AS TO THE ADMISSIBILITY OF
Application No. 13021/87
by José RUIZ MATEOS
against the United Kingdom
The European Commission of Human Rights sitting in private
on 8 September 1988, the following members being present:
MM. C.A. NØRGAARD, President
G. SPERDUTI
E. BUSUTTIL
G. JÖRUNDSSON
A.S. GÖZÜBÜYÜK
A. WEITZEL
J.-C. SOYER
G. BATLINER
H. VANDENBERGHE
Mrs. G.H. THUNE
Sir Basil HALL
MM. F. MARTINEZ
C.L. ROZAKIS
Mrs. J. LIDDY
Mr. J. RAYMOND, Deputy 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 18 February 1987
by José Ruiz Mateos against the United Kingdom and registered
on 12 June 1987 under file No. 13021/87;
Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The applicant, José Maria Ruiz Mateos, is a citizen of Spain
who was born in 1931. He is currently resident in Madrid. In the
proceedings before the Commission he is represented by Carter Faber,
solicitors, London. The facts of the case, as submitted on behalf of
the applicant, may be summarised as follows:
Prior to 23 February 1983, the applicant was the President of
Rumasa S.A. ("Rumasa"), a company incorporated in Spain. He also
owned 50% of the shares of this company, the remaining shares being
divided equally between other members of his family. Rumasa is the
parent company of a group involving hundreds of subsidiary and
associated companies, including an English company, W & H Ltd., and
two Spanish banks, Banco de Jerez S.A. ("Jerez") and Banco del Norte
("Norte"). In 1983, the Rumasa group employed over 60,000 people and
its assets have been estimated at over 500,000 million pesetas at
that time. In addition to banking, the business carried on by
companies in the group included the production and shipping of wine
and sherry and the management of hotels.
On 23 February 1983, Rumasa and all its subsidiaries
incorporated in Spain, including the two banks, were expropriated by
the Spanish Government by Royal Decree. This decree was replaced and
amended by a law of 29 June 1983, which also vested control of the
companies' management in the general board of state ownership. The
stated reason for the compulsory acquisition was that the Rumasa group
had embarked on rash speculations and reckless expansions of credit on
a scale which threatened the stability of the Spanish economy, the
livelihood of workers and the savings of bank depositors.
The representatives of the Spanish Government now charged with
the duty of managing the Rumasa group alleged that while the applicant
and his family controlled the group, sums amounting to $46 million had
been improperly diverted from the two Spanish banks. The Spanish
Government accordingly caused Rumasa and the two banks to institute
proceedings in the High Court, Chancery Division, in London against the
applicant and companies controlled by him in order to recover assets
representing the $46 million, as well as a claim for damages against
the applicant (Rumasa S.A. and Others v. Multinvest (U.K.) Ltd. and
Others).
During the course of these proceedings, the applicant applied
for leave to amend his defence to plead that the action amounted to
"an attempt to enforce a foreign law which is penal or which otherwise
ought not to be enforced" by the court, "and further, or
alternatively, that it would be contrary to public policy to grant
the relief sought or any relief."
In the applicant's submission, there were two aspects to this
defence. First, that the Spanish decree and law were confiscatory
laws made in breach of his property rights through an arbitrary and
discriminatory procedure and without proper compensation. Secondly,
that but for these confiscatory laws, the applicant and his family
would have retained ownership of the shares and the actions would not
have been brought.
The question of whether the applicant could raise this defence
was considered by the High Court together with the identical issue in
another action brought against the applicant and others arising out of
similar allegations concerning trade marks (Williams & Humbert v. W & H,
Trade Marks). In this case the plaintiff had applied to strike out
the same defence. The present application is only concerned with the
first action referred to above.
On 19 December 1984 Mr. Justice Nourse refused to allow the
applicant to raise this defence inter alia on the grounds that the
action did not amount to an attempt to enforce Spanish law either
directly or indirectly ([1986] AC 368, pp. 375-87). An appeal to the
Court of Appeal was rejected on 3 April 1985 (loc. cit., pp. 389-414).
