Violation of Article 6 - Right to a fair trial (Article 6 - Civil proceedings;Article 6-1 - Fair hearing;Equality of arms)

Branko Lubarda;Ján Šikuta;Johannes Silvis;Josep Casadevall;Kristina Pardalos;Luis López Guerra

The applicant company was established in 1995 and has its registered office in Bratislava.

On 17 March 1995 the applicant company concluded a contract with Slovak Radio (Slovenský rozhlas), Slovakia’s national public-service radio broadcaster, a publicly funded institution with its own legal personality, the status of which is regulated by law (at that time Law no. 619/2003 Coll., as amended, presently Law no. 532/2010 Coll., as amended).

Under the contract, in return for a fee, the applicant company agreed to act as exclusive agent for Slovak Radio as the principal (“the principal”) for the sale of broadcasting time for the purposes of advertising.

The venture worked well and the contract was amended several times. The amended contract was valid until 31 December 2007.

However, in 2004 the relationship between the applicant company and the principal began to sour because the principal was not content with the amount of business acquired by the applicant company in 2003.

The principal had accordingly issued the applicant company with a bill for the difference between the estimated profit and the real profit from such business.

As the applicant company did not pay the bill, the principal served the applicant company with a notice of termination of the contract, considering the applicant company’s failure to pay the bill to be a fundamental breach of the contract.

The notice period expired on 30 September 2005, following which the principal arranged for the sale of its broadcasting time by other means.

On 20 October 2005 the applicant company challenged the validity of the principal’s notice of termination of the contract in court, but later withdrew the action.

The principal, for its part, sued the applicant company for payment of the difference between the estimated profit and the real profit. No information has been made available about the current state and outcome of those proceedings.

On 5 December 2006 the applicant company demanded that the principal pay it the equivalent of some 693,000 euros (EUR), according to the exchange rate applicable at that time, by way of indemnity for termination of the contract.

With reference to the contract, the amount of the indemnity had been calculated as the applicant company’s average yearly commission for the preceding five years, taking into account both financial and non-financial transactions between the principal and third parties, the latter being referred to as barter transactions.

As the principal did not satisfy the applicant company’s claim, on 1 June 2006 the applicant company sued it for the above-mentioned amount and late-payment interest.

On 29 March 2007 a copy of the action was served on the principal for observations. Hearings were scheduled for 13 and 27 April and 14 May 2007, in the course of which the Bratislava I District Court (Okresný súd) examined complex documentary evidence and heard the statutory representative of the applicant company and four witnesses.

However, the principal submitted no written observations and appeared at none of the hearings. The circumstances of its absence were disputed (see below).

On 14 May 2007 the Bratislava I District Court (Okresný súd) granted the action in full. It observed that despite having been represented by a lawyer, the principal had failed to submit any observations or to present a good excuse for its failure to appear at any of the hearings. It therefore proceeded to examine the case under Article 101 § 2 of the Code of Civil Procedure (Law no. 99/1963 Coll., as amended – “the CCP”), which in the event of a party’s unjustified failure to cooperate, allows for the examination of the case on the basis of the elements available.

As a preliminary issue, the District Court examined the question of validity of the notice of termination of the contract issued by the principal. It observed that the notice had not been contested and concluded that it was valid. There were no reasons disqualifying the applicant company from being eligible for the indemnity, and the barter transactions had rightly been taken into account in its calculation.

The principal appealed (odvolanie) to the Bratislava Regional Court (Krajský súd).

In terms of form, it contested the first-instance judgment in its entirety. Nevertheless, in terms of substance, it acknowledged the existence of the legal basis of the applicant company’s entitlement to indemnity, disputing solely its scope, in so far as the barter transactions were concerned. Without those transactions, the acknowledged amount of the indemnity was equivalent to some EUR 526,000, according to the exchange rate applicable at that time.

In support of its challenge to the claim exceeding that amount, the principal pointed out that, in the proceedings in its action for payment of the difference between the estimated profit and the real profit (see paragraph 14 above), the applicant company had lodged a counter-claim for compensation for the barter transactions.

The principal also contended that the decision to determine the action in its absence had been arbitrary.

Having examined the appeal, the Regional Court upheld the firstinstance judgment on 28 November 2007.

It considered that, except for the part related to the barter transactions, the applicant company’s claim had been acknowledged by the principal.

As to those transactions, it observed that the applicant company had offset a claim for compensation for them against the claims asserted by the principal in its above-mentioned action. The claim for compensation for those transactions was however a different matter from a claim for indemnity for the termination of the contract, which was asserted in the present proceedings, and which the Regional Court found to be wellfounded.

Lastly, as regards the principal’s absence from the first-instance proceedings, the Regional Court observed (i) that the principal had requested the adjournment of the hearing of 13 April 2007; (ii) that the summons for the hearing of 27 April 2007 had not been deliverable to the principal’s lawyer prior to that hearing; and (iii) that on 11 May 2007 the principal’s new lawyer had requested that the hearing of 15 May 2007 be adjourned so as to allow him to study the case file, although the summons for that hearing had already been served on the principal on 3 May 2007 at the latest. In those circumstances, the District Court’s assessment that the principal had been “absolutely passive” in the proceedings was right and the examination of the case in the principal’s absence had been justified.

As no ordinary appeal lay against the Regional Court’s judgment, following its service on the parties, the matter was resolved with the force of a final and binding decision (právoplatnosť) on 9 January 2008.

On the expiry of a period of grace for voluntary payment, the judgment became enforceable (vykonateľnosť) on 12 January 2008.

On 10 March 2008 the principal challenged the Regional Court’s judgment by way of a complaint under Article 127 of the Constitution (Constitutional Law no. 460/1992 Coll., as amended). Asserting its rights of access to a court and to a fair hearing, it contended that the impugned judgment was grossly arbitrary and contrary to European Union law. In the latter respect, the Regional Court had arbitrarily refused to ask the Court of Justice of the European Union for a preliminary ruling.

On 3 July 2008 the Constitutional Court (Ústavný súd) declared the complaint inadmissible. It held that an unjustified refusal to ask for a preliminary ruling may in certain circumstances give rise to a ground for appealing on points of law (dovolanie) under Article 237 (g) of the CCP. As that remedy had not been exhausted, the Constitutional Court lacked jurisdiction to deal with the complaint.

On 25 April 2008 the principal filed a petition with the Office of the Prosecutor General (“the PG”) requesting the latter to exercise his discretionary power to challenge the above-mentioned judgments by way of an extraordinary appeal on points of law (mimoriadne dovolanie – “extraordinary appeal”).

The PG decided to accede to the request and on 23 October 2008 challenged the contested judgments in the Supreme Court (Najvyšší súd).

He argued primarily that the courts had erred in finding the notice of termination of the contract valid because it had not been disputed by the parties. This was a point of law and it could not have been resolved simply with reference to the lack of disagreement of the parties over it. The courts therefore should have examined that question independently and properly. As for the substance, in his view, had the notice been invalid, there would have been no reason for an indemnity. On the other hand, had the notice been valid, the indemnity could have been refused, because it had been based on a breach of contract by the applicant company.

Moreover, the PG pointed out that the contract had neither provided for nor excluded compensation for barter transactions. In such circumstances, the contract should have been interpreted in terms of the parties’ subsequent practice, which had not involved the payment of compensation for such transactions. They should accordingly not have been taken into account for the purpose of calculation of the indemnity.

Simultaneously, the PG applied for a ruling to suspend the enforceability of the impugned judgments pending the outcome of the extraordinary appeal. The Supreme Court acceded to that request on 8 December 2008.

Meanwhile, on 26 November 2008, the applicant company had submitted observations in reply; it submitted further observations on 3 February and 3 September 2009.

The latter observations were not submitted until after the Supreme Court had determined the extraordinary appeal (see paragraph 30 below), as the applicant company did not know of its decision at the time.

In its observations, the applicant company raised numerous arguments, including the following.

There was no justification for protecting the principal’s rights by way of an extraordinary appeal because it had failed to protect its own rights with due diligence in the lower courts and because, even at the cassation level, it had left the protection of its rights to the public authorities.

In that regard, it had been open to the principal to assert its rights before the Supreme Court directly by way of an appeal on points of law. It had not done so simply in order to avoid incurring court fees for such an appeal.

Moreover, under Article 243e § 1 of the CCP, the availability of an indirect remedy, an extraordinary appeal (on points of law), was excluded by the availability of a direct remedy, an (ordinary) appeal on points of law.

At the appellate level, the only point in dispute had been the part of the applicant company’s claim concerning the barter transactions.

