Communicated on 22 August 2016
FIFTH SECTION
Application no. 50805/14
Andrejs NAUMENKO and SIA RIX SHIPPING
against Latvia
lodged on 8 July 2014
STATEMENT OF FACTS
1. The first applicant, Mr Andrejs Naumenko, is a Russian citizen who was born in 1973 and lives in Riga. He is the sole owner and board member of the second applicant, SIA “Rix Shipping,” a limited liability company registered in Latvia in 2008.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicants, may be summarised as follows.
3. On 9 January 2014 the Competition Council filed an application with the Riga City Vidzeme District Court requesting a leave to carry out procedural actions listed in section 9(5), sub-paragraphs 4 and 5, of the Competition Law with regard to several enterprises, including the second applicant. The Competition Council submitted that it was investigating whether the National Association of Latvian Shipbrokers and Shipping Agents had concluded a prohibited agreement within the meaning of section 11 of the Competition Law. To substantiate its request the Competition Council referred to a document entitled “Recommended scale of agency fees,” adopted by the association, and to an invoice of SIA “Rix Shipping” stating that the price had been determined in accordance with said recommendation. These documents were not submitted to the district court.
4. On 14 January 2014 the Riga City Vidzeme District Court granted the request. The operative part of the decision reads:
“... [the court] has decided to allow the officials of the Executive Directorate of the Competition Council, in the presence of police and without prior notification, to carry out the actions listed in section 9(5), sub-paragraphs 4 and 5, of the Competition Law ... in the movable and immovable properties that are in the possession or use of Rix shipping, registration no. 40103170755, and its officials and employees, as well as at other persons’ [properties], if there is a reasonable suspicion that documents or property items that could serve as an evidence of a violation of the Commercial Law are stored in non-residential premises, vehicles, apartments, buildings and other movable or immovable objects that are in the ownership, possession or use of other persons.”
5. On 28 January 2014 the officials of the Competition Council, in the presence of a police officer, arrived at the premises of SIA “Rix Shipping.” Having awaited the arrival of the applicants’ advocate, they carried out a search of those premises. In particular, they inspected the invoices and other accountancy documents and the information available on SIA “Rix Shipping” server. At some point during the search the police officer, upon a mutual agreement of the involved parties, left. The officials of the Competition Council seized several accountancy documents and electronic files. The first applicant noted on the protocol of investigative actions that the seized electronic correspondence from 2003 was private and had no connection with the activities of SIA “Rix Shipping,” as at that time the company had not been established yet. He also requested that the seized documents and files be given a status of restricted access information.
6. On 7 February 2014 the second applicant filed a complaint with the chairperson of the Riga City Vidzeme District Court requesting the decision, in so far as concerned SIA “RIX Shipping,” its officials and employees, to be repealed. First, it argued that the Competition Council’s request and the impugned decision did not refer to any such circumstances that could lead to a conclusion that a prohibited agreement might have been concluded. Hence, there had been no necessity to search the property of SIA “RIX Shipping,” its officials or its employees or to carry out an inspection of their property items, documents or electronic files. Further, it contended that the carrying out of such investigative actions had to be justified and proportionate; it had to be compatible with an elementary threshold of human rights guarantees. Nonetheless, the impugned decision contained no reasoning as to why specifically the investigative actions set out in section 9(5), sub-paragraphs 4 and 5, Competition Law, which interfered most in person’s life, had been permitted. Furthermore, the impugned decision, due to its excessively broad formulation, had authorised the Competition Council to carry out searches with respect to an unidentified group of persons for an indeterminate amount of time. Thereby the power of deciding on the searches had been left entirely within the discretion of the Competition Council – an outcome that was contrary to the purpose of the Competition Law that required a judicial approval. Finally, it noted that only State actions that struck a fair balance between the need to acquire the necessary information and the persons’ human rights could be compatible with the needs of a democratic society. As the impugned decision failed to respect this balance, the applicant requested the chairperson of the district court to repeal it.
7. On 18 February 2014 the chairperson of the Riga City Vidzeme District Court dismissed the complaint. She considered that the necessity of the requested investigative actions had been assessed and that, in light of the offence the Competition Council was investigating, these actions had been proportionate. This decision was final.