On 12 December 1985 the House of Lords dismissed an appeal against
this decision, holding that the judge had been correct to refuse to
allow the applicant to amend his defence, as the consideration
advanced was irrelevant to the legal questions at issue (loc. cit.,
pp. 425-441).
The reasons for the decision of the House of Lords are set out
in the judgment of Lord Templeman, who stated:
"It is ... doubtful whether the Spanish law dated
29 June 1983 can properly be described as a penal
law for present purposes, but in any event the
respondents are not seeking to enforce Spanish law."
He found that the object of the Spanish law at issue, namely
the acquisition and control of the Spanish company and its Spanish
subsidiaries, had already been wholly achieved, and the purpose of the
action was therefore not the enforcement by the Spanish Government of
Spanish law but the recovery of assets and damages under English
private law by companies which were separate legal entities from the
Government which controlled them. Lord Templeman accordingly
considered that:
"...Rumasa, Jerez and Norte ... are seeking to enforce
English private law which can be invoked, subject to
exceptions not here relevant, by a plaintiff of any
nationality against any defendant within the jurisdiction and
against any property within the jurisdiction."
Lord Templeman further reasoned that the necessary corollary
of the applicant's argument was that the practical effect of the
Spanish law was to release from liability outside Spain all such legal
persons as were in breach of their civil obligations to any company
comprised in the Rumasa group. Such a proposition would be contrary
to the principles of international law upon which were based the
well-established rule that an English court will recognise, subject
only to limitations for the safeguarding of human rights, a foreign
law effecting a compulsory acquisition. An English court would
therefore normally decline to consider the merits of such a compulsory
acquisition and would recognise the consequences of the change of
title to property which has thereby come under the control of a
foreign state. Lord Templeman continued:
"... if an application to strike out involves a prolonged
and serious argument the judge should, as a general rule,
decline to proceed with the argument unless he not only
harbours doubts about the soundness of the pleading but,
in addition, is satisfied that striking out will obviate
the necessity for a trial or will substantially reduce
the burden of preparing for trial or the burden of the
trial itself. In the present case, the general rule would
seem to require a refusal by the judge to embark on the
problems of international law involved in the present appeal,
leaving those problems to be solved at the trial if they
became material. If at the trial the appellants were
cleared of any impropriety in their management of the
affairs of the Rumasa group, then the problems of
international law would not arise. Moreover, even if those
problems did arise I do not believe that the length of time,
namely seven days, occupied by the judge in deciding to
strike out the pleadings would have been added to the time
required to decide other issues. But there are special
circumstances which, in my view, made it right for the judge
to proceed and to make the order which he made. If the
appellants' pleadings and particulars had not been struck
out, the appellants would have proceeded to demand discovery
before trial and to lead evidence at the trial, harrassing
to the respondents and embarrassing to the court and
designed to support the allegations and insinuations of
oppression and bad faith on the part of the Spanish
authorities which appear in the amended defences and
particulars. These allegations are irrelevant to the ...
action and are inadmissible as a matter of law and comity
and were rightly disposed of at the first opportunity."
The case was then returned to the Chancery Division of the
High Court for trial. In his judgment on 12 December 1986, Mr.
Justice Gibson found that the assets in question had been wrongfully
misapplied by the applicant in breach of his fiduciary duties. He
accordingly ordered that the applicant should pay to Jerez the sums of
$53,777,106.02, Swiss Francs 9,146,561.13 and DM 13,380,647.09 by way
of compensation, plus the costs of the action.
The applicant was advised by leading counsel that as a result
of the above ruling of the House of Lords he had no realistic prospect
of success in an appeal against this decision.
COMPLAINTS
The applicant complains that he was prevented by United Kingdom
law from arguing, as a defence to the claim brought against him in the
English courts, that the action would not have been brought but for
the Spanish expropriation law, and that the said law was penal and
confiscatory in nature and was made in breach of his fundamental
rights, including the rights protected under the Convention and
Protocol No. 1 thereto.
Article 1 of Protocol No. 1
The applicant complains that the decision of Mr. Justice
Gibson of 12 December 1986 deprived him of his possessions in a manner
contrary to Article 1 of Protocol No. 1.
