ASOCIAȚIA PAS BERE TIMIȘOREANA AND OTHERS v. ROMANIA

FOURTH SECTION

DECISION

Application no. 23716/04
ASOCIAȚIA PAS BERE TIMIȘOREANA AND OTHERS
against Romania

The European Court of Human Rights (Fourth Section), sitting on 27 June 2017 as a Committee composed of:

Paulo Pinto de Albuquerque, President,
Egidijus Kūris,
Iulia Motoc, judges,
and Andrea Tamietti, Deputy Section Registrar,

Having regard to the above application lodged on 7 April 2004,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,

Having deliberated, decides as follows:

THE FACTS

1. The present application was lodged by two Romanian nationals, Mr Ioan Tîrnoveanu (“the first applicant”) and Mr Mihai Kőműves (“the second applicant”), and by a Romanian association, Pas Bere Timişoreana (“the applicant association”), on 7 April 2004.

2. The Romanian Government (“the Government”) were represented by their Agent, Ms C. Brumar from the Ministry of Foreign Affairs.

A. The circumstances of the case

3. The facts of the case, as submitted by the parties, may be summarised as follows.

1. Factual background

4. The applicant association was founded on 7 March 1995. Its main purpose was to acquire the shares of the State-owned company Bere Timişoreana (“the company”) and to distribute them to the company’s employees, in the context of the privatisation of the company. At that time, the applicant association became the main shareholder of the company, holding 70% of the shares.

5. On 13 September 1996 the Timişoara District Court validated the amendments to the articles of association of the applicant association, setting out that the composition of its supervisory board was set at seven members, including the first and second applicants; the first applicant was also appointed vice-president of the applicant association.

6. On 20 October 1997, during a general meeting of the applicant association’s shareholders, various disputes concerning the composition of the supervisory board arose, leading to the voting of the first and second applicants out of office as members of the supervisory board, and to the election of a new board run by a new president, D.B.

7. These decisions were contested by the first and second applicants in subsequent proceedings and – as it appears from the case file – they have been invalidated by the domestic courts, as follows: the appointment of D.B. as president was invalidated by the final judgment of 20 January 2000 given by the Timişoara Court of Appeal; the remainder of the decisions taken were invalidated by the Timiş County Court’s judgment of 21 February 2003, which became final at a later unspecified date.

8. Certain transactions concerning the distribution and the transmission of the applicant association’s shares to third parties, allegedly to the disadvantage of the shareholders, were approved and signed off on in
1999-2001 by the applicant association’s supervisory board, presided over by D.B. As a consequence, a new structure of the company’s shareholders was registered in the Companies’ Register on 14 March 2001. It appears that this registration became final at some point in 2001.

2. Proceedings terminated by the judgment given on 30 October 2003

9. On 28 January 2000 the first and second applicants lodged civil proceedings against, respectively, D.B. as president of the applicant association, and the company. Claiming to be the lawful representatives of the applicant association, the first and second applicants argued that the supervisory board presided over by D.B. was unlawful in view of the findings of the judgment of 20 January 2000 (see paragraph 7 above) and consequently asked that the management of the applicant association, as well as its legal headquarters, be handed over to them (“predarea conducerii asociaţiei şi a sediului acesteia”). They requested that the defendants be obliged to pay them punitive damages (daune cominatorii) for each day of delay in the enforcement of the judgment that would allow their claims.

10. These claims were dismissed by the Timiş County Court on 3 July 2001. The first and second applicants, mentioning that they had acted in their capacity as respectively vice-president and a member of the supervisory board of the applicant association, appealed against this judgment.

11. Their appeal was allowed on 6 November 2001 by the Timişoara Court of Appeal, by a majority of two; the court held that the supervisory board, presided over by D.B., was unlawful, as already found by the court on 20 January 2000 (see paragraph 7 above). The court further held that it could not take into consideration the judgment of 19 April 2001 granting the application that the applicant association be struck off the Register of Associations, in so far as it was not yet final (see paragraph 18 below). The court also granted the punitive damages requested by the first and second applicants, set at an amount of 10,000,000 Romanian lei daily until the judgment was fully enforced.

