THIRD SECTION
Application no. 25132/13
COMPCAR, s.r.o.
against Slovakia
lodged on 5 April 2013
STATEMENT OF FACTS
1. The applicant, COMPCAR, s.r.o., is a private limited company, which was established under Slovakian law in 1995, and has its registered office in Prešov.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Background
2. In 2004 the applicant company bought a set of real property registered on a certificate of ownership no. 5604 for the cadastral area of Južné mesto in the city of Košice. The seller was a State-owned enterprise (“the seller”) acting through its receiver in insolvency.
3. Prior to the sale, by way of a resolution (uznesenie) of 8 April 1998, acting as Insolvency Court, the Košice Regional Court (Krajský súd) had approved a direct sale of the property (i.e. not through a public auction).
4. By way of an order (opatrenie) of 9 July 2004 the Insolvency Court approved the sale of the property to the applicant company because it had fulfilled the conditions for the sale as set in the resolution of 8 April 1998.
5. The order of 9 July 2004 was subject to no appeal. It became final and binding on the same day as it was issued.
6. On 28 July 2004 the sale was registered in the Land Registry. The title in the property was thereby effectively conveyed onto the applicant company.
7. The seller was subsequently dissolved and struck out of the Companies Register whereby it seized legally to exist.
2. Action
8. On 22 April 2008 the City of Košice (“the claimant”) brought an action against the applicant company seeking a ruling to declare it the owner of the property. It argued in principle that, by mistake, the property had not been registered as its own; that it had accordingly not belonged to the seller; and that – consequently – the sale had been void.
9. The action was examined and dismissed on 27 February 2009 by the Košice I District Court (Okresný súd) and, following the claimant’s appeal, on 8 October 2009 by the Regional Court.
Both courts unanimously concluded that there was a non-rebuttable legal presumption, under Article 19 § 2 of the Insolvency Code (Law no. 328/1991 Coll., as applicable at the relevant time), that property belonged to the insolvency estate and could be lawfully sold to third parties unless its exclusion from the estate had been claimed by way of a special action (vylučovacia žaloba), which had not happened in the present case. The applicant company had thus acquired the property in good faith and the present action could not be used to contest that.
The dismissal of the action became final and binding on 7 January 2010.
3. Extraordinary review
10. On 13 December 2010 the claimant lodged a petition with the Office of the Prosecutor General requesting the latter to exercise his discretionary power to challenge the above-mentioned judgments by way of an extraordinary appeal on points of law (mimoriadne dovolanie ‑ “extraordinary appeal”).
11. Having decided to accede to the request and acting through a deputy, on 5 January 2011 the Prosecutor General challenged the contested judgments in the Supreme Court (Najvyšší súd).
12. The applicant and the claimant both were given an opportunity to comment.
13. On 30 April 2012 the Supreme Court quashed the challenged judgments and remitted the case to the first-instance court for a new determination.
It referred to is precedent of 11 September 2009 in a case no. 5Cdo 194/08, which had been published in the Collection of Standpoints of the Supreme Court in 2010 (issue 3/2010, item 25), according to which the legal presumption applied by the lower courts was qualified and the present case fell within one of the exceptions.
In particular, the Supreme Court found that there had been circumstances in view of which the insolvency receiver of the seller and the Insolvency Court should have had doubts as to whether the seller actually had been the owner and, in other words, whether the property actually had belonged to the seller’s insolvency estate. As they had not acted accordingly, the presumption in question was not applicable and the sale contract was void.
Moreover, the applicant company could not be considered as having been bona fides.
The contested judgments were therefore wrong in law and had to be quashed.
14. Since then the case has been pending at the first-instance.
4. Final domestic decision
15. On 3 August 2012 the applicant company lodged a complaint under Article 127 of the Constitution (Constitutional Law no. 460/1992 Coll., as amended) with the Constitutional Court (Ústavný súd). It relied, inter alia, on Article 6 § 1 of the Convention and challenged the Supreme Court’s decision. In particular, it contended that the Supreme Court had in fact wrongfully re-examined the lawfulness of the Insolvency Court’s order of 9 July 2004 which was impermissible outside the framework of the insolvency proceedings. In any event, any extraordinary review of that order was also impermissible on account of the expiry of the applicable time‑limits. In addition, the re-examination of that order was impermissible because it was in breach of the principle of res iudicata. Lastly, the applicant company disagreed with the Supreme Court’s findings on the merits.
