András Sajó;Egidijus Kūris;Krzysztof Wojtyczek;Nona Tsotsoria;Paulo Pinto De Albuquerque;Vincent A. De Gaetano;Gabriele Kucsko-Stadlmayer

The first applicant, Ms Claudine Desira, is a Maltese national who was born in 1992. The second applicant, Mr Moamar Ali Melad Eltarhuni, is a Libyan national who was born in 1985. Both applicants live in Zabbar. They are represented before the Court by Dr J. Brincat, a lawyer practising in Marsa.

The Maltese Government (“the Government”) were represented by their Agent, Dr P. Grech, Attorney General.

The facts of the case, as submitted by the parties, may be summarised as follows.

The second applicant arrived in Malta on 30 December 2005. He had obtained a visa on 28 December 2005 in Tripoli, which was valid for one entry for a duration of ten days, namely from 29 December 2005 to 9 January 2006.

The second applicant’s presence in Malta as from 10 January 2006 was thus illegal under the provisions of the Immigration Act.

During his illegal stay, the second applicant was charged before the Court of Magistrates in connection with a violent incident which had occurred on 25 May 2006 in the apartment in which he was residing. Following seven months of detention on remand the second applicant was granted bail and was released. The court ordered him not to leave Malta.

By a judgment of 9 March 2010 the second applicant was cleared of attempted murder, but found guilty of possessing a knife without a licence. He was sentenced to ten months imprisonment. He served his sentence while his appeal was pending. By an appeal judgment of 2 December 2010 the second applicant was acquitted of all the charges.

In 2006, the second applicant met the first applicant, who at the time was fourteen years of age, and they entered into a relationship. The second applicant moved in with the first applicant’s family and has lived in their house since.

According to the applicants, a request to issue marriage banns for the couple was rejected on a date that is not clear on the grounds that the first applicant was too young and her parents’ approval was required. The second applicant was also told that he required a visa, as it was not sufficient that he was in Malta on the basis of a court order. Nevertheless, no visa was issued to him, at first because his passport was being held by the police in connection with the court case, and later for unspecified reasons.

According to the Government, in 2009 the applicants verbally enquired with the Marriage Registrar about the documents which were necessary to contract a marriage. According to the principal officer of the registry (who gave evidence in later proceedings), the necessary documents were a birth certificate, a free status certificate, a permit allowing the second applicant to marry a non-Libyan woman (as required by the Libyan authorities), a valid passport and a valid visa. The application could not be processed that day as the applicants did not have the required documents.

It can be seen in the documents submitted to the Court that on 1 December 2009 the applicants lodged an application with the Civil Court (voluntary jurisdiction), requesting that the court order the Marriage Registrar to issue their banns. The Marriage Registrar objected, noting that the refusal had been a result of the fact that the second applicant had failed to submit the necessary documents, namely (i) a true copy of his birth certificate together with a certified translation, (ii) a free status certificate together with a certified translation, (iii) a passport or a visa covering his stay until the marriage, and (iv) the written consent of the first applicant’s parents. Furthermore, the second applicant had been waiting to undergo a trial by jury. By a decree of 26 January 2010, their application was rejected as the applicants had not produced all the documents required by law.

On 24 February 2010 the applicants verbally requested that the Marriage Registrar publish the marriage banns and to this end they produced the second applicant’s birth certificate, a certificate of free status and an expired passport. Since their request was not accompanied by a permit issued by the Libyan authorities allowing the second applicant (as a Libyan national) to marry, as well as a valid passport and visa, their request could not be processed.

The applicants put their case to the Ombudsman who by a decision of 22 April 2010 found that the fact that the would-be spouse had not presented a valid visa should not have been an obstacle to the marriage banns being issued. He thus advised the Marriage Registrar to issue the banns. However, the recommendation went unheeded.

In the meantime, the second applicant submitted a declaration of good conduct and behaviour, a certified free status certificate and a certified birth certificate. By a letter of 14 April 2010 the Director of the Public Registry declared that the only missing document was the visa.

On 29 April 2010 the applicants, assisted by a lawyer, lodged another application with the Civil Court (voluntary jurisdiction), requesting that it order the Marriage Registrar to issue the marriage banns given that the required visa was not a lawful requirement. Alternatively, if the court considered it to be a required document, they requested that the court refer the matter to the constitutional jurisdictions to establish whether there had been a violation of Articles 8 and 12 of the Convention. By means of a decree of 3 August 2010 the court found that, without prejudice to any rights of the applicants of obtaining constitutional redress si et quatenus [if and in so far as], given that it appeared that the applicants had not produced all the necessary documents the Marriage Registrar had been justified in refusing to issue their marriage banns.

In 2010 the applicants had a son, who was, however, registered as having an “unknown father” up to the date of the submission of observations, namely when the child was aged five. The applicants submitted that they wished to rectify the position of the child per subsequens matrimonium.

On 25 November 2010 the applicants, assisted by a lawyer, instituted constitutional redress proceedings, invoking Articles 8, 12 and 14 of the Convention.

By a judgment of 23 February 2012 the Civil Court, in its constitutional jurisdiction, considered that the applicants had exhausted ordinary remedies, no further remedies were available, and it thus found a breach of Article 12 in respect of the applicants’ rights. The court considered that the refusal to issue the banns had not been justified, and ordered the authorities to reverse that decision. In particular, it noted that Article 7 (2) and (5) of the Marriage Act (see paragraph 21 below) did not provide that a passport or visa were to be submitted in order to issue marriage banns. While it was true that a certain amount of discretion was allowed under Article 7 (5), which also referred to “in addition to all other relevant information”, such discretion had to operate to ensure good order and national security, and it had to be reasonable and proportionate to the aim pursued. The court considered that it was justified for a state to require a visa or a passport, nevertheless in the second applicant’s case it appeared that it was not possible to issue him with a visa, though no justification for this had been submitted. Now that the second applicant had submitted all the relevant documents (apart from the visa) and that he had been living in Malta for five years, the court could not find any justification or legitimate aim behind the registrar’’ family life had not been affected in any way and no discrimination had been proved.

The respondents, namely the Director of the Public Registry and the Marriage Registrar, appealed.

By a judgment of 9 November 2012 the Constitutional Court reversed the first-instance judgment. It considered that the applicants had not exhausted ordinary remedies as they had failed to institute ordinary proceedings before the Civil Court (First Hall) in its civil jurisdiction under Article 35 of the Code of Organisation and Civil Procedure (hereinafter the “COCP” - see paragraph 22 below). The Constitutional Court highlighted that according to domestic case-law, particularly Stacey Spiteri et vs Director of Public Registry, Constitutional Court judgment of 27 April 2012, and the domestic case-law cited therein (see paragraph 23 below) that procedure was a normal and ordinary procedure, one that was regularly used, and there was nothing preventing the applicants from instituting such proceedings. The decree of the court of voluntary jurisdiction could be challenged by an ordinary application before the Civil Court (First Hall) which had the power to confirm, revoke or alter the decree being challenged. In the event of the applicants’ request being acceded to, the remedy would have been an effective one and there would have been no complaint concerning any breach of human rights.

The relevant articles of the Marriage Act, Chapter 255 of the Laws of Malta, read as follows:

“(1) The celebration of marriage must be preceded by the publication of banns of matrimony.

(2) Banns of matrimony shall state the name, surname, place of birth and residence of each of the persons to be married, the place where they intend to contract marriage and, unless the Registrar in the case of natural filiation or other circumstances deems proper to act otherwise, the name of the father and the name and surname of the mother of each of the persons to be married.

(5) A request for the publication of banns shall not be entertained unless it is delivered to the Registrar earlier than six weeks before the date of the intended marriage, or than such shorter period as the Registrar may in his discretion accept in special circumstances, and unless and until, in addition to all other relevant information, there are delivered to the Registrar-

(a) the certificate of birth of each of the persons to be married;

(b) a declaration on oath made and signed by each of the persons to be married stating that to the best of his or her knowledge and belief there is no legal impediment to the marriage or other lawful cause why it should not take place.

Provided that if it is shown to the satisfaction of the Registrar that it is impracticable to obtain a certificate of birth required to be delivered by this sub-article, the Registrar may accept instead such other document or evidence as he may deem adequate for the purpose of this article.”

“(1) If the Registrar is of the opinion that he cannot proceed to the publication of the banns or that he cannot issue a certificate of such publication he shall notify the persons requesting the publication of his inability to do so, giving the reasons therefor.

(2) In any such case, either of the persons to be married may apply to the competent court of voluntary jurisdiction for an order directing the Registrar to publish the banns or to issue a certificate of their publication, as the case may require, and the court may, after hearing the applicant and the Registrar, give such directions as it may deem appropriate in the circumstances, and the Registrar shall act in accordance with any such directions.”

Article 35 of the COCP (Chapter 12 of the Laws of Malta) reads as follows:

“No appeal shall lie from any decree of the Court of voluntary jurisdiction; but it shall be lawful for any party, who deems himself aggrieved, to bring an action before the Civil Court, First Hall, for the necessary order.”

Relevant domestic case-law on the subject matter includes the case of Stacey Spiteri et vs Director of Public Registry (see paragraph 20, above), concerning the registrar’s refusal to issue the necessary banns on suspicion that it would have been a marriage of convenience. The Constitutional Court confirmed the first-instance judgment, noting that the applicable principles to decide whether the applicants have or had at their disposal an alternative and effective ordinary remedy had been underlined by it in various judgments and in particular in Olena Tretyak vs Director of Citizenship and Expatriate Affairs of 16 January 2006. Amongst other principles, the Constitutional Court referred to: the existence of another remedy as an actual and objective fact; that the remedy be accessible, just, effective and adequate in addressing the violation complained of; that for a remedy to be effective it need not guarantee a favourable outcome, but it sufficed that it could be pursued in a practical, effective and efficient manner; that the discretion of the Constitutional Court in this respect must be carried out justly and in the best interest of the administration of justice in order to, on the one hand, avoid that the constitutional jurisdictions be burdened by cases which could or should have been dealt with by other competent courts or through other effective remedies, and on the other hand to ensure that a person is not denied the remedies available under the Constitution or the Convention. It considered that the fact that a remedy is not pursued is not sufficient for the constitutional jurisdictions to refuse to take cognisance of a case, if it is shown that the remedy referred to was not effective to give full redress; however, when it is clear that there exists an available ordinary remedy, that must be pursued before seeking constitutional redress.

