AS TO THE ADMISSIBILITY OF
Application No. 14017/88
by Claes-Göran FRIDH and CIFOND AKTIEBOLAG
against Sweden
The European Commission of Human Rights sitting in private on
2 July 1992, the following members being present:
MM. C.A. NØRGAARD, President
S. TRECHSEL
F. ERMACORA
E. BUSUTTIL
G. JÖRUNDSSON
A.S. GÖZÜBÜYÜK
A. WEITZEL
J.-C. SOYER
H. DANELIUS
Mrs. G. H. THUNE
Sir Basil HALL
Mr. C.L. ROZAKIS
Mrs. J. LIDDY
MM. J.-C. GEUS
M.P. PELLONPÄÄ
B. MARXER
Mr. H.C. KRÜGER, Secretary to the Commission
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 4 May 1988 by
Claes-Göran FRIDH and CIFOND AKTIEBOLAG against Sweden and registered
on 11 July 1988 under file No. 14017/88;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having regard to the written observations submitted by the
respondent Government on 28 February 1990 and the observations in reply
submitted by the applicants on 2 May 1990 as well as the submissions
of the parties at the hearing held on 2 July 1992;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the parties, may be
summarised as follows.
The first applicant is a Swedish citizen, born in 1955 and
resident in Stockholm. The second applicant is a limited liability
company with its seat in Stockholm. They are represented by
Mr. Thomas Tendorf, a lawyer practising in Stockholm.
A. Particular circumstances of the case
At the origin of the present application is a decision, in
November 1987, to revoke from the professional stockbroker company
Civic Fondkommission Aktiebolag (Civic) its licences to deal in shares
and to keep shares in trust.
Civic was founded in 1982 by three stockbrokers. One of them was
the first applicant, who became managing director of the company and
member of the Board of Directors. At that time he owned 8% of the
shares in Civic.
On 25 March 1982 the Bank Inspection Board (bankinspektionen -
hereinafter "the Board") granted Civic a permit to deal in shares under
the 1979 Stockbrokers Act (fondkommissionslagen 1979:748 - "the 1979
Act") and on 5 April 1982 the company became a member of the Stockholm
Stock Exchange (Stockholms fondbörs). On 15 April 1982 the Government
furthermore authorised the company to keep shares in trust in
accordance with Section 16, Sub-Section 1, of the 1970 Act on
Simplified Handling of Shares (lagen 1970:596 om förenklad
aktiehantering - "the 1970 Act"). The authorisation was granted on the
condition inter alia that Civic always should keep, in its deposit, a
number of shares corresponding to the number of shares registered as
its managed shares.
In 1986 Civic's activities had expanded considerably and further
expansion was being planned. A new parent company, Civic Holding, was
accordingly founded in 1986. The first applicant became the managing
director of that company and ceased being managing director of Civic.
Civic Holding obtained all of Civic's shares which it held in trust and
Civic's shareholders received, for their shares, shares in Civic
Holding. Civic became a wholly owned subsidiary of Civic Holding which
also had a number of other subsidiaries dealing with financial matters,
real estate, insurance, etc.
The number of shares in Civic Holding was at all relevant times
1.800.000, divided into 600.000 so-called A shares, having 1.000 votes
each, and 1.200.000 so-called B shares, having 100 votes each, a total
of 720.000.000 votes. The shares were divided between 64 owners by
25 August 1987. At the hearing before the Commission the first
applicant submitted that at the time of the revocation decision (see
below) he owned 578.320 shares, either in his personal capacity or
through a company wholly owned by him. These shares were divided as
follows:
1) 106.000 B shares registered in the name of Affärsstrategerna i
Sverige, representing 10.600.000 votes;
2) 247.300 B shares registered in the name of the first applicant
personally, representing 24.730.000 votes;
3) 225.020 A shares registered in the name of the first applicant
personally, representing 225.020.000 votes.
These shares represented 260.350.000 votes which was equivalent
to 36.2% of the total voting power in Civic Holding.
During the period 3 November 1983 to 17 June 1987 the Board
carried out three inspections of Civic's activities. The inspections,
so the applicants submit, resulted in some oral remarks from the Board
which led Civic to take certain measures, described by Civic as "of
minor importance", to comply.