16. On 11 October 2012 the Constitutional Court declared the complaint inadmissible as being manifestly ill-founded. It found no constitutionally relevant arbitrariness, unfairness or irregularity in the Supreme Court’s decision, reasoning and the underlying procedure.
The Constitutional Court’s decision became final and binding on 2 November 2012.
B. Relevant domestic law and practice
1. Code of Civil Procedure
(a) Various provisions
17. Under the terms of Article 135 § 1 civil courts are bound by the rulings of the Constitutional Court on compatibility of legal provisions with the Constitution, laws or international treaties binding upon the Slovak Republic. In addition, the courts are bound by the rulings of the Constitutional Court and the European Court of Human Rights concerning fundamental human rights and freedoms. Moreover, the courts are bound by the decisions of competent authorities that a criminal offence, a minor offence or an administrative offence punishable under special statute has been committed and by whom. Furthermore, the courts are bound by decisions concerning personal status of individuals, creation and dissolution of companies and registration capital. However, the courts are not bound by decisions taken in summary minor-offence proceedings (blokové konanie).
18. In accordance with Article 135 § 2, other questions, which normally fall to be decided by other authorities, can also be decided by a civil court. However, if the competent authorities decided upon such a question, the civil court will adopt their decision (vychádza z ich rozhodnutia).
19. The operative part of a final judgment is binding upon the parties and upon all authorities. If it concerns personal status of individuals, it is binding upon everyone (Article 159 § 2).
20. Under Article 159 § 3, as soon as a matter has been resolved by force of a final and binding decision or a judgment, it may not give rise to new proceedings.
(b) Extraordinary appeals
21. Extraordinary appeals are regulated by the provisions of the CCP’s Articles 243e et seq.
22. The Prosecutor General has the power to challenge a decision of a court by means of an extraordinary appeal. He or she may do so upon a petition of a party to the proceedings or another person concerned or injured by the decision, provided that the Prosecutor General concludes that the final and binding decision violated the law; provided that the protection of the rights and legitimate interests of individuals, legal entities, or the State so requires; provided that that protection cannot be achieved by other means; and provided that the matter at hand is not excluded from review (Articles 243e § 1 and 243f § 2).
23. An extraordinary appeal may only be aimed at a ruling in a decision, which has been contested by the party to the proceedings or the person concerned or injured by that decision (Article 243e § 2). Unless a statute provides otherwise, the Prosecutor General is bound by the scope of the petition for an extraordinary appeal (Article 243e §§ 3 and 4).
24. Further conditions of admissibility of an extraordinary appeal are listed in Article 243f § 1. They comprise (a) major procedural flaws within the meaning of Article 237 (in that respect see, for example, Ringier Axel Springer Slovakia, v. Slovakia, no. 41262/05, § 62, 26 July 2011), (b) other errors of procedure resulting in an erroneous decision on the merits, and (c) wrongful assessment of points of law.
25. An extraordinary appeal is to be lodged with the cassation court within one year of the contested judicial decision’s becoming final and binding (Article 243g).
26. If the Prosecutor General concludes, upon a petition of a party to the proceedings or another person concerned or injured by the impugned decision, that there is the risk of considerable economic damage or other serious irreparable consequence, the extraordinary appeal may be filed even without reasons. The reasons then must be supplied within 60 days of the lodging of the extraordinary appeal with the cassation court, failing which the proceedings are to be discontinued (Article 243h §§ 3 and 4).
27. If the extraordinary appeal on points of law is accompanied by a request that that the enforceability of the contested decision be suspended, its enforceability is to be suspended at the moment when the extraordinary appeal is lodged with the court of cassation (Article 243ha § 1).
The duration of the effect of such a suspension is regulated by Article 243ha § 2, pursuant to which that effect ceases (a) when the request is dismissed or (b) with the decision on the extraordinary appeal, but unless extended by the court of cassation no later than one year from the lodging of the extraordinary appeal with the court of cassation.
28. A copy of an extraordinary appeal is to be transmitted to the parties to the proceedings for observations and so is, in addition to the Prosecutor General, the decision on it (Article 243i § 1 and Article 243j).