In this connection, the applicant submits first that this
decision enforced laws deemed necessary to control the use of property
within the meaning of the second paragraph of Article 1 of Protocol
No. 1.
In denying him the opportunity to raise the said defence, the
applicant argues that United Kingdom law failed to draw a fair balance
between his own interests and those of the community as a whole, as
required by the Convention, and more specifically, that it failed to
provide a procedure compatible with Article 1 of Protocol No. 1 in
denying him a reasonable opportunity of putting his case as to why he
should not be deprived of his property. In this respect, the
applicant invokes the Agosi case (Eur. Court H.R., Agosi judgment of
24 October 1986, Series A no. 108, p. 17 at paras. 54-55) as authority
for the proposition that all the relevant circumstances should be
taken into account in such a determination, and submits in consequence
that the reasons given by the House of Lords for refusing to allow him
to raise his defence in the English courts are no answer to the
complaint under Article 1 of Protocol No. 1. In the submission of the
applicant, the Spanish expropriation law was not only a relevant
circumstance for the action in the English courts, but was central to
its existence and outcome.
Articles 6, 13 and 14 of the Convention
The applicant complains further that in the determination of
his civil rights and obligations in respect of substantial sums of
money, he was prevented from raising before the courts the substance
of his defence and that he was therefore denied a fair hearing,
contrary to Article 6 para. 1 of the Convention.
The applicant also complains that he had no domestic remedy in
the United Kingdom for his complaint that United Kingdom law wrongly
deprived him of his property and denied him a fair hearing, contrary
to Article 13 of the Convention. In particular, the House of Lords
was unable, as a matter of domestic law, to apply to the case of the
applicant the standards and principles set down in the Convention and
in Protocol No. 1.
In the alternative, the applicant complains that the United
Kingdom acted in breach of Article 13 by failing to provide him with
an opportunity of arguing that the Spanish expropriation law was in
breach of the Convention and of Protocol No. 1.
Finally, the applicant complains that he is the victim of
discrimination in that other persons whose property is the subject of
litigation in the United Kingdom are able to present defences arguing
that for reasons of public policy no relief should be granted to the
plaintiff. In this connection, the applicant invokes Article 14 in
conjunction with Articles 6 and 13 of the Convention and with Article
1 of Protocol No. 1.
THE LAW
1. The applicant has complained that the proceedings before the
Chancery Division of the High Court which led to the decision of
Mr. Justice Gibson on 12 December 1986 amounted to a violation of his
rights under the Convention and, in particular, Article 1 of Protocol
No. 1 (P1-1). The applicant has complained that the High Court was prevented
by United Kingdom law from considering his defence to the action
brought against him by Rumasa, Jerez and Norte and such action would
not have been brought but for the Spanish expropriation law, and that
the said law was penal and confiscatory in nature and was made in
breach of his fundamental rights.
Article 26 (Art. 26) of the Convention
The Commission notes that in respect of the original refusal
of the High Court, on 19 December 1984, to consider the above defence,
the applicant subsequently appealed without success to the Court of
Appeal. He appealed again to the House of Lords which finally
dismissed the issue for purposes of domestic law on 12 December 1985.
It was not until one year later, on 12 December 1986, that judgment
was given against the applicant in the main action taken against him
by the Spanish companies. On the basis of advice then given to him by
counsel, the applicant did not appeal against that decision.
Article 26 (Art. 26) of the Convention provides as follows:
"The Commission may only deal with the matter after all
domestic remedies have been exhausted, according to the
generally recognised rules of international law, and within
a period of six months from the date on which the final
decision was taken."
The Commission is of the opinion that it is not necessary in
the present case to consider whether the applicant has complied with
the six months rule and has exhausted all available domestic remedies
since the applicant's complaints fall, in any event, to be
rejected as inadmissible for the reasons developed below.
2. Article 1 of Protocol No. 1 (P1-1)
The applicant has complained first that the decision of Mr.
Justice Gibson on 12 December 1986 deprived him of his possessions in
a manner contrary to Article 1 of Protocol No. 1 (P1-1), 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 applicant has submitted that he was deprived of his
possessions contrary to the second sentence of this provision. In
this connection he complains that he was denied a reasonable
opportunity of putting his case as to why he should not be deprived of
his property.
