In the case of Agrotexim and Others v. Greece (1),
The European Court of Human Rights, sitting, in accordance with
Article 43 (art. 43) of the Convention for the Protection of Human
Rights and Fundamental Freedoms ("the Convention") and the relevant
provisions of Rules of Court A (2), as a Chamber composed of the
following judges:
Mr R. Ryssdal, President,
Mr L.-E. Pettiti,
Mr B. Walsh,
Mr R. Macdonald,
Mr N. Valticos,
Mr S.K. Martens,
Mr F. Bigi,
Mr L. Wildhaber,
Mr K. Jungwiert,
and also of Mr H. Petzold, Registrar,
Having deliberated in private on 23 March and 26 September 1995,
Delivers the following judgment, which was adopted on the
last-mentioned date:
_______________
Notes by the Registrar
1. The case is numbered 15/1994/462/543. The first number is the
case's position on the list of cases referred to the Court in the
relevant year (second number). The last two numbers indicate the
case's position on the list of cases referred to the Court since its
creation and on the list of the corresponding originating applications
to the Commission.
2. Rules A apply to all cases referred to the Court before the entry
into force of Protocol No. 9 (P9) and thereafter only to cases
concerning States not bound by that Protocol (P9). They correspond to
the Rules that came into force on 1 January 1983, as amended several
times subsequently.
_______________
PROCEDURE
1. The case was referred to the Court by the European Commission of
Human Rights ("the Commission") on 18 May 1994, within the three-month
period laid down by Article 32 para. 1 and Article 47 (art. 32-1,
art. 47) of the Convention. It originated in an application
(no. 14807/89) against the Hellenic Republic lodged with the Commission
under Article 25 (art. 25) by six Greek limited companies, Agrotexim,
Viotex, Hymofix, Kykladiki, Mepex and Texema, shareholders in the
limited company Karolos Fix Brewery ("Fix Brewery"), on
29 November 1988. Since that date, the Mepex company has been wound
up and is therefore no longer a participant in the proceedings before
the Court.
The Commission's request referred to Articles 44 and 48 (art. 44,
art. 48) and to the declaration whereby Greece recognised the
compulsory jurisdiction of the Court (Article 46) (art. 46). The
object of the request was to obtain a decision as to whether the facts
of the case disclosed a breach by the respondent State of its
obligations under Articles 6 and 13 (art. 6, art. 13) of the Convention
and Article 1 of Protocol No. 1 (P1-1).
2. In response to the enquiry made in accordance with Rule 33
para. 3 (d) of Rules of Court A, the applicant companies stated that
they wished to take part in the proceedings and designated the lawyers
who would represent them (Rule 30).
3. The Chamber to be constituted included ex officio Mr N. Valticos,
the elected judge of Greek nationality (Article 43 (art. 43) of the
Convention), and Mr R. Ryssdal, the President of the Court (Rule 21
para. 3 (b)). On 28 May 1994, in the presence of the Registrar, the
President drew by lot the names of the other seven members, namely
Mr L.-E. Pettiti, Mr B. Walsh, Mr R. Macdonald, Mr S.K. Martens,
Mr F. Bigi, Mr L. Wildhaber and Mr K. Jungwiert (Article 43 in fine of
the Convention and Rule 21 para. 4) (art. 43).
4. As President of the Chamber (Rule 21 para. 5), Mr Ryssdal, acting
through the Registrar, consulted the Agent of the Greek Government
("the Government"), the applicants' lawyers and the Delegate of the
Commission on the organisation of the proceedings (Rules 37 para. 1 and
38). Pursuant to the order made in consequence, the Registrar received
the Government's memorial on 15 November 1994 and the applicant
companies' memorial on 16 December. On 20 January 1995 the Secretary
to the Commission informed the Registrar that the Delegate would submit
his observations at the hearing. The applicant companies' claims under
Article 50 (art. 50) of the Convention reached the registry on
20 February 1995. On 1 March 1995 the President gave them leave to
submit an additional memorial on Articles 6 and 13 (art. 6, art. 13)
of the Convention, which they lodged on 17 March.
5. In accordance with the President's decision, the hearing took
place in public in the Human Rights Building, Strasbourg, on
21 March 1995. The Court had held a preparatory meeting beforehand.
There appeared before the Court:
(a) for the Government
Mr P. Georgakopoulos, Senior Adviser,
Legal Council of State, Delegate of the Agent,
Mrs M. Basdeki, Legal Assistant,
Legal Council of State, Counsel;
(b) for the Commission
Mr Gaukur Jörundsson, Delegate;
(c) for the applicants
Mr P. Bernitsas,
Mr D. Mirasyesi, dikigoroi (lawyers), Counsel.
The Court heard addresses by the above-mentioned representatives,
and also replies to its questions.
During the hearing the applicant companies' lawyers stated that
they intended to send to the Court before the end of the week legal
opinions on a specific point of the relevant Greek legislation, drafted
by three professors. These documents did not reach the registry until
28 April 1995. The Court decided not to take cognisance of them.
AS TO THE FACTS
I. Circumstances of the case
6. Fix Brewery, which was founded in 1864, was one of the oldest
businesses of modern Greece. It was converted into a limited company
in 1927.
The applicant companies were shareholders in the company, holding
51.35% of its shares, namely 295,783 shares out of a total of 576,000.
Following the liquidation of the Mepex company, which held 108 shares,
this percentage was reduced to 51.33%.
7. According to a report published in October 1993 by the Business
Revival Agency (Organismos Anasigrotisseos Epikhirisseon - "the OAE"),
since 1975 Fix Brewery had experienced a falling-off of business and
had accumulated substantial debts with the National Bank of Greece, its
main creditor.
In 1976 Fix Brewery had decided to transfer its two largest
factories from their existing premises in Syngrou Avenue and Patission
Street in Athens to sites outside the centre of the city. It had at
the same time studied the possibility of developing these sites - which
had acquired an enormous value - in order to overcome its financial
problems. The scheme, to which the National Bank of Greece appeared
to give its consent, concerned the construction of an office and
shopping complex on the Syngrou Avenue site (a surface area of
9,509 sq. m and a building with usable space of 47,377 sq. m), which
was mortgaged for 1,016,600,000 drachmas.
8. In 1976 the Syngrou Avenue factory ceased production. The
Patission Street factory, which had been severely criticised for having
caused serious environmental nuisance, likewise ceased operating the
same year. In 1979 the company obtained from the Athens Town Planning
Department and from the Ministry of Town Planning, Housing and the
Environment a building permit (no. 2128/79) for the above-mentioned
scheme (see paragraph 7 above) and then concluded, by notarial deed of
28 March 1980, a contract with Prokopiou Ltd, a construction company.
9. On 9 September 1979 Athens Municipal Council (Diikitiko Symvoulio
Dimou Athineon), by order (praxi) no. 595/79 on planning matters,
designated the Patission Street property (10,500 sq. m) as an area to
be developed into a youth centre and a public park. This order was
confirmed by a further order of 17 March 1980. However, neither of
these orders was submitted for the approval of the relevant minister
or to the Athens Prefecture (Nomarkhia Athinon), despite the fact that
such approval was required for any amendment of the urban development
plan (see paragraph 39 below).