12. The dissenting judge (Judge R.O.) held that the appeal was inadmissible, in view of the fact that the appellant, namely the applicant association, did not have legal standing in the proceedings as it had not been a party from the outset. Judge R.O. further held that the first and second applicants could not be regarded as having acted on behalf of the applicant association, in so far as they had not provided any document proving their mandate; it was clear that they had acted in their own names in the proceedings. Moreover, the dissenting judge considered that in view of the fact that the judgment of 19 April 2001 (see paragraph 18 below) had not been appealed against, it had become final, meaning that the applicant association was to be considered liquidated and struck off the Register of Associations.

13. On 30 October 2003 the Supreme Court of Justice allowed a prior extraordinary appeal lodged by the Prosecutor General on 7 November 2002 at the request of the company, and quashed the final judgment of 6 November 2001 (see paragraph 11 above). The court held that when the final judgment was given, because the applicant association had been struck off the Register of associations, the parties in the trial had no longer had standing to pursue the proceedings.

14. The Supreme Court also held to be true that there was no evidence in the file to prove that the first and second applicants had acted as representatives of the applicant association, nor that the applicant association had ever been a party to the proceedings. However, these considerations were of a subsidiary nature in view of the crux of the case, which was the fact that at the time of the quashed judgment, the applicant association had lacked legal personality and therefore it had not had legal standing; nor, consequently, had the first and second applicants had standing to represent a non-existent association.

3. Liquidation and striking off of the applicant association

15. Pending the above-mentioned proceedings, on 2 March 2001 the applicant association’s supervisory board, with D.B. as its president, decided to liquidate the applicant association, in so far as the purpose for which it had been constituted, namely the distribution of shares, had been accomplished. A liquidator was appointed thereto, who drew up a report concerning the applicant association’s financial situation.

16. This decision was contested by the first and second applicants, who claimed that the supervisory board had not been lawfully constituted at the time and that the decision to liquidate the applicant association should have been taken by the shareholders in a general meeting. The final decision of 12 March 2003 of the Timişoara Court of Appeal allowed these claims, quashing the decision of 2 March 2001.

17. However, in the meantime, relying on, inter alia, the decision of 2 March 2001 and on the financial report drawn up by the liquidator (see paragraph 15 above), the applicant association applied to have the court take note of the liquidation procedure and to strike it off the Register of Associations.

18. On 19 April 2001 this application was granted by the Timişoara District Court in a non-contentious procedure; the court found that all the legal and substantial requirements for the liquidation of the applicant association had been fulfilled, ordering that the applicant association be struck off the Register of Associations. An excerpt of the Register of Associations reveals that the striking out decision became final on 9 November 2004.

4. Other proceedings initiated by the first and second applicant

19. On 16 May 2002, following a prior claim regarding payment of punitive damages granted by the judgment of 6 November 2001, the Timişoara District Court ruled against the first and second applicants (see paragraph 11 above); the court held that those damages could not be paid until they were properly determined in the course of another set of proceedings, in which the courts would estimate whether concrete harm had been substantiated by the creditor in connection with the delayed enforcement. No further proceedings aiming to substantiate the alleged damage incurred were lodged.

20. Starting with 1997, several criminal complaints were lodged by the first applicant, as a representative of the applicant association, against the supervisory board presided over by D.B., accusing them of corruption and of having acted unlawfully in the context of the events leading to the distribution of shares and the liquidation of the applicant association (see paragraphs 6, 8 and 15 above). These were all dismissed by the investigating authorities, who decided not to prosecute.

21. One such complaint was finally dismissed on 7 May 2007 by the Timiş County Court, which held that based on an excerpt from the Register of Associations, the applicant association appeared to have been struck off by virtue of the judgment of 19 April 2001, which had become final on 9 November 2004 (see paragraph 18 above). According to the Timiş County Court, it was evident that the applicant association no longer existed as a legal entity and therefore it could not be represented, nor could it have legal standing for the purposes of the criminal proceedings.

