Information Note on the Court’s case-law No. 134
October 2010
Suda v. the Czech Republic - 1643/06
Judgment 28.10.2010 [Section V]
Article 6
Civil proceedings
Article 6-1
Access to court
Obligation to submit to arbitration as a result of clause agreed by third parties: violation
Facts – The applicant was a minority shareholder in a public limited company, C. In November 2003 the general meeting of the company took a majority decision (without the vote cast by the applicant, who voted against) by which C. would be closed down without liquidation and its assets taken over by the main shareholder, the E. company. The redemption value of the shares held by the minority shareholders, including the applicant, was determined by contract. An arbitration clause in the contract provided that any re-examination of the redemption value would be a matter for arbitration and not ordinary court proceedings. Court proceedings brought by the applicant to have the redemption value re-examined and invalidated were unsuccessful.
Law – Article 6 § 1: The present case concerned neither voluntary arbitration nor compulsory arbitration required by law, but an agreement to submit to arbitration made by third parties, namely, the company of which the applicant was a minority shareholder and the main shareholder of that company. The Court had to examine the compatibility with the requirements of Article 6 § 1 of a given situation that obliged the applicant to have recourse to arbitration under a clause that he had not himself contracted. The applicant had instituted proceedings in the ordinary courts, which had found that the clause in question had been validly contracted and had declared the proceedings terminated without ruling on the merits of the case. The only option open to the applicant had therefore been to submit the case to the arbitrators named in the clause in question and wait for them to rule on whether they had jurisdiction to hear the case. Had he done so, however, he would have run the risk that the arbitrators, who were on the list of a private company and were guided by the rules governing that company, which he had not chosen, would rule not only on their jurisdiction but also, in the event that they accepted jurisdiction, on the merits of the case. Accordingly, the arbitrators imposed on the applicant would have indirectly determined the scope of jurisdiction of the ordinary courts because, if they had made an arbitration award on the merits of the case, any application by the applicant to the court would have been limited to procedural matters. It was only if the arbitrators had considered that the arbitration clause in question could not confer jurisdiction on them that the ordinary court could have ruled on the merits of the case. It was clear that the arbitration procedure would not in the present case fulfil two of the fundamental requirements of Article 6 § 1, namely, a) a lawful tribunal – because the arbitration clause gave decision-making power to arbitrators on the list of a limited liability company that was not an arbitration tribunal established by law – and b) a public hearing – because the arbitration procedure would not have been public and the applicant had not in any way waived his right to a public hearing. Lastly, national regulations concerning companies, governing relations between shareholders, were absolutely necessary to any activity subject to a market regime. These sometimes gave rise to an obligation on minority shareholders to sell their shares to the majority shareholder. The Court found that minority shareholders should be afforded appropriate means of defence in order to prevent an imbalance resulting in arbitrary and unjust deprivation of one person’s property in favour of another. Requiring the applicant to submit his pecuniary claim to arbitration bodies that did not meet the fundamental guarantees of Article 6 § 1, without his having waived those guarantees, amounted to a violation of his right to a court.
Conclusion: violation (unanimously).
Article 41: finding of a violation constituted sufficient just satisfaction in respect of any non-pecuniary damage.
Access to court
Imposition of small fines by courts for vexatious applications for rectification of judgments: inadmissible
Toyaksi and Others v. Turkey - 43569/08 et al.
Decision 20.10.2010 [Section IV]
Facts – The applicants were issued with fines ranging from 120 to 170 Turkish liras by the Court of Cassation and the Supreme Military Administrative Court under section 442 of the Code of Civil Procedure after unsuccessfully seeking the rectification of judgments that had been delivered by those courts. In their applications to the European Court, the applicants complained that the imposition of fines for having used a statutory legal remedy had violated their right of access to court.
Law – Article 6 § 1: The imposition of a fine in order to prevent a build-up of cases before the courts and to ensure the proper administration of justice was not, as such, in conflict with the right of access to court. The fines imposed on the applicants had constituted a penalty for vexatious rectification proceedings before the higher courts. None of the applicants had complained that they had been unable to have their cases heard due to the fines and their right of access to court had not been impaired in any way as they had had the opportunity to have their cases examined thoroughly before two levels of jurisdiction prior to their requests for rectification. There was no evidence that the amount of the fines had constituted a substantial economic burden. Accordingly, and in the specific circumstances of the case, the applicants’ right of access to court had not been violated.
Conclusion: inadmissible (manifestly ill-founded).
Article 7: The impugned fine did not constitute a penalty within the meaning of this provision, its sole purpose being the proper administration of justice.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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