10. On 28 April 1980, shortly before work on the demolition of the
Syngrou Avenue factory was due to begin (see paragraph 8 above), Athens
Municipal Council altered the development plan (order no. 355/80),
which now provided for the transformation of the site into a park. On
30 June 1980 the Municipal Council rejected the company's appeal
against the new plan (decisions nos. 602/80 and 602a/80) and confirmed
its earlier order.
11. According to the applicant companies, following these orders and
decisions, the construction company, Prokopiou Ltd, which was to build
the office and shopping complex, was unable to begin the work as
planned; the resulting dispute was settled through arbitration.
Following a feasibility study undertaken by a leading firm of
architects, an agreement was to be concluded with Thanopoulos Ltd, a
construction company. On 24 December 1980, that company, which had
contacted several banks with a view to financing the scheme, received
a favourable reply from the Athens office of the International Bank for
West Africa. On 10 February 1981 the Athanassopouloi company also
submitted plans for the development of the Syngrou Avenue site.
After these investors had failed in their efforts to have the
restrictions imposed by Athens Municipal Council lifted, an engineer
representing a group of companies interested in financing the
development of the two sites sent between 16 February 1982 and
18 March 1983 several letters to the Prime Minister, the Minister for
Economic Affairs and the Minister for Public Works proposing to invest
80 million US dollars on condition that the Greek State undertook not
to expropriate the two sites.
All the above-mentioned schemes were based on feasibility studies
which, according to the applicant companies, showed that not only would
it be possible to reimburse Fix Brewery's entire debt but also there
would be substantial profits.
12. On 22 February 1981 Athens Municipal Council had trees planted
and benches installed at the Syngrou Avenue site on a plot
(2,280 sq. m) whose ownership was contested by the State. On an
application by the company, State Counsel at the Athens Court of Appeal
ordered, on 3 November 1981, Athens Municipal Council and any third
parties to cease occupying the site. The applicant companies claim
that Athens municipal employees continued to cultivate the plants and
had transformed the part of the site concerned into a public park. On
12 March 1982 Fix Brewery brought an action in the Athens Court of
First Instance for a declaration recognising its right of ownership
over the contested part of the site; on 30 June 1983 the Court of First
Instance declared the action inadmissible on account of a procedural
defect.
The Athens court held that, under the relevant provisions of the
Towns and Municipalities Code and of Law no. 1539/38 on the protection
of public land, a person who asserted a right of ownership in respect
of real property in the State's possession had, before applying to the
courts, to serve on the State a writ setting out his claims, in
particular the right relied on, the nature, surface area, limits and
exact position of the property claimed and the title on which his claim
was based. Proceedings might be instituted in the courts only after
six months had elapsed following service of that writ and provided that
the State had not declared that it accepted the claim.
13. In 1981 signs bearing the words "Area to be expropriated" were
placed around the Syngrou Avenue factory. Subsequently similar signs
were erected at the Patission Street site. The company demanded that
the signs be removed, but without success. The Mayor of Athens stated
in speeches and to the press that the signs emphasised the City of
Athens's intention to acquire the land.
On 18 September 1981 Fix Brewery asked the Athens Municipal
Council to determine the permitted hypsometric level for the Patission
Street plot. As it received no reply, it repeated its request on
15 March 1982 and again on 21 July 1982, but to no avail. Its appeal
to the Supreme Administrative Court against the persistent failure of
Athens Municipal Council to reply was dismissed (judgment
no. 1446/1992).
In a letter of 24 May 1982, Fix Brewery proposed to the Mayor of
Athens - as it had done in 1981 - to hand over to the city free of
charge part of the land and of the planned buildings for the city's
social, cultural and commercial needs.
14. In August 1982 the National Bank of Greece ceased financing Fix
Brewery. According to the applicant companies, all the efforts of the
Brewery to obtain loans from other banks failed, because no transaction
could proceed without the approval of the three representatives of the
National Bank of Greece who sat on the company's board of directors.
15. As the company's business continued to decline, the shareholders'
general meeting decided on 30 August 1983 to wind up the company and
appointed two liquidators.
16. On 8 August and 9 November 1983 the company brought two actions
in the Athens Court of First Instance against the Greek State, the City
of Athens and the Mayor of Athens in person. It sought damages (in an
amount of 15 billion drachmas for the two sites) to make good the
prejudice sustained as a result of the activities and statements of the
Municipal Council and the Mayor (see paragraph 22 below).
17. On 8 November 1983 the Minister for Economic Affairs directed -
by order no 1802/83 - that the company be liquidated under the special
procedure laid down in sections 7 (3) and 9 of Law no. 1386/83 on
businesses in difficulties (see paragraph 44 below). On 5 January 1984
Fix Brewery - through its liquidators (see paragraph 15 above) - and
the applicant companies Kykladiki and Texema lodged an application with
the Supreme Administrative Court to have ministerial order no. 1802/83
quashed. They maintained, inter alia, that the conditions for making
their business subject to the provisions of Law no. 1386/83
(section 5 of the Law - see paragraph 44 below) had not been met.
18. In a judgment (no. 298/1985) of 28 January 1985 a full court of
the Supreme Administrative Court dismissed the application without
examining the merits of the case, after finding that neither Fix
Brewery nor Texema were legally represented and that Kykladiki had
withdrawn from the proceedings at the hearing.
19. On 21 November 1983 Athens Municipal Council had confirmed
(decision no. 1107/83) its plans to expropriate the Syngrou Avenue and
Patission Street sites. The city did not, however, commence formal
proceedings.
20. On an application by the Minister for Economic Affairs lodged on
12 December 1983, the Athens Court of Appeal appointed, for the
purposes of section 9 of Law no. 1386/83 (see paragraphs 17 above and
44 below), a single liquidator, Mr Voridis, head of the legal
department of the National Bank of Greece. It took the view that the
liquidator had to be chosen from the management of that bank, it being
the company's main creditor (judgment no. 880/1984 of 31 January 1984).
As Mr Voridis did not accept this appointment, the OAE submitted
a new application on 15 May 1984.
By a judgment (no 6552/1984) of 26 June 1984 the Athens Court of
Appeal appointed two liquidators, one representing the interests of the
National Bank of Greece and the other those of the company itself,
because of the extent of its assets and the size of its debts. The
court also decided that the two liquidators should act jointly.