The PG’s challenge to the ordinary courts’ findings as regards the validity of the notice to terminate the contract therefore exceeded the grounds of the principal’s petition for an extraordinary appeal. Indeed, it was contrary to it because the principal had not challenged the notice but rather had relied on it. In any event, the PG’s challenge was ill-founded because there was no correlation between the validity of the notice and the fact that it had been based on the applicant company’s refusal to pay the bill submitted by the principal.

Lastly, with reference to Convention case-law, the applicant company submitted that the extraordinary appeal as a remedy against a final and binding judgment in its favour was incompatible with the principles of the rule of law and legal certainty.

On 12 August 2009, sitting in chambers, the Supreme Court allowed the extraordinary appeal. It quashed the judgments of both the District Court and the Regional Court and remitted the matter to the former for a new examination.

It concluded that the courts had erred in that, firstly, they had omitted to examine the validity of the contract itself and secondly, depending on the outcome of that examination, they had failed properly to examine the validity of the notice. In view of those errors it had not been possible to deal in concreto with the questions of the basis and scope of the applicant company’s claim.

The Supreme Court’s decision was served on the applicant company’s lawyer on 22 September 2009. As a result, the case was remitted to the first instance, where it has been pending ever since.

On 20 November 2009 the applicant company lodged a complaint with the Constitutional Court, contesting the Supreme Court’s decision of 12 August 2009. It relied on its rights to access to a court, equality of arms, adversarial proceedings, legal certainty and a fair hearing.

The applicant company argued that the admissibility requirements for the extraordinary appeal had not been met, and that the extraordinary appeal had not only been belated but had exceeded the scope of the principal’s petition. In addition, by the mere fact of admitting the extraordinary appeal, the Supreme Court had set at naught the entire preceding judicial process, in violation of the principle of legal certainty.

The applicant company further argued that in view of the Supreme Court’s decision, a brand new hearing of the case had been called for, even though no procedural irregularities of the previous hearing had been established. In addition, the contested decision was biased in favour of the principal and was not amenable to review on account of lack of reasoning.

The applicant company also contended that the Supreme Court had completely ignored its observations in reply to the extraordinary appeal.

Lastly, the applicant company complained that it had been denied access to the Supreme Court’s case file in the extraordinary appeal.

On 25 November 2010 the Constitutional Court declared the applicant company’s complaint inadmissible as being manifestly illfounded.

In so far as the applicant company had sought to contest the extraordinary appeal in principle, the Constitutional Court observed that the statutory framework for examination of individual complaints did not allow it to examine the compliance of statutes with the Constitution and international instruments as such.

To the extent that the applicant company might be understood as wishing to object to any action on the part of the PG, no such objection could be considered because the applicant company had only identified the Supreme Court as the defendant of its complaint.

As for the remainder of the complaint, which concerned the Supreme Court, the Constitutional Court found that the applicant company had failed to show any constitutionally relevant arbitrariness in the interpretation and application of the relevant rules.

As regards the applicant company’s argument that the extraordinary appeal had been lodged belatedly, it was based on the premise that the principal had appealed against the first-instance judgment only in so far as it concerned the barter transactions. That premise was however mistaken because the principal had defined the target of its appeal as the firstinstance judgment as a whole (see paragraph 20 above).

As to the Supreme Court’s failure to give a specific answer to the applicant company’s arguments, the Constitutional Court considered that the right to an answer to submitted arguments was related not to a person but to substance. The Supreme Court had thus been under a duty not to reply to the arguments submitted by the applicant company as such, but rather to address the relevant aspects of the case. On the latter point, the applicant company had failed to show that any of the relevant aspects of the case had gone unanswered.

Lastly, the Constitutional Court accepted that it had been a mistake to deny the applicant company access to the Supreme Court’s case file. However, it held that that had no constitutional significance because, in view of the character of the extraordinary appeal proceedings, access to the case file or the lack of it would have had no impact on the outcome of the proceedings.

A copy of the Constitutional Court’s decision was served on the applicant company on 21 January 2011.


Dmitry Dedov;Elisabeth Steiner;Erik Møse;Isabelle Berro-Lefèvre;Khanlar Hajiyev;Linos-Alexandre Sicilianos;Ksenija Turković

The applicants, Ms Jelena Kovačević (“the first applicant”), Mr Safet Salković (“the second applicant”) and Ms Ivanka Karlovčan (“the third applicant”) were born on 27 October 1936, 27 April 1936 and 25 February 1937. They live in Varaždin, Tuzla (Bosnia and Herzegovina) and Zagreb respectively. The second applicant is a national of Bosnia and Herzegovina and the other two applicants are Croatian nationals. The first applicant was represented before the Court by Mr G. Vučetić and the second and the third applicant by Mr V. Đurović, advocates practising in Varaždin and Zagreb respectively.

The Croatian Government (“the Government”) were represented by their Agent, Mrs Š. Stažnik.

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

The applicants are pensioners. Until September 1993 their pensions were regularly adjusted in line with the increase in wages in accordance with section 30 of the Act on principal rights arising from pension and disability insurance (Zakon o osnovnim pravima iz mirovinskog i invalidskog osiguranja, Official Gazette of the Socialist Federal Republic of Yugoslavia 23/82, 77/82, 75/85, 8/87, 65/87, 76/88, 74/88, 74/89, 87/89, 44/90 and 87/90 and Official Gazette of the Republic of Croatia no. 53/91 – “the Basic Pension and Disability Insurance Act”) and section 121 of the Pension and Disability Insurance Act (Zakon o mirovinskom i invalidskom osiguranju, Official Gazette nos. 26/83, 5/86, 42/87, 34/89, 57/89, 40/90, 9/91, 26/93, 96/93, 44/94 and 59/96).

In the period between 1 October 1993 and January 1995 the Croatian Government adopted a series of successive decrees whereby it limited the funds available for payment of pensions. This measure was part of the Government’s strategy to curb inflation and stabilise the economy. Since the funds available were insufficient to enable pensions to be adjusted in line with the increase in wages, the level of pensions paid in that period was lower than required by law.

On 19 February 1997 the Act on adjustment of pensions and other benefits arising from pension and disability insurance and on administering pension and disability insurance funds (Zakon o usklađivanju mirovina i drugih novčanih primanja iz mirovinskog i invalidskog osiguranja, te upravljanju fondovima mirovinskog i invalidskog osiguranja, Official Gazette no. 20/97 – “the Pension Adjustment Act”) entered into force. It provided that in the period between 1 February 1995 and 31 December 1996 pensions should have been adjusted in line with the increase in wages (section 1), and that pensioners were to be compensated for their resultant loss within eighteen months from the Act’s entry into force by way of an increase in their pensions (section 2). The Act also abrogated section 30 of the Basic Pension and Disability Insurance Act and section 121 of the Pension and Disability Insurance Act (see paragraph 4 above) and provided that from 1 January 1997 pensions were to be adjusted in line with the increase in the cost of living (section 3).

By a decision of 12 May 1998 the Constitutional Court (Ustavni sud Republike Hrvatske) invalidated almost the entire Pension Adjustment Act, including sections 1-3, as unconstitutional. It also held that the State had an outstanding statutory obligation to pensioners to pay them pensions adjusted in line with the increase in wages as of September 1993. This obligation became known as “the debt to pensioners” (dug umirovljenicima, hereafter “the pension debt”).

As a result of the Constitutional Court’s decision, 427,809 requests were lodged with the Croatian Pension Fund’s regional offices by pensioners seeking (retrospective) adjustment of their pensions in accordance with the Constitutional Court’s decision, that is, in line with the increase in wages. In addition, pensioners brought 1,775 civil actions for payment of compensation for the pension debt in civil courts.

On 6 August 1998 the Act on the transfer of funds from the State budget to the pension and disability insurance funds and on the adjustment of pensions (Zakon o prenošenju sredstava državnog proračuna fondovima mirovinskog i invalidskog osiguranja te usklađivanju mirovina, Official Gazette no. 102/98 – “the Transfer Act”) entered into force. It provided that in the period between 1998 and 2002 the State would transfer HRK 7,524,856,731 to the Croatian Pension Fund with a view to increasing all pensions. The increase was paid in the form of a monthly pension supplement (dodatak uz mirovinu) of 100 Croatian kunas (HRK) plus 6% of the pension paid in June 1998. The supplement was paid from 6 August 1998 until 31 December 2002, after which it was permanently incorporated and became an integral part of a person’s pension. The legal basis for the supplement was provided by subordinate legislation passed on the basis of the Transfer Act, namely, the Ordinance on the method and time-limits of the payment of the pension supplement (Pravilnik o načinu i rokovima isplate dodatka uz mirovinu, Official Gazette no. 136/98). The Transfer Act also provided that pensions were to be adjusted at the rate calculated by adding up the rate of the increase in the cost of living and the rate of the increase in wages and then dividing them by half (hereafter “the Swiss formula”). Thereby it in fact derogated from section 30 of the Basic Pension and Disability Insurance Act and section 121 of the Pension and Disability Insurance Act, according to which pensions were to be adjusted in line with the increase in wages (see paragraph 4 above). On 23 December 1998 the Constitutional Court rejected four petitions for (abstract) constitutional review and thus refused to institute proceedings to review the constitutionality of the Transfer Act.

