WHAT IS GOING ON? The European Court of Human Rights has included an interesting decision on the case of Croatian company Project-Trade v. Croatia in the last information note on the Court’s case-law. Project-Trade was one of the shareholders in a privately-owned bank, which underwent restructuring and recovery process in the late 1990s. The consequence of this measure was that all the shares in the bank were revoked and cancelled, including those of Project-Trade, the applicant company. The shareholders had appealed more than once, unsuccessfully, in Croatian courts, the Constitutional Court and finally the European Court of Human Rights.
The ECHR found that there had been a violation of Article 1 of Protocol no. 1 and Article 6 § 1 – violation of the right to a peaceful enjoyment of his possessions and the right to a fair trial.
WHY IS IT IMPORTANT? An important and interesting aspect, however, is the ECHR’s approach to the case. The Court examined the victim status of the applicant company whether as a former shareholder of the bank could the applicant company claim to be a victim of Article 1 of Protocol no. 1. The Court did so despite the fact that the Croatian Government did not raise any objection concerning the applicant company’s victim status. The Court found it crucial to draw a distinction between complaints brought by shareholders about measures affecting their rights as shareholders and measures affecting only the companies themselves. In order to claim the victim status by the shareholders, the measures must affect their legal rights “both directly and personally and go beyond merely disturbing their interests in the company’s governance structure”. An interpretation of Article 34 of the Convention therefore sets grounds for proceedings before the ECHR not only from “any person, non-governmental organization or group of individuals”, as written in the Convention, but the victim status was upheld for the applicant company as well – under the circumstance of cancellation and revocation of shares in private bank directly affecting shareholders’ property rights.
WHAT WILL HAPPEN NEXT? The Court in Strasbourg, as an institution holding exceptional authority, publishes the Information Note containing legal summaries of the examined cases every month. Although the precedential status of ruling of the ECHR might be subject to controversy and discussion, it can certainly be said that the case summaries in some way “predict” the Court’s future decision-making. The monthly issued case-law Information note, available on the ECHR website, contains legal summaries of cases of the Court that are considered of particular interest; the most recent summary includes the Project-Trade d.o.o. decision against Croatia.
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