AS TO THE ADMISSIBILITY OF
Application No. 14807/89
by AGROTEXIM HELLAS S.A., BIOTEX S.A.,
HYMOFIX HELLAS S.A., KYKLADIKI S.A.,
MEPEX S.A. and TEXEMA S.A.
against Greece
The European Commission of Human Rights sitting in private on
12 February 1992, the following members being present:
MM.C.A. NØRGAARD, President
J.A. FROWEIN
F. ERMACORA
G. SPERDUTI
G. JÖRUNDSSON
A.S. GÖZÜBÜYÜK
J.-C. SOYER
H. DANELIUS
Mrs.G. H. THUNE
SirBasil HALL
MM.F. MARTINEZ RUIZ
C.L. ROZAKIS
Mrs.J. LIDDY
MM.L. LOUCAIDES
M.P. PELLONPÄÄ
Mr. J. RAYMOND, Deputy Secretary to the Commission
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 29 November 1988
by AGROTEXIM HELLAS S.A., BIOTEX S.A., HYMOFIX HELLAS S.A., KYKLADIKI
S.A., MEPEX S.A. and TEXEMA S.A., against Greece and registered on 21
March 1989 under file No. 14807/89;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having regard to the observations submitted by the respondent
Government on 16 May 1990 and to the applicants' observations in reply
presented on 4 July 1990;
Having regard to the parties' submissions in view of and at the
oral hearing on the admissibility and merits of the application;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case as submitted by the parties can be
summarised as follows.
The applicant companies are shareholders of the company "Karolos
Fix Brewery S.A." registered in Athens. They own 295,783 of the total
576,000 shares of the said company, i.e. 51.35 %. In the proceedings
before the Commission they were initially represented by Mr. Prodromos
Dagtoglou, Attorney at Law, and subsequently by Mr.Panagiotis
Bernitsas, Attorney at Law.
In 1976 the Karolos Fix Brewery S.A. decided to negotiate
development projects for two of its properties in Syngrou Avenue and
Patission Road in Athens, where two of its discontinued factories were
situated. The company expected these projects to enable it to overcome
its financial difficulties. The negociations concerned in particular
a project for building a complex of offices and shops on the Syngrou
Avenue plot, which project appeared to be supported by the National
Bank of Greece, a State controlled bank and the main creditor of the
company.
On 9 September 1979 the Municipal Council of the City of Athens
(Dioikitiko Symvoulio Dimou Athineon), by its decision (praxi) 595/1979
concerning town planning, designated the property in Patission Road as
an area to be turned into a public park. A similar decision was issued
on 28 April 1980 (No. 355/1980) with regard to the property in Syngrou
Avenue. As a result of the above the entreprises negotiating with the
company retracted. Moreover, the National Bank of Greece stopped the
financing of the company's projects.
On 22 February 1981 the Municipality of Athens occupied the site
in Syngrou Avenue and turned part of it into a public park. Signposts
were also erected with the words "Area to be expropriated". Similar
signposts were placed later on the site in Patission Road. The company
requested in vain that these signposts be removed. The Mayor of Athens
declared in speeches and to the press that the said signposts
emphasised the will of the City of Athens to acquire the land.
Upon request by the company, the Prosecutor of the Athens Court
of Appeal (Eisageleas ton en Athinais Efeton), ruling provisionally,
on the occupation of the Syngrou Avenue plot, ordered, on 3 November
1981, the Municipality of Athens and any other third party to cease the
occupation of the litigious site. However the occupation did not cease.
On 18 December 1982 the company appealed against the
Municipality's implicit refusal of a building permit for the property
on Patission Road. This appeal is now pending before the Council of
State (Symvoulio tis Epikrateias).
The company's commercial operations went on declining. On 10
August 1983 the General Meeting of the Shareholders decided the winding
up of the company and appointed a liquidator.
