FOURTH SECTION
PARTIAL DECISION
AS TO THE ADMISSIBILITY OF
Application no. 46190/99
by HEROLD TELE MEDIA, s.r.o. and Others
against Slovakia
The European Court of Human Rights (Fourth Section), sitting on 23 March 2004 as a Chamber composed of
SirNicolas Bratza, President,
MrM. Pellonpää,
MrsV. Strážnická,
MrR. Maruste,
MrS. Pavlovschi,
MrL. Garlicki,
MrJ. Borrego Borrego, judges,
and Mr M. O'Boyle, Section Registrar,
Having regard to the above application lodged on 15 December 1998,
Having deliberated, decides as follows:
THE FACTS
The applicants are creditors of the State-owned company Slovenské telekomunkácie, š.p. Bratislava. Their particulars appear in the appendix.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
On 16 January 1996 private company HBD Slovakia, spol. s r.o. (of which Herold Tele Media, s.r.o. is the legal successor) requested the Bratislava City Court to start settlement proceedings (dohodovacie konanie), within the meaning of Section 4 et seq. of the Bankruptcy Act of 1991, in respect of the State-owned company Slovenské telekomunikácie, š.p. The plaintiff claimed that the debtor had failed to comply with its contractual obligations in respect of several creditors. The plaintiff further claimed that the validity of the relevant contract had been earlier confirmed by the State Arbitration and by courts at two levels of jurisdiction.
According to the action, the debts of Slovenské telekomunikácie, š.p. in respect of four creditors mentioned in it amounted to 22,413,247,534.20 Slovakian korunas (SKK) and thus clearly exceeded its assets amounting to SKK 10,755,766,000. Finally, the plaintiff claimed that the debtor was to submit a list of its creditors within three days, to convoke a meeting of the creditors within thirty days, and to abstain from alienating or mortgaging its property.
On 20 August 1996 the Government of the Slovak Republic decided, following an inquiry addressed to it by the City Court, not to authorise an adjudication on bankruptcy of Slovenské telekomunikácie, š.p. Such an authorisation was a prerequisite for declaring the above company bankrupt as it fell under Section 67(4)(c) of the Bankruptcy Act of 1991. The Minister of Justice was instructed to notify this decision to the Bratislava City Court.
On 24 October 1996 the Bratislava City Court discontinued the proceedings. Reference was made to Article II of Act No. 292/1996 and to the fact that the defendant fell under Section 67(3) of the Bankruptcy Act of 1991 as it was a State-owned company of strategic importance, within the meaning of the relevant law. According to the decision, the proceedings in question concerned an adjudication on the company's bankruptcy.
On 19 November 1996 the plaintiff appealed stating that the first instance decision had been served on 5 November 1996. Its representative referred to the fact that a group of Members of Parliaments had challenged Act No. 292/1996 before the Constitutional Court and that the proceedings were pending.
On 11 December 1996 a meeting of creditors of Slovenské telekomunikácie, š.p. was held in the premises of a Notary Public in Bratislava. It was attended by six persons including Mr I. Matušík in his capacity as representative of the company HBD, s.r.o. Mr M. Sýkora was represented by another person. The participants elected a council of creditors, within the meaning of Section 4a(5) of the Bankruptcy Act. Mr I. Matušík was elected its President.
On 26 March 1997 the Supreme Court upheld the City Court's decision of 24 October 1996. Like the City Court, the Supreme Court decided in camera. A stamp on the Supreme Court's decision of 26 March 1997 indicates that it became final on 24 July 1998.
On 24 April 1998 Herold Tele Media, s.r.o. filed a new appeal against the Bratislava City Court's decision of 24 October 1996. In the appeal the plaintiff alleged that the City Court's decision had been formally served on 9 April 1998 and pointed out that Article II of Act No. 292/1996 had been invalidated as a result of the Constitutional Court's finding of 3 March 1998.
On 3 September 1998 the Supreme Court discontinued the proceedings. The decision stated that the matter had become res judicata on 24 July 1998 following the service of its above decision of 26 March 1997. The Supreme Court considered irrelevant whether or not the City Court's decision of 24 October 1996 had been duly served on the plaintiff on 5 November 1996.