The Constitutional Court held (in Stacey Spiteri et) that the plaintiffs had failed to challenge the decree of the court of voluntary jurisdiction by an ordinary application before the Civil Court (First Hall), which had the power to annul and revoke the decree being challenged (see also Director of Public Registry vs X, judgment of the Civil Court (First Hall) in its ordinary competence, of 21 May 2008). As had been held by the firstinstance court this was not an extraordinary remedy; it had been used in the past and continued to be used.


Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings;Article 6-1 - Access to court)

The applicant, Mr Grigoriy Nikolayevich Pleshchinskiy, is a Russian national who was born in 1954 and lives in Solnechnogorsk, Moscow Region.

The applicant was kept in Solnechnogorsk Police’s temporary detention centre in overcrowded cells from 2 to 10 October 2003; 20 to 24 October 2003; 17 to 21 November 2003; 21 to 28 November 2003; 22 to 29 December 2003; 26 to 30 January 2004; 2 and 3 February 2004; 31 March to 2 April 2004 and then on several occasions between April and 22 July 2004. He had to relieve himself in a bucket in the presence of other detainees and it was very difficult to breathe in the cells. There was no tap or other access to water, no proper light, no table on which to eat food and no area for outdoor activities. In the winter the walls and ceiling were covered with ice or damp. He had no access to a shower.

The applicant made numerous journeys in 2003-2004 between Volokolamsk remand centre and the temporary detention centre in Solnechnogorsk, which took three to four hours in an overcrowded van, which was cold in the winter and stuffy in the summer.

On 11 July 2005 the applicant sued the State for compensation in respect of non-pecuniary damage caused by the allegedly appalling conditions of his detention in the temporary detention centre.

On 14 November 2005 the Solnechnogorsk Town Court rejected the applicant’s claims. It established that the material conditions of his detention could be explained by insufficient funding.

On 22 November and 6 December 2005 the applicant lodged appeals against the decision of 14 November 2005.

On 19 December 2005 the applicant was informed that the text of the judgment had been available since 5 December 2005.

On an unspecified date the court sent a summons to an appeal hearing which had been scheduled for 30 January 2006. However, the applicant did not receive the summons as it contained an error in the address, which was written as “2, Vishnevskaya Street” instead of “2, Vishnevaya Street”.

On 30 January 2006 the Moscow Regional Court upheld the decision of 14 November 2005 in the applicant’s absence.

In reply to an enquiry from the applicant about the date of the appeal hearing, he was informed on 1 February 2006 that it had been held on 30 January 2006.

In December 1992 the municipality allowed the applicant and his son, a minor at the time, to obtain ownership of the flat in Solnechnogorsk in which they were living by way of privatisation. The applicant obtained a title certificate, which, however, named him as the sole owner.

After reaching the age of majority, the son sued the father, asserting his right to the flat and seeking an annulment of the above-mentioned certificate.

In support of his claim the plaintiff submitted a copy of the housing register, and certificates from his school and kindergarten. All the documents showed that the plaintiff had been permanently residing in Solnechnogorsk.

The applicant sought to prove that at the material time the plaintiff had lived in a flat in another town, Taganrog, and tried to obtain certificates of his moving in and out of the privatised flat. However, the competent authority would not issue them unless they were requested by a judge. However, the judge considered that the evidence adduced by the plaintiff sufficed.

On 4 May 2005 the Solnechnogorsk Town Court of the Moscow Region granted the plaintiff’s claim. It held that the housing law provided that minors living with a tenant in a flat leased under a social lease agreement enjoyed the same rights as the tenant as of the privatisation date. Accordingly, where flats were privatised without payment, they could become owners of the flat together with the adults. Furthermore, under the privatisation law then in force, a privatisation agreement had to contain a reference to the minors who enjoyed the right to use the premises in question.

On 14 June 2005 the Moscow Regional Court upheld the decision of 4 May 2005 on appeal.


Alena Poláčková;Branko Lubarda;Dmitry Dedov;Georgios A. Serghides;Helen Keller;Luis López Guerra;Pere Pastor Vilanova

The applicant, Mr Rudolf Simon Louw, is a Dutch national who was born in 1951 and lives in Zierikizee. He was represented before the Court by Mr T. Barkhuysen, a lawyer practising in Amsterdam.

The applicant worked as an engineer for a Swedish company that produces aircraft for the military. He started in 1996 in the civilian section and transferred to the military side of the business in 1998, where he had access to some classified information related to defence. However, he never had a security clearance. In 2003 the company changed its practices so that only security-cleared personnel could access classified information. A security protection agreement was signed between the company and the Swedish Defence Material Administration (Försvarets materielverk, hereinafter – “the Administration”). Thereafter the applicant did not have access to classified information on defence matters.

However, as the applicant needed access to classified information in order to carry out his work, the company requested that the Administration grant him security clearance at level 2 (out of a possible three levels). On 10 June 2008 the Administration refused the company’s request, stating that a foreign citizen could not be given access to defence secrets at that level.

The company subsequently renewed its request to the Administration to grant the applicant security clearance at level 2. On 7 October 2008 the Administration refused the request, stating that a foreign citizen could not be allowed to handle licensed information in the form of weapons data or information from strength of material analyses.

The Administration’s decisions could not be appealed against.

The applicant, meanwhile, continued to work for the company on tasks that did not require security clearance.

During 2008 and 2009 the company suffered major shortages in demand which led to a reorganisation and staff reductions. The applicant received an offer to transfer to another department to continue to work as an engineer. He refused the offer. As there were no other suitable positions available, he was made redundant on 27 November 2009.

The applicant took the company to court, asking the Linköping District Court (tingsrätt) to declare the dismissal invalid and award him damages.

On 20 June 2012 his application was dismissed by the court. It found that the company had made the applicant a reasonable offer of an internal transfer and that the company had had an actual shortage of work. The dismissal had therefore been valid.

The applicant appealed against the judgment to the Labour Court (Arbetsdomstolen) and also requested that the court refer the case to the Court of Justice of the European Union (hereinafter “the CJEU”) for a preliminary ruling.

On 19 December 2012 the Labour Court refused the request for a referral for a preliminary ruling and decided not to grant leave to appeal. The decision was final.

Thereafter the applicant lodged an application with the Court (application no. 46964/13). He complained that the Administration’s refusal to grant him security clearance and his subsequent dismissal had constituted a violation of Article 1 of Protocol No. 1 to the Convention, separately and in conjunction with Article 14. Under Article 6, alone and in conjunction with Article 14, he further complained that the domestic courts had failed to request a preliminary ruling from the CJEU, that the domestic courts had not been impartial or independent, and that he had not had access to a court with full jurisdiction. The application was declared inadmissible by the Court, sitting as a Single Judge, on 3 April 2014. The Court found that the complaints under Article 1 of Protocol No. 1 and Article 14 were premature since the applicant could bring a claim with the Chancellor of Justice (Justitiekanslern). The remaining complaints were declared inadmissible.

As a consequence, the applicant turned to the Chancellor of Justice, requesting damages from the State for the alleged violations of Article 6, Article 14 and Article 1 of Protocol No. 1. He submitted the same grounds as he had before the Court.

On 1 June 2015 the Chancellor of Justice rejected the claim. The Chancellor noted that the Administration’s decisions had not concerned the applicant, but the company. The decisions had rather to be seen as replies by the State to the company within the framework of their security protection agreement and not as an exercise of public authority. Article 6 had thus not been applicable. Even so, the applicant had been able to challenge the dismissal he claimed was the consequence of his failure to obtain security clearance before the courts. Moreover, the Chancellor of Justice found that the proceedings before the domestic courts had been Article 6-compliant. Regarding Article 1 of Protocol No. 1, the Labour Court had found that the dismissal had been lawful. Lastly, concerning Article 14, the distinction made between Swedes and foreign citizens in terms of defence secrets had an objective and reasonable basis. In any event, the applicant had contributed to the situation by refusing the company’s offer to be transferred to another department.

Pursuant to section 7 of the Security Protection Act (säkerhetsskyddslag, 1996:627), a private company has to protect, inter alia, classified information concerning national security in order to prevent such information being disclosed, changed or destroyed without authorisation and ensure that people who are not reliable from a security perspective do not participate in activities of importance to national security.

When the state procures services externally, a security protection agreement must be signed with the other party if it involves information that is classified on national security grounds (section 8 of the Act).

A security clearance must be granted before a person, through his or her employment at a company, participates in activities of importance to national security. The security clearance must ensure that the person is loyal to the protected interests and otherwise reliable in terms of security (section 11).

There is no prohibition on granting security clearance to foreign citizens working in private companies. Such a prohibition applies, however, in the public sector. The Government may in individual cases grant an exception for public sector employees (section 29 of the Act).

In accordance with section 17 of the Act, there are three different levels of security clearance, depending on the extent of access the employee has and the nature of the information. Level 1: the employee has access to a great extent to classified information of the utmost importance to national security. Level 2: the employee has access to classified information of the utmost importance to national security to an extent that is not insignificant. Level 3: the employee otherwise has access to classified information of importance to national security and where disclosure can be expected to cause a not insignificant level of harm to national security.

The Administration is responsible for granting security clearances. Pursuant to section 50 of the Security Protection Ordinance (säkerhetsskyddsförordning, 1996:633), no appeal lay against the Administration’s decisions.