On 8 and 9 October 1987 a further inspection was made, whereby
the Board discovered a number of shortcomings in the activities of
Civic, which it considered grave. On 12 October 1987 a memorandum
containing the Board's observations following the inspection was
forwarded to Civic for comments within two days. This time limit was
subsequently extended by seven days.
Civic submitted certain observations on 14 October 1987 and its
managers met with the Board on 15 October 1987 in order to discuss the
matter. Later the same day the Board held a meeting at which it laid
down certain general guidelines, the contents of which were not
recorded, regarding the decision to be taken by the Board's Director-
General as soon as Civic had submitted its further written
observations. These observations were submitted on 21 October 1987 and
2 November 1987.
On 2 November 1987 the Director-General decided, on behalf of the
Board, to revoke, with immediate effect, both Civic's licence to deal
in shares and its authorisation to keep shares in trust. As a
consequence, Civic could as of that date no longer be a member of the
Stock Exchange.
In the 13-page decision the Board concluded inter alia that Civic
had not properly held its shares separate from its clients' shares,
contrary to Chapter 2, Section 10, of the 1914 Act on Commissions,
Commerce Agencies and Representations (lagen (1914:45) om kommission,
handelsagentur och handelsresande), it had also in its own name sold
shares which had only been deposited with it by clients (blankning) in
violation of Section 23 of the 1979 Act and had thereby also violated
certain regulations issued by the Board in a circular letter in 1983
as well as the conditions set by the Government when granting the
authorisation of 15 April 1982. Furthermore, the Board found that the
inspection of Civic's activities had disclosed a number of violations
of Sections 13 and 21 of the 1979 Act in the form of irregularities
with regard to the trading of shares and index options and also with
regard to certain other financial transactions. The Board considered
that the shortcomings observed were of such a grave nature that it
would not be possible successfully to reconstruct the company.
The decision was announced to the Board on 19 November 1987. The
Board was informed of the contents of Civic's observations which had
been the basis for the Director-General's decision on its behalf. The
Board had no objections to the decision or to the way the case had been
dealt with. In a memorandum of 26 November 1987 it underlined that the
decision expressed the unanimous opinion of its members.
Civic appealed against the decision to the Government requesting,
on the one hand, that the Government should set aside the Board's
decision as it had not been taken in accordance with the law and, on
the other hand, that the decision should be revoked, as the company had
taken adequate remedial action. Civic also asked the Government to
postpone the entry into force of the revocation decision until the
Government had examined the matter. This last request was rejected by
the Government on 19 November 1987.
The Board submitted its written observations to the Government
on 11, 17 and 26 November 1987 and Civic submitted further observations
on 20, 23 and 30 November 1987.
On 10 December 1987 the Government rejected Civic's appeal on the
merits.
It pointed out that a decision to revoke a licence to deal in
shares should, according to Section 8 of the 1979 Ordinance with
Instructions for the Board (förordning 1979:740 med instruktion för
bankinspektionen), be taken by the Board if the measure could be
considered to be of particular importance for those concerned.
According to Section 9 of the Ordinance an urgent matter could, in
certain circumstances, be decided by the Director-General and four
members of the Board. If this procedure would not be appropriate the
Director-General could in certain cases take a decision in the presence
of the responsible staff member but such a decision should be announced
at the next meeting of the Board. The Ordinance did not otherwise
permit the Board to delegate to the Director-General its competence to
decide. The Government held that, having regard inter alia to the
considerable economic interests affected by the decision and its
importance to Civic's employees, it ought to have been taken by the
Board. However, as the Board had laid down general guidelines for the
decision and had stated on 26 November 1987 that the decision expressed
its unanimous opinion, the Government did not find it necessary to
annul the decision and remit the matter to the Board for a new
decision.
The Government went on to examine the merits of the decision
appealed against. They observed that Civic had seriously neglected the
regulations governing its activities. They found it established that,
although Civic had taken certain measures to remedy the unsatisfactory
state of affairs, the company had proved itself unfit to deal in shares
and to keep shares in trust. The Government found that a written
warning would not suffice and decided to uphold the Board's decision.