On 4 August 1998 one of the creditors of Slovenské telekomunikácie, š.p. filed a petition with the Constitutional Court. He alleged a violation of his constitutional right to judicial protection in that the Bratislava Regional Court (which had taken over the case‑list of the former Bratislava City Court) had failed to proceed with the settlement proceedings initiated by Herold Tele Media, s.r.o. on 16 January 1996.
On 20 May 1999 the Constitutional Court declared the petition manifestly ill-founded. The decision stated, inter alia, that the plaintiff was free to claim the sum due to him pursuant to the relevant provisions of the Commercial Code.
On 29 April 1999 Herold Tele Media, s.r.o. filed a petition with the Constitutional Court. Its representative alleged a violation of Article 6 § 1 of the Convention in that the Bratislava Regional Court had failed to proceed with the settlement proceedings which the legal predecessor of the company had initiated on 16 January 1996.
On 18 May 1999 the Constitutional Court declared the petition admissible.
Herold Tele Media, s.r.o. repeatedly requested the Constitutional Court to issue an interim measure preventing the competent Ministry from alienating the property of Slovenské telekomunikácie, a.s. which had become a joint stock company in the meantime. The Constitutional Court took no decision on such requests.
On 6 July 2000 Herold Tele Media, s.r.o. withdrew its petition with the explanation that there existed no guarantee that the proceedings before the Constitutional Court would be in conformity with Article 6 § 1 of the Convention. On 13 July 2000 the Constitutional Court discontinued the proceedings
B. Relevant domestic law and practice
1. The Bankruptcy Act of 1991
Section 3(3) of the Bankruptcy Act of 1991 (Zákon o konkurze a vyrovnaní, No. 328/1991 Coll.) provides that bankruptcy cases are dealt with and decided upon by a single judge. A hearing in the case shall be schedule only where it is required by the law or where the judge considers it necessary.
The second part of the Bankruptcy Act of 1991 is entitled “Bankruptcy”. Between 1 June 1993 and 31 January 1998 it comprised Sections 4 and 4a to 4g which provided for settlement proceedings. Such proceedings were to follow a bankruptcy petition and preceded the declaration of a person as bankrupt. The relevant provisions, which were repealed with effect from 1 February 1998, stipulated as follows.
Pursuant to Section 4(1), courts were not entitled to decide on bankruptcy prior to the termination of settlement proceedings. Section 4(3) provided that the aim of the settlement proceedings was to permit the debtor to resolve his or her situation and the creditors to have their claims satisfied.
Under Section 4a(2) and (5), the debtor was to convoke a meeting of creditors within thirty days following the service of a creditor's request for settlement proceedings to be brought. A council of creditors was to be elected at the meeting of creditors.
Section 4e(2) and (3) provided that the council of creditors was entitled to suspend the persons authorised to act on behalf of the company under its articles in the exercise of their functions, to nominate managers of the debtor company for the period of settlement negotiations, to authorise a person to supervise the debtor's business activities, to participate in the elaboration of a re-stabilisation project and to control its implementation. The council of creditors was also authorised to approve the use of property by the debtor.
Under Section 4f, the aim of the project of re-stabilisation was to ensure the improvement of the debtor's financial situation with a view to preventing his, her or its bankruptcy. Such a project had to specify measures to be taken including the time-table for paying-off the debts. The council of creditors was obliged to submit an approved project of re-stabilisation to the court within sixty days from its election.
Pursuant to Section 4g(1)(b), a court had to terminate settlement proceedings in the event that the council of creditors failed to submit to it an approved project of re-stabilisation within sixty days from the election of the council of creditors.
Pursuant to Section 67(3), the Bankruptcy Act of 1991 is not applicable to State bodies financed from the State budget, to municipalities and to legal persons established by virtue of a law.
Pursuant to Article I of Act No. 292/1996, Section 67(3) of the Bankruptcy Act of 1991 was amended, with effect from 16 October 1996, in that bankruptcy proceedings were also excluded in respect of State-owned companies listed in a special law, including Slovenské telekomunikácie, š.p.