On 8 August and 9 November 1983 the company, through its
liquidator appointed by the General Meeting of the Shareholders, lodged
with the First Instance Civil Court of Athens (Polymeles Protodikeio)
two actions against the Greek State, the Municipality of Athens and the
Mayor of Athens personally. It claimed compensation for the damage it
had suffered from the activities and declarations of the Municipality
and of the Mayor.
On 8 November 1983 the Minister of National Economy ordered by
Decree No. 1802/1983 the winding up of the company under the provisions
of Articles 7 para. 3 and 9 Law 1386/1983 on "ailing" companies. As a
result of this decision the company's administration was taken over by
the State agency "Organisation for the Redressment of Undertakings"
("Organismos Anasyngrotissis Epicheirisseon", OAE). On 28 June 1984 two
liquidators were appointed by decision (No. 6552/1984) of the Athens
Court of Appeal (Efeteio Athinon) which replaced the liquidator
appointed by the General Meeting of the Shareholders. The Court of
Athens found in particular that, having regard to the importance of the
company's property and of the amount of its debts, the appointment of
two liquidators, one on the side of the National Bank of Greece - the
main creditor of the company - and one on the side of the company
itself was required. The Court of Appeal ruled that the liquidators
should act in common.
On 21 November 1983 the Municipal Council of the City of Athens
decided to maintain its projects as to the property on Syngrou Avenue.
However, no expropriation proceedings started.
On 13 July 1984 the First Instance Court (Polymeles Protodikeio)
of Athens gave two judgments (Nos 10848/1984 and 10849/1984) concerning
the two civil actions lodged by the company in August and November
1983. The court found that the various actions complained of could not
be regarded as final administrative acts capable of causing damage to
the company's property rights. The liquidators appointed on 28 June
1984 did not pursue any remedies against the above judgments of the
First Instance Court.
In an interview published on 11 November 1985 the Mayor of Athens
confirmed that the placement and maintainance of the signposts
indicated the City's will to acquire these properties. The Mayor
mentioned that representatives of foreign companies had negotiated
projects for the building of a multi-purpose commercial centre and
asked for building permits. He had refused and the Fix company had
sued him personally claiming compensation for the damage it had
suffered.
On 18 July 1986 two of the applicant shareholders, namely TEXEMA
S.A. and KYKLADIKI S.A., summoned the liquidators to take action in
order to safeguard the value of the properties.
In March 1988 a building prohibition concerning the company's
property was enacted by the administrative board and published on 24
March 1988 in the Official Gazette (FEK 254/td/24.3.88).
A subsequent decision (No. 1317/88) provided that expropriation
proceedings should be instituted. However, on 26 September 1988 the
Prefecture of Athens (Nomarchia Athinon), which was the supervising
authority of the Municipality of Athens, declared this decision null
and void.
On 8 June 1988 the liquidators requested the City to remove the
signposts.
By letter of 5 October 1988 the Mayor answered as follows:
"The Municipality of Athens has aimed for years at acquiring the
areas of the old factories in order to give them to the public
use for the benefit of the city and its inhabitants. For this
reason the Municipal Council has passed since 1979 a series of
resolutions.
...
In view of the above, the desire of the Municipality of Athens
to acquire and develop the areas is apparent and it is this very
desire that is indicated by the signposts which have been
placed."
On 8 April 1989 public work services of the Municipality of
Athens occupied the company's plot in Patission Road and demolished the
walls of the old factory building.
The liquidators requested the Prosecutor of the Athens Court to
order provisional mesures against the occupation of the plot by the
Municipality of Athens. On 9 May 1989 the Prosecutor ordered the
Municipality of Athens to restore the previous status of the site and
prohibited any future disturbance. This order was confirmed by the
Prosecutor of the Court of Appeal on 22 November 1989. However the
situation remained unchanged.
On 23 October 1989 the Municipality of Athens decided to amend
the town planning concerning the property in Patission Road. The
relevant decision was published in the Official Gazette on 5 December
1989. As regards the Syngrou Avenue property the Municipality decided,
besides the amendment of the town planning, to expropriate that land.