On a more theoretical level, it considered further:
"... according to sections 5 (1), 7 (3) and 9 (1) of Law
no. 1386/83, businesses subject to this liquidation procedure
continue, even after they have been placed under the procedure,
to be represented by the same persons as before until such time
as the Court of Appeal ... has appointed a liquidator. It is
only after that appointment that the powers of the executive
organs of such businesses to manage and represent the business
are removed and vested in the liquidator."
21. On 13 July 1984 the Athens Court of First Instance dismissed (in
judgments nos. 10848/1984 and 10849/1984) the two civil actions that
Fix Brewery had brought in August and November 1983 (see paragraph 16
above). The court held that the various measures of Athens Municipal
Council that the company had challenged could not be regarded as
enforceable administrative measures adversely affecting the company's
property rights. More specifically, it noted that neither the decision
of Athens Municipal Council nor its disclosure to the public were acts
incurring the latter's liability capable of giving rise to a right to
compensation under sections 105 and 106 of the Introductory Law to the
Civil Code (see paragraph 45 below).
The two liquidators did not appeal against these judgments, which
accordingly became final.
22. On 5 and 11 November 1985 two major Athens daily newspapers
published a letter from the Mayor of Athens to their readers. It
contained the following passages:
"Finally, I should like to mention the signs bearing the words
CITY OF ATHENS - AREA TO BE EXPROPRIATED that we have erected on
large plots of land and at disused factories. By these signs we
have demonstrated the unshakeable intention of the Municipality
to acquire these areas. Thus, in contrast to what happened
before we were elected, all these areas have been saved from
construction because no one dares build on them. I can cite for
instance the case of the two Fix factories for which the
representatives of multinational companies have sought an
authorisation from the Municipal Council to build multi-purpose
commercial centres and proposed to hand over to the Municipality
half the land. Naturally we refused their offers. That is why
the Fix company has brought against me as Mayor an action for
damages claiming 12 billion drachmas for the prejudice that it
claims to have suffered as a result of my decision to erect these
signs. Mr Fix is evidently protecting his own interests and I,
as Mayor, am protecting the interests of the people of Athens.
I take this opportunity to inform you that the City has already
begun to purchase some of the sites on which it had erected
signs."
23. On 18 July 1986 two of the applicant companies, namely Texema and
Kykladiki, called upon the liquidators to take the following measures
in order to preserve the value of the two properties in question and
the vital interests of the company's creditors and shareholders: they
were to notify judgment no 10849/1984 of the Athens Court of First
Instance (see paragraph 21 above) to the parties concerned, lodge an
application for judicial review of the failure of the competent
minister to specify the procedure altering the development plan and
finally take any other proceedings that they considered necessary. By
an application of 31 May 1988 the liquidators requested the Mayor of
Athens to remove the signs. They stressed the unrealistic nature of
the expropriation scheme (on account of the enormous amount of
compensation that it would entail) and the deterrent effect of the
signs on potential purchasers.
24. By an order (no. 431/88) of 1 March 1988, Athens Municipal
Council suspended for one year the execution of the building permits
relating to the Syngrou Avenue site so that a study of the development
of the site could be effected and also to enable the indispensable
modification of the development plan which had first to be submitted
for the approval of the competent department of the Athens Prefecture.
The order entered into force on its publication in the Official Gazette
of 24 March 1988.
25. On 8 June 1988 the liquidators asked the Municipal Council to
remove the signs.
In a letter of 5 October 1988 the Mayor of Athens replied as
follows:
"The Municipality of Athens has been seeking for years to acquire
the sites of the two former factories so as to make them
available to the public and allow the city and its inhabitants
to use them. That is why since 1979 the Municipal Council has
taken a series of decisions.
...
In the light of the foregoing, the Municipality of Athens has a
clear interest in acquiring and improving these sites.
Putting up these signs is an indication of that interest."
26. On 19 July 1988 the planning department of the City of Athens
proposed an alteration of the development plan concerning the Syngrou
Avenue site which was designated as a "commercial, cultural and
exhibition centre". The proposal was aimed at preserving the existing
structure of the factory. The amendment was submitted for the approval
of the Municipal Council, in accordance with the Presidential Decree
of 29 December 1986 (which entered into force on 21 January 1987).
27. On 22 August 1988, through its liquidators, Fix Brewery appealed
to the planning department against the above-mentioned proposal, but
its appeal was rejected on 7 October 1988. On 4 May 1989 the Municipal
Council - which had previously secured the agreement of the Athens
Prefecture - adopted the proposal by an order (no. 822/89 of
4 May 1989) published in the Official Gazette of 12 June 1989. The
order stated that the alteration of the development plan for the site
in question was necessary because "it made it possible to improve an
urban district that was problematic yet vital for the city and to
release valuable space to set up a social and cultural infrastructure".
28. In the meantime, on 8 December 1988, the planning department had
drawn up a new amendment to the development plan concerning, inter
alia, the Patission Street site. It aimed to transform the site into
a public park, an underground car-park and a pedestrian street. On
8 May 1989 the planning department again rejected Fix Brewery's appeal
against this proposal.
29. The Municipal Council adopted the amendment - after it had been
approved by the Athens Prefecture - by an order (no. 1772/89 of
23 October 1989) published in the Official Gazette of 5 December 1989.
30. On 8 April 1989 the public works department of the City of Athens
demolished the surrounding wall of the Patission Street site and
entered the former factory premises to clean up the factory yard which
had been used as a public rubbish tip.
31. At the request of the company's liquidators on 10 April 1989,
State Counsel at the Athens Court of First Instance ordered, on
9 May 1989 and pursuant to section 22 (1) of Law no. 1539/38 "on the
protection of public land" (see paragraph 46 below), the restoration
of the site to its former state and directed the parties concerned to
refrain from any further interference. This order was confirmed on
22 November 1989 by Principal State Counsel at the Court of Appeal,
ruling on an objection lodged by the Municipality. The situation
remained unchanged, however.
32. On 23 August 1989 Athens Municipal Council decided (order
no. 1480/89, published in the Official Gazette of 9 November 1989) to
expropriate the Syngrou Avenue site with a view to building on it a
commercial and cultural centre and a car-park.
33. On 5 January 1990 Fix Brewery - through its liquidators - applied
to the Supreme Administrative Court for judicial review of that order
and the order of 4 May 1989 approving the amendment of the development
plan for the site in question (see paragraph 27 above). At the date
of the hearing before the European Court, the Supreme Administrative
Court had not yet given judgment.
No appeal was lodged against the order concerning the Patission
Street site.
34. By a letter of 28 May 1990, served on the liquidators by bailiff,
the Viotex, Agrotexim and Kykladiki companies asked them to cancel the
auction, due to be held as part of the liquidation procedure, of the
Syngrou Avenue and Patission Street sites.