5. Relevant updated information concerning the applicants

22. On 7 August 2014 the first applicant died. On 27 January 2015 the second applicant died. On 15 July 2016 Ms Paula Tîrnoveanu, the first applicant’s widow and heir, and Ms Edita Kőműves, the second applicant’s widow and heir, expressed their wish to pursue the proceedings lodged before the Court by their respective late husbands.

23. On the same date, Mr V.F.-I. and Mr S.-D.R., claiming to act on behalf of the applicant association and in the name of all its members, in their alleged capacity as respectively vice-president and a member of its supervisory board, expressed their wish to pursue the proceedings before the Court. No express document proving their mandate thereto was appended to their correspondence. However, they submitted an excerpt from the Register of Associations confirming the fact that on 28 March 2002, Mr V.F.-I. had been registered as vice-president of the applicant association.

B. Relevant domestic law

24. The relevant domestic provisions on extraordinary appeals are summarised in the cases of Brumărescu v. Romania ([GC], no. 28342/95, §§ 31-44, ECHR 1999-VII), and Gridan and Others v. Romania ([Committee] no. 28237/03, § 6, 4 June 2013).

COMPLAINTS

25. The applicants claimed that the principle of legal certainty enshrined in Article 6 § 1 of the Convention, as well as the right to property guaranteed by Article 1 of Protocol No. 1 to the Convention, had been breached by the High Court of Cassation and Justice, who quashed the final judgment of 6 November 2001.

26. They further claimed that the right to freedom of association safeguarded by Article 11 of the Convention had been breached in so far as they had been prevented from holding general meetings of the shareholders of the applicant association.

27. The applicants also complained that their criminal complaints lodged against D.B. and all those responsible for the unlawful liquidation of the applicant association were dismissed by the domestic courts. They generally complained that the privatisation process was tainted with corruption and it led to an unsatisfactory outcome in terms of the value of the shares.

THE LAW

A. Complaints concerning the quashing of the final judgment of 6 November 2001

28. The applicants complained that the quashing of the final judgment of 6 November 2001 (see paragraph 11 above) by means of an extraordinary appeal (see paragraph 13 above) had been in breach of Articles 6 of the Convention and Article 1 of Protocol No. 1 to the Convention, which, in so far as relevant, read as follows:

Article 6

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

Article 1 of Protocol No. 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.

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.”

1. Submissions by the parties

(a) The Government

29. The Government contended that none of the three applicants had standing before the Court, for the following reasons.

30. The applicant association had been struck off the register of associations on 19 April 2001 and had thus ceased to exist as a legal entity had therefore been incapable of proving any legal standing in any proceedings, including before the Court. Furthermore, in view of the scope of the proceedings terminated by the judgment of 30 October 2003, specifically the acknowledgment of the person entitled to represent and take decisions on behalf of the applicant association, the latter could not be considered to be a victim of the alleged breaches.

31. The Government further asserted that Mr V.F.-I. and Mr S.-D.R. could not be considered as representatives of the applicant association, in so far as they had not submitted any document proving their mandate entitling them to act on its behalf or on behalf of its members. The document relied on, dating from 28 March 2002, was out of date and in any event obsolete, because it preceded the striking of the applicant association off the Register of Associations.

32. In respect of the first applicant, the Government pointed to the fact that he had signed the application form in his capacity as vice-president of the applicant association and on its behalf, and not in his personal capacity, and in view of the fact that the applicant association had ceased to exist as a legal entity, any representative, including the first applicant, lacked standing to act before the Court.

33. Lastly, in respect of the second applicant, the Government pointed out that he had failed to sign the application form altogether.

34. In any event, in view of the fact that the first and second applicants had died, they Government claimed that the right to be member of an association was not transferrable to their heirs. Therefore the wish expressed by the next-of-kin of the first two applicants to pursue the proceedings before the Court on their behalf should not be taken into consideration.

35. With regard to the claim concerning the entitlement of the applicants to be paid punitive damages, the Government argued that this complaint was incompatible rationae materiae in so far as the punitive damages did not constitute a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention.

