Information Note on the Court’s case-law No. 156
October 2012
Süzer and Eksen Holding A.Ş. v. Turkey - 6334/05
Judgment 23.10.2012 [Section II]
Article 6
Civil proceedings
Article 6-1
Access to court
Failure to comply with judgments intended to remedy illegal transfer by authorities of private bank to State-owned entity: violation
Facts – The applicants are Eksen Holding S.A., a limited liability company incorporated under Turkish law, and Mr Süzer, the majority shareholder and chairman. Between them they controlled more than 99% of the capital of a private bank by the name of Kentbank. In 2001, owing to Kentbank’s severe financial difficulties, the Bank Regulatory and Supervisory Agency (“the Agency”) ordered its compulsory transfer to the Savings Deposits Insurance Fund (“the Fund”). While two sets of administrative proceedings brought by the applicants were still pending, the Agency and the Fund suspended Kentbank’s liquidation and merged it with another bank transferred to the Fund. In 2004 two judgments by the Division of the Supreme Court to which the case had been referred back from the full Supreme Court set aside the Agency’s orders transferring Kentbank to the Fund and prohibiting it from performing banking operations and accepting deposits. In 2005 a different Division of the Supreme Administrative Court quashed the orders for Kentbank’s merger with the other bank, on the grounds that those decisions had been deprived of their legal basis by the 2004 judgments. The applicants requested the Agency on several occasions to comply with the 2004 judgments, relying on the principle of restitutio in integrum. The Agency refused. The applicants then lodged two actions seeking the setting-aside of the decisions refusing their requests. In 2005 a Division of the Supreme Administrative Court acknowledged that there could be instances in which enforcement of a judgment proved impossible, as in the case at hand, where there was no realistic means of restoring Kentbank’s legal and financial situation to the position it had been in before its transfer to the Fund. Accordingly, the Agency’s refusal to comply had not been in breach of the law. However, in 2008 and 2009 the full Supreme Administrative Court allowed the applicants’ claims, holding that, failing enforcement in kind, the applicants should be enabled to set up a new operational bank and that they should be issued with the necessary licences for that purpose. In June 2010 all the administrative proceedings concerning the measures taken in respect of Kentbank were concluded in the applicants’ favour and the ex tunc nullity of all the disputed administrative acts was upheld in a final decision.
Law – Article 6 § 1: In view of the judgments given against it, the Agency had been constitutionally bound to take all necessary measures to restore the de facto and de jure situation that was likely to have prevailed had Kentbank not been unlawfully transferred to the Fund. However, the Agency had taken no action whatsoever. Faced with the administrative authorities’ complete lack of response, the applicants had been forced to remind it, on two occasions and in writing, of its obligation to comply. It was unacceptable for an applicant who had obtained a final judicial decision against the State to have to bring further actions against the authorities with a view to securing enforcement of the initial obligation. The de facto situation described by the domestic courts revealed that it was “objectively impossible” to enforce the judgments in question in kind or, in other words, that an “insurmountable obstacle” existed to such enforcement. Nevertheless, in view of their reasoning, the judgments of the full Administrative Court of 2008 and 2009 amounted to a genuine remedy for the administrative authorities’ failure to offer the applicants an equitable alternative solution. As a result of those judgments, the applicants had had an enforceable claim rather than just a general right to receive “assistance” from the State. There had been no possible justification for the administrative authorities’ failure to take any steps to implement that solution. The Government argued that the applicants must first apply to the Agency for authorisation to set up a bank and then, if their application was successful, apply for an operating licence, on the understanding that the granting of both those authorisations was within the Agency’s discretion. However, the administrative courts had not stipulated that the applicants had to comply with any such prior procedures. Moreover, to do so would contravene the principles of Turkish administrative law and the Court’s settled case-law. Laying down conditions of that kind would have been tantamount to depriving the judgments in question of all useful effect, allowing the Agency to assess their relevance and thus call the final judicial decisions into question. In addition to these objective considerations, the Court took account of the Agency’s uncooperative attitude regarding its obligation to comply with the two series of judgments given against it. In sum, the applicants should not have had to take any further steps in order to take advantage of the alternative solution which the administrative courts had been obliged to impose on the authorities in view of the latter’s failure to implement it of its own accord. Consequently, in failing to date to take the necessary measures to ensure execution of the final and enforceable administrative decisions against it, the respondent State had infringed the applicants’ right to a court.
Conclusion: violation (unanimously).
Article 1 of Protocol No. 1: The measures taken by the Agency had deprived the applicants of both tangible and intangible property rights linked to the operation of their former bank. The measures had originally come within the Agency’s powers of oversight of the Turkish banking sector and its task of ensuring the smooth operation of the latter. Accordingly, in the very specific circumstances of this case, the situation complained of amounted to control of the use of property. However, the measures at issue had been set aside ex tunc by the courts. Whether the unlawful situation had existed at the outset of the operation conducted by the Agency or had arisen subsequently was of no relevance, as the interference in question was deemed unlawful with retrospective effect.
Conclusion: violation (unanimously).
Article 41: reserved in part in respect of pecuniary damage; claim in respect of non-pecuniary damage dismissed.
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This summary by the Registry does not bind the Court.
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