Following the revocation, Civic submitted a complaint to the
Parliamentary Ombudsman (justitieombudsmannen). In a decision of 22
February 1988 the Ombudsman criticised the Board for giving Civic,
initially, only two days to file a reply to the Board's memorandum of
12 October 1987. Moreover, he found that the Board's transfer to the
Director-General of its competence to decide the matter violated the
1979 Ordinance, considering the importance of the matter to Civic and
its employees. The Ombudsman also noted that the Government, in their
decision of 10 December 1987, had considered whether the Board ought
to have given Civic a written warning in accordance with Section 31 of
the 1979 Act before revoking the licences and whether the decision of
the Director-General should have been considered a nullity. He pointed
out, however, that he had no competence to examine the Government's
decision in these respects.
As a consequence of the revocation of Civic's licences to deal
in shares and to keep shares in trust, the company's activities ceased.
As indicated above the parent company, Civic Holding, at that time held
1.800.000 shares in trust, and the applicants submit that the estimated
value was approximately 229.000.000 Swedish crowns. However, as Civic
Holding no longer owned a subsidiary company with a licence to deal in
shares, it saw no other alternative than to try to sell the shares. A
company holding licences of the kind Civic had lost offered to buy the
shares at 10 crowns per share plus an option in the company, valued,
so the applicants submit, at a maximum of 15 crowns. It appears that
almost all shareholders, including the first applicant, accepted the
offer and they received, in December 1987, a total of 47.700.000
crowns. Accordingly, the applicants submit that Civic Holding's
shareholders' total loss was approximately 181.000.000 crowns. From the
documents submitted it appears that as from 7 January 1988 the first
applicant did not own shares in Civic Holding any longer.
On 4 February 1988 Civic and Civic Holding entered into the
following agreement with a company called Hängmattan 8 AB which had
been established on 17 September 1987:
(translation)
"TRANSFER
Civic and Civic Holding hereby transfer to Hängmattan 8 AB
(556303-4808) whose name will be changed to Cifond Aktiebolag
[the second applicant] the right to damages and/or other
compensation which Civic and/or Civic Holding may have against
the Swedish State or any other body as a result of the revocation
of the licence to deal in shares (fondkommissionstillståndet) and
of the authorisation to keep shares in trust (förvaltare av
aktier) and/or the manner in which any authority concerned has
dealt with this matter.
Stockholm 4 February 1988
CIVIC FONDKOMMISSION AB AB CIVIC HOLDING
(signature) (signature) (signature) (signature)
Bure Malmström Hans Herrlin Gerhard Hällgård Claes-Göran Fridh"
On 30 March 1988 the Patent and Registration Office (Patent- och
registreringsverket) recorded that Hängmattan 8 had changed its name
to Cifond AB (the second applicant) the registered purpose of which was
to bring proceedings, nationally or internationally, against the
Swedish State in order to obtain for Civic Holding's shareholders
compensation for the revocation of Civic's licences.
B. Relevant domestic law and practice
Professional stockbroking in Sweden was governed at the relevant
time the 1979 Act and the 1970 Act and the 1970 Ordinance on Simplified
Handling of Shares (förordningen 1970:600 om förenklad aktiehantering -
"the 1970 Ordinance"). As of 1 July 1987 the 1970 Act and the 1970
Ordinance were replaced by the 1987 Act on Simplified Handling of
Shares (lagen 1987:623 om förenklad aktiehantering - "the 1987 Act").
a. Professional Stockbroking and the Bank Inspection Board
According to the 1979 Act, Section 3, everyone who wishes to deal
professionally in shares must have the permission of the Board, which
is a specialised organ supervising banks and professional stockbrokers.
Such a licence may be granted only to Swedish limited liability
companies and to Swedish banks that meet the requirements laid down in
the Act. These are in particular that the articles of association of
the company or the bank must not conflict with the Act or any other
statute, that the company or bank must not be unsuitable to conduct the
kind of business activity at issue and that the enterprise must not
harm the public. In addition the minimum share capital is 500.000
Swedish crowns.
