ECHR ruling of November 19, 2020 in the case "Project Trade D. o. o." v. Croatia (Project-Trade d. o. o. v. Croatia)" (aplication No. 1920/14).
In 2014, the applicant company was assisted in the preparation of the aplication. Subsequently, the aplication was communicated to Croatia.
In the case, an aplication was successfully considered against the cancellation and revocation of shares of a private bank, which directly affected the property rights of shareholders. The case involved a violation of the requirements of article 1 of Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms.
THE CIRCUMSTANCES OF THE CASE
The applicant company was a shareholder of a private bank. Following the decisions of the Croatian authorities on the restructuring and financial recovery of the banking sector, all shares in the bank were canceled and withdrawn, including shares owned by the applicant company, which unsuccessfully appealed against this circumstance.
Regarding compliance with article 34 of the Convention. Taking into account its case-law (see the Judgment of the Grand Chamber of the European Court of Justice in the case "Albert and Others v. Hungary" (Albert and Others v. Hungary) of 7 July 2020, complaint No. 5294/14), the European Court had to consider whether the applicant company, previously a shareholder of the Bank of Croatia, could claim that it was a victim of an alleged violation of Article 1 of Protocol No. 1 to the Convention.
With regard to complaints filed by shareholders of a company, it is extremely important to distinguish between complaints by shareholders about measures affecting their rights as shareholders (when they can be considered victims) and complaints about actions affecting companies whose shares the applicants had (and in these cases, the applicants cannot be considered victims of a violation of the Convention within the meaning of article 34 of the Convention). In order for shareholders to be able to call themselves victims of a violation of the Convention, the measures or actions complained of must violate their legal rights both directly and personally, and go beyond the violation of the interests of the company's shareholders in the form of a simple change in their position in the company's management structure.
The appealed measure, namely the aforementioned decision of the Croatian authorities on the restructuring and financial rehabilitation of the Bank of Croatia, included a requirement to revoke and cancel all shares of the bank's shareholders, including shares of the applicant company. Thus, the applicant company certainly lost its property as a result of the decision of the Croatian authorities. Consequently, the applicant company's rights guaranteed by article 1 of Protocol No. 1 to the Convention were directly violated in a way that went beyond simply changing the applicant company's position in the management structure of the Bank of Croatia.
In view of the above, the applicant company may be considered a victim of the alleged violation of the Convention.
The status of a victim of a violation of the Convention has been left unchanged.
The European Court also ruled by five votes in favor and two against that there had been a violation of Article 1 of Protocol No. 1 to the Convention due to unlawful interference with the applicant company's right to respect for its property, and found two violations of Article 6, paragraph 1, of the Convention due to insufficient access of the applicant company to the court and due to excessively long court proceedings.
In the application of article 41 of the Convention. The European Court rejected the applicant company's claim for compensation for material damage.