This decision was published in the Official Gazette on 9 November 1989.
The company appealed, through its liquidators, to the Council of State
against the decisions relating to the property in Syngrou Avenue. No
appeal was lodged against the decision concerning the Patission Road
land.
On 21 October 1991 the Court of Appeal replaced the two
liquidators by another liquidator, representing the interests of the
Bank of Greece.
COMPLAINTS
The applicants submit that the activities of the Municipality of
Athens in the last ten years hinder the exercise of their right to
peaceful enjoyment of their possessions as shareholders of the Karolos
Fix Brewery S.A. Referring to the Sporrong and Lönnroth case (Eur.
Court H.R. judgment of 23.9.1982, Series A no. 52), they submit that
they are kept in a complete uncertainty as to the fate of their
property over a period of ten years. In this respect the applicants
note that the Karolos Fix Brewery S.A. is since 1983 administered by
liquidators and that they are not entitled to participate in the
company's administration. They consider, nevertheless, that they have
a legitimate interest in seeking legal protection, since the measures
affecting the company's property also affect the value of their own
shares.
The applicants submit that as a result of the non-exploitation
of the company's property in the last ten years, its debt increased and
this was reflected in the decline of its shares. The applicants submit
that since 1979 the share value of the Karolos Fix Brewery S.A. slid
from 1,200 to 40 Drachmas.
The applicants moreover note that pursuant to the constant
case-law of the Court of Cassation (Areios Pagos) the protection of
property under Greek law is confined to rights in rem, excluding the
rights of shareholders. They submit that a complaint to the Greek
courts that their property rights as shareholders are violated by the
situation created by the activities of the City of Athens would be
futile.
The applicants invoke Article 1 of Protocol No. 1 and Articles
6 and 13 of the Convention.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 29 November 1988 and registered
on 21 March 1989.
On 13 February 1990 the Commission decided to bring the
application to the notice of the respondent Government and to invite
them to submit written observations on the admissibility and merits of
the application.
The Government submitted their observations on 16 May 1990.
The applicants submitted observations in reply on 4 July 1990.
On 8 July 1991 the Commission decided to invite the parties to
a hearing on the admissibility and merits of the application. At the
hearing, which took place on 12 February 1992, the parties were
represented as follows:
For the Government
Mr. Fokion Georgakopoulos, Assistant Legal Adviser of the Legal
Council of the State, acting
Agent of the Government
Mr. Vassilios Kontolaimos, Assistant Legal Adviser of the Legal
Council of the State, Counsel
For the applicant
Mr. Panayiotis Bernitsas, Lawyer at the Athens Bar,
Representative of the applicants
Mrs. Domna Mirasyesi, Lawyer at the Athens Bar,
Counsel
Mr. George Tsironis, Ex-director general of the
Karolos Fix Brewery S.A., Counsel
THE LAW
The applicant companies complain, in their capacity of
shareholders of the Karolos Fix Brewery S.A., that the various measures
taken by the Municipality of Athens constitute an interference with
their right to peaceful enjoyment of their possessions contrary to
Article 1 of Protocol No 1 (P1-1) which reads as follows:
1. Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be
deprived of his possessions except in the public interest
and subject to the conditions provided for by law and by
the general principles of international law.
2. The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it
deems necessary to control the use of property in
accordance with the general interest or to secure the
payment of taxes or other contributions or penalties.
Furthermore the applicants allege that the Greek legal order
prevents them from having access to a court in order to seek judicial
protection of their rights as shareholders. They are also deprived of
any remedy against the acts or omissions complained of which allegedly
violate their rights under Article 1 of Protocol No 1 (P1-1). The
applicants invoke in this respect Articles 6 para. 1 and 13
(Art. 6-1, 13) of the Convention.
i) As to the Commission's competence ratione temporis
The Government first submit that the measures the applicants
complain of were taken before 20 November 1985, the date on which the
Commission's competence to examine individual applications against
Greece took effect. They point out in particular that the public
declaration of the Municipality's intention to expropriate the Karolos
Fix company's land was made in 1979 and that the occupation of part of
the Syngrou Avenue property and the placement of the litigious
signposts took place in 1981. The Government submit that the
application is incompatible ratione temporis with the provisions of the
Convention.
