Dissolution of a sports association due to a court decision by a court of disputed impartiality. Determination of lack of court impartiality and violation of the right to associate
JUDGMENT
Croatian Golf Federation v. Croatia 17.12.2020 (app. no. 66994/14)
SUMMARY
Freedom of association and legal protection of the right. Right to a fair trial by an impartial tribunal.
The applicant sports association was declared bankrupt due to debts. The liquidator proposed a reorganization plan that was ratified by the bankruptcy court. Nevertheless, the domestic authorities, following irrevocable court decisions, ordered the dissolution of the association and its deletion from the European Golf Union. The composition of the Constitutional Court that heard the appeal of the association against the decision of dissolution, participated a judge, whose husband was President of a sports club that owed to the applicant association. With the dissolution of the union, the debt of the sports club was repaid. The association filed a complaint for violation of the freedom of association and for violation of a fair trial under its particular manifestation of the lack of impartiality of the Constitutional Court.
The Court reiterated its well-established case-law that such a final intervention as the final dissolution of a union must be in accordance with the law, the law must be clear and predictable, and intervention must be necessary in a democratic society based on the principle of proportionality.
In the present case, the ECtHR ruled that the dissolution decision did not comply with the principle of proportionality. The applicant put forward its main argument that it was in the process of being consolidated, but which was not examined by the domestic authorities. The decision to dissolve it left its creditors without the possibility of satisfying their claims. That reason was sufficient for the court to find that the dissolution of the association violated his freedom of association.
With regard to the complaint for impartiality of a judge, the ECtHR ruled that the personal relationship of the judge who participated in the composition of the Constitutional Court had raised legitimate doubts of impartiality. It found a violation of Article 6§1 of the ECHR.
PROVISIONS
Article 11
Article 6 par. 1
PRINCIPAL FACTS
The applicant, the Croatian Golf Federation, is an association which was established in 1992 and
which was previously registered in Zagreb.
The case concerned the dissolution of the applicant association by the authorities despite it having
been decided in bankruptcy proceedings that it should continue its activities, and the subsequent
court proceedings.
In 2009 bankruptcy proceedings were opened against the applicant association owing to nonpayment of debts and insolvency. Its creditors decided that the association should continue to operate rather than its assets being sold. On 26 January 2010 the bankruptcy administrator was
instructed to prepare a bankruptcy plan, which was approved and then confirmed by the bankruptcy
court. The bankruptcy proceedings were closed. The General Administration Office of the City of
Zagreb (“the Zagreb City Office”), which was responsible for registration of associations, was kept
informed of developments in the proceedings, as were the member golf clubs and the Croatian
Olympic Committee.
In a decision of 26 February 2009, the Zagreb City Office established that the association had ceased
activities, which was grounds for dissolution. That decision was unsuccessfully appealed against by
the applicant association. A subsequent constitutional complaint by the applicant association was
declared inadmissible on 20 March 2014.
On 27 January 2014 the Zagreb City Office struck the applicant association off its register of
associations. That decision was confirmed by the Ministry of Administration. The Zagreb
Administrative Court then dismissed an action for judicial review of the decision, the judgment thus
becoming final on 9 August 2018.
Between 2010 and 2012 the applicant association was removed as a member association of the
Croatian Olympic Committee, and then replaced with another golf association. In 2010 the applicant
association was expelled from the European Golf Association.
The applicant association submits that it maintained its activities throughout the period, specifically
organising the team and individual Croatian golf championships and participating in the World Team
Championship, taking part in international meetings, and maintaining its membership.
The applicant association also submits that it commenced enforcement proceedings in April 2011
against a golf club whose president was the husband of a judge who had been on the bench that
would decide his constitutional complaint.
Relying on Article 11 (freedom of assembly and association) and Article 6 § 1 (right to a tribunal
established by law) of the European Convention on Human Rights, the applicant association
complained of its dissolution and alleged that the Constitutional Court’s bench had lacked
impartiality.
THE DECISION OF THE COURT…
The Court reiterates that any interference with the freedom of association will not be justified under the terms of Article 11 of the Convention unless it is “prescribed by law”, pursues one or more of the legitimate aims set out in paragraph 2 of that Article, and is “necessary in a democratic society” for the achievement of that aim or aims
Whether the interference was prescribed by law
As regards the lawfulness of the interference, the Court firstly notes that it had a legal basis in domestic law, in particular in section 28(1) of the Associations Act. The Court further reiterates that the expression “prescribed by law” does not only require that the impugned measure should have some basis in domestic law, but also refers to the quality of the law in question. The law should be accessible to the persons concerned and formulated with sufficient precision to be foreseeable as to its effects.