Under Article II of Act No. 292/1996 courts were obliged to discontinue bankruptcy proceedings in respect of debtors set out in Section 67(3) of the Bankruptcy Act of 1991 where the person concerned had not been declared bankrupt at the moment of the entry into force of Act No. 292/1996 on 16 October 1996. Article II of Act No. 292/1996 became ineffective following a Constitutional Court's finding of 3 March 1998 (see “The relevant domestic practice” below).
Pursuant to Section 67(4)(c) of the Bankruptcy Act of 1991, the provisions of this Act are not applicable, with the exception of Sections 4a to 4g, in respect of debtors in the area of transport and telecommunications which are of strategic economic importance for the State. An exemption from this rule can be granted by the Government of the Slovak Republic.
2. The relevant domestic practice
On 3 March 1998 the Constitutional Court found that Article I of Act No. 292/1996 was contrary to the Constitution to the extent that it excluded the bringing of bankruptcy proceedings in respect of legal persons established by a law. The Constitutional Court further found that Article II of Act No. 292/1996 was contrary to Article 1 of the Constitution which provides, inter alia, that the Slovak Republic is a State of law. The finding became effective upon its publication in the Collection of Laws on 3 April 1998.
According to the Supreme Court's case-law (decision No. 5 Obo 67/97 of 22 August 1997), a court has to terminate settlement proceedings under the Bankruptcy Act of 1991 by delivering a formal decision which can be challenged by means of an appeal. The settlement proceedings are considered as terminated when the relevant judicial decision becomes final.
According to the explanatory report to a draft amendment to the Bankruptcy Act of 1991 proposing to repeal the provisions governing settlement proceedings in the context of adjudication on a person's bankruptcy, settlement proceedings turned out to be ineffective in practice. In particular, projects of re-stabilisation adopted in the context of such proceedings were not legally binding so that debts could be enforced in parallel, councils of creditors did not represent all creditors and their activities could not be controlled by courts. As a result, property of debtors was sold.
COMPLAINTS
1. The applicants allege that the settlement proceedings initiated by the predecessor of Herold Tele Media, s.r.o. on 16 January 1996 preceded and were distinct from bankruptcy proceedings and that those settlement proceedings should have been terminated by a formal decision. Since such a decision has not been delivered, the applicants contend that the settlement proceedings are still pending and complain under Article 6 § 1 of the Convention that their length has been excessive.
The applicants further complain under Article 6 § 1 of the Convention that, as a result of adoption of Act No. 292/1996 and the ensuing decision to discontinue the proceedings initiated on 16 January 1996, their right to a fair hearing by a tribunal was violated. In their view, the Supreme Court should have suspended the proceedings on the appeal against the Bratislava City Court's decision of 24 October 1996 pending the outcome of the proceedings before the Constitutional Court concerning the conformity with the Constitution of Act No. 292/1996. They also complain that the courts decided in camera without having heard the parties.
In the applicants' view, they all should have been considered as parties to the settlement proceedings initiated on 16 January 1996 as they were creditors of Slovenské telekomunikácie, š.p. As the Bratislava City Court's decision was only served on the company Herold Tele Media, s.r.o. the other applicants' rights under Article 6 § 1 were violated in this context.
2. The applicant company Herold Tele Media, s.r.o. complains under Article 6 § 1 of the Convention that the Constitutional Court failed to proceed with its petition of 29 April 1999 without delay and that it did not grant its request for an interim measure to be issued.
3. The applicants allege a violation of Article 13 in conjunction with Article 6 of the Convention in that the domestic courts discontinued the proceedings pursuant to Article II of Act No. 292/1996.
4. Under Article 1 of Protocol No. l the applicants complain that, as a result of the decision to discontinue the proceedings following the entry into force of Act No. 292/1996, they were prevented from recovering sums which Slovenské telekomunikácie, š.p. owed them by means provided for by law.