The Commission notes the following:
It is true that the applicants' complaints refer to a series of
measures which originated in 1979 and 1981. Some of the decisions
ordering these measures are, as such, outside the Commission's
competence ratione temporis, since they were taken before the above-
mentioned date.
However, the Commission notes that the measures complained of
continued after 20 November 1985. It emphasises in this respect that
the applicants do not complain of any "instant" effect of these
measures on their rights but of a continuing situation created by the
said measures and still existing. Moreover, the repeated public
declarations of the intention to expropriate, the maintainance of the
signposts with the indication "Area to be expropriated" and the
occupation of the plots occurred or persisted after 20 November 1985.
Consequently, the Commission finds that it is competent to
examine the application and that the Government's objection in this
respect must be rejected.
ii) As to the question whether the applicants can claim to be
"victims" of a violation
The Government submit that the applicant companies cannot claim
to be victims of the measures affecting the Karolos Fix Brewery S.A.
They observe that the natural or legal persons which are shareholders
of a company do not "own" the company's property, which belongs to and
is administered by the company itself. The legal person of the company
being clearly distinct from its shareholders, it is not possible to
consider that measures which allegedly affect the property of the
Karolos Fix Brewery S.A. also affect the property rights of the
shareholders. The fact that the interests of the shareholders may be
affected by the situation of the company does not enable them to claim
that their personal property rights are directly interfered with. The
effect of the measures taken with regard to the property of the company
on the rights of the shareholders is indirect and distant and does not
suffice to enable them to claim that they themselves are "victims".
The Government note in this respect that the Commission's case-
law clearly indicates that minority shareholders cannot complain of the
measures affecting the company. Moreover, the cases in which the
situation of a company has been taken into account in order to examine
its effects on the rights of the shareholders, were cases in which the
applicant shareholder held a substantial majority and was also the
manager and the general director of the company. The applicants in the
present case, taken separately, are minority shareholders and are
excluded from the administration of the company since 1983. Moreover,
they could in their capacity as shareholders request the liquidators
of the company to take action against the various measures complained
of. They could also lodge an action against the liquidators insofar as
the latter's alleged inactivity would have damaged their own rights.
Having omitted to take such steps the shareholders cannot claim that
they suffered damage from the measures taken by the Municipality of
Athens. The devaluation of their shares is not established and,
assuming that such devaluation actually took place, it is not
established that it was due to the measures complained of.
The applicants contend that Article 25 (Art. 25) of the
Convention, as it has been interpreted by the organs of the Convention,
enables them to bring an application before the Commission and to
complain of the measures taken against the company. They insist on the
fact that they detain the majority of the shares of the Karolos Fix
Brewery S.A. and that they represent the interests of the Karolos Fix
company.
The applicants also emphasise that the company is under
liquidation and that its legal personality is maintained only for the
purpose of its winding up. The rights of the shareholders are
consequently limited. Moreover, the special liquidation regime to
which the company is submitted leads to an even further limitation of
their rights.
The Commission recalls that the term "victim" in Article 25
(Art. 25) of the Convention denotes the person directly affected by the
act or omission which is at issue (cf. Eur. Court H.R., Eckle judgment
of 15 July 1982, Series A No 51, p. 30, para. 66). The Commission has
held that an individual who held a substantial majority shareholding
in a company could, under certain circumstances, claim to be victim of
measures directed against the company (No 1706/62, Dec. 4.10.66,
Collection 21, p. 26 and No 7598/76 Kaplan v. United Kingdom, Comm.