On 1 January 1999 the Pension Insurance Act (Zakon o mirovinskom osiguranju, Official Gazette nos. 102/98, 127/00, 59/01, 109/01, 147/02, 117/03, 30/04, 177/04, 92/05, 43/07, 79/07, 35/08, 40/10, 121/10, 130/10, 139/10, 61/11, 114/11, 76/12, 112/13) entered into force. It expressly abrogated the Basic Pension and Disability Insurance Act and the Pension and Disability Insurance Act (see paragraph 4 above) and provided that pensions were to be adjusted according to the Swiss formula.

On 1 January 2001 the Act on the increase of pensions to eliminate differences in levels of pensions earned in different periods (Zakon o povećanju mirovina radi otklanjanja razlika u razini mirovina ostvarenih u različitim razdobljima, Official Gazette no. 127/00 – “the Pensions Increase Act”) entered into force with a view to levelling out pensions, because pensions earned before 31 December 1994 were disproportionately lower than those earned after that date. As set out in its section 1, the Act regulated the method of increasing pensions with a view to eliminating differences in levels of pensions earned in different periods and implemented the Constitutional Court’s decision of 12 May 1998 in accordance with the State’s economic capacities. The Act increased pensions earned before 31 December 1998 by anything between 5% to 20% depending on the year of retirement. The increase was paid between 1 January 2001 and 31 July 2004. On 19 December 2001 the Constitutional Court rejected a number of petitions for (abstract) constitutional review and thus refused to institute proceedings to review the constitutionality of the Pensions Increase Act.

On 5 August 2004 the Act on the implementation of the Constitutional Court’s decision of 12 May 1998 (see paragraphs 51-53 below, hereafter “the Implementation Act”) entered into force. It provided that those pensioners (hereafter “eligible pensioners”) whose pensions had, in the period between 1 September 1993 and 31 December 1998 (hereafter “the relevant period”), not been adjusted in line with the increase in wages had a right to compensation (for the pension debt) which corresponded to the difference between the pension they had been entitled to receive and the pension actually paid to them in that period, reduced by the pension supplement paid under the Transfer Act and the pension increase received under the Pensions Increase Act. In addition, eligible pensioners were also entitled to interest on the total amount of compensation at a rate of 19.9752% calculated from the date of the Act’s entry into force. While the amount of compensation was to be determined (calculated) by the Croatian Pension Fund, the compensation itself was to be obtained through a special fund (“the Pensioners’ Fund”) that was to be established on the basis of subsequent legislation.

On 29 July 2005 the Pensioners’ Fund Act (see paragraphs 54-62 below) entered into force. The Act provided that each eligible pensioner had a right to a share in the Fund depending on the amount of compensation to which they were entitled. The Act gave each of them a choice between payment of half of the compensation in four semi-annual instalments over a period of two years (2006-2007) (Model A), or payment of full compensation in six annual instalments over a period of eight years (2006-2013) with a two-year delay (Model B). In the end, around 74% of eligible pensioners opted for Model A whereas 26% chose Model B. The Pensioners’ Fund is operated and managed by a private investment company, HPB-Invest, which is also charged with calculating the interest due on the amount of compensation determined in advance by the Croatian Pension Fund under the Implementation Act in respect of each eligible pensioner.

According to a report by the Croatian Pension Fund of 31 December 2010, the total amount of compensation for the pension debt that was to be paid through the Pensioners’ Fund was HRK 12,912,219,047.17 plus an additional HRK 2.579.243.782.89 in accrued interest. The report also suggests that 464,025 eligible pensioners were entitled to compensation whereas 257,865 were not, because the total amount of their pensions received in the relevant period together with the pension supplement paid under the Transfer Act and the pension increase paid under the Pensions Increase Act exceeded the total amount of pension they were entitled to receive in that period.

On 15 February 2011 the Constitutional Court rejected thirty-nine petitions for (abstract) constitutional review and thus refused to institute proceedings to review the constitutionality of five provisions of the Implementation Act. Likewise, on 4 October 2011 it rejected eleven petitions for (abstract) constitutional review and thus refused to institute proceedings to review the constitutionality of eight provisions of the Pensioners’ Fund Act (see paragraph 76 below).

The first applicant has been receiving a survivor’s pension (obiteljska mirovina) since 9 May 1996, following the death of her husband.

By a notice of 27 November 2005 HPB-Invest informed the first applicant that the amount of compensation for the pension debt owed to her equalled zero Croatian kunas (HRK); in other words, she was not entitled to any compensation. In particular, the calculation contained in the information notice indicated that in the relevant period the first applicant had received, together with the disbursements paid under the Transfer Act and the Pensions Increase Act (see paragraphs 9 and 11-12 above), pension payments in the total amount of HRK 72,238.38, whereas she was entitled to receive HRK 45,538.44.

On 14 December 2005 the first applicant requested the Varaždin Regional Office of the Croatian Pension Fund (Hrvatski zavod za mirovinsko osiguranje – Područna služba u Varaždinu) to verify whether the amount of compensation referred to in the HPB-Invest’s information notice had been correctly calculated.

By a letter of 16 January 2006 the Regional Office replied that it had verified the calculation and established that the amount had been calculated correctly.

On 9 October 2007 the first applicant requested the Regional Office to re-calculate the amount of compensation in accordance with the criteria set forth in the Constitutional Court’s decision of 12 May 1998 (see paragraph 7 above).

By a letter of 12 October 2007 the Regional Office, after explaining the method of calculation to the first applicant, reiterated that the amount of compensation in her case had, in its view, been accurately calculated.

On 25 October 2007 the first applicant brought an action for judicial review in the Administrative Court (Upravni sud Republike Hrvatske) contesting the Regional Office’s letter of 12 October 2007. She argued that the Regional Office had refused to re-calculate the amount of compensation in her case in accordance with the Constitutional Court’s decision of 12 May 1998.

By a decision of 13 December 2007 the Administrative Court declared the first applicant’s action inadmissible, finding that the contested letter of 12 October 2007 did not constitute an “administrative act”, within the meaning of section 6(2) of the Administrative Disputes Act (see paragraph 66 below), against which administrative-dispute (judicial review) proceedings could be instituted. The relevant part of that decision reads as follows:

“Section 4 paragraph 1 of [the Implementation Act] provides that the difference between the pension to which a person was entitled and the pension actually received in the period between 1 September 1993 and 31 December 1998 shall be determined [that is, calculated] for each pensioner separately by the Croatian Pension Fund of its own motion and within a year (without issuing a special decision in administrative proceedings).

Section 6(1) of the Administrative Disputes Act provides that administrative-dispute proceedings may be initiated only against an administrative act. According to section 8 of that Act, administrative-dispute proceedings may also be initiated [for failure to respond] when the competent [administrative] authority has not adopted the relevant administrative act [that is, a formal decision] following an application or an appeal by a party ...

Given that [the plaintiff in the present case] by her action contests an act that is not an administrative act and that [the case] concerns a matter in which the relevant administrative act is not being issued ... it was decided as indicated in the operative provisions.”

On 7 April 2008 the first applicant lodged a constitutional complaint with the Constitutional Court. She relied on Article 14 paragraph 2 (equality before the law) of the Croatian Constitution (see paragraph 50 below).

By a decision of 29 May 2008 the Constitutional Court declared the first applicant’s constitutional complaint inadmissible as lodged outside the statutory time-limit of thirty days. The Constitutional Court’s decision was served on the first applicant on 26 June 2008.

The second applicant has been receiving a disability pension (invalidska mirovina) since 10 June 1986.

