the independence and functions of regulatory authorities for the broadcasting sector, in which it recommended that the Member States, inter alia, “include provisions in their legislation and measures in their policies entrusting the regulatory authorities for the broadcasting sector with powers which enable them to fulfil their missions, as prescribed by national law, in an effective, independent and transparent manner, in accordance with the guidelines set out in the appendix to this recommendation”. 63. The guidelines appended to the recommendation, provide, as relevant: “... 3. The rules governing regulatory authorities for the broadcasting sector, especially their membership, are a key element of their independence. Therefore, they should be defined so as to protect them against any interference, in particular by political forces or economic interests. 4. For this purpose, specific rules should be defined as regards incompatibilities in order to avoid that: – regulatory authorities are under the influence of political power; – members of regulatory authorities exercise functions or hold interests in enterprises or other organisations in the media or related sectors, which might lead to a conflict of interest in connection with membership of the regulatory authority. 5. Furthermore, rules should guarantee that the members of these authorities: – are appointed in a democratic and transparent manner; – may not receive any mandate or take any instructions from any person or body; – do not make any statement or undertake any action which may prejudice the independence of their functions and do not take any advantage of them. ... 13. One of the essential tasks of regulatory authorities in the broadcasting sector is normally the granting of broadcasting licences. The basic conditions and criteria governing the granting and renewal of broadcasting licences should be clearly defined in the law. 14. The regulations governing the broadcasting licensing procedure should be clear and precise and should be applied in an open, transparent and impartial manner. The decisions made by the regulatory authorities in this context should be subject to adequate publicity. ... 27. All decisions taken and regulations adopted by the regulatory authorities should be: – duly reasoned, in accordance with national law; – open to review by the competent jurisdictions according to national law; – made available to the public.” 64. The relevant extracts of this Declaration provide as follows: “13. In most Council of Europe member states, the members of regulatory authorities are appointed by the parliament or by the head of state at the proposal of parliament. In some member states, in order to ensure that the membership of the regulatory authority reflects the country's social and political diversity, part or all of the members are nominated by non-governmental groups which are considered to be representative of society. Further, in a few member states, the law provides objective selection criteria for the appointment of members. By contrast, in a number of countries, members are appointed by sole decision of one state authority, e.g. the head of state or a state department, often without clearly specified selection criteria. The appointment of members of regulatory authorities by the head of state and/or parliament has sometimes been criticised advancing that, in such cases, membership would represent or reproduce political power structures. 14. Concerns have often been raised that the nominating or appointing bodies could exert pressure on the members after their appointment. In fact, in some member states, the members of regulatory authorities are frequently accused of acting on behalf of the state body that designated them or political formation behind the designating or appointing authority.” 65. In paragraph 19 of this Resolution the PACE stated: “As regards freedom of expression and media pluralism, the Assembly is concerned at developments in the audiovisual media in Armenia and expresses serious doubts as to pluralism in the electronic media, regretting in particular that the vagueness of the law in force has resulted in the National Television and Radio Commission being given outright discretionary powers in the award of broadcasting licences, in particular as regards the television channel A1+.”