The travaux préparatoires (proposition 1978/79:9, pp. 175-176)
to the 1979 Act provide the following background information as to the
conditions for granting a licence. The Board shall look into the
organisation of the business and the personal suitability of the
management and the owners. Before granting a permit the Board must
ascertain that the business will be conducted in a correct and
judicious manner. The question of whether or not a company or a bank
is deemed suitable to conduct the business of dealing professionally
in shares is an essential part of the Board's consideration of an
application for a licence.
The activities of professional stockbrokers are supervised by the
Board (Section 26 of the 1979 Act). The Board shall ensure that the
brokers conduct their business in accordance with the 1979 Act and
other statutes governing their activities. Furthermore, the Board
shall, to the extent needed, supervise their activities in order to
make sure that their business is conducted in an acceptable manner, not
only from the point of view of capital investment security, but also
taking into account the general demand for security and other factors
which are important for the sound development of stockbroking (Section
27). In order to make it possible for the Board to fulfil its tasks,
the professional stockbrokers have to submit certain documents and
reports to the Board. The Board may also collect information through
inspections at their offices or in other ways (Section 28).
The Board may revoke a licence in three different cases: first,
if the assets of the limited liability company of the professional
stockbroker do not correspond to a specified part of the required share
capital; secondly, if the stockbroking company or bank infringes the
1979 Act, manifestly sets aside the interests of its clients or in any
other way demonstrates that it is no longer suitable to engage in the
stockbroking business; and finally, if the brokerage business in some
other way proves to be harmful to the general interest (Section 29).
Instead of revoking the licence, the Board may issue a written
warning to the professional stockbroker in cases where it considers
this sufficient (Section 31).
As regards the background to these rules the above-mentioned
travaux préparatoires state the following (pp. 151-152). The investors
are entitled to an official supervision of the activities of the
professional stockbrokers equivalent to that applied to banks and
insurance companies. Accordingly, the regulations proposed correspond
to a large extent to those governing the banks. The aim of the
supervision is to ensure that the brokers conduct their business in
forms that are acceptable from the point of view of capital investment
security. The Board shall note phenomena which could negatively
influence the brokers' wish and capability to act according to the
interests of their customers, e.g. cases where the broker might have
interests contrary to those of the clients. The Board should therefore
ensure that the brokers observe the 1979 Act and other statutes
regulating their activities. It should also supervise the brokers'
respect of their own articles of association. In addition, the Board
shall ascertain that the management and the owners of the broker are
persons who can be expected to conduct the business in a correct and
judicious manner.
b. Authorisation to keep shares in trust under the 1987 Act on
Simplified Handling of Shares
According to the 1987 Act, the Government or the special
authority entrusted with this task (i.e. the Board) may authorise banks
and professional stockbrokers to hold shares in trust for their clients
(Section 6, Sub-Section 1). When granting an authorisation the Board
may prescribe such conditions as it deems necessary both in relation
to the general interest and to the private interests involved. An
authorisation may be revoked according to the same Act if the broker
does not comply with the conditions issued and if the non-observance
is deemed to be important.
The travaux préparatoires (Government Bill 1970:99 - which is
also referred to in the Bill proposing the 1987 Act) indicate that a
prerequisite for maintaining an authorisation given under the 1970 and
1987 Acts is that the company or the bank is holding a licence under
the 1979 Act to deal professionally in shares. Banks and brokers have
furthermore to have satisfactory bookkeeping concerning the deposited
shares in order to receive this authorisation. The trustee
(förvaltaren) has, for instance, to have complete and reliable
information regarding the actual shareholder and his/her stock of
shares. If the conditions are seriously infringed, the authorisation
may be revoked.
c. Decisions of the Bank Inspection Board
At the relevant time, the competence of the Board was regulated
by the 1979 Ordinance. This Ordinance specified that the Board should
consist of six members headed by a Director-General.