The Commission recalls that the deprivation of property
referred to in the second sentence of Article 1 of Protocol No. 1 (P1-1) is
primarily concerned with the formal expropriation of assets for public
purposes, and not with the regulation of rights between persons under private
law unless state responsibility is in some way involved in affecting their
exercise (e.g. Nos. 8588/79 and 8589/79, Bramelid and Malmström v. Sweden,
Dec. 12.10.82, D.R. 29 p. 64).
In the present case, it is clear that the United Kingdom has
not directly deprived the applicant of his possessions or otherwise
expropriated his property. Nor can it be said that the United Kingdom
was enforcing "such laws as it deems necessary to control the use of
property" within the meaning of Article 1 of Protocol No. 1 (P1-1). The
order against the applicant was rather made by the Chancery Division
of the High Court in the exercise of its jurisdiction over a private
law dispute between the applicant on the one hand and three companies
which he had formerly controlled on the other. The dispute directly
concerned an alleged breach on the part of the applicant of his
fiduciary obligations towards those companies, in improperly
diverting money from them. In essence the High Court in its decision
of 12 December 1986 decided that the applicant had no entitlement to
the monies so diverted and that they should be returned with interest
to the plaintiff companies.
The Commission finds that the mere fact that a judicial
authority provided a forum for the determination of such a private law
dispute does not give rise to an interference by the State with
property rights under Article 1 of Protocol No. 1 (P1-1) (see in this
context No. 10000/82, Dec. 4.7.83, D.R. 33 p. 247; No. 11949/86, Dec.
1.12.86, to be published in D.R.)
However, the applicant contends that a State is subject to a
positive obligation under Article 1 of Protocol No. 1 (P1-1) to
protect the property rights of an individual in the context of a
dispute with another private individual to the extent necessary to
ensure that in the determination of that dispute all relevant
arguments will be fully considered by the courts. In this connection,
the applicant has invoked the finding of the European Court of Human
Rights in the Agosi judgment of 24 October 1986 to the effect that
"... although the second paragraph of Aricle 1 [of Protocol No. 1]
(P1-1) contains no explicit procedural requirements, the court must
consider ... whether the procedures in question afforded the applicant
... a reasonable opportunity of putting its case to the responsible
authorities" (loc. cit., p. 19, para. 55).
The Commission recalls that the Agosi case concerned a direct
control of the applicant company's property by the respondent State in
purported pursuance of the aims laid down in the second paragaraph of
Article 1 of Protocol No. 1 (P1-1). In the present case, however,
there has been neither a deprivation of the applicant's property nor a
control of the use of property by the respondent State within the
meaning of that provision. Accordingly, the considerations taken into
account by the Court in the Agosi case relating to the striking of a
fair balance between the interests of the individual and the interests
of the State do not arise in the present case.
Having regard to the above, the Commission finds that Article
1 of Protocol No. 1 (P1-1) cannot be interpreted so as to require the
United Kingdom courts to examine the applicant's claim that the
Spanish law providing for the acquisition of Rumasa was penal and
confiscatory.
It follows that the proceedings in question do not amount to
an interference with the applicant's property rights as guaranteed by
this provision and that this complaint must be dismissed as manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
3. Article 6 para. 1 (Art. 6-1) of the Convention
The applicant has also complained that as a result of the
ruling that the said defence could not be invoked, he was denied a
fair hearing in the action brought against him by the Spanish
companies, contrary to Article 6 para. 1 (Art. 6-1) of the Convention.
With regard to the proceedings of which the applicant
complains, the Commission recalls that, in accordance with Article 19
(Art. 19) of the Convention, its only task is to ensure the observance
of the obligations undertaken by the Parties in the Convention. In
particular, it is not competent to deal with a complaint alleging that
errors of law or fact have been committed by domestic courts, except
where it considers that such errors might have involved a possible
violation of any of the rights and freedoms set out in the Convention.
