SECOND SECTION

CASE OF ROMIĆ AND OTHERS v. CROATIA

(Application no. 24501/19)

JUDGMENT
 

STRASBOURG

25 June 2024

This judgment is final but it may be subject to editorial revision.

In the case of Romić and Others v. Croatia,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

 Lorraine Schembri Orland, President,
 Frédéric Krenc,
 Davor Derenčinović, judges,
and Dorothee von Arnim, Deputy Section Registrar,

Having regard to:

the application (no. 24501/19) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 23 April 2019 by the applicants listed in the appended table (“the applicants”), who are individuals of Croatian nationality or legal entities established or incorporated under Croatian law, and who were all represented by Mr D. Štivić, a lawyer practising in Županja;

the decision to give notice of the complaints concerning access to a court and the peaceful enjoyment of possessions to the Croatian Government (“the Government”), represented by their Agent, Ms Š. Stažnik, and to declare inadmissible the remainder of the application;

the parties’ observations;

Having deliberated in private on 4 June 2024,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The application concerns the deprivation of property arising from the Government Decision of 23 September 1999 (“the Government Decision”) on the restructuring and recovery of Croatia Bank (“the bank”) depriving its shareholders, including the applicants or their predecessors, of their shares, and the lack of access to a court in that regard.

2.  On 8 April 2003 the predecessor of three applicants (see paragraph 3 below) and the remaining applicants brought a civil action against the State and the State Agency for Deposit Insurance and Bank Resolution (hereafter “DAB”), asking the court to (a) issue a declaratory judgment confirming that they were still holders of a specific number of shares, and (b) order the DAB to issue a valid document for the registration of the applicants’ ownership of the shares. Alternatively, they asked for the defendants to be held jointly and severally liable to pay them compensation corresponding to the nominal value of the revoked and cancelled shares. The civil courts dismissed the action, while the Supreme Court in part dismissed and in part declared inadmissible the plaintiffs’ subsequent appeal on points of law. The plaintiffs then lodged a constitutional complaint.

3.  On 24 March 2018, K.B., the father and husband of three applicants – Dalibor, Mirta and Terezija Brajković (see the appended table) – died, and they were declared his heirs on 11 May 2018. At that time the case was pending before the Constitutional Court but the three applicants in question did not inform that court of K.B.’s death and did not take over the proceedings.

4.  On 17 October 2018 the Constitutional Court dismissed the constitutional complaint, and on 2 November 2018 notified the complainants’ representative of its decision.

5.  In a letter of 21 September 2021, the applicants’ representative informed the Court that one of the applicants, Mr Šimun Romić (see the appended table), had died on 16 December 2020 and that his wife, Ms Josipa Romić, wished to pursue the application in his stead. He submitted a decision issued by a notary public of 13 September 2021 declaring her his sole heir. He also submitted an authority form whereby she had authorised him to represent her before the Court. The Government did not oppose her wish to pursue the application in her late husband’s stead.

6.  Before the Court, the applicants complained that, on the basis of the Government Decision, they and/or their predecessor had been deprived of their shares without compensation. They further complained that the Government Decision had been unconstitutional and that the domestic courts had refused to examine its conformity with the Constitution and relevant primary legislation. They relied on Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 thereto.

THE COURT’S ASSESSMENT

1. PRELIMINARY ISSUE

7.  In view of her position as a heir and close relative, and of its case-law on the matter (see, for example, López Ribalda and Others v. Spain [GC], nos. 1874/13 and 8567/13, §§ 71-73, 17 October 2019), the Court finds that Ms Josipa Romić has standing to continue the proceedings before the Court in Mr Šimun Romić’s stead (see paragraph 5 above).

2. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION AND OF ARTICLE 1 OF PROTOCOL No. 1 THERETO
   1. Admissibility
      1. The Government’s objections

(a)   Exhaustion of domestic remedies and compliance with the six-month rule

8.  The Government argued that, prior to the adoption of the Government Decision, the applicants and/or their predecessor had not exhausted domestic remedies because they had not: (i) convened an extraordinary General Meeting of the bank, (ii) brought an action for judicial review in the Administrative Court against the decision of the Croatian National Bank appointing a temporary administrator, or (iii) brought a civil action for damages against the members of the bank’s Management Board and the Supervisory Board on account of their failure to conduct business with due care and diligence.

9.  In the alternative, the Government submitted that the applicants had failed to comply with the six-month time-limit because, in the absence of an effective remedy against the Government Decision, the six-month time-limit had started running from the date of its adoption on 23 September 1999.

10.  The Court notes that the Government never raised the above arguments in the leading case of Project-Trade d.o.o., no. 1920/14, 19 November 2020. In any event, having regard to its findings in that case, the Court notes that the applicants and/or their predecessor in the present case resorted to the remedy which at the time seemed to have reasonable prospects of success and reiterates that if more than one potentially effective remedy is available the applicants are only required to have used one of them (ibid., § 54). The fact that the remedy in question lacked any prospects of success and was therefore ineffective was established only on 24 July 2013 (ibid., § 56). At that time the remedies suggested by the Government (see paragraph 8 above), regardless of their (in)effectiveness, were no longer available as the relevant time-limits had expired (compare ibid., § 57).