By a notice of 26 November 2005 HPB-Invest informed the second applicant that the amount of compensation for the pension debt owed to him equalled zero HRK, that is, that he was not entitled to any compensation. In particular, the calculation detailed in the information notice indicated that in the relevant period the second applicant had received, together with the disbursements paid under the Transfer Act and the Pensions Increase Act (see paragraphs 9 and 11-12 above), pension payments in the total amount of HRK 101,291.64, whereas he had been entitled to HRK 98,728.45. However, from the calculation it is evident that the sum of the amounts the second applicant was entitled to receive was not HRK 98,728.45, but HRK 222,378.70. The relevant part of HPB-Invest’s information notice reads as follows:

On 9 January 2006 the second applicant requested both the Zagreb Regional Office of the Croatian Pension Fund (Hrvatski zavod za mirovinsko osiguranje – Područna služba u Zagrebu) and HPB-Invest to correct the manifest error in calculation contained in the information notice of 26 November 2005 and pay him HRK 121,087.06, that is, the difference between the amount received and the amount he had actually been entitled to. On 19 January 2006 the applicant submitted the same request to the Central Office of the Croatian Pension Fund (Hrvatski zavod za mirovinsko osiguranje – Središnja služba).

By a letter of 20 January 2006 the Central Office replied that it had verified the calculation contained in HPB-Invest’s information notice of 26 November 2005 and established that it was correct.

In his motion of 6 February 2006 the second applicant asked the Zagreb Regional Office to issue a formal decision on the merits of his request of 9 January 2006, pursuant to the Administrative Procedure Act. He added that if the Central Office’s letter of 20 January 2006 was to be considered a decision on his request, then his motion should be considered as an appeal against that decision.

By a decision of 28 February 2006 the Zagreb Regional Office declared the second applicant’s motion inadmissible for lack of jurisdiction. The relevant part of that decision reads as follows:

“Section 1 paragraph 2 of [the Implementation Act] provides that compensation is to be obtained through a special fund. Given that, pursuant to the said Act, the ... compensation is not to be obtained through the Croatian Pension Fund but through the Pensioners’ Fund, this authority does not have jurisdiction to decide on the request submitted.”

On 28 March 2006 the second applicant appealed against that decision.

By a decision of 24 April 2006 the Central Office of the Croatian Pension Fund dismissed the second applicant’s appeal and upheld the first-instance decision, repeating the reasons given therein.

On 23 May 2006 the second applicant brought an action for judicial review in the Administrative Court contesting the second-instance decision.

By a judgment of 8 July 2009 the Administrative Court dismissed the second applicant’s action, endorsing the reasons given by the Fund. The relevant part of that judgment reads as follows:

“The courts finds that the defendant authority [i.e. the Croatian Pension Fund] acted correctly when it dismissed the plaintiff’s appeal against the decision of the first-instance authority and that it correctly held that the Croatian Pension Fund and its [regional] offices were not competent to determine the amount of compensation [payable for the pension debt], which is exclusively within the power of the Pensioners’ Fund, pursuant to the Pensioners’ Fund Act”

On 5 October 2009 the second applicant lodged a constitutional complaint with the Constitutional Court. He relied on Article 18 (the right to appeal), Article 19 paragraph 2 (the guarantee of judicial review of decisions of administrative and other public authorities) and Article 29 paragraph 1 (the right to a fair hearing) of the Croatian Constitution (see paragraph 50 below) as well as on Article 13 of the Convention. In his constitutional complaint the second applicant wrote, inter alia, the following:

“By the contested judgment of 8 July 2009 the Administrative Court dismissed the complainant’s action brought against the decision of the Croatian Pension Fund – Central Office of 24 April 2006 dismissing the complainant’s appeal against the decision of [its] Zagreb Regional Office of 28 February 2006.

By so doing the Administrative Court failed to fulfil its constitutional role to review the lawfulness of administrative acts and thus breached the complainant’s right to judicial review of the lawfulness of administrative acts guaranteed by Article 19 paragraph 2 of the Constitution.

In addition, the complainant’s constitutional right to appeal guaranteed by Article 18 of the Constitution was also breached. In particular, throughout the entire administrative proceedings neither [the Croatian Pension Fund] nor the Administrative Court addressed the complainant’s arguments relating to the incorrect calculation of compensation, raised in his appeal and in his action, but only declined the jurisdiction expressly conferred on them by [the Implementation Act].

After having received [the information notice containing] the calculation with which he disagrees, the complainant asked [the Croatian Pension Fund] to issue a [formal] decision so that he could avail himself of the legal remedies guaranteed by the Constitution. However, [the Croatian Pension Fund] refused to issue such a decision, even though section 3(1) [the Implementation Act] expressly and unequivocally provides that the Croatian Pension Fund shall determine [i.e. calculate] the difference between the pension to which each pensioner was entitled to and the pension actually paid.

Such conduct [on the part of the domestic authorities] ... is not and cannot be lawful nor in accordance with the Constitution in any civilised country.

That would mean, for example, that someone whose pension was calculated incorrectly would never be able to contest that. Naturally, that [conclusion] cannot be sustained as every party has the right to ask the Croatian Pension Fund to issue a [formal] decision each time the pension is revised (for example, each time the pension is increased) in order to be able to verify that [new] calculation and, if dissatisfied with it, resort to legal remedies (appeal, action).

The conduct of [the domestic authorities in the present case] is also contrary to Article 13 of the [Convention] ... and in breach of the constitutional right to a fair hearing under Article 29 paragraph 1 of the Constitution ...”

By a decision of 3 December 2009 the Constitutional Court declared the second applicant’s constitutional complaint inadmissible. It found that even though in his constitutional complaint the second applicant had relied on the relevant Articles of the Constitution, he had not substantiated his complaint by any constitutional-law arguments but had merely repeated the arguments raised in the proceedings before the Administrative Court. Therefore, the Constitutional Court was unable to examine the merits of his constitutional complaint. The Constitutional Court’s decision was served on the second applicant’s representative on 11 January 2010.

The third applicant received an early retirement pension (prijevremena starosna mirovina) and then a retirement pension (starosna mirovina) from 1 May 1987 until 30 July 2004, whereupon, following the death of her husband, she received a survivor’s pension.

In April 2007 HPB-Invest informed the third applicant that the amount of compensation for the pension debt owed to her equalled zero HRK, that is, that she was not entitled to any compensation. In particular, the calculation detailed in the information notice indicated that in the relevant period the third applicant had received, together with the disbursements paid under the Transfer Act and the Pensions Increase Act (see paragraphs 9 and 11-12 above), pension payments in the total amount of HRK 133,848.36, whereas she had been entitled to receive HRK 92,586.58.

On 30 April 2007 the third applicant asked the Zagreb Regional Office of the Croatian Pension Fund to re-calculate the amount of compensation in accordance with the criteria set forth in the Constitutional Court’s decision of 12 May 1998 (see paragraph 7 above). She argued that the amount of pension she had been entitled to receive was HRK 168,837.00, and not HRK 92,586.58 as indicated in HPB-Invest’s information notice.

By a letter of 17 May 2007 the Zagreb Regional Office replied that it had verified the calculation contained in HPB-Invest’s information notice and established that it was correct.

In her motion of 12 June 2007 the third applicant asked the Zagreb Regional Office to issue a formal decision on the merits of her request of 30 April 2007, pursuant to the Administrative Procedure Act. She added that, if the Regional Office’s letter of 20 January 2006 was to be considered a decision on her request, then her motion should be considered as an appeal against that decision.

By a decision of 27 June 2007 the Zagreb Regional Office declared the third applicant’s motion inadmissible for lack of jurisdiction. The relevant part of that decision reads as follows:

“Section 1 paragraph 2 of [the Implementation Act] provides that compensation is to be obtained through a special fund. Given that, pursuant to the said Act, the ... compensation is not to be obtained through the Croatian Pension Fund but through the Pensioners’ Fund, this authority does not have jurisdiction to decide on the request submitted.”

On 17 July 2007 the third applicant appealed against that decision.

By a decision of 22 October 2007 the Central Office of the Croatian Pension Fund dismissed the third applicant’s appeal and upheld the decision of the Regional Office, repeating the reasons given therein.

On 4 December 2007 the third applicant brought an action for judicial review in the Administrative Court contesting the second-instance decision.

By a judgment of 27 March 2008 the Administrative Court dismissed the third applicant’s action, endorsing the reasons given by the Fund. The relevant part of that judgment reads as follows:

“Given that compensation [for the pension debt] is not to be obtained through the defendant authority [the Croatian Pension Fund], the first-instance authority [the Regional Office] ... correctly declared the motion [of 12 June 2007] inadmissible for lack of jurisdiction and the second-instance authority [the Central Office] correctly dismissed the plaintiff’s appeal against that decision.”