The applicant association argued that the interference with its freedom of association had not been foreseeable, having regard to both the text of the relevant provisions of the Associations Act which was “unclear, confusing, and badly drafted”, and the manner in which it was applied and interpreted in its case which suggested that the domestic authorities had not had a clear picture as to whether the grounds for dissolution had been the cessation of activities or bankruptcy.
- Whether the interference pursed a legitimate aim, and whether it was necessary in a democratic society
- As regards a legitimate aim, having regard to its case-law (and the relevant Council of Europe instruments), the Court considers that, in principle, dissolving an association on grounds of bankruptcy or prolonged inactivity may be regarded as pursuing one of the legitimate aims set out in Article 11 § 2 of the Convention, namely those relating to the prevention of disorder and the protection of the rights and freedoms of others.
Accordingly, the Court must further examine whether that interference was “necessary in a democratic society” for the achievement of one of those aims. The notion of necessity implies that any interference with the freedom of association must correspond to a “pressing social need”, and that it must be proportionate to the legitimate aim pursued.
The Court reiterates that the dissolution of an association is a harsh and particularly far-reaching measure entailing significant consequences, which can be justified only in strictly limited circumstances. In order to satisfy the proportionality principle in cases concerning dissolution, the authorities must show that there are no other means of achieving the same aims that would interfere less seriously with the freedom of association. In the present case, the Government argued that the dissolution of the applicant association had been necessary because, owing to bankruptcy, it could no longer exercise the role or fulfil the purpose of a national sports federation . The Court is not persuaded that this aim could not have been achieved by depriving the applicant association of its status as a national sports federation, and is therefore not convinced that this aim had not already been accomplished by the applicant association’s exclusion from the Croatian Olympic Committee.
The Court further notes that the domestic authorities applied the relevant provisions of the Associations Act mechanically as their conclusion that the applicant association had ceased its activities was based on the mere fact that bankruptcy proceedings had been opened against it. The applicant association’s arguments to the contrary were not addressed. Having regard to the decision, first by the bankruptcy administrator and then by its creditors, to continue with the activities of the applicant’s association , the evidence submitted by the applicant association in support of its argument that it had continued with its activities during the bankruptcy proceedings, and to the findings of the High Commercial Court in unrelated civil proceedings, the Court considers that the decisions of the domestic authorities in the dissolution proceedings, and in particular their finding that the applicant association had ceased its activities, were not based on an acceptable assessment of the relevant facts, let alone on compelling evidence .
Lastly, it must be noted that in the reorganisation plan it was agreed that all the creditors’ claims should be satisfied by the end of 2023. However, the domestic authorities did not even consider that their decision to dissolve the applicant association left its creditors without such possibility to satisfy their claims The foregoing considerations are sufficient to enable the Court to conclude that the interference with the applicant association’s freedom of association was not justified.There has accordingly been a violation of Article 11 of the Convention.
Article 6 § 1
The Court observes that what is at stake is the confidence which the courts in a democratic society must inspire in the public.
Judge D.Š. sat on the three-judge Constitutional Court panel deciding on the applicant association’s constitutional complaint against the administrative authorities’ decision to dissolve the association. The applicant association’s misgivings regarding her impartiality are based on the fact that her husband was the president of the golf club against which the applicant association instituted enforcement proceedings with a view to collecting unpaid membership fees.
It is true that the two proceedings were unrelated in terms of their subject matter. However, it cannot be overlooked that the dissolution of the applicant association was directly decisive for the existence of that golf club’s debt owed to the applicant association, it being understood that a debt is extinguished if the creditor no longer exists.
It is also true that the Constitutional Court’s decision of 20 March 2014 was not constitutive of the dissolution but only resulted in the administrative authorities’ decision to dissolve the applicant association to stand. Yet, the Court cannot disregard the fact that, once the Constitutional Court declared the applicant association’s constitutional complaint inadmissible, the administrative authorities’ decision on dissolution became irreversible and the debt of the golf club whose president was Judge D.Š.’s husband was definitely extinguished.
The Court considers that, against this background and having regard to the importance of appearances, the fact that Judge D.Š. was a member of the Constitutional Court’s panel which decided the applicant association’s constitutional complaint was capable of raising legitimate doubts as to her impartiality. Accordingly, she should have withdrawn from sitting but did not do so. The applicant association’s fears as regards her impartiality can thus be held to have been objectively justified.
There has accordingly been a violation of Article 6 § 1 of the Convention.