According to a letter from the Government Offices (Regeringskansliet), dated 28 January 2013 (Fö2013/62RS) to the European Commission, the Administration handled about 3,000 cases of security clearance during 2012. Thirteen of those cases concerned foreign citizens, including eleven EU citizens. The Administration granted all the requests for security clearance.


CASE OF FRANČIŠKA ŠTEFANČIČ  v. SLOVENIA

Violation of Article 2 - Right to life (Article 2-1 - Effective investigation) (Procedural aspect)

Carlo Ranzoni;Egidijus Kūris;Ganna Yudkivska;Iulia Motoc;Marko Bošnjak;Paulo Pinto De Albuquerque

The applicant was born in 1933 and lives in Ajdovščina. She is the mother of Branko Štefančič, born in 1961. Mr Štefančič suffered from paranoid schizophrenia and depression and had been admitted to the Idrija Psychiatric Hospital on several occasions. In 2007 he lodged an extensive criminal complaint, alleging that he had suffered various injustices at the hands of his work colleagues, acquaintances, the police and other organisations. Upon examining the complaint, the Nova Gorica State Prosecutor’s Office decided not to pursue it. In June 2008 Mr Štefančič started to telephone the Prosecutor’s Office and go there in person on an almost daily basis. He made various delusional accusations regarding murders that had gone unpunished “since the age of Christ”.

On 19 June 2008 Mr Štefančič appeared at the Nova Gorica State Prosecutor’s Office, and was told by the receptionist that the office was closed that day. He replied that he would come back the next day, armed, and that nobody would be able to hide from him. Having been told about Mr Štefančič’s threats, the Head of the Nova Gorica State Prosecutor’s Office, B.O., telephoned the Idrija Psychiatric Hospital and told the staff what had happened. She was told that Mr Štefančič was mentally ill and had already been treated in the hospital several times. She was further advised to contact the Ajdovščina Community Health Centre and suggest that a referral be made for Mr Štefančič’s involuntary confinement. In addition, B.O. was warned by Mr Štefančič’s consulting psychiatrist that over the past few weeks his patient had threatened to kill several people, including his doctor, mother and sisters. In view of this, the psychiatrist had assessed that Mr Štefančič was dangerous and in need of treatment, and added that he should be taken seriously due to his physical strength. B.O. also called the Nova Gorica police and told them about Mr Štefančič’s visits to the Prosecutor’s Office.

At 5.30 p.m. a doctor from the health centre telephoned the Ajdovščina police station to request police assistance with Mr Štefančič’s involuntary confinement on the grounds that he could become aggressive. She later took the request for his police-assisted transport and the order for his confinement to the police station in person.

At 5.55 p.m. the duty officer submitted the request to the commander of the police station, who granted it immediately.

At 6 p.m. officer J.T. from the Ajdovščina police station set off to the applicant’s house and found her son, who was living there, at home. He informed officers at the Nova Gorica police communications centre, and they informed the health centre staff that they could proceed with the involuntary confinement. Police officer J.T. remained at the scene until health centre medical staff consisting of B.A., the doctor on duty, and S.M. and I.P., medical technicians, arrived. Also sent to the scene were D.K., a second officer from the Ajdovščina police station, police officer dog handler J.K., and two traffic officers of the Nova Gorica traffic police.

According to the police report of 31 July 2008 based on the statements made by the police officers and medical staff, upon their arrival at around 8 p.m. the police officers and medical technicians first talked to the applicant, who was sitting on a bench at the back of her house. They asked her whether her son was in the house and whether he was armed. She replied that her son was indeed in the house and was on the telephone. She further explained that she was not aware of him possessing any firearms. The medical team informed the applicant why they were there and then entered the house, while the police officers remained at the front door.

Dr B.A. informed Mr Štefančič that they were going to take him to a psychiatric hospital, but he refused to go with them. The medical team attempted to persuade him, but he became agitated and verbally aggressive. The police officers warned him that he would be taken to the hospital by force if he refused to go of his own free will.

The medical technicians attempted to take hold of Mr Štefančič’s arms, but he pushed them off and started to scream. Dr B.A. then instructed the police officers to handcuff him, but when J.T. and D.K. attempted to restrain him, he resisted forcefully and pushed them off. In response, the police officers used physical force in order to push him to the ground, and J.K. ordered a muzzled dog on a leash to jump at him. As Mr Štefančič did not seem to react to the dog jumping at his chest, J.K. took it back to the police car. J.T. and D.K. meanwhile continued to use physical force and managed to wrestle Mr Štefančič to the ground onto his back.

The two police officers were then joined by dog handler J.K., who used the “rear chokehold” technique on Mr Štefančič. Together they managed to put him into the recovery position and medical technician S.M. injected Haldol (an antipsychotic drug with tranquilising effects) into his buttocks. As Mr Štefančič continued to resist, they could not administer the full dose of medication to him. The police officers then turned him onto his stomach, and J.T. handcuffed his hands behind his back. Medical technician I.P. injected him with Akineton, medication used on psychiatric patients to reduce the tremors caused by antipsychotic drugs.

Mr Štefančič calmed down as soon as he received the second dose of medication. A few moments later, the police officers and medical technicians noticed that there was a brown palm-sized pool of liquid under his head. They alerted Dr B.A., who established that Mr Štefančič had vomited and assessed that it could have been attributed to exertion. However, when one of the medical technicians checked Mr Štefančič again, he detected an irregular heartbeat, and again called out to the doctor. The medical team began to resuscitate him at 8.10 p.m. The police officers attempted to unlock his handcuffs, but only managed to free one of his hands, before the key broke.

The applicant, who was waiting outside during the intervention, was heading to the front of the house when she heard loud noises and a dog barking. When she approached the front door, she saw Dr B.A. massaging her son’s chest. She asked the police officers what was going on, to which one of them replied that they were resuscitating her son. Another ambulance arrived at the scene at 8.42 p.m., and an electrocardiogram was performed on Mr Štefančič, but to no avail. At 8.45 p.m. Dr B.A. pronounced him dead. He attributed the death to a heart attack or stroke.

Immediately after Mr Štefančič’s death, the officers from the Ajdovščina police station notified the Nova Gorica police communications centre of the incident and secured the area. The duty State prosecutor and the duty investigating judge of the Nova Gorica District Court were also notified of the death. The investigating judge attended the scene and ordered a forensic examination of the body. The medical file and equipment used in his resuscitation were also seized.

On 20 June 2008 police officers D.K., J.T. and J.K. made records of the methods of restraint they had used on Mr Štefančič (physical force, handcuffs and the police dog), which were confirmed by their superior officers to have been lawful.

In the days after the incident, an officer of the Nova Gorica police took statements from the police officers and medical staff involved in the incident, as well as from the applicant.

The applicant stated that on the evening of 19 June 2008 several police cars and an ambulance drove to the house and an officer asked her whether her son was keeping firearms. She replied that he was not, as far as she was aware. The applicant remained outside during the intervention and could not remember exactly how the events unfolded. She heard screaming, but was afraid to go inside. Sometime later she looked into the hallway and saw her son lying on the floor, surrounded by Dr B.A. and the medical technicians. She asked them what was going on, and they replied that they were resuscitating her son. She noticed that he had vomited.

D.K. and J.T., police officers, stated that upon entering the house, Mr Štefančič, who appeared to be talking on the telephone, told the medical technicians that he would not go with them, and D.K. and J.T. then warned him that they would use force if necessary. Dr B.A. also tried to convince him to go with them without success and he then instructed the officers to handcuff him. D.K. and J.T. took him by the arms to lead him to the ambulance but he resisted strongly. Dog handler J.K. attempted to calm him down by ordering the police dog to jump at him but Mr Štefančič did not react to the dog’s attack. The officers struggled to wrestle him to the ground and eventually succeeded in pushing him to the ground on his back; they then turned him onto his stomach, but he continued to resist forcefully. Dog handler J.K. then used the so-called “rear chokehold” technique on him, and together they managed to turn him onto his side. One of the medical technicians then administered the first dose of medication to him, whereupon he was again turned onto his stomach and handcuffed with his hands behind his back. The second dose of medication was then administered to him and he calmed down.

After Mr Štefančič received the second dose of medication, D.K. noticed a brown palm-sized pool of liquid under his head. Somebody mentioned that it was vomit and D.K. then asked if that was right. Dr B.A. was on the telephone arranging for Mr Štefančič’s transport to the psychiatric hospital but upon hearing D.K.’s question checked Mr Štefančič and said that the vomiting was due to exertion. J.T. confirmed that Dr B.A. initially said that Mr Štefančič was okay and vomited from exertion but added that the doctor did not check Mr Štefančič’s pupils or pulse. Then one of the medical technicians looked at Mr Štefančič again and checked his pulse. He called out to the doctor, saying that something was not right as he was breathing irregularly. Officer J.T. then attempted to unlock the handcuffs, and managed to get the one on his right hand off before the key broke. The medical staff started to resuscitate him. The whole incident, from the beginning of the police intervention until the beginning of the resuscitation procedure, only lasted a few minutes, five at the most.

J.K., a police dog handler, confirmed that he had first joined the intervention by ordering the police dog, which was muzzled, to jump at Mr Štefančič, who, however, made no attempt to shake the dog off or to withdraw from the attack. Therefore J.K. took the dog back to his car and then returned to the house, where officers D.K. and J.T. were not able to turn Mr Štefančič onto his stomach. J.K. helped them by holding him in a rear chokehold and together they managed to turn him onto his stomach and handcuff him. As this was going on, one of the medical technicians injected medication into his buttocks. J.K. also confirmed his colleagues’ accounts as to how the resuscitation of Mr Štefančič proceeded after it was discovered that he had vomited.