On 2 July 2008 the third applicant lodged a constitutional complaint with the Constitutional Court. She relied on Article 18 (the right to appeal), Article 19 paragraph 2 (the guarantee of judicial review of decisions of administrative and other public authorities) and Article 29 paragraph 1 (the right to a fair hearing) of the Croatian Constitution (see paragraph 50 below) and Article 13 of the Convention. In her constitutional complaint the third applicant wrote, inter alia, the following:

“By the contested judgment of 27 March 2008 the Administrative Court dismissed the complainant’s action brought against the decision of the Croatian Pension Fund Central Office of 22 October 2007 dismissing the complainant’s appeal against the decision of [its] Zagreb Regional Office of 2 June 2007.

By so doing the Administrative Court failed to fulfil its constitutional role to review the lawfulness of administrative acts and thus breached the complainant’s right to judicial review of the lawfulness of administrative acts guaranteed by Article 19 paragraph 2 of the Constitution.

In addition, the complainant’s constitutional right to appeal guaranteed by Article 18 of the Constitution was also breached. In particular, throughout the entire administrative proceedings neither [the Croatian Pension Fund] nor the Administrative Court addressed the complainant’s arguments relating to the incorrect calculation of compensation raised in her appeal.

[The Croatian Pension Fund] declined jurisdiction to decide on rights arising from pension insurance (even though it is the only authority in Croatia competent to decide on such rights) and the Administrative Court endorsed that without any legitimate reason. ...

After having received the calculation with which she disagrees, the complainant asked [the Croatian Pension Fund] to issue a [formal] decision so that she could avail herself of legal remedies guaranteed by the Constitution. However, [the Croatian Pension Fund] refused to issue such a decision, which is not and cannot be lawful nor in accordance with the Constitution in any civilised country. That is also contrary to Article 13 of the [Convention] ...

The above-described conduct [on the part of the domestic authorities] is also in breach of the constitutional right to a fair hearing under Article 29 paragraph 1 of the Constitution ...”

By a decision of 25 March 2010 the Constitutional Court declared the third applicant’s constitutional complaint inadmissible. It found that even though in her constitutional complaint the third applicant had relied on the relevant Articles of the Constitution, she had not substantiated her complaint by any constitutional-law arguments but had merely repeated the arguments raised in the proceedings before the Administrative Court. Therefore, the Constitutional Court was unable to examine the merits of her constitutional complaint. The Constitutional Court’s decision was served on the third applicant on 29 April 2010.

The relevant Articles of the Constitution of the Republic of Croatia (Ustav Republike Hrvatske, Official Gazette nos. 56/1990, 135/1997, 8/1998 (consolidated text), 113/2000, 124/2000 (consolidated text), 28/2001 and 41/2001 (consolidated text), 55/2001 (corrigendum), 76/10 and 85/10 read as follows:

“Everyone in the Republic of Croatia shall enjoy rights and freedoms regardless of their race, colour, sex, language, religion, political or other beliefs, national or social origin, property, birth, education, social status or other characteristics.

All shall be equal before the law.”

“(1) Rights and freedoms may be restricted only by law in order to protect the rights and freedoms of others, legal order, public morals or health.

(2) Every restriction of the rights and freedoms should be proportional to the nature of the necessity for the restriction in each individual case.”

“The right to appeal against decisions adopted in the first-instance proceedings before a court or other competent authority shall be guaranteed.

The right of appeal may exceptionally be excluded in cases provided by law if other legal protection is ensured.”

Decisions of the state administration and other public authorities shall be based on law.

Judicial review of the lawfulness of decisions given by administrative or other public authorities shall be guaranteed.”

“In the determination of his rights and obligations or of any criminal charge against him, everyone is entitled to a fair hearing within a reasonable time by an independent and impartial court established by law.”

“1. The right of ownership shall be guaranteed.

Ownership implies duties. Owners and users of property shall contribute to the general welfare.”

The relevant provisions of the Act on the implementation of the Constitutional Court’s decision of 12 May 1998 (Zakon o provođenju odluke Ustavnog suda od 12. svibnja 1998, Official Gazette of the Republic of Croatia nos. 105/04 and 19/07 – “the Implementation Act”), which entered into force on 5 August 2004, provide as follows.

Sections 1 and 2 provide that pensioners whose pensions had not been adjusted in the period between 1 September 1993 and 31 December 1998 in line with the increase in wages have a right to compensation. Compensation is to be obtained through a special fund that is to be established by special legislation.

Section 3 provides that, with a view to compensating pensioners, the Croatian Pension Fund shall determine (calculate) the difference between the amount of retirement pension, early retirement pension, disability pension or survivor’s pension to which each pensioner was entitled in the relevant period, and the pension actually paid in that period. Disbursements paid under the Transfer Act and the Pensions Increase Act must be included in the calculation (see paragraphs 9 and 11 above).

The relevant provisions of the Pensioners’ Fund Act (Zakon o umirovljeničkom fondu, Official Gazette of the Republic of Croatia nos. 93/05, 41/07 and 90/11), which entered into force on 29 July 2005, provide as follows.

Section 2 provides that the founder of the Pensioners’ Fund is, on behalf of the State, the Government of Croatia.

Section 3 provides that the members of the Pensioners’ Fund are (eligible) pensioners referred to in section 2 of the Implementation Act (see paragraph 52 above).

Section 18(1) provides that the calculation of the difference (that is, the calculation of the amount of the pension debt in respect of each pensioner) referred to in section 3 of the Implementation Act (see paragraph 53 above) is the basis for membership of the Pensioners’ Fund.

Section 18(4) provides that HPB-Invest, that is, the private investment company that operates and manages the Pensioners’ Fund, must inform pensioners (by way of an “information notice”) of their membership of the Fund and the amount of compensation they are entitled to within ninety days of the establishment of the Fund.

Section 18(9) – as amended by 2007 Amendments to the Pensioners’ Fund Act (Zakon o izmjenama i dopunama Zakona o umirovljeničkom fondu, Official Gazette of the Republic of Croatia no. 41/07), which entered into force on 21 April 2007 – provides that a member of the Fund may lodge a complaint (prigovor) with HPB-Invest against the information notice referred to in paragraph 4 of the same section (see the preceding paragraph) within fifteen days from the day he or she received it.

Section 41(1) provides that pensioners who have already been compensated on the basis of final and enforceable court decisions are not entitled to compensation from the Pensioners’ Fund.

Section 41(2) provides that pensioners involved in pending administrative proceedings or administrative-dispute proceedings (judicial review before the Administrative Court), shall obtain compensation pursuant to the Pensioners’ Fund Act.

Section 42(1) provides that pensioners who brought civil actions for compensation may become members of the Pensioners’ Fund and obtain compensation pursuant to the Pensioners’ Fund Act if they withdraw their actions.

The relevant part of the Instruction (Uputa) of the Pensioners’ Fund’s Administrative Board of 30 November 2005, which was, according to the Government, published on the web page of the Croatian Party of Pensioners on 1 December 2005, reads as follows:

Pensioners may obtain clarifications concerning the calculation of compensation [payable to them] exclusively from the employees of the Croatian Pension Fund on the premises of [its] regional offices ...

Pensioners who have received an information notice on membership [of the Fund] and the amount of compensation [payable to them] and who consider that the compensation has been incorrectly calculated may submit a request for re-calculation of the compensation.

Pensioners who have not received an information notice on the calculation of compensation but consider that they are entitled to ... compensation may submit a request for calculation of the amount of compensation [payable to them].

If a pensioner wishes to have the calculation verified he or she may make such a request at a regional office of the Croatian Pension Fund, at the counters specially designated for that purpose, or lodge a written complaint (prigovor) with HPB-Invest.

The Croatian Pension Fund shall communicate all its replies to complaints to HPB-Invest, which shall notify all pensioners who lodged complaints of new calculations.

Costs related to requests for calculation or re-calculation of compensation shall be borne by the Croatian Pension Fund only in respect of those pensioners whose compensation was incorrectly calculated by the Croatian Pension Fund.

Another complaint may not be lodged if an earlier one was refused but court proceedings may be instituted [instead].

The Croatian Pension Fund has forwarded to HPB-Invest information on [civil] proceedings previously instituted against the Croatian Pension Fund by pensioners in [civil] actions. The Croatian Pension Fund shall obtain information on the remaining actions, on the basis of which civil proceedings have not yet been instituted, and forward it to HPB-Invest. The Croatian Pension Fund and HPB-Invest shall ensure that obtaining compensation on two grounds, that is, in [both] civil proceedings and through the Pensioners’ Fund, is avoided. All pensioners who have brought [civil] actions shall be encouraged through the media to reconsider their position ... and to consider withdrawing their actions.”