They claimed to represent the majority of Fix Brewery's
shareholders and relied on sections 47 and 48 of Law no. 1892/90
(amending sections 8 and 9 of Law no. 1386/83), according to which the
shareholders' general meeting and the most recently elected board of
directors remain entitled to defend the company's interests when the
liquidators take action against it as a debtor.
They drew the liquidators' attention to the fact that Athens
Municipal Council had amended the development plan concerning the two
properties in order to proceed with their expropriation. They pointed
out that an auction in such circumstances would deter prospective
bidders, would significantly affect the reserve price and thus make it
possible for Athens Municipal Council to purchase the properties for
a derisory sum. The resulting prejudice for the company's creditors
and shareholders would be enormous.
35. In a judgment (no. 10261/1990) of 2 October 1990 the Athens Court
of Appeal dismissed an application by the OAE to have the two
liquidators who had been appointed on 26 June 1984 (see paragraph 20
above) replaced.
The Court of Appeal took the view that a request to have the
liquidators replaced might, according to the relevant provisions, be
made by anyone with a legitimate interest and on "important grounds",
such as the failure of the liquidators to perform, or their belated
performance of, the duties entrusted to them. The Court of Appeal
noted that from the outset the two liquidators had proceeded with the
liquidation in a particularly diligent manner. They had brought
several legal actions against a large number of the company's debtors
(estimated to number 4,000) and had organised several auctions in towns
where the company owned real estate. They had in this way succeeded
in meeting the company's debts in relation to its employees and some
of its creditors to the extent that at that date the only debts that
were outstanding were those of the Greek State (500 million drachmas)
and the National Bank of Greece (6 billion drachmas). The delay in
selling the Syngrou Avenue and the Patission Street properties was due
to circumstances beyond their control, such as the expropriation
proceedings instituted by Athens Municipal Council, the applications
for judicial review of the decisions relating to those proceedings
lodged with the Supreme Administrative Court and the fact that the OAE
had itself advised postponing the sale until after the general election
- which was imminent at the time - because it was likely to have an
effect on the reserve price for the properties. Finally, the Court of
Appeal observed that the National Bank of Greece had not made any
complaint concerning the two liquidators.
36. On 21 October 1991, on an application by the National Bank of
Greece, the Athens Court of Appeal replaced the two liquidators by a
single liquidator designated by the bank (judgment no. 9136/1991). The
court considered that although the two liquidators had carried out
their duties satisfactorily up to September 1990 (see paragraph 35
above), since then there had been an unjustified delay in the sale of
the Syngrou Avenue and Patission Street properties. It noted in
particular that under section 31 (2) of Law no. 1947/91 amending Law
no. 1386/83 it was required to replace a liquidator where such a move
was demanded by creditors representing at least 51% of the company's
debts. In a judgment (no. 7822/1992) of 28 July 1992, the Court of
Appeal placed Fix Brewery under the special procedure provided for in
Law no. 1892/90 and entrusted the task of winding up the company to a
subsidiary of the National Bank of Greece (section 46 (1) of the Law -
see paragraph 47 below).
37. By a joint decision of the Ministers for Finance, the Environment
and Public Works of 2 March 1993, the Syngrou Avenue site was
expropriated, the cost being borne by a State undertaking responsible
for building the Athens underground train system.
38. On 11 June 1993 the National Bank of Greece acquired all the
brewery's remaining movable and immovable assets, situated in Athens
and in other Greek towns.
II. Relevant domestic law
A. Legislation concerning development plans
39. The publication and amendment of development plans are governed
by the legislative decree of 17 July and 16 August 1923. As regards
the authority with competence to draw up such plans, section 3 (2)
provides as follows:
"Development plans with explanatory reports and memoranda shall
be approved by presidential order promulgated on a proposal by
the Minister for Transport and after the relevant municipal
council and the Minister for Public Works have been consulted.
The opinion of the municipal council is purely advisory and the
minister may in any case reject or vary the plans proposed by
municipal councils."
It appears from this provision that the only authority competent
to approve a development plan is the Minister for Transport or a
provincial governor, who carries out some of the latter's duties. The
amendment to the development plan begins to produce its effects once
the minister's decision approving it has been published in the Official
Gazette.
40. Section 8 (1) of the legislative decree provides:
"In order to commence the procedure for the implementation of a
new development plan, a total ban on building in all or certain
sectors of the town or community affected by the development plan
may be imposed by presidential order for a maximum period of one
year. The same order may define the conditions subject to which
construction work may be undertaken. The period of one year may
be extended by two years if it is established that studies
concerning the new development plan have made clear progress.
The above-mentioned restrictions and prohibitions may give rise
to an entitlement on the part of any injured party to
compensation paid by the State or the Municipality."
41. Proposals for the amendment of a development plan may be made by
any private-law or public-law legal person or entity. Municipalities
may also submit such proposals in accordance with section 21 (1), (2)
and (3) of the decree of 22 April 1929 as amended by the presidential
order of 25 June and 21 August 1943, which is worded as follows:
"1. Development plans or amendments to such plans submitted for
the approval of the competent minister shall be accompanied by
all the objections raised by members of the public and by the
relevant comments of the Municipality concerned ...
2. No amendment to a development plan shall be submitted to the
minister if it does not serve the public interest ... The
amendment shall be notified to the persons whose property will
be affected by the proposed amendment. The Municipality shall
duly certify such notifications.
In addition to the individual notifications mentioned above, a
declaration shall be posted up at all the central points of the
town ... and the proposed amendment shall be published in the
local newspapers ..."
42. As regards the Municipality of Athens, the presidential order of
29 December 1986, which came into force on 21 January 1987, provides
that the Municipal Council is to have responsibility for approving
amendments to the development plan and is empowered to issue building
prohibitions pursuant to section 8 of the decree of 17 July and
16 August 1923. Section 1 of the presidential order provides, inter
alia:
"In the Municipality of Athens, any amendment of the development
plan must be effected by order of the Municipal Council ...
..."
B. Law no. 1386/83 of 5 August 1983 establishing the Business
Revival Agency
43. The Business Revival Agency was established by Law no. 1386/83
of 5 August 1983 and is a limited company under the supervision of the
State.
It is intended to serve the public interest and its purpose is
to contribute to the country's economic and social development by
putting businesses on a sound financial footing, importing and applying
technological know-how and developing Greek technological know-how, and
setting up and running nationalised or semi-public businesses
(section 2 (2) of the Law).
To achieve these objectives the OAE may, among other things, take
over the running of businesses being rehabilitated or nationalised,
acquire shareholdings in businesses, grant loans to businesses in which
it has an interest or give guarantees for such loans, issue debenture
loans and transfer shares to employees or to organisations representing
them, local authorities or other public-law entities (section 2 (3) of
the Law).