I.P., a medical technician, stated that on his arrival, he first asked the applicant a few questions and then entered her house with his colleague S.M. According to both medical technicians, Mr Štefančič pretended to be speaking on the telephone. I.P. explained to him that he was being taken to the psychiatric hospital to see a psychiatrist. Mr Štefančič refused to go and Dr B.A. ordered him to be handcuffed. As regards the events that ensued concerning the use of force by the police officers, I.P.’s statement matched the statements of police officers D.K., J.T. and J.K. (see paragraphs 2022 above), while S.M. did not pay much attention to the police operation, as he was preparing a syringe of Haldol.

As soon as the police officers managed to wrestle Mr Štefančič to the ground and turn him onto his side, S.M. injected him with Haldol. S.M. added that because Mr Štefančič forcefully resisted, he could not administer the full dose of medication to him. He then left the house. While the police officers turned Mr Štefančič onto his stomach, I.P. administered the second injection into his buttocks and he calmed down. I.P. then noticed that he was not breathing or was struggling to breathe. As far as he could remember, he called out that Mr Štefančič was not breathing. Dr B.A. approached him and saw him take a breath, concluding that he was breathing. S.M., standing outside, stated that he had not seen when and how Mr Štefančič had started to vomit, but heard the exchange between his colleague and Dr B.A. The doctor then left the house and started to arrange Mr Štefančič’s transport to the hospital. I.P. checked Mr Štefančič again and exclaimed that he was not breathing. Together with the police officers they turned Mr Štefančič onto his back and I.P. noticed that he was cyanotic. He also noticed traces of vomit on Mr Štefančič’s face, so he first protected his airways. The police officers had by then removed the handcuffs from him. His colleague S.M., who confirmed that Mr Štefančič looked grey and had traces of vomit on his face, fetched the resuscitation kit from the ambulance. Together with Dr B.A. they had intubated him; however, even at the beginning of resuscitation, his pupils were dilated, which was also a bad sign. I.P. also stated that the whole incident, from the use of physical force on Mr Štefančič until the beginning of the resuscitation procedure, only lasted a few minutes, five at the most. I.P.’s account was confirmed in substance by traffic officer M.D., who together with his colleague A.K. guarded the back entrance to the applicant’s house and thus only heard part of the incident.

Medical technician S.M. expressed the view that the police officers might have used excessive force in dealing with Mr Štefančič. He added that though Mr Štefančič had refused to go to the psychiatric hospital, he had not been particularly aggressive, and above all, had not physically attacked anyone.

Dr B.A., a general practitioner, stated that Mr Štefančič’s psychiatrist expected that he might behave aggressively so he received instructions to give him an injection of two ampoules of Haldol and one ampoule of Akineton. Although in the beginning of the intervention Mr Štefančič appeared agitated, but not aggressive, he started to resist forcefully when the police officers attempted to handcuff him.

According to Dr B.A., after Mr Štefančič was handcuffed and calmed down, he came out of the applicant’s house and started to arrange his transport. One of the police officers then called out to him that something was not right, that Mr Štefančič had vomited and was having trouble breathing. He was immediately turned onto his back. Dr B.A. noticed that Mr Štefančič had turned blue in the face and that he was wheezing. The medical team then started the resuscitation procedure, massaging his heart and intubating him, as well as administering 1 mg of adrenaline and 3 mg of atropine to him. However, as they did not have an electrocardiogram monitor or a defibrillator, another ambulance was called. By the time the second ambulance arrived at 8.42 p.m., they could only establish that Mr Štefančič had died.

On 21 July 2008 a criminal investigations officer of the Nova Gorica police obtained an oral preliminary report from the forensic pathologist who had performed the autopsy of Mr Štefančič. According to him, the deceased had most likely died of asphyxiation from inhaling gastric contents (choking on his own vomit). With regard to the question of potential liability for Mr Štefančič’s death, he took the view that the asphyxiation occurred during the police intervention, and that the presence of a doctor could not have altered the course of events. He added that the doctor could only be accused of negligence if the death had occurred during the resuscitation, which in his opinion had not been the case.

On 31 July 2008 the head of the Nova Gorica police criminal investigations unit submitted a report of the incident to the Nova Gorica State Prosecutor’s Office. Based on a statement provided by the forensic pathologist who conducted the forensic examination, the report stated asphyxiation from inhaling gastric contents as the cause of Mr Štefančič’s death. As to the events leading to the death, the police report summarised the statements given by the intervention team and stated that Mr Štefančič had resisted the police officers who had tried to take him to the psychiatric hospital, whereupon physical force had been used on him. After Mr Štefančič had been restrained and had calmed down, the police officers and medical technicians had noticed that he had vomited. After Dr B.A. had initially assessed that this could be attributed to exertion, he had been found to have an irregular heartbeat and the medical team had tried to resuscitate him, but to no avail. As regards the question of potential liability for Mr Štefančič’s death, the police report followed the forensic pathologist’s opinion that he had died during the police intervention and that his death could not have been prevented by any medical assistance. The report concluded by saying that no facts had been established giving rise to a suspicion that a criminal offence had been committed in connection with the death of Mr Štefančič which warranted criminal prosecution.

On 10 September 2008 the completed forensic report was submitted to the investigating judge of the District Court, confirming asphyxiation from inhaling gastric contents as the immediate cause of Mr Štefančič’s death. In addition to the trauma consistent with the cause of death, the examination revealed a number of blunt injuries to various parts of his body.

These included contusions on the outer edge of the shoulder blade, the left of the back and the back of the right thigh, swelling on the right of the hairline and the squamous part of the temporal bone, contusions on the inside of the upper right arm and left forearm and on the front of the left thigh. Several haematomas were recorded around the left shoulder blade, on the outer edge of the right shoulder blade, on the right of the thorax and on the scalp, as well as a pulmonary oedema, an oblique fracture of the fifth rib, bruising around the lumbar spine, and brain swelling.

According to the report, these injuries had either been caused by Mr Štefančič’s body being struck by an object, by part of his body being pressed against something, by him falling, or by his body being pressed between two hard surfaces. As regards the injuries to the back of his body, hairline and front left thigh, the forensic pathologist concluded that they had most likely occurred by him falling or falling after being struck, and that the bruises were caused by the body being pulled to the ground.

The toxicology report revealed a low concentration of haloperidol (an antipsychotic drug with strong calming effects) in Mr Štefančič’s blood. The forensic report concluded that the substance had been consumed either as a prescription medicine or administered during the intervention in order to calm him down, but could not be linked to his death or identified as the cause of his vomiting.

No particularities or disease-related changes had been found in Mr Štefančič’s system which could have directly contributed to his death.

With regard to enquiries made by the investigating judge as to whether Mr Štefančič’s death could have been prevented by prompt and adequate medical assistance, the forensic report stated:

“Disregarding the particular circumstances surrounding the incident, this question could be answered in the affirmative; however, one cannot neglect the exceptional circumstances in which the incident occurred.

Prompt and adequate medical assistance could have saved the life of [Mr Štefančič], even in the event that no ambulance with resuscitation equipment was immediately available.

It is likely that [Mr Štefančič] was thrown or pushed to the ground where, prior to being handcuffed, his body was pushed down by applying body weight or some other pressure. [Being struck or pushed in] the stomach most likely induced the vomiting. In so far as the medical staff or the officers assisting them in the involuntary confinement had noticed in due course that [Mr Štefančič] began to vomit, they could have prevented him from inhaling gastric contents either by lifting his body into a vertical position or by turning him onto his side and mechanically clearing his oral cavity by using their fingers or an aspirator (if an aspirator was at the disposal of the medical staff). However, it was not possible to apply any of these measures to an aggressive patient resisting hospitalisation; it is only possible to apply such measures after the patient has calmed down or lost consciousness as a result of disruption in the exchange of gases following the aspiration of gastric contents. Having regard to the agitation and aggressiveness of the patient, as well as the circumstances of the incident, such measures almost certainly could not have been applied.

The deceased only lost consciousness when his breathing was disrupted by inhaling massive amounts of gastric contents. Only then was it possible to apply more aggressive medical intervention (mechanical clearing of the oral cavity, suction of gastric contents from the oral cavity and respiratory tract, removal of potentially larger foreign objects and insertion of a tube with a balloon to prevent continuing aspiration of gastric contents, ventilation of the patient), which could not be performed on a conscious person, in particular on an aggressive person, due to the unpleasant feelings such an intervention induces. In the present case, the aspiration of gastric contents was particularly massive and aggressive, which is indicated by the pieces of food found by the histological analysis to be present even in the alveoli, the final branching of the respiratory system.

In the present case it was not possible, once the deceased lost consciousness, to apply those methods and to suck the gastric contents from the respiratory passages and alveoli; considering the quantity and force of the aspiration of gastric contents, medical assistance probably would not have saved the life of [Mr Štefančič].”

On 18 September 2008 the investigating judge of the Nova Gorica District Court sent the statements of the persons involved in the incident, a record of the examination of the scene, the order for a forensic examination of Mr Štefančič’s body and the forensic report to the State Prosecutor’s Office.

On 23 September 2008 the Head of the Nova Gorica State Prosecutor’s Office, B.O., informed the District Court that the conditions had not been met for the institution of criminal proceedings, and that the case file had been archived.

On 20 January 2009 the applicant, through her representative, lodged a criminal complaint against police officers J.T., D.K. and J.K., whereby she stated that her son had been strangled and had died as a result of an unnecessary and unprofessional police intervention. The applicant also stated that the forensic report was misleading and there were doubts as to its accuracy. In addition, an anonymous criminal complaint was lodged against E.G., the head of the Nova Gorica uniformed police unit. The complainant alleged that E.G. had abused his position by giving a statement at a press conference in which he had covered up the actual cause of Mr Štefančič’s death in order to prevent criminal prosecution of Dr B.A.