The Administrative Disputes Act (Zakon o upravnim sporovima, Official Gazette of the Socialist Federal Republic of Yugoslavia no. 4/1977, and Official Gazette of the Republic of Croatia nos. 53/91, 9/92 and 77/92), which was in force between 1 July 1977 and 31 December 2011, in its relevant part, provides as follows:

Section 6(1) provided that administrative-dispute (judicial review) proceedings could be initiated only against an administrative act.

Section 6(2) defined an administrative act as an act whereby a State organ, in the exercise of public authority, decided on a right or obligation of an individual or organisation in an administrative matter.

Section 23 provided that administrative-dispute (judicial review) proceedings were instituted by the bringing of an action.

Section 30 provided that the Administrative Court had to declare an action inadmissible if, inter alia, the contested decision did not constitute an administrative act within the meaning of section 6 of that Act (see paragraph 66 above).

The Obligations Act (Zakon o obveznim odnosima, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/1978, 39/1985 and 57/1989, and Official Gazette of the Republic of Croatia nos. 53/91, 73/91, 111/93, 3/94, 7/96, 91/96, 112/99 and 88/01 – hereafter: “the 1978 Obligations Act”), which was in force between 1 October 1978 and 31 December 2005, was the legislation governing contracts and torts. Its relevant provisions read as follows:

“Damage is diminution of one’s property (actual damage) or prevention of its increase (lost profits) ...”

“A legal entity shall be liable for damage caused by its organ to a third person in the exercise, or in relation with the exercise of its functions [duties].”

The text of sections 1046 and 1062(1) of the Obligations Act (Zakon o obveznim odnosima, Official Gazette, nos. 35/2005 and 41/2008 – “the 2006 Obligations Act”), which entered into force on 1 January 2006, is nearly identical to the text of sections 155 and 172(1) of the former 1978 Obligations Act.

In the period between the adoption of the Constitutional Court’s decision of 12 May 1998 (see paragraph 7 above) and the entry into force of the Implementation Act on 5 August 2004 (see paragraph 12 above) 427,809 requests were filed with the Croatian Pension Fund’s regional offices by those seeking (retrospective) adjustment of their pensions in accordance with that decision, that is, in line with the increase in wages (see paragraph 8 above). The Croatian Pension Fund either: (a) did not decide on those requests, thus forcing the pensioners to lodge appeals and actions for failure to respond (žalba zbog šutnje administracije, tužba zbog šutnje administracije), or (b) issued formal decisions whereby it dismissed such requests on their merits explaining that in the period between 1 September 1993 and 31 December 1998 no relevant subordinate legislation was adopted enabling it to calculate the level of pensions in line with the increase in wages. On 18 December 2001 the Administrative Court adopted the following practice direction (zaključak) which was followed in its subsequent judgments (for example, in cases no. Us-M-788/1993 of 28 December 2001 and no. Us-M-3200/1998 of 15 May 2002):

“On the appeals lodged in the [administrative] proceedings for adjustment of pensions following the adoption of the Constitutional Court’s decision of 12 May 1998 the competent authority [i.e. the Croatian Pension Fund] shall decide by applying the legislation in force after the adoption of that decision, which means that pensions should be adjusted [only] from 1 January 1997 until 30 June 1998 pursuant to section 30 of the [Basic Pension and Disability Insurance Act] ... but having regard also to the provisions of [the Pension Increase Act].”

In decision no. Us-4756/2006 of 6 June 2006 the Administrative Court held that the calculation of the amount of the pension debt by the Croatian Pension Fund in respect of each eligible pensioner was not an “administrative act” within the meaning of section 6 of the Administrative Disputes Act (see paragraph 66 above). It thus declared the plaintiff’s action for judicial review brought against such calculation inadmissible. The relevant part of that decision reads as follows:

“Section 4 paragraph 1 of [the Implementation Act] provides that the difference between the pension to which a person was entitled and the pension actually received in the period between 1 September 1993 and 31 December 1998 shall be established [that is, calculated] for each pensioner separately by the Croatian Pension Fund of its own motion and within a year (without issuing a special decision in administrative proceedings).

Section 6(1) of the Administrative Disputes Act provides that administrative dispute proceedings may be initiated only against an administrative act. Under section 8 of that Act, administrative dispute proceedings may also be initiated [for failure to respond, that is] when the competent [administrative] authority has not adopted the relevant administrative act [that is, a decision] at the request of or on an appeal by a party ...

Given that [the plaintiff in the present case] by her action contests an act that is not an administrative act and that [the case] concerns a matter in [respect of] which an administrative act [would not, in any case] be issued ... it was decided as indicated in the operative provisions.”

In decision no. Us-3529/2006 of 6 July 2006 the Administrative Court held that HPB-Invest was not a public authority and that therefore the information notice on the amount of compensation owed to pensioners issued by that company was not an administrative act within the meaning of section 6 of the Administrative Disputes Act (see paragraph 66 above).

In decision no. U-III-4245/2007 of 20 February 2008 the Constitutional Court dismissed a constitutional complaint lodged against a judgment of the Administrative Court dismissing an action brought against decisions of the Croatian Pension Fund declaring a pensioner’s request for calculation of the amount of compensation inadmissible for lack of jurisdiction.

In decision no. U-III-3814/2006 of 6 May 2009 the Constitutional Court dismissed a constitutional complaint lodged against a decision of the Administrative Court declaring inadmissible an action brought by a pensioner against a notice from HPB-Invest informing her that she was not entitled to any compensation. Even though in her constitutional complaint the complainant relied on Article 14 paragraph 2 (equality before the law), Article 18 (the right to appeal), Article 19 (the guarantee of judicial review of decisions of administrative and other public authorities) and Article 48 (the right of ownership), the Constitutional Court examined her case not only under those Articles, but also under Article 29 paragraph 1 of the Constitution (see paragraph 50 above) as it found that from her submissions it followed that she was also complaining of a violation of her constitutional right of access to court. The relevant part of the Constitutional Court’s decision reads as follows:

“In substance [the complainant] argues that it is unacceptable that the right ... to compensation under the Implementation Act is not determined in administrative proceedings, that parties only receive an information notice without an instruction on legal remedies available, that the Administrative Court does not examine cases concerning compensation on their merits but declares actions inadmissible on the ground that they do not concern an administrative act and that HPB-Invest is not a State or public authority which can decide in administrative matters.

From the submissions and arguments the complainant has adduced in [support of] her constitutional complaint it follows that, by expressly complaining of a violation of her right to appeal guaranteed by Article 18 of the Constitution and in view of the fact that her administrative action was declared inadmissible, the complainant is also complaining of a violation of the right of access to court guaranteed by Article 29 paragraph 1 of the Constitution.

Procedural guarantees enshrined in Article 29 of the Constitution, in particular the right of access to court, are elements of the “right to a court”. Those guarantees secure the right of everyone to bring any claim relating to their rights or obligations before a court and [the right] to have that claim decided.

The right to a court is not an absolute right. Rather, it is subject to regulation by the competent State authorities, and as such, is subject to certain limitations which do not impair the very essence of the right and its legitimate aim, or which do not upset the relationship of proportionality between the means employed to restrict it and the aim sought to be achieved.

The present case concerns a constitutionally acceptable restriction of the right of access to court due to the legal nature of the document (it is not an administrative act), the complainant contested before the Administrative Court. Besides, pursuant to the Implementation Act the calculation of the amount of compensation (or denial of compensation) is not an administrative matter within the meaning of section 6(2) of the Administrative Disputes Act in which an administrative or other public authority would decide on one’s rights or obligations. [Rather,] it concerns direct execution, proprio motu, of the Implementation Act, which determines which categories of pensioners, depending on the type of pensions [they receive], are entitled to compensation, as well as how [that compensation] should be calculated. That Act does not lay down an obligation to conduct administrative proceedings and render an administrative act [i.e. a formal decision] which would confer on citizens the rights it sets out. Therefore, the document [in question] (the information notice) on the calculation of compensation (or the non-existence of the right to compensation) is of a declaratory nature only.

Since the obligation to conduct administrative proceedings and issue an administrative act [i.e. a formal decision] is not prescribed (in any event, HPB-Invest would not be entitled to conduct such proceedings or issue an administrative act as it is evidently not an administrative or other public authority but a commercial company) there is no constitutive act [i.e. a formal decision] which would entail the right to appeal, within the meaning of Article 18 of the Constitution, whereas the right of access to court is limited only [to the extent that] the jurisdiction of the Administrative Court, which is prescribed by law, excludes ... non-administrative matters. That means that the right of access to court, or [the possibility] to resort to another legal avenue of redress or to other remedies is not excluded.