According to this Ordinance (Section 8, Sub-Section 7) decisions
concerning inter alia various licences, should be taken by the Board
to the extent that the decision could be deemed to be of special
importance for a body under the supervision of the Board. However, the
Board could also decide a case through communications between the
Director-General and at least four other members of the Board if the
matter was of such an urgent nature that there was no time for the
Board members to convene (Section 9). If the case could not be handled
in this way either, the Director-General was allowed to make
decision on his/her own in the presence of the person reporting the
case. Such a decision had to be reported to the Board at its following
meeting.
d. Appeals to the Government and other remedies
Decisions by the Board under the 1979 and 1987 Acts may be
appealed against to the Government as first and final instance (Section
46 of the 1979 Act and Section 10 of the 1987 Act). The proceedings
before the Government are not regulated by the Administrative Procedure
Act (förvaltningslagen) although the Government will, as a matter of
practice, follow, as far as possible, the provisions of this Act. At
the relevant time, the Government's decisions could not be appealed to
the courts. As from 1 June 1988 a possibility of judicial review of the
Government's decisions has been created through the entry into force
of the 1988 Act on Judicial Review of certain Administrative Decisions
(lag om rättsprövning av vissa förvaltningsbeslut).
COMPLAINTS
The applicants allege a violation of Article 6 para. 1 of the
Convention. They argue that the revocation of Civic's licences to deal
in shares and to keep shares in trust was a determination of that
company's civil rights. Since the only right of appeal was to the
Government, Civic had no possibility of having the dispute which arose
with regard to the revocation of the licences examined by a court.
They also allege a violation of Article 13 of the Convention.
Furthermore, they maintain that the revocation of Civic's
licences to deal in shares and to keep shares in trust amounted to a
deprivation of property contrary to Article 1 of Protocol No. 1 to the
Convention.
Finally, they complain that Civic has been the victim of
discrimination as the Board did not treat other cases of failure to
comply with the relevant regulations in the same way as Civic's case.
The applicants invoke Article 14 of the Convention in conjunction with
Article 1 of Protocol No. 1 to the Convention.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 4 May 1988 and registered on
11 July 1988.
On 14 December 1989 the Commission decided to bring the
application to the notice of the respondent Government and to invite
them to submit written observations on the admissibility and merits of
the application.
The Government submitted their observations on 28 February 1990
and the applicants submitted their observations in reply on 2 May 1990.
On 31 March 1992 the Commission decided to hold a hearing on the
admissibility and merits of the application.
The hearing took place on 2 July 1992. The parties were
represented as follows:
For the Government
- Mr. Carl Henrik Ehrenkrona, Assistant Under-Secretary, Ministry
for Foreign Affairs, Agent
- Mr. Göran Haag, Legal Adviser, Ministry of Finance
For the applicants
- Mr. Thomas Tendorf, lawyer, counsel for the applicants
- Mr. Claes-Göran Fridh, applicant and representative of Cifond AB.
THE LAW
The applicants complain, under Article 6 para. 1 (Art. 6-1) of
the Convention and Article 1 of Protocol No. 1 (P1-1) to the
Convention, of the revocation of Civic's licences to deal in shares and
to keep shares in trust. These provisions read as follows:
Article 6 para. 1 (Art. 6-1) of the Convention
"In the determination of his civil rights and obligations or of
any criminal charge against him, everyone is entitled to a fair
and public hearing within a reasonable time by an independent and
impartial tribunal established by law. Judgment shall be
pronounced publicly but the press and public may be excluded from
all or part of the trial in the interest of morals, public order
or national security in a democratic society, where the interests
of juveniles or the protection of the private life of the parties
so require, or to the extent strictly necessary in the opinion
of the court in special circumstances where publicity would
prejudice the interests of justice."
Article 1 of Protocol No. 1 (P1-1) to the Convention
"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."
It is clear from Article 25 para. 1 (Art. 25-1) of the Convention
that the Commission may receive an application from a person, non-
governmental organisation or group of individuals only if such person,
non-governmental organisation or group of individuals can claim to be
a victim of a violation, by one of the High Contracting Parties, of the
rights set forth in the Convention or its Protocols. It is undisputed
that the company Civic is not itself a party to the present
proceedings, although the licences in question had been issued to this
company and the revocation order addressed to it and not to the
applicants in the present case. Accordingly the Commission must first
examine whether the decision to revoke the licences affected the
applicants to such an extent that they can claim to be victims within
the meaning of Article 25 para. 1 (Art. 25-1) of the Convention.
As regards the first applicant the Government submit that he
could only be a victim if it could be established that he was a
majority or controlling shareholder of Civic Holding, Civic's parent
company. In this context the Government submit that it would lead very
far to permit complaints from applicants who hold shares in companies
which in turn own shares in other companies.