After having reviewed the Nova Gorica State Prosecutor’s Office’s case file, on 2 June 2009 a State prosecutor from the Group of State Prosecutors for Special Matters (Skupina državnih tožilcev za posebne zadeve – hereinafter “the Special Matters Group”), which had exclusive jurisdiction over the prosecution of criminal offences committed by police officers, rejected both criminal complaints on the basis of the police and forensic reports and the media reports from the press conference on Mr Štefančič’s death.

The decision to reject the criminal complaints summarised the information included in the police and forensic reports, as well as the statements given to the police by Dr B.A. and medical technicians S.M. and I.P.

The State prosecutor, relying on the forensic report, concluded that Mr Štefančič’s death could have been prevented if someone had been noticed in time that he had started to vomit. However, in the case in question Mr Štefančič had been aggressive and resisted hospitalisation, and no assistance could be provided until he had calmed down. Therefore, in the State prosecutor’s opinion there was no is reasonable suspicion that the actions of J.T., D.K. and J.K., the three police officers who had restrained Mr Štefančič, constituted a criminal offence. Moreover, as regards the anonymous criminal complaint, the State prosecutor established that, according to the reports in the media, the head of the Nova Gorica uniformed police unit had stated neither that Mr Štefančič had died as a result of being administered sedatives, nor that the medical team had immediately begun resuscitation after his condition had deteriorated. Therefore, no reasonable suspicion existed that E.G. had committed a criminal offence liable to prosecution ex officio.

No appeal was available to the applicant against the decision to reject her criminal complaint. However, she could take over the conduct of criminal proceedings as a “subsidiary prosecutor”.


CASE OF INTERNATIONAL BANK FOR COMMERCE AND DEVELOPMENT AD AND OTHERS v. BULGARIA

Preliminary objection joined to merits and dismissed (Article 35-1 - Exhaustion of domestic remedies);Remainder inadmissible;Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 2 of Protocol No. 1 - Control of the use of property);Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 2 of Protocol No. 1 - Control of the use of property);Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings;Article 6-1 - Access to court;Fair hearing;Adversarial trial);Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 2 of Protocol No. 1 - Control of the use of property);Violation of Article 13 - Right to an effective remedy (Article 13 - Effective remedy);Pecuniary damage - claim dismissed (Article 41 - Pecuniary damage;Just satisfaction);Non-pecuniary damage - claim dismissed (Article 41 - Non-pecuniary damage;Just satisfaction)

Angelika Nußberger;Carlo Ranzoni;Erik Møse;Khanlar Hajiyev;Mārtiņš Mits;Síofra O’Leary;Yonko Grozev

The bank was founded and entered in the register of companies in 1991. According to the BNB’s records, its shareholders on 31 March 2004 were the second applicant, Mr Bonev, who held 4.98% of the shares; his brother, Mr P.E.B., who also held 4.98% of the shares; the twenty companies listed in paragraph 6 above, each of which held between 4.98% and 2.81% of the shares; a Mr B.P., who held 0.19% of the shares; and a Mr P.B., who held 1.20% of the shares (for a full breakdown, see the Appendix).

At the material time the bank had a two-tier management system, consisting of an executive board and a supervisory board. Mr Panev and Mr Ivanov were members of the executive board between 30 May 2003 and 5 April 2004. In May and June 2004 Mr B.P. (see paragraph 11 above) was member of the bank’s executive board and one of its executive directors.

In early 2004 tensions arose among the bank’s shareholders and between some of the shareholders and the bank’s management. On 18 March 2004 Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd, acting in their capacity as shareholders who had held more than five per cent of the bank’s shares for more than three months, asked the executive board to call a general meeting of shareholders with a view to adopting amendments to the bank’s articles of association, reducing the number of members of the bank’s executive and supervisory boards, and replacing some of the boards’ members. The same day the executive board agreed to call such a meeting, but on 23 March 2004 the supervisory board set its resolution aside and called a general meeting of shareholders with a different order of business, to be held on 24 June 2004.

Thereupon Mr Bonev, Card Transaction Services Ltd, Flavors, Fragrances and Chemicals (FFCH) Ltd, Geneltech Ltd, General Foods Int’l Corp, Industrial Finance Int’l Corp, Megatours-A New Dimension in Travel-Inc, Petrofinance Ltd and V.V.V. Holdings Corp, acting in their capacity as shareholders who had held more than five per cent of the bank’s shares for more than three months, applied to the Sofia City Court for an order adding the points that they wished to have included on the general meeting’s order of business. On 14 May 2004 the chairman of the bank’s executive board and one of its executive directors objected to the request, saying that according to the bank’s register of shareholders, the persons who had made the request did not hold enough shares to be entitled to make one, and that the companies which had made the request had not produced proper credentials. On 8 June 2004 the Sofia City Court made an order in the terms sought by Mr Bonev and the companies, noting that they had proved that they had held the required number of shares for more than three months through notarised declarations.

Separately, Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd, again acting in their capacity as shareholders who had held more than five per cent of the bank’s shares for more than three months, asked the Sofia City Court to authorise them to call a separate general meeting of shareholders, with the order of business that they wished to have. To establish their capacity as shareholders, they enclosed with their request provisional share warrants issued in 2003. On 17 May 2004 the Sofia City Court upheld the request. On 20 and 26 May 2004 the chairman of the bank’s executive board and one of its executive directors, Mr B.P., asked the court to vary its order, arguing that the provisional share warrants had not been registered in the bank’s register of shareholders, and that the documents enclosed with the applicants’ request had not been issued by persons authorised to act on the bank’s behalf. On 20 and 28 May 2004 the court refused to vary its order, holding that by law that was not possible.

On 24 June 2004 proxies representing the twenty companies listed in paragraph 6 above showed up at the bank’s premises with a view to taking part in the general meeting of shareholders. Mr P.E.B, Mr B.P. and Mr P.B., who between them held 6.37% of the bank’s shares, were also represented. The polling commission entrusted by the bank’s executive board to check the shareholders’ credentials refused to accept the provisional share warrants through which the twenty companies sought to establish their capacity as shareholders. Concluding that only 6.37% of the shares were duly represented, the commission decided to adjourn the meeting for another date. A dispute ensued, and the twenty companies’ proxies held a parallel general meeting in the stairwell of the bank’s building. They resolved to amend the bank’s articles of association, reduce the number of members of its executive and supervisory boards from five to three, remove four members of the supervisory board and four members of the executive board, including Mr B.P., and appoint two new members of the supervisory board and three new members of the executive board, who were to be also executive directors: the applicants Mr Panev, Mr Ivanov and Mr Radev.

On 27 June 2004 Mr Bonev’s and the twenty companies’ proxies tried to hold another general meeting of shareholders at the Sofia Hilton hotel, as authorised by the Sofia City Court (see paragraph 15 above). Mr P.E.B, Mr B.P. and Mr P.B. were also represented. The police showed up, trying to seize the provisional share warrants which Mr Bonev’s and the twenty companies’ proxies were supposed to use to establish their capacity as shareholders, but could apparently not find them. The police were acting on an order issued by the prosecuting authorities in connection with criminal proceedings concerning the genuineness of those warrants, which they had opened pursuant to complaints by Mr B.P. (see paragraph 22 below). In view of the failure of the proxies to produce valid share warrants, the polling commission entrusted by the bank’s executive board to check the shareholders’ credentials found that only 6.37% of the shares were duly represented and decided to adjourn the meeting for another date. However, Mr Bonev’s and the twenty companies’ proxies held a parallel general meeting in an adjoining room, and adopted the same resolutions as the ones adopted on 24 June 2004.

On 16 August 2004 the Sofia City Court, sitting in private, decided to enter the changes resolved upon at the general meeting on 24 June 2004 (see paragraph 16 above) in the register of companies. The court found that the change in the bank’s management and the amendment of its articles of association had been duly carried out. It registered the amendment to the bank’s articles of association and the reduction of the number of members of its executive and supervisory boards from five to three. The court also struck out of the register four members of the supervisory board and four members of the executive board, including Mr B.P., and registered two new members of the supervisory board and three new members of the executive board, who were also to be executive directors: the applicants Mr Panev, Mr Ivanov and Mr Radev. Lastly, the court registered Mr Panev as chairman of the executive board. The court specified that its decision was to be entered in the register of companies and published, and that it was not subject to appeal.

The court’s decision was entered in the register of companies the afternoon of the following day, 17 August 2004. In the morning a notary sent to the register of companies by Mr B.P. certified that the decision had not yet been entered in the register. The same day the court issued a certificate reflecting the changes in the bank’s registration.

On 24 August 2004 the Sofia City Court, sitting in private, decided to enter the changes and amendments resolved upon at the general meeting on 27 June 2004 (see paragraph 17 above) in the register of companies. The court found that the changes in the bank’s management and the amendment of its articles of association had been duly made. The changes registered by the court were identical to the ones registered with its decision of 16 August 2008 (see paragraph 18 above).

Subsequently, Mr B.P. and Mr P.B. sought revision of those two decisions and brought claims for the annulment of the shareholder resolutions whose registration they ordered (see paragraphs 52-58 below).

On 19 May 2004 Mr B.P. wrote to the police and to the Sofia District Prosecutor’s Office, alleging that the provisional share warrants on which Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd had relied to obtain the court order of 17 May 2004 (see paragraph 15 above) were false and did not correspond to the entries in the bank’s register of shareholders. He pointed out that the warrants had been signed by Mr Panev and Mr Ivanov, and asked the authorities to open criminal proceedings and check whether any criminal offences had been committed in relation to that.

On 4 June 2004 the police issued an order for Mr Panev’s arrest for twenty-four hours. He was arrested and released later the same day. It does not appear that he has attempted to seek judicial review of his detention.

In the following days Mr Panev and Mr Ivanov were charged with making false private documents. Mr Bonev was, for his part, charged with using a false official document. The charges were later amended: Mr Panev and Mr Ivanov were charged with making false official documents, and Mr Bonev was charged with knowingly using a false document.