The Constitutional Court therefore finds that the complainant’s constitutional rights guaranteed by Article 18 and Article 29 paragraph 1 of the [Croatian] Constitution were not violated by the contested decision.”

By decision no. U-I-84/2006 of 4 October 2011 (published in the Official Gazette 119/11 of 21 October 2011) the Constitutional Court rejected eleven petitions for (abstract) constitutional review and thus refused to institute proceedings to review the constitutionality of eight provisions of the Pensioners’ Fund Act, including sections 41 and 42 (see paragraphs 60-62 above). The relevant part of that decision reads as follows:

“The calculation of the amount of compensation contained in an information notice [from HPB-Invest], may be contested by way of a complaint (prigovor) to [HPB-Invest] within fifteen days of the receipt of the notice (section 18 paragraph 9 of the Pensioners’ Fund Act) whereupon the possibility of judicial protection is also open. The commercial company [i.e. HPB-Invest] which operates and manages the [Pensioners’] Fund within the meaning of section 5 of the Pensioners’ Fund Act has standing to be sued in [such] judicial proceedings.

As regards the petitioners’ argument that section 42(1) of the Pensioners’ Fund Act [is incompatible with the Constitution] because ‘the exercise of the right to be paid compensation is contingent on withdrawal of [any civil] action [which may have been brought], which restricts the right to judicial protection’ ... the Constitutional Court, having regard to the unquestionable power of the legislator to prescribe conditions for acquiring the right to membership of the [Pensioners’] Fund, as well as to the fact that the impugned restriction does not prevent the addressees of [the Implementation Act] [to exercise] the right to judicial protection in a way that would impair the essence of that right but ‘allows them to choose the way’ [in which they] ... exercise the right to be paid compensation, finds that the prescribed restriction is proportional to the aim sought to be achieved by the restriction.”

By decision no. Gr1- 500/05 of 17 October 2005 the Supreme Court ruled that an ordinary (civil) court had jurisdiction in a case where the plaintiff sought payment of the pension debt, and thereby resolved a conflict of jurisdiction between that ordinary court and the Administrative Court.

In judgments nos. Rev-x 974/11 of 14 February 2012 and Rev-x 430/10 of 20 March 2012 the Supreme Court dismissed appeals on points of law (revizija) and upheld the lower courts’ judgments dismissing actions brought against the Croatian Pension Fund after the entry into force of the Implementation Act and the Pensioners’ Fund Act whereby the plaintiffs sought payment of (compensation for) the pension debt owed to them. In particular, the Supreme Court held that after these two legislative acts had come into force on 5 August 2004 and 29 July 2005 respectively such compensation claims had to be adjudicated solely on the basis of that legislation. Since under those two legislative enactments compensation for the pension debt could be obtained either as payment of half of the compensation due over a period of two years or as delayed payment of the entire amount of compensation due over a period of eight years, awarding full and immediate compensation to those pensioners who had brought civil actions to that end would place them in a privileged position compared to other pensioners who had not brought such actions and thus had to obtain compensation through the Pensioners’ Fund. The relevant part of those judgments reads as follows:

“The substantive-law issue raised by the plaintiff in his appeal on points of law is whether the plaintiff is entitled to be paid the difference in pension in accordance with the Constitutional Court’s decision of 12 May 1998 or [whether he may exercise] the right to be paid [that difference] only through the Pensioners’ Fund.

The lower-instance courts dismissed the plaintiff’s claim by holding that the provisions of the Pensioners’ Fund Act applied only to those pensioners who had withdrawn their [civil] actions, which the plaintiff had not done, and therefore he had not acquired the right to compensation pursuant to that Act and [the Implementation Act] ...

It is beyond dispute that the plaintiff falls within the category of pensioners who were by section 2(1) of [the Implementation Act] granted the right to compensation due to the partial adjustment of [their] pensions in the period between 1 September 1993 and 31 December 1998.

... the Pensioners’ Fund Act ... regulates the method of compensation of pensioners referred to in section 2(1-3) of [the Implementation Act] and thereby fully implements the [Constitutional Court’s] decision [of 12 May 1998].

The right to compensation under the [Pensioners’ Fund] Act belongs only to those pensioners who are the members of the Fund.

Pursuant to section 42(1) of the Pensioners’ Fund Act pensioners referred to in section 2 of [the Implementation Act] who have brought civil actions for compensation may become members of the Fund and obtain compensation pursuant to that Act if they withdraw their actions.

These [civil] proceedings in which the plaintiff seeks compensation ... were instituted after the entry into force of [the Implementation Act] and the Pensioners’ Fund Act. Given that the plaintiff ... had not, in accordance with the said provision, withdrawn his action [he] did not become a member of the Fund nor [did he] acquire the right to compensation under the Pensioners’ Fund Act.

The plaintiff seeks payment of the full amount of compensation, whereas the Pensioners’ Fund Act provides that compensation must be obtained by acquiring and disposing of the shares in the Fund in accordance with the prescribed standards and criteria, so that under section 24(1) sub-paragraph 2 of the Pensioners’ Fund Act the right to the entire amount of compensation due belongs [only] to those members who opted for the right to acquire and dispose of the shares over a period of eight years with a two-year delay where the amount of compensation is paid in six annual instalments.

After the entry into force of [the Implementation Act] and the Pensioners’ Fund Act the pensioners’ claims for compensation for non-adjustment of [their] pensions in the period between 1 September 1993 and 31 December 1998 must be decided exclusively on the basis of these legislative acts, which were adopted with a view to removing the effects of unconstitutional pension insurance legislation which had been invalidated by the Constitutional Court.

Those legislative acts enabled pensioners who had brought civil actions for compensation to obtain it in the same way and under the same conditions as other pensioners who had not brought civil actions. The plaintiff was therefore not put in a disadvantaged position vis-à-vis those [other] pensioners.

By refusing compensation [paid] in accordance with the Pensioners’ Fund Act and maintaining his claim for a single payment of the full amount of the difference in pension owed to him, the plaintiff seeks to obtain compensation under conditions that are more favourable than those applied to pensioners who exercise that right as members of the [Pensioners’] Fund. Therefore, to allow the plaintiff’s claim would place him in a more favourable position than those [other] pensioners and thereby breach the constitutional guarantee of equality enshrined in Article 3 of the [Croatian] Constitution.

The plaintiff’s claim is unfounded even if adjudicated on the basis of the legislation in force before the adoption of [the Implementation Act] and the Pensioners’ Fund Act because a [civil] court is not entitled to decide on rights arising from pension insurance as a preliminary issue.

The defendant [i.e. the Croatian Pension Fund] as the competent authority had rendered final decisions in the administrative proceedings on the amount of pension payable to ... the plaintiff and paid the pension on the basis of those decisions. The lawfulness of those decisions could have been examined in administrative proceedings.

Therefore, the legal basis for determining the ... amount of pension to be paid to the plaintiff, are the defendant’s final decisions on the basis of which the pension was paid ... The court is not entitled to assess the lawfulness of the defendant’s decisions nor to establish that the plaintiff was entitled to a higher pension than the one paid on the basis of [those] final decisions.

The existence of that right is determined in administrative proceedings by a constitutive decision. [However,] a decision that could have represented a legal title rendering the claim for payment of the difference in pension sought by the plaintiff well-founded was not rendered in the present case.

In view of the above the second-instance court, in dismissing the plaintiff’s claim, correctly applied the [relevant] substantive law. Therefore, the plaintiff’s appeal on points of law has to be dismissed ...”

In judgment no. Rev-x 533/11 of 28 August 2012 the Supreme Court held that the same reasoning applied to those cases where an action for payment of (compensation for) the pension debt had been brought before the entry into force of the Implementation Act and the Pensioners’ Fund Act.

By judgment no. P-219/99 of 5 June 2001 the Vukovar Municipal Court ordered the Croatian Pension Fund as the defendant to pay the plaintiff (a pensioner) the pension debt. The exact amount of the pension debt owed to the plaintiff the court ordered the defendant to pay was calculated on the basis of an opinion prepared by a financial expert.

By judgment no. Gž-1266/08 of 1 June 2007 the Split County Court reversed a first-instance judgment dismissing an action brought by two pensioners as plaintiffs and ordered the Croatian Pension Fund as the defendant to pay them the pension debt. It held that because the plaintiffs had not withdrawn their action in accordance with section 42(1) of the Pensioners’ Fund Act (see paragraph 62 above), they had chosen to obtain compensation for the pension debt not through the Pensioners’ Fund but in civil proceedings.

