Project-Trade d.o.o. v. Croatia (European Court of Human Rights)

Information Note on the Court’s case-law 245
November 2020

Project-Trade d.o.o. v. Croatia – 1920/14

Judgment 19.11.2020 [Section I]

Article 34
Cancellation and revocation of shares in private bank directly affecting shareholders’ property rights: victim status upheld

Facts – The applicant company was a shareholder in a privately-owned bank. Following a government decision on the bank’s restructuring and recovery, all shares in the bank were revoked and cancelled, including those of the applicant company. They appealed unsuccessfully.

Law – Article 34: Having regard to its case-law (see Albert and Others v. Hungary [GC], 5294/14, 7 July 2020, Information Note 242), the Court had to examine whether the applicant company, as a former shareholder of Croatia Bank, could claim to be a victim of the alleged violation of Article 1 of Protocol No. 1.

For cases brought by shareholders of a company, it was crucial to draw a distinction between complaints brought by shareholders about measures affecting their rights as shareholders (where they could be considered victims) and those about acts affecting companies, in which they held shares (where they could not be seen as victims within the meaning of Article 34). For shareholders to be able to claim to be the victims, the impugned measures or acts must have impacted their legal rights both directly and personally and gone beyond merely disturbing their interests in the company by upsetting their position in the company’s governance structure.

The measure complained of, namely the impugned Government Decision on the recovery and restructuring of Croatia Bank, had consisted of the revoking and cancellation of all shares held by the bank’s shareholders, including those belonging to the applicant company. The applicant company thus had undeniably lost its property as a result of that Decision. Accordingly, the applicant company’s rights protected by Article 1 of Protocol No. 1 had been directly affected in a manner that had gone beyond merely upsetting the applicant company’s position in the Croatia Bank’s governance structure.

The applicant company might therefore claim to be a victim of the violation complained of.

Conclusion: victim status upheld

The Court also found, by five votes to two, that there had been a violation of Article 1 of Protocol No. 1 on account of an unlawful interference with the applicant company’s right to peaceful enjoyment of possessions; and two violations of Article 6 § 1 on account of their lack of access to court and the excessive length of the proceedings.

Article 41: claim in respect of pecuniary damage dismissed.

(See also Olczak v. Poland (dec.), 30417/96, 7 November 2002, Information Note 47; Albert and Others v. Hungary [GC], 5294/14, 7 July 2020, Information Note 242)

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