On 11 June 2004 the Sofia District Prosecutor’s Office, noting that Mr Panev and Mr Ivanov had in the past four years travelled extensively out of the country, which in its view meant that they could seek to evade criminal liability by fleeing abroad, banned them from leaving the country. On 23 July 2004 it made the same decision with respect to Mr Bonev.

On 29 December 2004 the Sofia District Prosecutor’s Office turned down Mr Bonev’s, Mr Panev’s and Mr Ivanov’s requests that the travel bans be lifted. It reasoned that, in view of the advanced stage of the pre-trial proceedings, their prolonged absence from the country might cause delays.

The preliminary investigation was completed in the end of December 2004 and on 11 January 2005 the three applicants were indicted. However, finding that the indictment suffered from various defects, on 25 January 2005 the Sofia District Court referred the case back to the prosecuting authorities.

On 14 June 2005 the Sofia District Prosecutor’s Office turned down a request by Mr Bonev to be allowed to travel to Switzerland for business meetings in July, August, September and October 2005.

On 27 June 2005 the Sofia District Prosecutor’s Office re-submitted the indictment, and on 22 July 2005 the Sofia District Court set the case down for trial on 6 December 2005.

In the meantime, on 11 July 2005 the Sofia District Court refused a request by Mr Bonev to be allowed to travel to Switzerland for business meetings. It held that there was no evidence that he had a pressing need to travel there. However, on 21 September and 19 October 2005 the court allowed Mr Bonev to travel abroad in October and the first half of November 2005 respectively. On 27 October 2005 it allowed him to travel to Turkey in the end of November 2005 for a business seminar.

The Sofia District Court heard the case on 6 December 2005 and 14 March, 5 June and 19 October 2006.

At the hearing on 6 December 2005, noting that Mr Bonev had duly appeared and had not attempted to flee during the investigation, the court allowed him to travel abroad during the period until the following hearing. On 17 February 2006 the court allowed Mr Bonev to travel to Belgium in the second half of March 2006 for business meetings.

On 4 April, 26 April and 5 May 2006 respectively the Sofia District Court lifted the travel bans imposed on Mr Bonev, Mr Panev and Mr Ivanov.

On 19 October 2006 the Sofia District Court acquitted Mr Panev, Mr Ivanov and Mr Bonev. Its judgment was not appealed against and became final on 4 November 2006.

On 14 and 18 October 2004 respectively Mr Ivanov and Mr Panev were charged with forgery offences in connection with their participation in the general meeting of shareholders of the bank on 24 June 2004 (see paragraph 16 above). On 18 January 2005 the Sofia District Prosecutor’s Office banned them from leaving the country. Four other persons were charged as well.

On 13 April 2005 Mr Panev, Mr Ivanov and their co-accused were indicted. However, finding that the indictment suffered from various defects, on 3 June 2005 the Sofia District Court referred the case back to the prosecuting authorities.

On 27 November 2005 the Sofia District Prosecutor’s Office resubmitted the indictment. The Sofia District Court heard the case on four unspecified dates in 2005-06.

On an unspecified date in the autumn of 2005 Mr Panev and Mr Ivanov asked the Sofia District Court to lift the travel bans. In a decision of 24 November 2005 the court refused their request, but on 4 April 2006 lifted the bans.

On 11 July 2006 the Sofia District Court acquitted Mr Panev, Mr Ivanov and their four co-accused. On 25 July 2006 the prosecution appealed but then withdrew its appeal, and on 18 December 2006 the Sofia City Court discontinued the appeal proceedings.

On 16 August 2004 Mr Panev, Mr Ivanov and Mr Radev entered into service contracts with the bank, represented by a member of its supervisory board. They undertook to sit on the bank’s executive board for three years following the registration of the resolutions of the general meeting of shareholders to appoint them as members of that board. In return, each of them was to receive a monthly salary of 10,000 Bulgarian levs (BGN) plus a host of other benefits.

The same day Mr Panev and Mr Ivanov tried to take up their duties, but the bank’s former management refused to vacate their offices and called the police, saying that they were not aware of any resolution to remove them. The next day, 17 August 2004, the bank’s former management forced the applicants out of the bank’s building, with help from the police. It appears that the police were acting on orders from the prosecuting authorities (see paragraph 42 below).

On 17 August 2004 the Sofia City Prosecutor’s Office ordered the police to assist Mr B.P. in preventing any changes in the status quo in the bank’s management and operations, and to warn Mr Panev, Mr Ivanov and Mr K.Y., a newly registered member of the bank’s supervisory board, to refrain from any actions in relation to that until the matter had been duly resolved by the competent authorities. It relied on section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below), and reasoned that the Sofia City Court’s decision of 16 August 2004 (see paragraph 18 above) was being verified by the Sofia District Prosecutor’s Office, that the record drawn up by the notary public (see paragraph 19 above) made it apparent that that decision had not been entered in the register of companies, which meant that it did not in fact exist, that Mr B.P. had applied to the Supreme Court of Cassation to reopen the proceedings and annul that decision (see paragraph 52 below), and that by trying to put the decision into effect Mr Panev, Mr Ivanov and Mr K.Y. were interfering with the bank’s normal business. The prosecutor found that, in view of the possibility for them to dispose of the bank’s documents and assets and imperil the interests of the bank’s depositors, that gave rise to a real risk of irreparable damage.

Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Sofia Appellate Prosecutor’s Office, arguing that the order was unlawful and arbitrary. They pointed out that the Sofia City Court’s decision was valid and immediately enforceable, that no appeal lay against it to the Supreme Court of Cassation, and that the prosecuting authorities had no power to stay its enforcement. The question whether a judicial decision had been entered in the register of companies was to be established on the basis of official documents issued by the competent court, not of a record drawn up by a notary public outside his competence. The certificate issued by the Sofia City Court (see paragraph 19 above) showed that its decision had in fact been duly entered in the register of companies.

On 23 August 2004 the Sofia Appellate Prosecutor’s Office dismissed the appeal. It noted that the Sofia City Prosecutor’s Office had been spurred into action by information, given to it by the Sofia District Prosecutor’s Office, that the Sofia City Court’s decision to make changes in the bank’s registration might have been based on false documents. At the time when the Sofia City Prosecutor’s Office had issued its order, the Sofia City Court’s decision had not yet been entered in the register of companies. Proceedings against that decision were pending before the Supreme Court of Cassation. All of that showed that until the Sofia District Prosecutor’s Office had completed its inquiry into the matter or until the Supreme Court of Cassation had given judgment, there would continue to exist a risk of changes in the status quo and irreparable damage to the bank.

Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Supreme Cassation Prosecutor’s Office, reiterating their arguments.

On 7 September 2004 the Supreme Cassation Prosecutor’s Office dismissed the appeal. It reasoned that it was beyond doubt that the prosecuting authorities were faced with a judicial decision under challenge and with evidence that that decision had been obtained through the use of false documents. Moreover, the decision had been issued in spite of a decision staying the registration proceedings and the existence of pending contentious proceedings. The appellants’ argument that the Supreme Court of Cassation had no jurisdiction to hear a legal challenge against the Sofia City Court’s decision was unavailing because the prosecuting authorities were not competent to make pronouncements on such points. Faced with pending judicial proceedings and a pending criminal investigation, they were bound to take measures to prevent changes in the status quo before any judicial resolution of the matter. The appellants’ attempts to change that status quo were premised on rights acquired through a judicial decision based on false documents. It was necessary for the judiciary to check the lawfulness of that decision and for the investigating authorities to gather evidence with a view to uncovering the truth. The bank had to be protected against damage flowing from offences that had already been committed and from the risk of future offences. The prerequisites of section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below) were therefore in place.

Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Chief Prosecutor, arguing that the prosecuting authorities had acted in a patently unlawful way and in excess of their powers. Their decisions had been based on false findings of fact, and on the finding – not based on a final conviction – that offences had been committed by them.

On 28 September 2004 the head of the economic crime division of the Supreme Cassation Prosecutor’s Office, to whom the case had been assigned, dismissed the appeal. He reasoned that the prosecuting authorities had acted lawfully and within their powers under section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below). The Sofia District Prosecutor’s Office was investigating the making of false documents with a view to obtaining changes in the bank’s registration, and the Sofia City Court’s decision had been challenged before the Supreme Court of Cassation. There had therefore been a need to preserve the status quo with a view to ensuring the normal operation of the bank.

The same day, 28 September 2004, the Sofia District Prosecutor’s Office ordered the police to take measures to ensure compliance with the Sofia City Prosecutor’s Office’s order of 17 August 2004 (see paragraph 42 above) and the preservation of the status quo in the bank. It noted that criminal proceedings had been instituted against members of the bank’s newly appointed management in relation to documentary offences, and that information existed that a group of persons had tried to enter the bank’s premises. Mr B.P. and the applicants Mr Panev and Mr Ivanov had complained to the prosecuting authorities in relation to that. Since the criminal proceedings concerned allegations of using false documents to obtain judicial decisions to make entries in the register of companies, it was appropriate to maintain the status quo pending the resolution of the case. Indeed, this had already been ordered by the higher prosecutor’s offices, whose decisions were mandatory for the Sofia District Prosecutor’s Office. The decision did not mention the legal provisions on which it was based.

In the following months Mr Bonev wrote a number of letters to the Chief Prosecutor and tried to meet him in person with a view to obtaining the quashing or varying of the above prosecutors’ decisions, to no avail. He also lodged complaints with the Minister of Justice and the Supreme Judicial Council.

On 25 August 2004 the twenty companies listed in paragraph 6 above transferred their shares to Mr Bonev by endorsing the provisional share warrants issued in 2003. As a result, he became the owner of 93.63% of the bank’s shares. The companies submitted that Mr Bonev paid part of the shares’ price immediately and undertook to pay the remainder when the transfer would be registered in the bank’s register of shareholders. The companies submitted that they could not obtain the remainder of the price because the bank’s former management, who were de facto running the bank by virtue of the prosecutors’ decisions outlined in paragraphs 42-49 above, refused to register the transfer.