Report 17.7.80, D.R. 21 pp. 5, 23). In the case of Yarrow and others
(No 9266/81, Dec. 28.1.83, D.R. 30, pp. 155, 185) the Commission held
that the applicants, who did not hold a majority or controlling
interest in the company in question, were not directly and personally
affected by the nationalisation of the company, although this measure
undoubtedly affected the value of their shares. In that case the
Commission found that the applicants could not claim to be victims of
the measure of nationalisation.
The Commission finds that, the question whether a shareholder may
claim to be victim of measures affecting a company cannot be determined
on the sole criterion of whether the shareholder detains the majority
of the company shares. This element is an objective and important
indication but other elements may also be relevant in view of the
circumstances of each particular case. In this respect the Commission
recalls that it has previously taken into account the fact that an
applicant shareholder was carrying out his own business through the
medium of the company and that he had a personal interest in the
subject-matter of the complaint (cf. above-mentioned Applications No
1706/62 and 9266/81). It has also considered whether it was open to the
company itself, being the direct victim, to lodge an application with
the Commission.
In the present case the Commission notes that, although none of
the applicants separately holds the majority of the company's shares,
the group of the applicant companies holds 51,35% of the Karolos Fix
Brewery S.A. shares. It is moreover apparent that the applicant
companies have an interest in the subject-matter of the application.
Furthermore, in the Commission's view, the circumstance that the
company is under liquidation and subject to the special regime of
ailing enterprises is of particular relevance. The Commission notes
in this respect that as a result of the decision of the competent
Minister in 1983 the company has been since administered by the State
agency OAE and subsequently by liquidators and that the shareholders'
rights to participate in the administration and representation of the
company have ceased. The Commission also takes into account the fact
that one of the two liquidators initially appointed by the Court of
Appeal represented the interests of the National Bank of Greece, a
State controlled bank. It also notes that, according to the decision
of the Court of Appeal, the two liquidators should act in common.
Finally, the Commission notes that since 21 October 1991 the Court of
Appeal replaced the two liquidators by a new single liquidator
representing the interests of the National Bank of Greece.
The Commission finds that the company Karolos Fix Brewery S.A.,
has been essentially under effective State control since 1983.
Consequently, this company cannot reasonably be expected to lodge an
application with the Commission against the Greek State. In these
specific circumstances, the Commission finds that the applicant
shareholders are entitled, by lifting the veil of the company's legal
personality, to claim that they are victims of the measures affecting
the company's property, within the meaning of Article 25 para. 1
(Art. 25-1) of the Convention. In this respect the Commission recalls
that not only substantive rights under Section I of the Convention or
its Protocols but also Article 25 (Art. 25) of the Convention, which
confers upon individuals and non-governmental organisations a right of
a procedural nature, must be interpreted as guaranteeing rights which
are practical and effective as opposed to theoretical and illusory (cf.
Eur. Court H.R., Cruz Varas and Others v. Sweden judgment of 20 March
1991, Series A No 201, p.36, para. 99).
It follows that the Government's objection on this point must be
rejected.
iii) As to the requirements of Article 26 (Art. 26) of the
Convention
The Government furthermore object that the applicants have not
exhausted the domestic remedies at their disposal and that they have
not complied with the six months rule. The Government submit that the
application should be declared inadmissible on this ground.
In particular the Government indicate that it was open to any
person who could claim to be injured by the acts or omissions of the
Municipality of Athens to introduce a recourse before the
administrative tribunal seeking the annulment of the allegedly illegal
acts or omissions. It was further open to any injured party to claim
compensation for any damage suffered as a result of the measures
complained of. Actions before civil tribunals against the alleged
interferences with the company's property rights could also be
introduced on the basis of the relevant provisions of the Civil Code.
The Government emphasise that on various occasions the company sought
judicial protection. Thus, in 1983 it claimed damages for the torts due
to the activities of the Municipality of Athens and in 1989 it sought
the annulment of the decisions of the Municipal Council modifying the
town planning and providing for the expropriation of the Syngrou Avenue
property. However, these actions were discontinued or are still pending
before the domestic courts.