(b) The applicants

36. The first applicant claimed that both he and the second applicant had always acted together in the domestic proceedings and that both of them were direct victims of the quashing of the final judgment of 6 November 2001. With regard to the loss of legal personality of the applicant association, the first applicant contended that the applicant association had been deprived of its legal personality in an unlawful manner and that, moreover, it had continued to stand as a legal entity in relation to subsequent court proceedings.

2. The Court’s assessment

37. The Court has to establish whether the present application has been validly brought by persons who could claim to be “victims”, within the meaning of Article 34 of the Convention, of a violation of their rights under Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention. To this end, it will examine separately the situation of the second applicant, of the applicant association and of the first applicant.

(a) The second applicant

38. The Court first notes that the second applicant, Mr Mihai Kőműves, never signed the application form, nor did he ever express his wish to either lodge this application, or to pursue the proceedings before the Court.

39. Consequently, in view of the fact that the second applicant failed to validly lodge an application before the Court and that he cannot be regarded as wishing to have a claim examined by the Court, his application must be rejected for being incompatible ratione personae with the provisions of the Convention, pursuant to Article 35 §§ 3 and 4 of the Convention.

(b) The applicant association

40. The Court further notes that the proceedings finalised with the extraordinary appeal granted on 30 October 2003 (see paragraph 13 above) reflected essentially a dispute between private individuals concerning the right to represent and to take decisions on behalf of the applicant association. These proceedings had been lodged before the domestic courts by the first and second applicants, in their alleged capacities respectively as vice-president and as a member of the supervisory board of the applicant association.

41. The Court notes in this respect that the above-mentioned dispute concerning the right to represent the applicant association did not impede in any way on the latter’s ability to hold general meetings, on its possibility to take strategic decisions, or on its ability to administer its own property by prohibiting it from taking certain decisions concerning it (see, by way of contrast, Pekárny a cukrárny Klatovy, a.s. v. the Czech Republic, nos. 12266/07 and 3 others, §§ 66-68, 12 January 2012). On the contrary, several such strategic measures were taken by the applicant association during the impugned proceedings, predominantly in connection with acts of administration of its own property (see paragraphs 8 and 15 above).

42. While it is true that the opportunity and the lawfulness of these measures gave rise to a series of civil or criminal court proceedings (see paragraphs 7, 9-13, 16 and 20-21 above), the Court cannot disregard the fact that both the acquiring of the shares, their subsequent distribution and the liquidation plan were measures confirmed by the domestic courts who eventually ordered the striking out of the applicant association (see paragraphs 8 and 18 above).

43. Having regard to the fact that the term “victim” in Article 34 of the Convention denotes the person directly affected by the act or omission which is at issue, and in view of the above, the Court considers that there is nothing in the case file to substantiate the argument that the applicant association itself was affected by the quashing of the judgment of 6 November 2001 ordering the reinstatement of the first and second applicants to the supervisory board of the applicant association (see, by way of contrast, Credit and Industrial Bank v. the Czech Republic, no. 29010/95, § 65, ECHR 2003-XI (extracts)).

44. It follows that the applicant association lacks victim status in the present application, which, in so far as it was introduced on behalf of the applicant association, should therefore be rejected as being incompatible ratione personae with the provisions of the Convention, pursuant to Article 35 §§ 3 and 4 of the Convention.

(c) The first applicant

45. With regard to the first applicant, who stated that as a result of the quashing of the final judgment of 6 November 2001, he had lost his right to represent and take decisions on behalf of the applicant association, as well as his right to obtain punitive damages in the amount stated in the judgment, the Court notes that throughout the proceedings he had consistently claimed to act on behalf of the applicant association in the capacity of
vice-president, and not in his personal capacity.

46. The Court considers that in so far as he can be considered to have acted as a representative of the applicant association, his claims must be dismissed for the reasons mentioned above, namely on account of the lack of victim status of the applicant association (see paragraphs 40-44 above).

47. Nevertheless, the Court considers that, from the manner in which the first applicant formulated his complaints before it, he substantially claims a violation of his right to be reinstated as vice-president of the supervisory board of the applicant association.

48. The Court reiterates that the right to represent a legal entity may, in certain circumstances, be considered as “civil” within the autonomous meaning of that notion under Article 6 of the Convention (see, for instance, A.K. v. Liechtenstein, no. 38191/12, § 49, 9 July 2015).