On an unspecified date in 2004 Mr B.P. and Mr P.B. sought revision of the Sofia City Court’s decisions of 16 and 24 August 2004 (see paragraphs 18 and 20 above).

In two decisions of 4 February 2005 (опр. № 6 от 04.02.2005 г. по гр. д. № 554/2004 г., ВКС, І т. о., and опр. № 7 от 04.02.2005 г. по гр. д. № 483/2004 г., ВКС, І т. о.) a three-member panel of the Supreme Court of Cassation refused to examine the requests, holding that judicial decisions making entries in the register of companies were not subject to revision. Such decisions did not determine disputes between opposing litigants and did not enjoy res judicata. The proper way to contest entries in the register of companies obtained by criminal means was by way of a claim under Article 431 § 2 of the Code of Civil Procedure 1952 aiming to have the entries erased under Article 498 of that Code (see paragraph 76 below). Mr B.P. and Mr P.B. appealed. In two decisions of 28 June 2005 (опр. от 28.06.2005 г. по гр. д. № 53/2005 г., ВКС, петчл. с-в, and опр. № 28 от 28.06.2005 г. по гр. д. № 52/2005 г., ВКС, петчл. с-в) a five-member panel of the Supreme Court of Cassation upheld the three-member panel’s rulings, fully agreeing with them.

In the meantime, Mr B.P. and Mr P.B. brought claims against the bank under section 74 of the Commerce Act 1991 (see paragraph 76 below), asking the Sofia City Court to annul the resolutions of the general meetings of shareholders held on 24 and 27 June 2004 (see paragraphs 16 and 17 above).

In two judgments of 28 February and 7 March 2005, the Sofia City Court allowed the claims and annulled all resolutions adopted by the two meetings. It found that the meetings had been adjourned by the polling commission for lack of quorum and had not taken place, and that the parallel meetings had not been valid, chiefly because the persons who had taken part in them had not established their capacity as shareholders on the basis of valid provisional share warrants.

Following appeals by the bank, represented by the management appointed in June 2004 (see paragraphs 16 and 17 above) and registered by the Sofia City Court in August 2004 (paragraphs 18-20 above), on 16 and 19 June 2006 respectively the Sofia Court of Appeal quashed those judgments and dismissed the claims. It found that the persons who had held the parallel meetings had in fact represented 93.62% of the bank’s capital. The bank’s records, which fully matched those of the BNB, and a document issued by Mr B.P. in his capacity as executive director on the day of the meeting, showed that they had indeed been shareholders in it.

On appeals by Mr B.P. and Mr P.B., in two judgments of 7 June and 3 July 2007 (реш. № 111 от 07.06.2007 по т. д. № 598/2006 г., ВКС, І т. о., and реш. № 113 от 03.07.2007 по т. д. № 600/2006 г., ВКС, І т. о.) the Supreme Court of Cassation quashed the Sofia Court of Appeal’s judgments and annulled the resolutions of the two general meetings. It held that, where nominative shares which had still not been issued were concerned, the only way of proving that a person was a shareholder entitled to take part in a general meeting was by producing a valid provisional share warrant. This had not happened at the two meetings. They had therefore been held by persons whose capacity as shareholders had not been duly established, and all resolutions adopted by them were unlawful.

On 27 June and 18 July 2007 the Sofia City Court, acting of its own motion (see paragraph 76 below), and noting that the resolutions of the general meetings of 24 and 27 June 2004 had been ultimately annulled by the Supreme Court of Cassation, erased the entries in the register of companies relating to those resolutions.

Between September 2004 and April 2005 the applicants repeatedly asked the BNB to exercise its supervisory powers and take measures to resolve the bank’s situation. On 4 October 2004 the BNB wrote to the Chief Prosecutor with a view to elucidating the effect of the prosecutors’ decisions outlined in paragraphs 42-49 above on the bank’s management, but apparently did not receive a reply.

On 10 February 2005 the BNB’s deputy-governor in charge of banking supervision noted that Mr Panev and Mr Ivanov, who had been duly registered as members of the bank’s executive board, were being prevented from carrying out their duties as a result of the decisions of the prosecuting authorities (see paragraphs 42-49 above). That made it impossible for the bank’s executive board to function. The attempts to approach the Chief Prosecutor with a view to solving the problem had proved unfruitful. At the same time, a check of the bank’s finances carried out in December 2004 showed that its credit portfolio was deteriorating due to the ever more frequent failure of its debtors to service considerable loans extended by the bank, and that the bank was not carrying out proper creditrisk assessments. All of that seriously affected its stability and the interests of its creditors and depositors. It was therefore necessary to take urgent measures to solve the problem with the bank’s management. The BNB’s deputy-governor accordingly decided to call a meeting of the bank’s supervisory board on 11 February 2005 with a view to taking measures, possibly including replacing the members of the bank’s executive board, that could allow the bank to be effectively managed. The order specified that it was immediately enforceable and not subject to judicial review.

The next day, 11 February 2005, the bank’s supervisory board held a meeting at which it resolved to relieve Mr Ivanov of his duties as executive director of the bank and member of its executive board, and to appoint a Mr S.S. in his stead. The board noted that Mr Ivanov’s removal was not due to any failure on his part but to factors beyond the bank’s control. The next day, 18 February 2005, the BNB informed the bank that it gave its regulatory approval to the changes in the bank’s executive board.

On 18 February 2005 Mr Panev and Mr S.S. asked the Sofia City Court to register the supervisory board’s resolution. On 17 March 2005 Mr B.P. and Mr Bonev’s brother, Mr P.E.B., acting in their capacity as shareholders in the bank, asked the court not to proceed with the registration pending the outcome of the proceedings in which Mr B.P. and Mr P.B. had challenged the resolutions of the general meetings of shareholders of 24 and 27 June 2004 (see paragraph 54 above). On 21 March 2005 the court upheld that latter request, noting that the general meeting’s resolutions under challenge included the one to appoint the supervisory board whose resolution the court was being asked to enter in the register of companies. This registration was therefore to be adjourned pending the outcome of the proceedings against the general meeting’s resolutions.

In the following months the BNB repeatedly instructed the bank to take steps to overcome its financial difficulties. On 4 May 2005 it noted that, contrary to a statutory rule prohibiting banks from exposing more than a quarter of their capital to any one debtor, the bank had, as early as July 2004, extended a large loan to a company. In spite of the BNB’s instructions to fix that, the bank later had, on the contrary, vastly increased its exposure to that company. It was also overly exposed to other debtors, and faced with a serious deterioration of its credit portfolio, with ever more frequent failures by its nine principal debtors to service their loans. That required the bank to increase its non-performing loan provisions, but doing so would deplete its capital to a level requiring revocation of its licence. The BNB therefore asked all persons engaged with running the bank to join efforts to remedy its situation, and instructed the bank immediately to bring its exposure into line with the statutory requirements and collect its overdue loans from nine companies and all of its loans from another company. The BNB also barred the bank from taking in new term deposits, except from shareholders, and warned it that failure to comply with those instructions would lead to harsher measures, including the appointment of special administrators or revocation of its licence.

On 28 May 2005 the BNB’s deputy-governor in charge of banking supervision decided to place the bank under compulsory administration and to appoint two special administrators to run it for three months. She noted that it had already been established that the bank’s financial situation had substantially deteriorated and that its capital was below the amount required by law, which called for immediate remedial action; in particular, the collection of some of the loans extended by the bank. Despite instructions to that effect by the BNB and a warning that failure to act would trigger harsher measures, the bank’s management had not taken such action. A report by an inspector appointed by the BNB showed that the bank’s liquidity was worsening daily. The bank was therefore at risk of insolvency that its shareholders and management had not taken steps to avert. There was uncertainty in relation to the persons running the bank: those actually doing so no longer featured in the register of companies and were not in law entitled to act on the bank’s behalf, whereas those featuring in the register could not in fact do so because of the decisions of the prosecuting authorities (see paragraphs 42-49 above). That threw doubt on the reliability of the reports which the bank was submitting to the BNB; there were reasons to believe that its financial situation was worse than transpiring from these reports. At the same time, the infighting between the bank’s shareholders precluded outside assistance. All that showed that the interests of the bank’s depositors were at serious risk, and the BNB had no choice but to place it under administration and appoint special administrators to run it. The BNB specified that its order was immediately enforceable and not subject to judicial review.

In the following days the special administrators invited the bank’s management and shareholders to take steps to resolve the bank’s situation. Mr Bonev entered into settlements with the other shareholders – his brother, Mr B.P. and Mr P.B. – whereby they agreed to resolve the disputes between them. Mr Bonev also tried to find companies which would take over the non-performing loans extended by the bank. However, on 8 June 2005 the special administrators wrote to Mr Bonev, advising him that the results of an audit that they had ordered showed that the only way to prevent the bank from sliding into insolvency was to sell its risky loans immediately. The administrators went on to say that if Mr Bonev was serious about preventing that from happening, he had to buy those loans before 5 p.m. the next day, 9 June 2005. Otherwise, the administrators would be bound to notify the BNB that the bank was insolvent.

On 14 June 2005 the applicants wrote to the BNB’s governor and deputy-governor, complaining of undue pressure and improper conduct on the part of the special administrators, and saying that one of them was forcing Mr Bonev to sell his shares in the bank on very unfavourable terms.

The same day, 14 June 2005, the BNB’s governor, relying on section 21(2) and (5) of the Banks Act 1997 (see paragraph 78 below), and acting on a recommendation by the deputy-governor in charge of banking supervision, revoked the bank’s licence and extended the term of office of the two special administrators previously appointed to run the bank (see paragraph 64 above). He noted that a report by those administrators filed the previous day and the documents enclosed with it, all of which had been drawn up in line with the BNB’s requirements, showed that the bank’s liabilities exceeded its assets by BGN 19,181,000 and that its capital was negative – minus BGN 19,184,000. It was thus clear that the bank was insolvent, and that the BNB had to revoke its licence and petition the courts to open winding-up proceedings against it. The special administrators previously appointed to run the bank were to continue to carry out their duties pending the appointment of liquidators by the court. The governor specified that his decision was immediately enforceable and not subject to judicial review.