44. The relevant provisions of Law no. 1386/83 provide:
Section 5
"Conditions for making a business subject
to the provisions of this Law
1. By an order of the Minister for Economic Affairs, issued
after consultation of the advisory committee ..., the provisions
of this Law may be applied to businesses
(a) which have suspended or ceased their activities for financial
reasons;
(b) which have suspended payments;
(c) which are insolvent or have been placed under the management
of their creditors or under provisional management or which have
gone into liquidation ...;
(d) whose total liabilities are five times greater than the sum
of their capital and apparent reserves and which are manifestly
unable to meet their liabilities; ...
(e) which concern the country's defence or are of vital
importance for the development of national resources or whose
main object is the provision of public services and which are
manifestly unable to meet their liabilities;
(f) which request application of the provisions to them.
2. For the purposes of applying the preceding subsection,
...
(c) `manifestly unable to meet their liabilities' means: (a) a
fall in production and in the number of employees due to the lack
of liquid assets; (b) an accumulation of debts due; and (c) a
deterioration in the liquidity indicators. This situation may
also be proved by a declaration by one or more banks which are
the business's main source of finance to the effect that they
will no longer maintain their financial support.
..."
Section 6
"Procedure for making a business subject
to the provisions of this Law
1. The order by the Minister for Economic Affairs making the
business subject to the provisions of this Law ... shall be made
(a) at the request of the business;
(b) ...
(c) at the request of a bank or of the administrative authorities
or of a public-law entity where these have matured claims against
the business;
(d) at the request of the business's creditors other than those
mentioned in paragraphs (b) and (c) whose claims represent at
least 20% of the business's outstanding debts...;
(e) at the request of the ... trustee in bankruptcy or of the
insolvent firm.
..."
Section 7
"Provisions on the rehabilitation of businesses
The order by the Minister for Economic Affairs ... may provide
for
1. Management of the firm by the OAE, in accordance with
section 8;
2. The satisfaction of the business's obligations in such a way
as to ensure its viability
(a) by an increase in the capital by means of contributions of
new assets or by the conversion of existing debts into shares ...
...
3. Winding-up, in accordance with section 9 of this Law."
Section 9
"Special winding-up procedure
1. Where no agreement within the meaning of section 8 is
concluded ..., the Court of Appeal within whose jurisdiction the
registered office of the firm in question is located shall
appoint, at the request of the OAE or any other person with a
sufficient interest, a liquidator, who must proceed, in
accordance with the provisions of the present section, to wind
up the business ...
2. Winding-up is governed by the provisions of sections 18-22
of Decree no. 3562/1956 'placing limited companies under the
administration and management of creditors and under the special
winding-up procedure'.
During the winding-up, the liquidator may continue to run the
business or parts of it.
3. In order to reimburse the creditors, the liquidator shall
draw up a list pursuant to the provisions of Articles 975-979 and
1007 of the Code of Civil Procedure. The list shall be drawn up
after the creditors have made themselves known to the liquidator
within a period of two months following the publication of the
relevant notice in two daily newspapers ...
4. In distributing the proceeds of the winding-up, preference
shall be given to the debts of the OAE incurred during its
provisional management of the business and deemed to qualify as
preferential debts for the purposes of Article 975 of the Code
of Civil Procedure.
..."
C. Introductory Law to the Civil Code
45. The following provisions of the Introductory Law (Isagogikos
Nomos) no. 2783/41 to the Civil Code are relevant:
Section 104
"The State shall be liable in accordance with the provisions of
the Civil Code concerning legal persons, for acts or omissions
of its organs regarding private-law relations or private
property."
Section 105
"The State shall be under a duty to make good damage caused by
the unlawful acts or omissions of its organs in the exercise of
public authority, except where the unlawful act or omission is
intended to serve the public interest. The person responsible
shall be jointly and severally liable, without prejudice to the
special provisions on ministerial responsibility."
Section 106
"The provisions of the two preceding sections shall also apply
in regard to the liability of municipalities and other public-law
persons for the damage caused by the acts or omissions of their
organs."
D. Section 22 of Law no. 1539/38 "on the protection of public land"
(as supplemented by section 30 of Law no. 3800/57)
46. This provision was kept in force by section 52 (18) of the
Introductory Law to the Code of Civil Procedure and applies by analogy
to the protection of land owned by local government entities.
Where possession of a specific parcel of land is disputed between
a State body and a private individual, the two parties may - the former
simply by letter and the latter by a formal application - ask State
Counsel at the Court of First Instance to make an interim order
resolving the dispute. As soon as he receives the letter or the
application, State Counsel must, if possible the same day, visit the
site and either order that the site be restored to its original
condition or - where there is some doubt as to who is entitled to
possession or if the possession does not entail any serious prejudice
to third parties - prohibit any step concerning possession of the
property until the court has given its decision.
An appeal lies against State Counsel's decision to State Counsel
at the Court of Appeal and must be lodged within two months of the
notification of the decision to the State or to the private party.
The case-law has established that State Counsel's competence in
this area is to be regarded as an administrative power properly so
called. His decision does not have final effect and does not resolve
the question of who holds the right of ownership; it merely determines
the person with possession of the disputed property.
E. Section 46 (1) of Law no. 1892/90
47. Section 46 (1) of Law no. 1892/90 provides that at the request
of creditors representing at least 51% of the total debt of a company,
the Court of Appeal is to set in motion the special winding-up
procedure provided for in this section. In such circumstances the
Court of Appeal must appoint as liquidator a bank legally established
in Greece, or a subsidiary of such a bank, to be designated by the
creditors themselves. This procedure may also be imposed on a company
that is already in liquidation and where substantial assets have not
yet been auctioned off.
F. Law no. 2190/1920 on limited companies and the relevant
provisions of the Civil Code concerning corporations
(Articles 61-78) and of the Code of Civil Procedure
1. The legal personality of limited companies
48. A limited company acquires legal personality as soon as the
prefect has approved its setting up and its articles have been entered
in the register of companies - kept at the prefecture of the place
where the company has its registered address (sections 4 (2) and
7b (10) of the Law). Legal personality gives the company autonomy in
relation to its founders and its shareholders, confers on it its own
name, nationality and a registered address, as well as legal capacity
(Article 62 of the Civil Code) and the right to take legal proceedings
(Articles 62 para. 1 and 63 para. 1, sub-paragraph 1, of the Code of
Civil Procedure).
Limited companies have their own assets which are distinct from
the individual assets of the shareholders. The latter have no right
of ownership over their investment in the company. Their participation
is solely financial. They are not personally liable for the company's
debts.
2. The rights of minority shareholders
49. Shareholders who represent 5% of the capital may request, by
application to the board of directors, that an extraordinary general
meeting of shareholders be called (section 39 (1) of the Law).
