Inter-state application for the protection of the interests of a governmental organization, ie a Bank that does not enjoy independence from the state, does not fall within the jurisdiction of the ECtHR
GRAND CHAMBER JUDGMENT
Slovenia v. Croatia 16.12.2020 (no. 54155/16)
SUMMARY
The case concerned unpaid and overdue debts owed to Ljubljana Bank by various Croatian
companies on the basis of loans granted at the time of the former Yugoslavia.
The Court observed that under Article 34 (individual applications) a legal entity could bring a case
before it provided that it was a “non-governmental organisation” within the meaning of that Article.
The idea behind this principle was to ensure that a State Party could not act as both an applicant and
a respondent in the same matter.
Article 33 of the Convention (inter-State applications) did not allow an applicant Government to
defend the rights of a legal entity which did not qualify as a “non-governmental organisation” and
which therefore would not be entitled to lodge an individual application under Article 34.
As Ljubljana Bank was not a “non-governmental organisation” within the meaning of Article 34 it did
not have standing to lodge an individual application. Accordingly, Article 33 did not empower the
Court to examine an inter-State application alleging a violation of any Convention right in respect of
this legal entity. The Court therefore lacked jurisdiction to hear the present case.
PROVISIONS
Article 32
Article 33
Article 34
PRINCIPAL FACTS
The Slovenian Government lodged an inter-State application (under Article 33 of the Convention)
against the Croatian Government, alleging a series of violations of the fundamental rights of
Ljubljana Bank. The bank was founded in 1955 under the laws of the then Socialist Federal Republic
of Yugoslavia and reorganised in the framework of the 1989-90 reforms, later being nationalised and
restructured by the Slovenian State after its declaration of independence. Most of the bank’s assets
and part of its liabilities were transferred to a new bank, the New Ljubljana Bank. The old Ljubljana
Bank was initially administered by the Bank Rehabilitation Agency of Slovenia and is now controlled
by a Slovenian Government agency, the Succession Fund.
In the applicant Government’s submission, as its Croatian debtors had failed to repay their liabilities,
Ljubljana Bank (Head Office and Zagreb Main Branch) lodged civil claims with Croatian courts, from
1991 onwards. As of 1994 over 80 such cases were pending before Croatian courts, concerning
unpaid and overdue receivables from credit loans and guarantees, mainly granted to companies
operating in the agricultural and food sectors of Croatia. In more than a half of all these cases, as the
debtors had gone bankrupt or into liquidation, the enforcement of Ljubljana Bank’s claims had
become impossible. The applicant Government added that since 2004, the Croatian courts, including
the Constitutional Court, had denied the locus standi of Ljubljana Bank, as claims which it had
against various Croatian companies arising from loans it had granted them in the former Yugoslavia
had been transferred to the New Ljubljana Bank by the entry into force on 27 July 1994 of the 1994
Amendments to the Constitutional Act of Slovenia 1991. Thus, in those courts’ view, Ljubljana Bank
had no standing to sue in order to obtain repayment of such loans.
The Court had previously established the general factual and legal background to the case in its
judgments and decision in Kovačić and Others v. Slovenia, Ališić and Others v. Bosnia and
Herzegovina, Croatia, Serbia, Slovenia and the former Yugoslav Republic of Macedonia, and
Ljubljanska Banka D.D. v. Croatia. In the latter case the Court had declared inadmissible an individual
application lodged by Ljubljana Bank itself, finding that, as it did not have sufficient institutional and
operational independence from the State, it was not “non-governmental” within the meaning of
Article 34 of the Convention.
The applicant Government complained that the Croatian authorities had prevented and continued to
prevent Ljubljana Bank from enforcing and collecting the debts of its Croatian debtors in Croatia.
They alleged multiple violations of Articles 6 § 1 (right to a fair hearing), 13 (right to an effective
remedy) and 14 (prohibition of discrimination) of the Convention and of Article 1 of Protocol No. 1
(protection of property). Under Article 41 of the Convention, they also requested just satisfaction
corresponding to the losses incurred by Ljubljana Bank as a result of the alleged violations.
THE DECISION OF THE COURT…
It was pointed out by the Court that the only reasons for which an inter-State application could be
rejected at the admissibility stage on the basis of Article 35 (admissibility conditions) were the nonexhaustion of domestic remedies and the failure to comply with the six-month time-limit. All other grounds of inadmissibility were reserved for a later stage, to be examined jointly with the merits of
the case. However, the Court was not precluded from establishing, already at the admissibility stage,
under general principles governing the exercise of jurisdiction by international tribunals, whether it
had any competence at all to deal with the matter before it. The Court was entitled to reject an
inter-State application without declaring it admissible if it was clear from the outset that it was
wholly unsubstantiated, or otherwise lacking the requirements of a genuine allegation within the
meaning of Article 33 of the Convention.
The question whether the Convention as a human-rights treaty could create fundamental rights for
State-owned and State-run entities went beyond the boundaries of the Convention mechanism and
touched upon a general issue of international law. The main question before the Court was whether
it had “jurisdiction” within the meaning of Article 32 of the Convention, and that question could be
adjudicated at any stage of the proceedings.
The Court thus proceeded to address the key question raised by the case, namely whether it was
able to examine an inter-State application that had been lodged by a High Contracting Party in order
to protect the rights and interests of an entity which was not a “non-governmental organisation” for
the purposes of Article 34 of the Convention and was therefore precluded from lodging an individual
application.
Firstly, it was a well-established general principle that the Convention must be read as a whole and
that its Articles should be construed in such a way as to promote internal consistency and harmony
between its provisions – including the jurisdictional and procedural provisions such as those of
Articles 33 and 34. The term “non-governmental organisation” thus had the same meaning and
scope in both of those provisions.
Secondly, the Court emphasised the specific nature of the Convention as an instrument for the
effective protection of human rights, and observed that even in an inter-State case it was always the
individual who was directly or indirectly harmed and primarily “injured” by a violation of the
Convention. In other words, only individuals, groups of individuals and legal entities which qualified
as “non-governmental organisations” could be bearers of Convention rights, but not a Contracting
State or any legal entity which had to be regarded as a governmental organisation.
Thirdly, the Court referred to the principle laid down in Cyprus v. Turkey (just satisfaction), whereby,
if just satisfaction was afforded in an inter-State case, it should always be for the benefit of
individual victims and not for that of the State. If the Court were to find a violation in a case brought
by a State on behalf of a “governmental” entity and to award a sum of money as just satisfaction,
then the final beneficiary of that sum would be the applicant State. The Court concluded that Article
33 of the Convention did not allow it to examine an inter-State application seeking to protect the
rights of a legal entity which did not qualify as a “non-governmental organisation” and therefore
would not be entitled to lodge an individual application under Article 34.
In the present case and having regard to all the material in the file, the Court saw no reason to
depart from its findings in the Ljubljanska Banka D.D. case to the effect that Ljubljana Bank did not
enjoy sufficient institutional and operational independence from the State and could not therefore
be regarded as a “non-governmental organisation” within the meaning of Article 34. Accordingly,
Article 33 did not empower the Court to examine an inter-State application alleging a violation of
any Convention right in respect of this legal entity. The Court therefore lacked jurisdiction to hear
the present case.
