Communicated on 10 May 2017
THIRD SECTION
Application no. 50817/15
NASK, s.r.o.
against Slovakia
lodged on 1 October 2015
STATEMENT OF FACTS
The applicant, NASK, s.r.o., is a private limited company which was established under the laws of Slovakia in 2001 and has its registered office in Veľký Meder. It is represented before the Court by Mr M. Šulva, a lawyer practising in Bratislava.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
The applicant company operated a distillery and produced and marketed alcoholic beverages. In 2004 the customs authorities carried out an audit of the applicant company’s operations, in the course of which they issued a seizure order in relation to a large quantity of alcohol on the suspicion that it had been marked with counterfeit excise stamps. They subsequently stayed the proceedings pending an assessment of the authenticity of the stamps by an expert.
However, the decision to stay the proceedings was quashed by the Central Customs Administration. It also subsequently quashed the decision to seize the alcohol, in particular on the grounds that in the given context the authenticity of the stamps was not decisive as long as the alcohol was located in a tax warehouse, as in the case at hand, and not in free circulation.
In 2006 the applicant company sued the State, in the person of the Ministry of Finance, for a large sum of money in compensation for the damage it had allegedly sustained due to the decision to seize its alcohol and for what it considered to be errors of procedure before the customs authorities. In particular, it argued that as its alcohol had been seized it had been prevented from honouring old contracts and acquiring new ones and had eventually run out of business.
On 19 June 2007 the Bratislava II District Court issued an interlocutory judgment recognising the basis for the applicant company’s claim. It accepted that the applicant company had sustained damage on account of the defendant’s wrongful official decision and conduct in terms of the applicable statute. That was a prerequisite for granting it damages. The scope of the applicant company’s claim or, in other words, the amount of damages to be awarded to the applicant company, was to be determined in subsequent proceedings by a final judgment.
On 1 October 2009 the Bratislava Regional Court upheld the judgment of 19 June 2007 following an appeal (odvolanie) by the defendant, as a result of which the interlocutory judgment became final and binding on 17 December 2009.
The remaining question of the amount of damages then fell to be determined at first instance by the District Court. On 28 June 2010 the applicant company informed the court that it had transferred its claim to another private entity. Accordingly, it asked that the other entity be admitted to the proceedings as claimant in its place.
On 6 July 2010 the Prosecutor General acceded to a request by the defendant and exercised his discretionary power to challenge the judgments of 19 June 2007 and 1 October 2009 by way of an extraordinary appeal on points of law (mimoriadne dovolanie) to the Supreme Court. He argued in particular that there had been no causal connection between the damage sustained and the impugned wrongful official actions and decisions. He argued that the primary reason for the applicant company having been prevented from utilising the alcohol in question was not its seizure by the customs authorities but the fact that the police had previously sealed the premises where the alcohol was stored, thus preventing anyone from using it.
The Supreme Court’s first judgment on the Prosecutor General’s extraordinary appeal was quashed by the Constitutional Court following a complaint by the applicant company. The Constitutional Court found that the Supreme Court had committed errors in its assessment of the admissibility of the extraordinary appeal, in particular in connection with the premise that such an appeal was not admissible in cases where the party concerned could have directly asserted its rights by way of an ordinary appeal on points of law (dovolanie). In consequence, the extraordinary appeal was remitted to the Supreme Court for a new determination.
On 23 April 2014 the Supreme Court allowed the extraordinary appeal anew, quashed the judgments of 19 June 2007 and 1 October 2009 and remitted the matter to the District Court for re-examination.
It noted that the applicant company had contended in its observations in reply that the notion of an extraordinary appeal was itself incompatible with the Court’s case-law concerning legal certainty and that there had been a breach of the principle of equality of arms in the proceedings on that appeal in the present case as the defendant’s request to the Prosecutor General to lodge it had never been made available to the applicant company. The Supreme Court dismissed the objections, noting that the Constitutional Court had in the past reviewed the compatibility of the statutory provisions governing extraordinary appeals with the Constitution and had upheld them and that the applicant company had had the opportunity to respond to the Prosecutor General’s appeal and had used it twice. Furthermore, the Supreme Court examined in detail whether the defendant could have asserted its rights by way of an ordinary appeal on points of law and concluded that no such avenue had been open to it. There was, accordingly, no obstacle to the admissibility of the extraordinary appeal. As to the merits, the Supreme Court found that the lower courts had failed properly to take and assess documentary evidence adduced by the parties and had reached a decision that was contestable as regards the relevance for the applicant company’s claim of the fact that the excise stickers on the alcohol in question had been counterfeit. The overriding reason for not being able to trade with the alcohol had been that it had not had valid excise stickers. There was accordingly no causal connection between the damage alleged and the defendant’s impugned official actions and decisions.
The applicant company challenged the Supreme Court’s decision of 23 April 2014 by a fresh complaint to the Constitutional Court, alleging a violation of its rights under Article 6 § 1 of the Convention and its constitutional equivalents.
On 4 March 2015 the Constitutional Court rejected the complaints as being manifestly ill-founded. It endorsed the Supreme Court’s conclusions and found no constitutionally relevant arbitrariness or irregularity in them or in the underlying procedure. The decision was served on the applicant company’s lawyer on 7 April 2015 and was not amenable to appeal.
On 29 June 2015 the applicant company was declared insolvent.
No information has been made available on further developments, the current state and outcome (if any) of: (i) the insolvency proceedings; (ii) the proceedings in the applicant company’s action after the Supreme Court’s decision of 23 April 2014 quashing the previous judgments and remitting the matter to the first-instance court for fresh examination; and (iii) criminal proceedings against a third person associated with the applicant company, who was charged with fraud in connection with claims for damages against the State asserted in the context of the events that gave rise to the present application.
B. Relevant domestic law and practice and European texts
The relevant domestic law and practice and European texts have been summarised in, for example, the Court’s judgment in the case of DRAFT‑OVA a.s. v. Slovakia (no. 72493/10, §§ 39-56 and 58-61, 9 June 2015).
COMPLAINT
The applicant company complains under Article 6 § 1 of the Convention that the quashing of the final and binding judgment in its favour was contrary to the principles of legal certainty and equality of arms.
QUESTIONS TO THE PARTIES
1. Can the applicant company claim to be a victim within the meaning of Article 34 of the Convention of the alleged violation of Article 6 § 1 of the Convention (legal certainty and equality of arms), given that it transferred its claim asserted in the underlying proceedings to a third party before the events complained of (the lodging of the extraordinary appeal and its outcome)?
2. 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, given that the Supreme Court quashed a final and binding judgment in its favour following an extraordinary appeal on points of law by the Prosecutor General, prompted by an application by the defendant in its case?
In particular, were the principles of legal certainty and equality of arms respected (see, for example, DRAF-OVA a.s. v. Slovakia, no. 72493/10, § 86, 9 June 2015)?
Full & Egal Universal Law Academy