In addition, on an application by shareholders representing a
third of the capital, lodged five days before the general meeting - and
provided that these shareholders are not represented on the board of
directors -, the board must inform them how the company's business is
faring and what its assets are (section 39 (5) (a)). The board may for
specific reasons mentioned in the minutes of the general meeting refuse
to provide this information (section 39 (5) (b)). The same proportion
of shareholders may also request the competent court of first instance
to order an inspection of the company where it appears that the
business is not being run in accordance with the rules of sound
management (section 40 (3) (a)). The court then entrusts the duty of
carrying out the inspection to one or more special inspectors of
companies (section 40a). If the inspectors find that offences have
been committed, they must submit their report to the relevant
prosecuting authority (section 40c (1)).
3. Article 786 para. 3 of the Code of Civil Procedure
50. Article 786 para. 3 of the Code of Civil Procedure provides:
"The court may, at the request of a person having an interest
entitling him to take proceedings, replace the interim board or
the liquidators on serious grounds ..."
PROCEEDINGS BEFORE THE COMMISSION
51. The applicant companies applied to the Commission on
29 November 1988. They complained of the unlawful interference of the
Municipality of Athens with their right to the peaceful enjoyment of
their possessions as guaranteed under Article 1 of Protocol No. 1
(P1-1). They further alleged a violation of Articles 6 and 13
(art. 6, art. 13) of the Convention in that it was not possible for
them, under Greek law, as Fix Brewery's shareholders to take
proceedings in a court and to secure legal protection of their rights.
The Commission declared the application (no. 14807/89) admissible
on 12 February 1992. In its report of 10 March 1994 (Article 31)
(art. 31), it expressed the opinion that there had been a violation of
Article 1 of Protocol No. 1 (P1-1) (thirteen votes to two), but not of
Articles 6 (art. 6) (eleven votes to four) and 13 (art. 13) (nine votes
to six) of the Convention.
The full text of the Commission's opinion and of the four
separate opinions contained in the report is reproduced as an annex to
this judgment (1).
_______________
1. Note by the Registrar: for practical reasons this annex will appear
only with the printed version of the judgment (volume 330-A of
Series A of the Publications of the Court), but a copy of the
Commission's report is obtainable from the registry.
_______________
FINAL SUBMISSIONS TO THE COURT
52. In their memorial the Government asked the Court to dismiss the
application as "inadmissible or unfounded on the merits".
53. The applicant companies requested the Court:
"- to hold that their rights under the second rule of
paragraph 1 of Article 1 of Protocol No. 1 (P1-1) have been
violated and to award fair compensation in respect thereof under
Article 50 (art. 50) of the European Convention;
- to award the amount of 20,000,000 drachmas for the costs and
expenses incurred."
AS TO THE LAW
54. The applicant companies complained in the first place of a breach
of Article 1 of Protocol No. 1 (P1-1) inasmuch as the measures adopted
by Athens Municipal Council with regard to the sites owned by Fix
Brewery (see paragraphs 9, 10, 12 and 13 above), taken together,
amounted to an unjustified interference with their right to the
peaceful enjoyment of their possessions. They maintained secondly that
there had been a breach of Articles 6 and 13 (art. 6, art. 13) of the
Convention in that it was not possible under Greek law for them, as
shareholders of the Brewery, to institute proceedings in a court.
I. ARTICLE 1 OF PROTOCOL No. 1 (P1-1)
55. The Government contended by way of primary submission, as they
had done before the Commission, that the application was inadmissible
because it was incompatible ratione temporis and ratione personae with
the provisions of the Convention and because the applicant companies
had failed to exhaust domestic remedies and to comply with the
six-month time-limit laid down in Article 26 (art. 26) of the
Convention.
A. Lack of jurisdiction ratione temporis
56. The Government submitted firstly that the applicant companies'
complaints were caught by the temporal restriction contained in
Greece's declaration concerning Article 25 (art. 25) of the Convention,
which is worded as follows:
"... the Government of Greece recognises, for the period
beginning on 20 November 1985 and ending on 19 November 1988, the
competence of the European Commission of Human Rights to receive
petitions addressed to the Secretary General of the Council of
Europe, [after 19 November 1985,] by any person, non-governmental
organisation or group of individuals claiming, in relation to any
act, decision, facts or events subsequent to this date, to be the
victim of a violation of the rights set forth in the Convention
and in the Additional Protocol (P1-1) ..."
The Government argued that the measures alleged to be contrary
to the Convention, namely the Mayor of Athens's declarations in 1979
and 1980 of his intention to expropriate the Syngrou Avenue and the
Patission Street sites (see paragraphs 9 and 10 above), the putting up
of the signs in 1981 (see paragraph 13 above) and the planting of trees
on the contested part of the Syngrou Avenue site (see paragraph 12
above) were instantaneous acts which occurred and caused their
allegedly prejudicial effects before the critical date of
20 November 1985.
Even if it were accepted that the situation of which the
applicant companies complained subsisted after 1985, that would be true
only for the company itself and not for its shareholders, who, for
their part, had suffered since that date only the consequences of the
alleged violation.
Neither the fact that the signs were kept in place nor the
planting of trees was sufficient for the alleged violation to acquire
a continuous character. The signs had remained because Fix Brewery -
which at the time had been under the full control of its shareholders -
had failed to institute legal proceedings to have them removed. As
regards the trees, State Counsel's order of 3 November 1981 (see
paragraph 12 above) had been complied with and Fix Brewery's action of
12 March 1982 for a declaration recognising its right of ownership over
that part of the site had been declared inadmissible (see paragraph 12
above).
57. In its decision on the admissibility of the application, the
Commission found that the applicant companies' complaints related to
a continuing situation because some of the contested measures continued
after 20 November 1985 and up to the Commission's decision.
58. A preliminary study of the case leads the Court to conclude that
it may be possible to regard the successive actions of Athens Municipal
Council as a series of steps amounting to a continuing violation and
indicating the existence of a plan by the Municipal Council to purchase
the two sites at the lowest possible price.
It does not, however, consider it necessary to give a final
ruling on this issue, because it must first examine the objection based
on the applicant companies' lack of the status of "victim", which is
more fundamental than the objection of lack of jurisdiction ratione
temporis.
B. Lack of the status of "victim"
59. According to the Government, the applicant companies lack the
status of "victim" within the meaning of Article 25 (art. 25) of the
Convention.
Only a person whose personal interests have been directly
affected could have that status. Acts which cause prejudice to a
limited company do not directly affect the personal interests of the
shareholders, except perhaps where there is only one shareholder, who
is at the same time the sole director of the company. The fact that
the shareholders suffer the indirect effects of such acts - as do
moreover all those who have a financial relationship with the company,
such as for instance its creditors - is not in itself sufficient for
them to acquire the status of "victims" within the meaning of
Article 25 (art. 25).