49. While accepting that the issues raised by the first applicant, namely the right to represent the applicant association and to take decisions on its behalf, fall primarily under Article 6 of the Convention, the Court considers that this right is so closely linked to the first applicant’s person, that it cannot be regarded as transferable.

50. Therefore, even though following the death of the first applicant in 2014 – in the course of the proceedings before the Court – his wife, Ms Tîrnoveanu, expressed her wish to pursue the proceedings lodged by him (see paragraph 22 above), the Court finds that the first applicant’s
next-of-kin has no legal standing to pursue these proceedings.

51. Moreover, the Court considers that the moral and principled dimensions of the issue at hand do not necessitate proceeding with the examination of the complaints raised by the first applicant. Consequently, the Court finds that the conditions in which the application, in so far as it concerns the complaint lodged by the first applicant in his own name under Article 6, may be struck out of its list, as provided by Article 37 § 1 of the Convention, are satisfied (see, by way of contrast, Hristozov and Others v. Bulgaria, nos. 47039/11 and 358/12, § 73, ECHR 2012 (extracts)).

52. The Court will now assess the first applicant’s complaint raised under Article 1 of Protocol No. 1 to the Convention, concerning the punitive damages that the he was allegedly no longer able to receive following the quashing of the judgment of 6 November 2001.

53. The Court considers that it is not necessary, for the purposes of establishing the locus standi of the first applicant’s next-of-kin, to examine whether this right has a transferrable nature or not, because the complaint is in any event inadmissible, as shown below.

54. The Court notes that in this connection, it has already held that punitive damages have, according to the relevant domestic law in force at the time, a provisional nature and were to be regarded as a sanction imposed on the debtor who was delaying the enforcement of a previous outstanding judgment. The judgment granting punitive damages was therefore not enforceable, in so far as the exact amount of the damages had not been determined; the determination of the exact amount, if any, was to be done in the course of another set of proceedings, in which the courts were to estimate whether concrete harm had been substantiated by the creditor in connection with the delayed enforcement (see for instance Gavrileanu v. Romania, no. 18037/02, § 23, 22 February 2007, and Foundation Hostel for Students of the Reformed Church and Stanomirescu v. Romania, nos. 2699/03 and 43597/07, §§ 72-74 and 90, 7 January 2014, judgments in which the Court found a violation of Article 1 of Protocol No. 1 to the Convention exclusively in connection with the non-enforcement of the principal obligation, and not in respect of the part of the outstanding judgment granting the respective punitive damages). The same approach was taken by the domestic courts in their judgment of 16 May 2002, indicating that the first and second applicants should lodge another set of proceedings in which they had to substantiate their claims related to the punitive damages (see paragraph 19 above).

55. In view of the fact that the first applicant has not lodged any such separate proceedings, the Court considers that he has proved neither before the domestic courts, nor before it, that his claim concerning the payment of punitive damages was sufficiently established in order to attract the guarantees of Article 1 of Protocol No. 1 to the Convention.

56. The Court therefore concludes that the first applicant’s complaint under Article 1 of Protocol No. 1 is incompatible ratione materiae with the provisions of the Convention and should be declared inadmissible, pursuant to Article 35 §§ 3 and 4 of the Convention.

B. Other complaints

57. The applicants also raised other complaints under the Convention, more particularly in relation to the manner in which the decisions concerning the privatisation of the company had been taken and concerning the impact of these decisions on the pecuniary interests of the
shareholder-members of the applicant association (see paragraphs 26-27 above).

58. However, having regard to all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that these complaints do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols.

For these reasons, the Court, unanimously,

Decides to strike the application out of its list of cases in so far as it concerns the complaint lodged by the first applicant under Article 6 of the Convention in relation to the quashing of a final judgment via the extraordinary appeal allowed on 30 October 2003;

Declares the remainder of the application inadmissible.

Done in English and notified in writing on 20 July 2017.

Andrea TamiettiPaulo Pinto de Albuquerque
              Deputy RegistrarPresident

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