2. The Constitutional Court’s practice
(a) As regards extraordinary appeals
29. In a decision of 29 October 2003 in an unrelated case no. IV. ÚS 197/03, the Constitutional Court held, inter alia, that the Prosecutor General in proceedings before the cassation court in his or her extraordinary appeal has no standing of a party to the proceedings as such, but rather a standing sui generis, similar to that of the parties. In such proceedings, the Prosecutor General does not have any subjective interest of his or her own. The protection from unlawful final and binding decisions, pursued in those proceedings, rather serves general interest.
30. In a decision of 3 June 2008, in another unrelated case no. IV. ÚS 180/08, the Constitutional Court observed, among other things, that individuals and legal entities having submitted a petition to the Prosecutor General for lodging an extraordinary appeal had no legal claim to have such an appeal lodged and that, conversely, the Prosecutor General was under no legal duty to accommodate the petition. It was within the Prosecutor General’s entire discretion to decide whether or not to lodge an extraordinary appeal.
(b) As regards power of review on an extraordinary appeal of questions falling within the framework of other proceedings
31. In its judgment (nález) of 11 December 2007 in an unrelated case no. I. ÚS 159/07, the Constitutional Court held that it was excluded that the lawfulness of the course of enforcement proceedings be examined as a preliminary matter in another type of proceedings, which included proceedings on extraordinary appeals by the Prosecutor General against decisions taken in other proceedings than in the underlying enforcement proceedings.
C. Relevant European texts
The Venice Commission’s Report on the Independence of the Judicial System
32. The report was adopted by the European Commission for Democracy through Law (Venice Commission) at its 82nd Plenary Session (12-13 March 2010).
33. In its section III (9), entitled “Final character of judicial decisions”, the report refers to Principle I(2)(a)(i) of Recommendation No. R (94) 12 of the Committee of Ministers of the Council of Europe on the Independence, Efficiency and Role of Judges, which provides that:
“decisions of judges should not be the subject of any revision outside the appeals procedures as provided for by law”.
The relevant part of the report continues that:
“It should be understood that this principle does not preclude the re-opening of procedures in exceptional cases on the basis of new facts or on other grounds as provided for by law.
66. While the [Consultative Council of European Judges] concludes in its Opinion No. 1 (at 65), on the basis of the replies to its questionnaire, that this principle seems to be generally observed, the experience of the Venice Commission and the case law of the [Court] indicate that the supervisory powers of the Prokuratura in post-Soviet states often extend to being able to protest judicial decisions no longer subject to an appeal.
67. The Venice Commission underlines the principle that judicial decisions should not be subject to any revision outside the appeals process, in particular not through a protest of the prosecutor or any other state body outside the time limit for an appeal.”
COMPLAINT
34. The applicant complains under Article 6 § 1 of the Convention about the quashing of the judgments of 27 February and 8 October 2009 by the Supreme Court upon the extraordinary appeal by the Prosecutor General.
In that respect, it challenges the concept of the extraordinary appeal in general and its application in the present case in particular.
As to the present case in concreto, the applicant company argues that the question of the lawfulness of the acquisition of title in the property by the applicant company was the subject matter of the final and binding order of 9 July 2004 and that, in the proceedings leading up to the quashed judgments, the Supreme Court had no jurisdiction to examine this question as a preliminary matter. Doing so was incompatible with the principles of legal certainty and res iudicata and the rule of law, all the more so that the Supreme Court’s decision is essentially motivated by no more than a differing legal view on the substance from those of the lower courts.
In addition, the applicant company argues that the extraordinary appeal was lodged by the deputy Prosecutor General and not the Prosecutor General himself, which had neither any basis in statute nor in the Constitution.
QUESTIONS TO THE PARTIES
1. Has the applicant company complied with the six-month time-limit laid down in Article 35 § 1 of the Convention?
2. Having regard to the fact that a final and binding judgment in its favour has been quashed by the Supreme Court following an extraordinary appeal on points of law by the Prosecutor General, prompted by a petition by the claimant, did the applicant company have a fair hearing in the determination of its civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular, but not only, were its rights of access to a court and the principles of legal certainty and equality of arms respected?
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