11.  This means that the applicants and/or their predecessor were not required to use those remedies, and that, by lodging their application with the Court within six months from the service of the Constitutional Court’s decision adopted in their case (see paragraph 4 above), they have complied with the six-month time-limit (see ibid., §§ 48-59, and Pintar and Others v. Slovenia, nos. 49969/14 and 4 others, §§ 103 and §§ 106-107, 14 September 2021). The Government’s objections must therefore be rejected.

(b)   Applicability of Article 1 of Protocol No. 1

12.  The Government also argued that Article 1 of Protocol No. 1 was not applicable to the period following the adoption of the Government Decision, as at that time the applicants and/or their predecessor had no longer been shareholders of the bank and could not have had a legitimate expectation that their property rights over the shares would be restored. They also submitted that, at the time of the adoption of the Government Decision, those shares had already become worthless.

13.  Having regard to its findings in Project-Trade d.o.o., cited above, § 75, and Pintar and Others, cited above, § 91, the Court considers that the Government Decision resulting in the revocation and cancellation of the applicants’ and/or their predecessors’ shares constituted an interference with their right to peaceful enjoyment of their possessions. This objection must therefore also be rejected.

2. Victim status of certain applicants

14.  The Court notes that three of the applicants were never parties to the domestic proceedings complained of (see paragraph 3 above).

15.  Even though the Government did not raise an objection concerning the victim status of those applicants, that is an issue which the Court must examine of its own motion (see Project-Trade d.o.o., cited above, § 43, and the case-law cited therein).

16.  The Court notes that the three applicants in question had a material interest in the outcome of the case before the domestic courts, in that a judgment in favour of their predecessor would have affected them as his heirs, who stood to inherit any pecuniary award that may have resulted from the domestic proceedings complained of. The alleged lack of access to a court thus had a direct effect on those applicants’ property rights. That being so, and having regard to its case-law on the matter (see Stoimenovikj and Miloshevikj v. North Macedonia, no. 59842/14, §§ 24-26, 25 March 2021), the Court finds that the three applicants in question may claim to be victims of both violations complained of (see paragraph 6 above).

3. Conclusion as to the admissibility

17.  The Court further notes that the present application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

2. Merits

18.  The Court notes that, in a case raising similar issues to the present one, it has already found a violation of Article 6 § 1 of the Convention on account of the lack of access to a court due to a shareholder’s inability to effectively challenge the Government Decision before the courts. It has further found a violation of Article 1 of Protocol No. 1 as the interference with the shareholder’s possessions was not accompanied by sufficient procedural guarantees against arbitrariness and was thus unlawful (see Project-Trade d.o.o., cited above, §§ 62-88).

19.  Having examined all the material submitted to it, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case.

20.  There has accordingly been a breach of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1.

3. APPLICATION OF ARTICLE 41 OF THE CONVENTION

21.  The applicants claimed pecuniary damage in various amounts corresponding to the nominal value of their shares, multiplied by an inflation rate, together with interest accrued on those amounts in the period between 27 September 1999 and 31 December 2021. Under that head they also claimed the amount of costs of the domestic proceedings they had been ordered to pay to the State. The applicants also claimed 7,500 euros (EUR) each in respect of non-pecuniary damage. Lastly, they claimed a total of EUR 23,800 for the costs and expenses incurred before the Court, which corresponded to EUR 850 per applicant, excluding Mr Štivić who, while being one of the applicants, was also their representative (see the appended table).

22.  The Government contested these claims.

23.  Having regard to its findings in the case of Project-Trade d.o.o., cited above, §§ 110-111, and to the possibility under domestic law for the applicants (including Ms Romić, see paragraph 7 above) to request the reopening of the proceedings at issue, the Court rejects their claims for pecuniary damage.

24.  On the other hand, the Court finds that the applicants must have sustained non-pecuniary damage. It therefore awards them the sums indicated in the appended table, plus any tax that may be chargeable. In particular, the Court awards each applicant (including Ms Romić) EUR 2,800, except some applicants who live together in a common household and to whom it therefore awards that amount jointly (see the appended table).

25.  As to the costs and expenses they had themselves incurred before the domestic courts, the Court notes that the applicants did not claim such costs.

26.  As to the costs and expenses incurred before it, the Court considers it reasonable to award the applicants (including Ms Romić but excluding Mr Štivić, see paragraph 21 above) EUR 2,550 jointly, plus any tax that may be chargeable to them.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Holds that Ms Josipa Romić has standing to pursue the application in Mr Šimun Romić’s stead;
2. Declares the application admissible;
3. Holds that there has been a violation of Article 6 § 1 of the Convention;
4. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;
5. Holds

(a)  that the respondent State is to pay the applicants, within three months, the amounts indicated in the appended table;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

6. Dismisses the remainder of the applicants’ claims for just satisfaction.

Done in English, and notified in writing on 25 June 2024, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Dorothee von Arnim Lorraine Schembri Orland
 Deputy Registrar President

APPENDIX

List of applicants:

[1] Plus any tax that may be chargeable.

[2] Plus any tax that may be chargeable to the applicant.

[3] The amount due to the applicant Mr Šimun Romić is to be paid to his heir Ms Josipa Romić.