Following its decision to revoke the bank’s licence, on 15 June 2005 the BNB petitioned the Sofia City Court to declare the bank insolvent and wind it up. As required by law (see paragraph 79 below), in those proceedings the bank was represented by the special administrators previously appointed by the BNB (see paragraphs 64 and 67 above and paragraph 79 below).

Mr Bonev sought leave to intervene as a third party, citing concerns that the special administrators would not strive to protect the bank’s best interests. On 27 June 2005 the Sofia City Court turned down his request, holding that the Bank Insolvency Act 2002 set out in an exhaustive manner the persons entitled to take part in such proceedings (see paragraph 79 below). Mr Bonev appealed, arguing that he had an interest to take part in the proceedings in his capacity as shareholder in the bank. In a final decision of 11 October 2005, the Sofia Court of Appeal dismissed the appeal. It agreed with the lower court, and added that Mr Bonev did not have an interest to take part in the proceedings because, being merely a shareholder in the bank, he would not himself be bound by the courts’ decisions in relation to it.

In a decision of 29 June 2005, the Sofia City Court granted the BNB’s petition, declared the bank insolvent, made an order for it to be wound up, divested its decision-making bodies of their powers and the bank of the right to administer its property, and ordered the sale of its assets. Relying on the Supreme Court of Cassation’s judgment at issue in Capital Bank AD v. Bulgaria (no. 49429/99, § 33, 24 November 2005), the court held that, unlike the position with regular companies, the fact that a bank was insolvent was conclusively determined by the BNB. The construction of the applicable statutory provisions (see paragraph 79 below) showed that the insolvency court could not scrutinise that determination, and, faced with a decision by the BNB to revoke a bank’s licence and a facially valid winding-up petition lodged by the BNB, it was bound to declare the bank insolvent and make an order for it to be wound up. The decision was not appealed against. Immediately after it the Deposit Insurance Fund appointed liquidators from among the list of persons eligible to serve as liquidators kept by the BNB (see paragraph 81 below).

On 23 May 2007 Central Cooperative Bank AD bought all of the bank’s assets for one Bulgarian lev and undertook to satisfy the claims of its creditors which had been accepted by its liquidators. On 2 July 2007 the Sofia City Court approved the transaction. It found that it would result in a higher rate of repayment of the bank’s debts than if its assets were to be sold piecemeal over a protracted period of time.

On 17 August 2007 the Sofia City Court closed the winding-up proceedings in respect of the bank and struck it out of the register of companies.

On 24 June 2005 the BNB informed Mr Panev and Mr Ivanov that following the revocation of the bank’s licence, all of their bank accounts were being frozen, as required under paragraph 4(1) of the transitional and concluding provisions of the Bank Deposits Guarantee Act 1998 (see paragraph 83 below). They would be unfrozen six months after the BNB had applied for the opening of insolvency proceedings against the bank, unless in the meantime Mr Panev and Mr Ivanov had been charged with a criminal offence in relation to that, or unless the bank’s liquidators had brought a claim against them.

On 16 August 2005 Mr Ivanov and Mr Panev protested against the freeze, pointing out that as a result of the prosecuting authorities’ decisions set out in paragraphs 42-49 above they had in effect never been able to take up their duties and therefore did not fall under that provision. On 31 August 2005 the BNB replied that it did not have discretion to unfreeze the accounts.

On 12 January 2006 Mr Panev and Mr Ivanov asked the BNB to unfreeze their accounts as the six-month period laid down in paragraph 4(1) of the transitional and concluding provisions of the Bank Deposits Guarantee Act 1998 (see paragraph 83 below) had expired. Finding that no criminal proceedings or claims by the bank’s liquidators had been brought against Mr Panev or Mr Ivanov within those six months, on 20 January 2006 the BNB unfroze the accounts.


Violation of Article 6+6-3-d - Right to a fair trial (Article 6 - Administrative proceedings;Criminal proceedings) (Article 6 - Right to a fair trial;Administrative proceedings;Criminal proceedings;Article 6-3-d - Examination of witnesses;Obtain attendance of witnesses)

Aleš Pejchal;Armen Harutyunyan;Kristina Pardalos;Linos-Alexandre Sicilianos;Robert Spano

The applicant company, Chap Ltd, is a private Armenian company that was set up in 1999 and has its registered office in Gyumri.

In 2005 the applicant company established a regional television channel, Gala TV, with the intention of broadcasting in the local region.

On 23 February 2005 the applicant company was granted a licence by the National Television and Radio Commission (“the NTRC”) permitting it to broadcast in Gyumri, the second largest town in Armenia, and the surrounding area. The licence was granted for a period of seven years. Gala TV was one of four television stations operating in Gyumri and, according to the applicant company, it was widely recognised as one of the few independent voices in television broadcasting in Armenia.

From 29 October to 12 November 2007 the State Revenue Service (“the SRS”) conducted an inspection of the applicant company’s accounts. As a result, on 12 November 2007 it issued a report stating that the applicant company had a high tax liability for the years 2005 to 2007 and ordered it to pay 25,665,100 Armenian drams (AMD) (approximately 51,000 euros (EUR)), including surcharges and fines. The report stated that the indicated amounts were payable to the State budget within a period of ten days.

The SRS established in its report that the applicant company had underreported its tax liability by hiding income earned from advertising. The report also stated that the applicant company had failed to include the prices for its services in its invoices or keep records, as required by the Television and Radio Broadcasting Act. Furthermore, it was alleged that the applicant company had manufactured and sold fireworks without a government licence.

The SRS’s report was based, inter alia, on:

a) documents requested from and subsequently submitted by Gr.A., the head of the NTRC;

b) statements by the heads of companies and individual businessmen that they had placed advertisements on Gala TV but had not received any documents acknowledging payment to the applicant company for such services.

The applicant company objected to the allegations of tax evasion as fabricated and politically motivated as home-made advertisements that had a social function, which Gala TV had broadcast for free, had been taken into account by the authorities in calculating the tax arrears.

On an unspecified date the SRS instituted criminal proceedings against the applicant company’s chief executive, K.H., for tax evasion. The investigating authorities discontinued the proceedings after the required amount had been paid.

Having received no payment from the applicant company as regards the amounts stated in its report of 12 November 2007, on 26 November 2007 the SRS brought a claim with the Commercial Court to oblige the applicant company to pay AMD 25,212,800 (approximately EUR 50,000) in tax debt and to freeze its bank accounts and other assets in the amount of the alleged tax shortfall.

On 27 November 2007 the Commercial Court admitted the case to its proceedings and at the same time dismissed the application to freeze the applicant company’s bank accounts.

On 3 December 2007 the Commercial Court approved a freezing order on the applicant company’s assets as security for the claim.

On 17 December 2007 the applicant company brought a counterclaim against the SRS, challenging the results of the tax inspection. It argued, inter alia, that the relevant statements obtained from the heads of companies and individual businessmen, as well as the information obtained from Gr.A., could not be used as evidence to support the findings of the SRS in its report.

On 24 December 2007 the applicant company’s case was transferred to the Administrative Court, which had been set up as part of a reform of the court system that year.

On 29 January 2008 the Administrative Court admitted the case.

On 12 March 2008 the applicant company’s lawyer lodged an application to obtain and examine the tax records of the companies that had advertised on Gala TV and had been inspected by the SRS. He claimed that those tax records contained tax reports and other documents which could rebut the evidence submitted by the SRS. This application was rejected.

On the same day the applicant company’s lawyer also asked the Administrative Court to summon, inter alia, the heads of the relevant companies and the businessmen, namely A.J., S.A., S.M., H.P., G.S., G.A. and H.M. to whose statements the SRS had referred in its report.

By another application submitted on the same date the lawyer asked the Administrative Court to summon Gr.A. to testify about the information and documents he had provided to the SRS and confirm the veracity of those documents.

The applicant company’s applications were rejected by the Administrative Court, which considered the witness evidence in question as irrelevant.

On 19 March 2008 the Administrative Court granted the SRS’s claim against the applicant company in part. It annulled the SRS’s report in respect of a charge of AMD 96,000 (approximately EUR 190) imposed on the applicant company for the alleged illegal production and sale of fireworks. The Administrative Court decided to levy a total charge of AMD 25,116,700 (approximately EUR 50,000) on the company, including AMD 14,291,300 (approximately EUR 28,400) for Value Added Tax (VAT), comprising arrears, a 60% fine and surcharges for late payment; AMD 8,338,300 (approximately EUR 16,600) for profit tax, comprising arrears, a 60% fine and surcharges for late payment; and AMD 2,487,100 (approximately EUR 5,000) for the tax authority’s development fund. The Administrative Court referred to the relevant provisions of the Law on Value Added Tax and the Law on Taxes when imposing the surcharges and fines. In establishing the applicant company’s VAT and profit tax liability, it relied, inter alia, on the documents provided by Gr. A. and the statements of A.J., S.A., S.M., H.P., G.S., G.A. and H.M. which had been referred to in the SRS’s report. The amount of court fees to be paid by the applicant company was calculated at AMD 502,334 (approximately EUR 1,000).

On 18 June 2008 the applicant company lodged an appeal on points of law with the Administrative Court.

On 4 August 2008 the Court of Cassation returned the applicant company’s appeal on the grounds that it had failed to pay the correct amount of State fee and set a deadline for resubmission.

After paying the required State fee, the applicant company resubmitted its appeal on 3 September 2008.

On 18 September 2008 the Court of Cassation declared the applicant company’s appeal on points of law inadmissible for lack of merit.