The first applicant maintains that his financial involvement in
Civic was such that he had an interest in the outcome of the
proceedings against Civic sufficient for him to be considered a
"victim" within the meaning of Article 25 para. 1 (Art. 25-1) of the
Convention.
As a starting-point the Commission recalls that the term "victim"
in Article 25 (Art. 25) denotes the person directly affected by the act
or omission which is at issue (cf. Eur. Court H.R., Eckle judgment of
15 July 1982, Series A no. 51, p. 30, para. 66). Furthermore, the
Commission recalls that it has in several cases considered to what
extent shareholders could claim to be victims within the meaning of
Article 25 (Art. 25) of the Convention. In two applications, No.
1706/62 (Dec. 4.10.66, Collection 21 p. 33) and No. 10259/83 (Dec.
10.12.84, D.R. 40 p. 170), the Commission held that the applicants who
were both presidents of the companies against which measures were taken
and who both owned 91% of the shares in the respective companies could
claim to be a victim under Article 25 (Art. 25) of the Convention. In
application No. 7598/76 (Kaplan v. United Kingdom, Comm. Report
17.7.80, D.R. 21 p. 5, at p. 23) the Commission found that the
applicant who was managing director and "controller" of the company and
furthermore owned 82% of the shares in a company which owned 99% of the
shares of another company which again owned the company in question,
could claim to be a victim under Article 25 (Art. 25). In effect the
Commission found that the applicants in the above cases were carrying
out their own business through the medium of the company and that they
had a direct personal interest in the subject-matter of the complaint.
In the case of Yarrow and others (No. 9266/81, Dec. 28.1.83, D.R.
30 p. 155, at p. 185) the Commission held that the applicant
shareholders, who did not hold a majority or controlling interest in
the company in question, were not directly and personally affected by
the measure taken (the nationalisation of a wholly owned subsidiary)
even though this measure undoubtedly reduced the value of their
shareholdings. It concluded therefore that they could not claim to be
victims within the meaning of Article 25 (Art. 25) of the Convention.
The Commission has examined the first applicant's situation in
the light of the above case-law. As regards the number of shares owned
by him, the Commission recalls that he did not own any shares in Civic
but in the parent company Civic Holding and that his shareholding,
according to him, amounted to 578.320 shares which corresponded to a
total of 260.350.000 votes, or approximately 36.2% of the total votes.
The Commission has not found it necessary to establish whether these
figures are correct in all respects as, even if they are, it has found
that the first applicant cannot claim to be a victim of any violation
of his rights under the Convention. As regards in particular the
complaint under Article 6 (Art. 6) of the Convention, the Commission
notes that, in contrast to the above-mentioned Kaplan case, the
impugned measures were not taken as a result of any evaluation of the
first applicant's personal situation. As regards in particular the
complaint under Article 1 of Protocol No. 1 (P1-1) to the Convention
it is true that the Commission has previously accepted as a victim a
shareholder claiming that an attack on his right to influence a company
interfered with his property rights (cf. No. 11189/84, Dec. 11.12.86,
D.R. 50 p. 121). However, the revocation of Civic's licences did not
change the first applicant's situation in this respect. In particular
the Commission has not found it established that the applicant was
subjected to any legal or other obligation to sell his shares in Civic
Holding as a result of the revocation of Civic's licences. There
remains, however, the allegation that he was personally affected by the
revocation of Civic's licences as his shares dropped in value due to
this decision. In the circumstances of the present case, in particular
the limited size of the applicant's alleged shareholding, the
Commission finds that his situation in this respect was comparable to
the situation of the applicant shareholders in the above-mentioned case
of Yarrow and others. He cannot therefore, in the Commission's view,
himself claim to be a victim within the meaning of Article 25 (Art. 25)
of the Convention of the revocation of Civic's licences.
As regards the second applicant the Government maintain that
Civic Holding's and Civic's transfer to the second applicant of their
possible right to damages does not imply a transfer also of the status
of victim. The purpose of the examination under the Convention is not
primarily to establish a right to damages, but to establish whether or
not the applicant has been a victim of a violation of the Convention
in any respect. The Government claim that it would not be consistent
with the ideas underlying the Convention to accept that the second
applicant's acquisition of the mere right to damages was equivalent to
a transfer of the status of victim.