B. Relevant domestic law
8. Section 9(5) of the Competition Law sets out the actions the Executive Directorate of the Competition Council is allowed to undertake when supervising the market or investigating the potential violations of the Competition Law or the Advertising Law. In particular:
“... 4) on the basis of a judicial decision, without prior notice and in the presence of police, [the Executive Directorate is entitled] to enter the non-residential premises, vehicles, apartments, buildings and other movable and immovable objects that are in the ownership, possession or use of a market participant or of an association of market participants, to open [those objects] and the storage facilities that are therein, to carry out a forced search of those objects and storage facilities, and to inspect the property items and documents that are therein, including the information (data) stored in an electronic information system – computers, floppy disks and other information media. If a person whose property undergoes a search refuses to open the objects or the storage facilities that are therein, the officials of the Executive Directorate are entitled to open them, without causing a substantial harm. During the search and inspection the officials of the Executive Directorate are entitled to:
a) prohibit the persons who are present at the inspection site from leaving the site without permission, from moving and from conversing among themselves until the end of the search and inspection;
b) get acquainted with the information included in the documents and in the electronic information system (including information containing commercial secret);
c) seize the property items and documents which may be of importance to the case;
d) request and receive document copies that are certified in accordance with the procedures laid down in laws and regulations;
e) print out or record to an electronic information media the information (data) stored in the electronic information system;
f) request and receive written or oral explanations from the employees of the market participant;
g) seal the non-residential premises, vehicles, buildings and other objects and the storage facilities that are therein for a period up to 72 hours, in order to ensure the preservation of evidence;
5) on the basis of a judicial decision, if there is a reasonable suspicion that documents or property items that might serve as an evidence of a violation of this Law are being stored in the non-residential premises, vehicles, apartments, buildings and other movable and immovable objects that are in the ownership, possession or use of other persons, [the Executive Directorate is entitled] to perform, in the presence of police, the actions listed in sub-paragraph 4 of this paragraph in relation to such persons ...”
9. Section 91(1) of the Competition Law provides that a decision on the actions listed in section 9(5), sub-paragraphs 4 and 5, of this Law shall be taken by the judge of a district court who shall, within 72 hours, examine the application of the Executive Director and other documents that justify the necessity of such activities, hear the information provided by the officials of the Executive Directorate and decide on permission or refusal of the actions. According to section 91(3), a complaint against this decision may be submitted before the chairperson of the district court within ten days from the date of its receipt. Section 91(4) states that a complaint lodged by the Executive Directorate shall be examined with the participation of a representative of the Executive Directorate, whereas a complaint lodged by a person shall be examined with the participation of a representative of the Executive Directorate and a representative of the interested party. A decision taken by the chairperson of the district court shall be final and not subject to appeal. In addition, section 91(6) provides that the evidence obtained on the basis of a decision that has been revoked or modified cannot be used to the extent to which this decision has been found unlawful.
10. Section 93(2), sub-paragraph 5, of the Competition Law provides that the market participant or another person in relation to whom the actions referred to in section 9(5), sub-paragraphs 4 and 5, of this Law are performed have the right to submit a complaint regarding the actions of the official of the Executive Directorate to the Chairperson of the Competition Council.
11. Section 11(1) of the Competition Law provides that agreements between market participants which have as their object or effect the prevention, restriction or distortion of competition in the territory of Latvia are prohibited and null and void from the moment of being entered into. According to sub-section 1 of that section, that includes agreements regarding the direct or indirect fixing of prices and tariffs in any manner, or rules on their formation, as well as agreements regarding such exchange of information as relates to prices or conditions of sale.
COMPLAINTS
The applicants complain under Article 8 of the Convention that the search of their business premises and the inspection and seizure of their documents and electronic files had lacked any necessity and justification, that the scope of the authorisation in that regard had been excessively wide, that correspondence not pertaining to the investigation had been seized and that the safeguards had been insufficient. In this respect the applicants also invoke Article 6 of the Convention.
QUESTIONS TO THE PARTIES
1. Have the applicants exhausted all effective domestic remedies, as required by Article 35 § 1 of the Convention?
In particular, was there an effective remedy within the meaning of this provision in respect of the first applicant’s complaints under Article 8?
Also, did the second applicant invoke before the national authorities, at least in substance, the rights under Article 8 on which it now wishes to rely before the Court?
2. Has there been an interference with the applicants’ right to respect for their private life, home or correspondence, within the meaning of Article 8 § 1 of the Convention?
If so, was that interference in accordance with the law and necessary in terms of Article 8 § 2?
In particular, were the reasons adduced relevant and sufficient to authorise the investigative measures, was the scope of the judicial authorisation reasonably limited and were the applicants afforded adequate and effective safeguards against abuse?
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