By judgment no. Gžo-276/10 of 9 August 2010 the Split County Court quashed a first-instance judgment and remitted the case where the first-instance court had dismissed an action for payment of compensation brought by a pensioner as the plaintiff against the Croatian Pension Fund for its failure to satisfy its statutory obligation under section 3 of the Implementation Act (see paragraph 53 above) and determine the amount of compensation owed to him. The plaintiff had brought his action because he had not received HPB-Invest’s information notice within the statutory time-limit, and the Croatian Pension Fund, in reply to his request for calculation of the compensation owed to him, had informed him that he was not eligible for compensation because he had been receiving a pension on account of his status as a former political prisoner. The Fund did so even though it had previously granted him a disability pension.

By judgment no. P-514/06 of 2 February 2009 the Kutina Municipal Court dismissed an action for payment of the pension debt brought by a pensioner as the plaintiff against the State as the defendant. The plaintiff brought her action after she had been informed via HPB-Invest’s information notice that she was not entitled to any compensation through the Pensioners’ Fund, and after the Croatian Pension Fund, in reply to her request for re-calculation of the compensation owed to her, had informed her that the compensation had been correctly calculated. The court did not accept the State’s argument that it did not have jurisdiction in the matter. It held that it had jurisdiction precisely because the Croatian Pension Fund had not issued a formal decision (an administrative act) on the plaintiff’s request for re-calculation, thus depriving her of the possibility to seek judicial review before the Administrative Court. The court eventually dismissed the plaintiff’s claim because it held that she should have sued the Croatian Pension Fund instead of the State, and because she had refused to advance the fees of the financial expert the court had been prepared to call upon to verify the Fund’s calculation of compensation.

By judgment no. Gž-772/10 of 10 February 2011 the Sisak County Court upheld a first-instance judgment dismissing an action brought by a pensioner as the plaintiff against the State as the defendant for payment of compensation for the pension debt. The court held that the State had standing to be sued because the Pensioners’ Fund Act provided that Pensioners’ Fund had been established by the Government of Croatia on behalf of the State (see paragraph 55 above). The court dismissed the plaintiff’s claim because a financial expert confirmed that the Croatian Pension Fund’s calculation, according to which the plaintiff was not entitled to compensation, was correct.

By judgment no. P-1931/08 of 2 November 2010 the Zagreb Municipal Civil Court dismissed an action brought by a pensioner as the plaintiff against the Croatian Pension Fund and HPB-Invest as defendants whereby she sought: (a) declaration that she had become a member of the Pensioners’ Fund and acquired a certain number of shares in it corresponding to the pension debt owed to her, and (b) payment of compensation in accordance with Model B provided for by the Pensioners’ Fund Act. The plaintiff brought her action because she considered that the amount of compensation indicated in HPB-Invest’s information notice was too low. She did so only after the Croatian Pension Fund, in reply to her request for re-calculation of the compensation, had informed her that the compensation had been correctly calculated. The plaintiff specifically asked the court to establish the correct amount of compensation owed to her under the Implementation Act and the Pensioners’ Fund Act. The court dismissed her action because it held that it was not authorised to verify the accuracy of the Croatian Pension Fund’s calculation of the compensation. The court held, in particular:

“This court considers that it has no power to establish whether the amount of compensation for the pension debt ... has been determined correctly. That is so because there is not a single legislative act in force which would entitle it to examine whether the amount of compensation determined by the first defendant [i.e. the Croatian Pension Fund] is correct and accurate, or to determine the amount of compensation and order it to be paid.

Namely, even though the case file does not contain any decision by the first or the second defendant adopted on the basis of [the Implementation Act] or the Pensioners’ Fund Act in the form of an administrative act, from [their provisions] it is evident that authorities other than this court are competent to decide on compensation and its amount. Therefore, the plaintiff should have requested those authorities to determine [her right to compensation] and its amount either in administrative proceedings or in administrative-dispute [i.e. judicial review] proceedings [before the Administrative Court] especially because the right to compensation for the pension [debt] owed to [her] is a right arising from pension insurance.

Given that from the aforementioned legislation it is evident that the first defendant [i.e. the Croatian Pension Fund] is competent to decide on the rights arising from the pension insurance and that [the Implementation Act] confers on it also [the power] to determine the amount of compensation payable for the pension debt, the plaintiff in the civil proceedings may claim payment of only the amount of the pension debt which was determined by the competent authority. That being so, the plaintiff should have obtained, either from the first defendant or by instituting administrative-dispute [judicial review] proceedings [before the Administrative Court], a decision on the amount of compensation owed to her for the pension debt ... That is so because to obtain a court judgment ordering payment, the plaintiff must first have a title for it, and it is precisely a decision by the first defendant [i.e. the Croatian Pension Fund] which she does not have ...”


Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions;Article 1 para. 2 of Protocol No. 1 - Control of the use of property)

Jon Fridrik Kjølbro;Georges Ravarani;Ksenija Turković

The applicant was born in 1963 and lives in Split.

He is the owner of a flat in Split with a surface area of 106.90 square metres. According to the applicant, that flat is the only real estate in his ownership and his only property of value.

It would appear that in 1971 the housing authorities awarded a specially protected tenancy (stanarsko pravo) of the flat to a certain Ms N.R. and her family.

On 5 November 1996 the Lease of Flats Act entered into force. It abolished the legal concept of the specially protected tenancy and provided that the holders of such tenancies in respect of, inter alia, privately owned flats were to become “protected lessees” (zaštićeni najmoprimci). Under the Act such lessees are subject to a number of protective measures, such as the duty of landlords to contract a lease of indefinite duration, payment of protected rent (zaštićena najamnina), the amount of which is set by the Government and significantly lower than the market rent; and better protection against termination of the lease.

The applicant refused to conclude a lease contract with N.R. under the protected lease scheme.

Therefore, on 16 October 1997 she brought a civil action against him in the Split Municipal Court (Općinski sud u Splitu) with a view to obtaining a judgment in lieu of such a contract.

At the hearing held on 4 November 1998 the applicant argued that N.R. was not entitled to protected rent because she owned a house in the tourist village of Rogoznica, some 53 kilometres from Split.

At the hearing held on 15 April 2002 the applicant submitted a counter-claim seeking to obtain a judgment ordering N.R. and her family to vacate the flat in question. He argued that he intended to move into the flat.

By a judgment of 27 February 2008 the Municipal Court found in favour of N.R. and imposed on the applicant a lease contract stipulating protected rent in the amount of 163.56 Croatian kunas (HRK) per month.

On 21 October 2008 the Split County Court (Županijski sud u Splitu) dismissed an appeal by the applicant and upheld the first-instance judgment.

The Municipal and the County Court established that N.R. was living in the flat with her son M.R., her daughter-in-law and her grandson whereas the applicant was living with his mother in a flat located in the same building. His mother also owned an adjacent building where he was running his medical practice in one of the flats. The court also found that N.R. and her son M.R. indeed owned a small summer home in Rogoznica surfacing 18 square metres only.

Against this factual background the Municipal and the County Court held that the conditions provided in section 40(1) of the Lease of Flats Act, as interpreted by the Supreme Court (see Statileo v. Croatia, no. 12027/10, §§ 48-49, 10 July 2014), had not been met and that the applicant was therefore not entitled to refuse to enter into a lease contract with N.R. under the protected lease scheme. In particular, even though the applicant intended to move into the flat and had no other accommodation, he was neither entitled to permanent social assistance or was over sixty years of age, nor was N.R.’s summer home in Rogoznica located in the same municipality or township.

Those courts also held that, apart from being protected from eviction, N.R. was also entitled to protected rent; the applicant thus having no right to charge her the market rent for living in his flat. That was so because they found that N.R.’s summer home did not constitute a habitable house within the meaning of section 31(2) of the Lease of Flats Act (see Statileo, cited above, § 41).

By a decision of 21 November 2012 the Constitutional Court (Ustavni sud Republike Hrvatske) dismissed the applicant’s constitutional complaint against the judgments of the Municipal and the County Court, and served its decision on the applicant’s representative on 7 December 2012.


Violation of Article 6 - Right to a fair trial (Article 6 - Enforcement proceedings;Article 6-1 - Access to court);Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)

The list of applicants and the relevant details of the applications are set out in the appended table.

The applicants complained of the non-enforcement or delayed enforcement of domestic decisions according to which the applicants were entitled to various pecuniary amounts and/or to have certain actions taken by State authorities in their favour.

In some of the applications, the applicants also raised complaints under other provisions of the Convention.