The Commission refers, on this point, to its constant case-law (see
e.g. No. 458/59, Dec. 29.3.60, Yearbook 3 pp. 222, 236; No. 5258/71,
Dec. 8.2.73, Collection 43 pp. 71, 77; No. 7987/77, Dec. 13.12.79,
D.R. 18 pp. 31, 45).
The Commission notes in this connection that the question as
to whether the applicant's said defence could be raised was
extensively examined by the courts. In addition to being considered
in a lengthy hearing before the High Court in December 1984, the issue
was the subject of two separate hearings on appeal before the Court of
Appeal and the House of Lords. The decision then reached as a matter
of domestic law was that the defence sought to be raised was
irrelevant to the proceedings in question and that it had been
disposed of correctly by the trial judge.
Moreover, the applicant had the assistance of counsel in the
presentation of his defence before the High Court and in the appeal
proceedings. There is nothing in his submissions which suggests that
his counsel, or the applicant in person, was prevented from making
full submissions on the question of the relevance of the said defence
to the proceedings taken against him. Nor is there any other indication
of unfairness in the proceedings as a whole such as to raise an issue
under Article 6 para. 1 (Art. 6-1) of the Convention.
It follows that this part of the applicant's complaint must also
be rejected as manifestly ill-founded within the meaning of Article 27
para. 2 (Art. 27-2) of the Convention.
4. Article 13 (Art. 13) of the Convention
The applicant has complained firstly that the failure of
United Kingdom law to provide him with an opportunity of raising the
said defence amounted to a breach of Article 13 (Art. 13) of the Convention.
Article 13 (Art. 13) states as follows:
"Everyone whose rights and freedoms as set forth in
this 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 Commission recalls that it is well established that where
the right claimed is of a civil character, the guarantees of Article
13 (Art. 13) are superseded by the more stringent requirements of
Article 6 para. 1 (Art. 6-1) of the Convention (e.g. No. 10358/83,
Dec. 15.12.83, D.R. 37 p. 142). It follows that no separate issue
arises under Article 13 (Art. 13) in respect of this aspect of the
applicant's complaint.
The applicant has argued in the alternative that the United
Kingdom is in breach of Article 13 (Art. 13) in failing to provide a
remedy under United Kingdom law for his complaints under Article 6
(Art. 6) of the Convention and Article 1 of Protocol No. 1 (P1-1).
The Commission recalls that for Article 13 (Art. 13) to apply
the claim that a provision of the Convention has been breached must be
an "arguable" one (see Eur. Court H.R., Boyle and Rice judgment of 27
April 1988, Series A no. 131, paras. 52-55). The Commission notes
that it has rejected the applicant's complaint under Article 1 of
Protocol No. 1 (P1-1) on the basis that the judicial determination
before the courts of the United Kingdom of the dispute between the
applicant and Rumasa, Jerez and Norte does not interfere with the
applicant's property rights. It also recalls that it has concluded
that the court proceedings were fair within the meaning of Article 6
para. 1 (Art. 6-1) of the Convention. Against this background the
Commission does not consider that the applicant's complaints under
these provisions can be described as "arguable" ones for the purpose
of this provision.
It follows that the above complaint under Article 13 (Art. 13)
must be rejected as incompatible ratione materiae with the provisions
of the Convention within the meaning of Article 27 para. 2 (Art. 27-2)
of the Convention.
5. Article 14 (Art. 14) of the Convention
The applicant has also complained that he was subject to
discrimination in that other persons or companies whose property is the
subject of litigation in the United Kingdom are able to present
similar defences to that which the applicant sought to raise in
relation to the Spanish expropriation law.
However, the applicant has not shown that persons or companies
in a comparable situation to that obtaining in his case would be
treated differently in the determination of a similar dispute under
United Kingdom law.
The Commission therefore finds that the applicant has not
substantiated his complaint of discrimination contrary to Article 14
(Art. 14) of the Convention.
It follows that this part of the application must also be
rejected as manifestly ill-founded within the meaning of Article 27
para. 2 (Art. 27-2) of the Convention.
For these reasons, the Commission
DECLARES THE APPLICATION INADMISSIBLE.
Deputy Secretary to the Commission President of the Commission
(J. RAYMOND) (C. A. NØRGAARD)