The Government also observe that the second applicant cannot be
considered a victim as the company did not pay anything for the rights
acquired. Otherwise this would imply that the second applicant was
compensated for a damage it had never suffered.
The second applicant maintains in the first place that the sale
of the shares in question was a necessity in order to minimise the big
losses which resulted from the revocation of Civic's licences. As the
buyer was not willing to pay anything for Civic Holding's and Civic's
possible right to compensation it was considered just and fair that
this right should be transferred to another organ which was capable to
pursue and interested in pursuing the interests of the old
shareholders. The second applicant considers that it would create an
obstacle to the filing of complaints under the Convention if the
acquirer of compensation rights in a case such as the present one would
not be allowed to participate in the proceedings before the Commission.
The second applicant adds that it is not true that it only stands
to gain from the transfer. It has undertaken to pay any compensation
received to those persons who were the real victims of the impugned
decision, namely the shareholders in Civic Holding, by 1 December 1987.
Having regard to the case-law referred to above the Commission
finds that a transfer of the status of victim can only be accepted in
special circumstances where special reasons exist (cf. also
No. 8261/78, Kofler v. Italy, Comm. Report 9.10.82, D.R. 30 p. 5). The
Commission does not find that such reasons exist. The mere fact that
the second applicant submits that it is in fact defending the common
interests of the real victims, namely the shareholders of Civic
Holding, is not sufficient to make the second applicant a victim within
the meaning of Article 25 (Art. 25) of the Convention (cf. No. 9939/82,
Dec. 4.7.83, D.R. 34 p. 213). In addition, the Commission has not found
it established that the real victims, i.e. Civic and possibly its
owners, were in fact prevented from lodging themselves the present
complaints with the Commission (cf. the above-mentioned Yarrow case,
D.R. 30 p. 155, at p. 185).
It follows that, as regards the alleged violations of Article 6
para. 1 (Art. 6-1) of the Convention and Article 1 of Protocol No. 1
(P1-1) to the Convention, neither applicant fulfils the victim
requirement set out in Article 25 (Art. 25) of the Convention.
Accordingly this part of the application is incompatible, ratione
personae, with the provisions of the Convention and must be rejected
in accordance with Article 27 para. 2 (Art. 27-2) of the Convention.
At the hearing before the Commission on 2 July 1992, the second
applicant alternatively maintained that the real applicants were in
fact the old shareholders of Civil Holding and that Cifond only acted
as their legal representative. The company also produced affidavits
attesting to the correctness of this assertion in respect of some 52%
of Civic Holding's old shareholders, representing approximately 62% of
the total voting power in the company.
Even assuming that such a majority group of shareholders may be
considered as "victim" for the purposes of Article 25 (Art. 25) of the
Convention, the Commission cannot in the circumstances of the present
case find that this new submission is of such a nature as to give it
competence to deal with the merits of the complaints of Civic Holding's
shareholders.
The original application to the Commission unequivocally stated
that Cifond itself was the victim of the alleged violations of the
Convention and of Protocol No. 1. In no way did it appear from the
documents submitted to the Commission before the hearing that Cifond
was in fact merely acting as a legal representative of Civic Holding's
shareholders. These shareholders only put forward their claim to be
themselves victims of these alleged violations at the hearing on 2 July
1992, i.e. more than six months after the Government's final decision
of 10 December 1987.
Considering that the Commission may not deal with complaints
submitted more than six months after the final domestic decision
(Article 26 (Art. 26) of the Convention), it follows that the
complaints presented by Civic Holding's shareholders at the hearing on
2 July 1992 have to be rejected.
The applicants also invoke Articles 13 (Art. 13) and 14 of the
Convention, the latter in conjunction with Article 1 of Protocol No.
1 (Art. 14+P1-1) to the Convention.
Having regard to its above conclusion, however, the Commission
finds that no separate issue arises under these provisions.
For these reasons, the Commission, by a majority,
DECLARES THE APPLICATION INADMISSIBLE.
Secretary to the Commission President of the Commission
(H.C. KRÜGER) (C.A. NØRGAARD)
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