The Government maintained generally that to accord the
shareholders of a limited company such as Fix Brewery the right to
apply to the Convention institutions in respect of alleged violations
directly affecting such a company would overturn the rules on the
setting up and operation of companies and the principles governing the
administration of justice. A limited company had its own legal
personality and held possessions that were distinct from those of the
shareholders so that a measure taken against it would concern only
indirectly persons having financial links with it or interests in it
such as creditors or shareholders. To allow the latter a right of
management or representation of the company or to permit them to
substitute themselves for the organs set up under the company's
articles would create a source of uncertainty in commercial
transactions and relations.
Through the general meeting the majority shareholders admittedly
exerted an influence on the management of the company, although such
a majority, far from being fixed, varied with the passing of time as
new investors bought shares or new alliances were concluded. Certain
limits should, however, be imposed on the rights of shareholders in
particular where the rights of other persons, for instance creditors,
were threatened because of the company's financial difficulties. The
piercing of the "corporate veil" was justified in such circumstances
to identify - behind the appearances - the true interests at stake.
60. More specifically, since 1975 Fix Brewery's business had
considerably declined. In a few years it had accumulated such
extensive debts that it had decided to cease payments and to mortgage
parts of the Syngrou Avenue and Patission Street sites, with the result
that its ownership of these properties was purely theoretical.
Moreover the properties in question were the sole guarantee that it
would honour at least part of its debts. Consequently, the piercing
of the "corporate veil" in favour of a notional majority of
shareholders, such as that of the applicant companies, failed to
identify the interests that were really affected by the fate of Fix
Brewery. The applicant companies' interests were entirely
insignificant, or indeed non-existent, compared with those of the
creditors. This also explained their inactivity or negligence in
exercising their rights, both within the company's organs and in the
courts. They had nothing of their own to defend.
As regards the application to Fix Brewery of the procedure
provided for in Law no. 1386/83, the liquidators appointed by the
Athens Court of Appeal had performed their duties in a wholly
satisfactory manner. There had never been any disagreement or conflict
between them and the applicant companies justifying the piercing of the
"corporate veil" in this respect. Finally, not only had the applicant
companies failed to ask the liquidators to avail themselves of certain
remedies, they had also released them from all liability.
61. The applicant companies drew attention to the fact that, as was
clear from the judgment of the Athens Court of Appeal (see
paragraph 20 above), the special liquidators appointed pursuant to
section 9 of Law no. 1386/83 enjoyed, with effect from their
appointment, exclusive power to manage and represent the company in
liquidation. It followed that not only did the shareholders no longer
have the capacity to take proceedings, but the company itself was
deprived of its right to challenge in the courts any questionable
decision taken by the liquidators.
Furthermore, the liquidators had failed to protect the company's
interests. They had not defended those interests in the Supreme
Administrative Court. They had not authorised its lawyer to represent
it during the proceedings relating to the application to it of Law
no. 1386/83 and had not supported the action brought against that
decision by the company's first liquidators appointed by the general
meeting. They had in short proved loyal to the OAE - which in fact
exercised control over their management - and to the National Bank of
Greece and had completely disregarded the shareholders.
62. The Court notes at the outset that the applicant companies did
not complain of a violation of the rights vested in them as
shareholders of Fix Brewery, such as the right to attend the general
meeting and to vote. Their complaint was based exclusively on the
proposition that the alleged violation of the Brewery's right to the
peaceful enjoyment of its possessions had adversely affected their own
financial interests because of the resulting fall in the value of their
shares. They considered that the financial losses sustained by the
company and the latter's rights were to be regarded as their own, and
that they were therefore victims, albeit indirectly, of the alleged
violation. In sum, they sought to have the company's corporate veil
pierced in their favour.
63. In its decision on the admissibility of the application, the
Commission reached the conclusion that the question whether a
shareholder may claim to be a victim of measures affecting a company
cannot be determined solely on the basis of whether he is a majority
shareholder. This aspect provides an important, objective indication,
but other considerations may also be relevant, regard being had to the
specific circumstances of each case.
Thus in some cases the Commission has considered whether an
applicant shareholder was carrying out his own business through the
company and whether he had a personal interest in the subject-matter
of the complaint. In one case the Commission regarded it as decisive
that it had been open to the company itself as the direct victim to
apply to the Commission. The Commission appears to have relied on the
latter criterion to dismiss the Government's objection in the present
case. The fact that Fix Brewery was subject to a special liquidation
procedure meant that it was essentially and effectively under the
control of the State so that it was not reasonably an option for the
company to lodge a complaint against Greece.
64. However, in its report the Commission seems to accept that where
a violation of a company's rights protected by Article 1 of
Protocol No. 1 (P1-1) results in a fall in the value of its shares,
there is automatically an infringement of the shareholders' rights
under that Article (P1-1).
The Court considers that such an affirmation seeks to establish
a criterion - and in the Court's view an unacceptable one - for
according shareholders locus standi to complain of a violation of their
company's rights under Article 1 of Protocol No. 1 (P1-1).
65. It is a perfectly normal occurrence in the life of a limited
company for there to be differences of opinion among its shareholders
or between its shareholders and its board of directors as to the
reality of an infringement of the right to the peaceful enjoyment of
the company's possessions or concerning the most appropriate way of
reacting to such an infringement. Such differences of opinion may,
however, be more serious where the company is in the process of
liquidation because the realisation of its assets and the discharging
of its liabilities are intended primarily to meet the claims of the
creditors of a company whose survival is rendered impossible by its
financial situation, and only as a secondary aim to satisfy the claims
of the shareholders, among whom any remaining assets are divided up.
To adopt the Commission's position would be to run the risk of
creating - in view of these competing interests - difficulties in
determining who is entitled to apply to the Strasbourg institutions.
The Commission's view would also engender considerable problems
concerning the requirement of exhaustion of domestic remedies. It may
be assumed that in the majority of national legal systems shareholders
do not normally have the right to bring an action for damages in
respect of an act or an omission that is prejudicial to "their"
company. It would accordingly be unreasonable to require them to do
so before complaining of such an act or omission before the Convention
institutions. Nor could, conversely, a company be required to exhaust
domestic remedies itself, because the shareholders are of course not
empowered to take such proceedings on behalf of "their" company.
66. Concerned to reduce such risks and difficulties the Court
considers that the piercing of the "corporate veil" or the disregarding
of a company's legal personality will be justified only in exceptional
circumstances, in particular where it is clearly established that it
is impossible for the company to apply to the Convention institutions
through the organs set up under its articles of incorporation or - in
the event of liquidation - through its liquidators. The Supreme Courts
of certain member States of the Council of Europe have taken the same
line. This principle has also been confirmed with regard to the
diplomatic protection of companies by the International Court of
Justice (Barcelona Traction, Light and Power Company Limited, judgment
of 5 February 1970, Reports of judgments, advisory opinions and orders
1970, pp. 39 and 41, paras. 56-58 and 66).