THE LAW
1. The applicants allege a violation of Article 6 § 1 of the Convention the relevant part of which provides as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal ...”
a) To the extent that Mr I. Matušík, Mr. Ľ. Sládek, Mr M. Sýkora and the Council of Creditors of Slovenské telekomunikácie, š.p. complain that the Bratislava City Court's decision was only served on the company Herold Tele Media, s.r.o., the Court notes that the proceedings in question were brought by the predecessor of Herold Tele Media, s.r.o. and that the other applicants did not formally join those proceedings. The Court, without having to determine whether or not Article 6 § 1 is applicable, finds that no issue under Articles 6 § 1 arises as regards the fact that the City Court's decision was only served on the representative of Herold Tele Media, s.r.o.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
b) The applicants allege that the settlement proceedings initiated by the predecessor of Herold Tele Media, s.r.o. on 16 January 1996 preceded and were distinct from bankruptcy proceedings and that those settlement proceedings should have been terminated by a formal decision. Since such a decision has not been delivered, the applicants contend that the settlement proceedings are still pending and complain that their length has been excessive.
The Court notes that at the relevant time settlement proceedings were to precede adjudication on a person's bankruptcy and that they were conducted in the context of bankruptcy proceedings which, as a whole, were governed by the second part of the Bankruptcy Act of 1991.
The documents available indicate that the proceedings brought by the predecessor of Herold Tele Media, s.r.o. on 16 January 1996 were terminated by the Bratislava City Court's decision of 24 October 1996. This decision was upheld by the Supreme Court on 26 March 1997 and became final on 24 July 1998. The Court considers irrelevant that these judicial decisions did not specifically indicate that they concerned settlement proceedings.
The Court is not called upon to determine whether Article 6 § 1 is applicable and whether the applicants other than Herold Tele Media, s.r.o. can claim to be victims in this context as, in any event, the length of the proceedings in question was not in breach of the reasonable time requirement laid down in Article 6 § 1.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
c) The applicants further allege that, as a result of adoption of Act No. 292/1996 and the ensuing decision to discontinue the proceedings initiated on 16 January 1996, their right to a fair and public hearing by a tribunal was violated.
The Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
d) To the extent that the applicant company Herold Tele Media, s.r.o. complains that the Constitutional Court did not grant its request for an interim measure to be issued, the Court recalls that interlocutory proceedings relating to a request for an interim measure to be issued do not attract the guarantees of Article 6 § 1 (see Apis a.s. v. Slovakia (dec.), no. 39754/98, 13 January 2000, unpublished).
It follows that this complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
e) The applicant company Herold Tele Media, s.r.o. also complains about the length of the proceedings before the Constitutional Court.
The Court finds that this complaint, to the extent that it has been substantiated and falls within its competence, does not disclose any appearance of the applicant company's rights under the Convention.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
2. The applicants complain that they had no effective remedy at their disposal in respect of their complaint under Article 6 § 1 concerning the domestic courts' decision to discontinue the proceedings pursuant to Act No. 292/1996. They rely on Article 13 of the Convention which provides as follows:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
The Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
3. Finally, the applicants complain that, as a result of the decision to discontinue the proceedings following the entry into force of Act No. 292/1996, they were prevented from recovering sums which Slovenské telekomunikácie, š.p. owed them by means provided for by law. They allege a violation of Article 1 of Protocol No. l which provides as follows:
“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.”
The Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
For these reasons, the Court unanimously
Decides to adjourn the examination of the applicants' complaints that their right to a fair and public hearing by a tribunal, their right to an effective remedy and also their property rights were violated as a result of the decision to discontinue the proceedings pursuant to Article II of Act No. 292/1996;
Declares the remainder of the application inadmissible.
Michael O'BoyleNicolas bratza
RegistrarPresident
APPENDIX
LIST OF THE APPLICANTS
1.Herold Tele Media, s.r.o., a private limited company with registered office in Bratislava, represented by Mr I. Matušík.
2.Mr Ivan MATUŠÍK, a Slovakian national born in 1956, resides in Láb.
3.Mr Ľubomír SLÁDEK, a Slovakian national born in 1954, resides in Bratislava.
4.Mr Martin SÝKORA, a Slovakian national born in 1975, resides in Bratislava.
5.Council of Creditors of the State-owned Enterprise Slovenské telekomunikácie, š.p., established at a meeting of creditors held on 11 December 1996 and represented by its President, Mr. I. Matušík.
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