Communicated on 7 February 2020
Published on 24 February 2020
SECOND SECTION
Application no. 13863/19
UAB ,,LEWBEN INVESTMENT MANAGEMENT”
against Lithuania
lodged on 4 March 2019
SUBJECT MATTER OF THE CASE
The application primarily concerns fairness of court proceedings. The applicant company intended to buy 100 per cent of shares of another Lithuanian company, Prosperus Real Estate Fund II, which operated in the sector of finance and credit. Under the Lithuanian law, that sector is considered as falling within the sphere of strategic importance to national security. That transaction required approval by the Commission for the Assessment of Conformity of Potential Participants to National Security Interests. The Commission held that R.K., who is the applicant company’s sole shareholder, had links to the persons from countries that do not belong to the EU and NATO and thus posed threat to the national security of Lithuania. R.K. did not deny that she had seen those two persons – citizens of the Republic of Byelorussia – at a private event outside Lithuania, but that sole fact was not sufficient to call R.K. a treat to national security. In reaching that decision the Commission relied on classified information by the State Security Department which was not revealed to the applicant company. That classified information was also relied on by the administrative courts which dismissed the applicant company’s appeals.
Under Article 6 § 1 of the Convention the applicant company complains that it had not had a fair hearing. It argues that the national authorities’ decisions are very succinct, that the courts examined the classified information behind closed doors, and that the applicant company could not respond to it, whereas the respondent exercised such right. The applicant company underscores that the findings against it were based on classified materials. It states that any publicly available information was too scarce or unreliable to justify the conclusion that the applicant company was threat to national security.
Under Article 8 of the Convention the applicant company further complains that although the Commission and the administrative courts examined its appeals and the case in closed hearings, the State authorities, including the State Security Department and the administrative courts, revealed the circumstances of the case to the media. This tarnished the applicant company’s name and reputation.
QUESTIONS TO THE PARTIES
1. Was Article 6 § 1 of the Convention, under its civil head, applicable to the administrative court proceedings in which the applicant company challenged the Commission’s decision not to permit it to acquire the shares of the Prosperus Real Estate Fund II (see Pocius v. Lithuania, no. 35601/04, §§ 38-46, 6 July 2010; Regner v. the Czech Republic [GC], no. 35289/11, §§ 124 and 125, 19 September 2017, and, mutatis mutandis, Sine Tsaggarakis A.E.E. v. Greece, no. 17257/13, §§ 40 and 42, 23 May 2019, with further references)?
2. If Article 6 § 1 of the Convention is applicable, did the applicant company have a fair hearing and adversarial proceedings in the case? The Court refers to the applicant’s complaint that when upholding the Commission’s decision against it the administrative courts examined and relied on classified evidence which was not revealed to the applicant and which it could not contest.
Has the applicant company been placed in disadvantage with another party (see, mutatis mutandis, Jasper v. the United Kingdom [GC], no. 27052/95, §§ 52 and 53, 16 February 2000)? Did the decision-making procedure ensure, as far as possible, compliance with the requirements of equality of arms, and incorporate adequate safeguards to protect the applicant’s interests (see ibid., § 53)?
Apart from the classified information, what exactly and specifically was the other evidence that was publicly available to the parties and the courts at each stage of the administrative court proceedings, this evidence purportedly also having served as basis for the decision not to issue the applicant company the permit to acquire the shares of the Prosperus Real Estate Fund II (see Regner v. the Czech Republic [GC], no. 35289/11, §§ 146-49, 19 September 2017; in this context also see and compare Zarubin and Others v Lithuania (dec.), no. 39870/12, § 55, 19 December 2019)?
3. Has there been a breach of the applicant company’s right to protection of reputation, under Article 8 of the Convention (see, mutatis mutandis, Turek v. Slovakia, no. 57986/00, §§ 110 and 111, ECHR 2006‑II (extracts), and A. v. Norway, no. 28070/06, §§ 63-66, 9 April 2009)? The Court refers to the applicant company’s complaint that although the case was examined in closed hearings by the Commission and by the administrative courts, the State authorities, including the State Security Department and the administrative courts, disclosed the circumstances of the case to the media (see, mutatis mutandis, Drakšas v. Lithuania, no. 36662/04, § 60, 31 July 2012).
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