67. In the Commission's opinion, the criterion for regarding the
applicant companies as "victims" is satisfied as, following the
ministerial order of 8 November 1983 (see paragraph 17 above), Fix
Brewery was under the control of the State and could therefore
reasonably be held to be in a position in which it was impossible for
it to apply to the Convention institutions. The Court does not share
this view.
68. In the first place, when the applicant companies lodged their
application with the Commission in 1988, Fix Brewery, although in the
process of liquidation, had not ceased to exist as a legal person. It
was at that time represented by its two liquidators, who had legal
capacity to defend its rights and therefore to apply to the Convention
institutions, if they considered it appropriate. There is no evidence
to suggest that at the material time it would have been impossible as
a matter of fact or of law for the liquidators to do so.
69. The Court notes in this connection that the ministerial order of
8 November 1983 had not applied the provisions of section 8 of Law
no. 1386/83 to the Brewery, which would have led to its being managed
by the OAE. That order in fact merely varied the conditions of the
liquidation that the company itself had just decided (see paragraph 15
above). Thus the Athens Court of Appeal appointed, just as the general
meeting had done, two liquidators, one representing the interests of
the main creditor and the other those of the company. There are no
grounds for doubting that the task of these liquidators was, like a
trustee in bankruptcy, to liquidate the company's assets in the
interests both of the creditors and the shareholders, or that, de facto
and de jure, they were free to carry out that task as they saw fit.
70. The Court notes further that there is no reason to suppose that
the liquidators failed to perform their duties satisfactorily. On the
contrary, there is sufficient evidence to show that they took all the
measures that they considered to be in the interests of the insolvent
company's assets. This is clear, as regards the properties in issue,
from their representations to the Mayor of Athens on 8 June 1988 (see
paragraph 25 above), their application to State Counsel at the Athens
Court of First Instance on 10 April 1989 (see paragraph 31 above) and
the applications lodged with the Supreme Administrative Court for
judicial review of the municipal orders amending the development plan
and proclaiming the expropriation of the Syngrou Avenue site (see
paragraph 32 above). The Athens Court of Appeal found that the
liquidators had performed their duties in a particularly diligent
manner (judgment no. 10261/1990 of 2 October 1990 - see paragraph 35
above).
Finally, it should be recalled that if it had been otherwise the
applicant companies could, according to the Athens Court of Appeal in
its decision of 2 October 1990 (see paragraph 35 above), have taken
steps to have the liquidators replaced. The applicant companies denied
this, but have failed to convince the European Court that the Court of
Appeal misconstrued national law. The Court notes in addition that in
two letters dated 18 July 1986 and 28 May 1990, served by bailiff, the
applicant companies gave the liquidators instructions, indicated their
opinion and requested them to take more effective measures to protect
the interests of Fix Brewery's creditors and shareholders (see
paragraphs 23 and 34 above).
71. In sum it has not been clearly established that at the time when
the application was lodged with the Commission it was not possible for
Fix Brewery to apply through its liquidators to the Convention
institutions in respect of the alleged violation of Article 1 of
Protocol No. 1 (P1-1) which is the basis of the applicant companies'
complaint. It follows that the latter companies cannot be regarded as
being entitled to apply to the Convention institutions.
72. This conclusion makes it unnecessary to examine the other
objections raised by the Government in relation to the alleged
violation of Protocol No. 1 (P1).
II. ARTICLES 6 AND 13 (art. 6, art. 13) OF THE CONVENTION
73. According to its report the Commission understood the applicant
companies' complaint under Articles 6 and 13 (art. 6, art. 13) of the
Convention to be the following: they complained that the national legal
system did not give them, as Fix Brewery shareholders, the right to
take proceedings in the courts to challenge the actions of Athens
Municipal Council or to seek damages in respect of such actions.
The Court shares the Commission's opinion that this complaint
must be dismissed. Neither Article 6 nor Article 13 (art. 6, art. 13)
imply that under the national law of the Contracting States
shareholders in a limited company should have the right to bring an
action seeking an injunction or damages in respect of an act or
omission that is prejudicial to "their" company (see paragraph 65
above).
74. In their additional memorial and their oral argument, the
applicant companies claimed that the true issue in relation to
Articles 6 and 13 (art. 6, art. 13) was that neither Fix Brewery nor
its shareholders had any remedy whatsoever against the steps taken by
the liquidators.
75. The Court reiterates that, under the Convention, the compass of
the case before it is delimited by the Commission's decision on
admissibility (see, among many other authorities, the Helmers v. Sweden
judgment of 29 October 1991, Series A no. 212-A, p. 13, para. 25).
It cannot be ruled out that it may be possible in this context
for an applicant to plead before the Court that a different
construction should be placed on a complaint declared admissible by the
Commission than that adopted by the latter (see the Kefalas and Others
v. Greece judgment of 8 June 1995, Series A no. 318-A, p. 19,
para. 44). However, the Court observes that the applicant companies
have not shown this to be the case and it therefore lacks jurisdiction
to take cognisance of this complaint.
FOR THESE REASONS, THE COURT
Holds by eight votes to one that it cannot take cognisance of the
merits of the case.
Done in English and in French, and delivered at a public hearing
in the Human Rights Building, Strasbourg, on 24 October 1995.
Signed: Rolv RYSSDAL
President
Signed: Herbert PETZOLD
Registrar
In accordance with Article 51 para. 2 (art. 51-2) of the
Convention and Rule 53 para. 2 of Rules of Court A, the dissenting
opinion of Mr Walsh is annexed to this judgment.
Initialled: R. R.
Initialled: H. P.
DISSENTING OPINION OF JUDGE WALSH
1. Joint stock companies are simply commercial devices for raising
capital, particularly when large sums are required which would normally
be beyond the private means of individuals. Nevertheless if such a
company fails the ultimate losers are the individual shareholders.
They have the power to liquidate the company even when it is doing
well. They are the beneficial owners of the assets even though the
legal ownership rests in the legal entity of the body corporate.
2. While it is true to say that such a body corporate has neither
a soul to be damned nor a body to be beaten, nonetheless, the
shareholders have and the existence of the corporate entity gives no
protection to the shareholders as individuals against the loss in value
of their shares or against criminal or civil liability for their
individual activities in the commercial advancement of the companies.
3. It appears to me to be anomalous that the defence of human rights
in the field of property, or otherwise, should yield to the
commercially sacred impenetrability of the "corporate veil".
4. In the present case the fact that the applicants are themselves
bodies corporate does not affect the principle because such bodies are
composed of individuals each of whom has property rights. Shareholders
may complain of the violation of their own rights and insofar as they
complain of injustice to their corporate image they are in fact seeking
to protect their individual property rights to the extent thereof.
5. Ordinary joint stock companies are to be distinguished from
special bodies created by statute or by royal grant which may not in
fact have any shareholders.
6. In my opinion the applicant bodies may be treated as the
collective face of the individual victims.
Full & Egal Universal Law Academy