The Government conclude that the domestic remedies existing under
Greek law have not been exhausted according to the generally recognised
rules of international law.
Moreover, the Government submit that the applicants, in their
capacity as shareholders, could take various steps, according to the
law on commercial societies, in order to oblige the liquidators to
react against the measures taken by the Municipality of Athens. The
Government refer in particular to the fact that it was open to the
applicant shareholders to ask the Court of Appeal to replace the
allegedly inactive liquidators.
Finally, the Government submit that if it were to be found that
no remedies were available against the measures complained of, the
applicants' complaints concerning acts or events which occurred more
than six months before the introduction of the application should be
declared to have been submitted out of time.
The applicants submit that no effective remedy was available to
them under Greek law.
The Commission finds that the Government have not shown that the
applicants could, in their capacity as shareholders, exercise the
rights of the Karolos Fix Brewery S.A. and pursue the remedies which
were available, under Greek law, to the said company, i.e. the legal
person directly affected by the litigious measures. The Commission
finds that according to the generally recognised rules of international
law, it should not take into consideration measures which were not open
to the applicants themselves.
Moreover, the Commission finds that the steps the shareholders
could take against the liquidators are not to be considered as
effective remedies, according to the generally recognised rules of
international law. It recalls in this respect that only those remedies
which are capable of remedying the criticised state of affairs
directly, and not merely indirectly, are to be considered as effective
(No 10092/82, Dec. 5.10.84, D.R. 40, p.118). In the present case any
action against the liquidators would be incapable of directly
redressing the situation created by the measures taken by the
Municipality of Athens.
Finally, the Commission has also had regard to the fact that the
orders issued by the Athens prosecutor against the Municipality for
cessation of the trespass of the land in question remained ineffective
and inoperative.
It follows that the Government's objections as to the exhaustion
of domestic remedies must be rejected.
As regards the Government's objection that part of the
application has been introduced out of time, the Commission refers to
its considerations under point i) above. It recalls that the
applicants' complaints relate to a continuing situation and that in
such circumstances the six months period runs from the termination of
the situation concerned (No. 6852/74, Dec. 5.12.78 D.R. 15, p. 5).
Having regard to the fact that the situation complained of is still
continuing, the Commission finds that the Government's objection must
be rejected.
iv) As regards the merits of the application
As regards the merits of the applicants' complaint, the
Government submit that legal procedures have been initiated for the
purpose of expropriating the Karolos Fix Brewery S.A.'s land. Until
termination of these procedures the property of the land remains with
the company. Moreover, the Government observe that the applicants have
not shown that the devaluation, if any, of the value of their shares
is due to the measures taken by the Municipality of Athens.
The Government conclude that in these circumstances no
interference with the applicants' rights can be found.
As regards the merits of the complaints under Articles 6 and 13
(Art. 6, 13) of the Convention, the Government deny that the applicants
are deprived of effective judicial protection.
The applicants submit that the measures complained of constitute
serious hindrances in the exercise of their right to peaceful enjoyment
of their possessions. They are not in the public interest, they have
no legal basis in Greek or international law and are, in any event,
disproportionate to the possible aims pursued.
The applicants conclude that their rights under Article 1 of
Protocol No 1 (P1-1) have been violated.
Moreover, they reiterate their complaints under Articles 6 and
13 (Art. 6, 13) of the Convention.
The Commission examined the parties' submissions and arguments.
It finds that the application raises complex issues of fact and law and
that it cannot be regarded as manifestly ill founded.
The application must, therefore, be declared admissible, no other
ground for declaring it inadmissible having been established.
For these reasons, the Commission by majority
DECLARES THE APPLICATION ADMISSIBLE,
without prejudging the merits.
Deputy Secretary to the Commission President of the Commission
(J. RAYMOND) (C.A. NØRGAARD)
Full & Egal Universal Law Academy