INVESTYLIA PUBLIC COMPANY LTD v Cyprus - 13832/05 [2009] ECHR 1519 (17 September 2009)

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The European Court of Human Rights (First Section), sitting on 17 September 2009 as a Chamber composed of:

Nina Vajić, President,
Anatoly Kovler,
Elisabeth Steiner,
Dean Spielmann,
Sverre Erik Jebens,
Giorgio Malinverni,
George Nicolaou, judges,
and André Wampach, Deputy Section Registrar,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

The applicant, Investylia Public Company Ltd, is a company incorporated under Cypriot law, with its registered office in Larnaca. It was represented before the Court by Ms L. Stylianou, a lawyer practising in Nicosia. The Cypriot Government (“the Government”) were represented by their Agent, Mr P. Clerides, Attorney-General of the Republic of Cyprus.

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

In January 2000 one of the applicant company’s directors spoke to the director of a potential investor company (E. & P. Livadiotis Ltd) and informed it about the future issue of shares by the applicant company and the fact that there would be shares available for purchase, the titles of which would be introduced on the Cyprus Stock Exchange. During the same period the applicant company was registered as a public company.

On 14 January 2000 the investor company made an offer to purchase, by private placement, 20,000 shares for 0.6 Cypriot pounds (CYP) each. The offer was accepted for 20,000 ordinary shares and 20 founder’s shares. The investor made an advance payment of CYP 1,200.

On 7 April 2000 Law 42(I)/2000 came into force, amending the Securities and Cyprus Stock Exchange Law of 1993 (Law 14(I)/1993).

On 4 May 2000 the investor company paid the remaining sum of CYP 10,820 to the applicant company.

On 14 June 2000 the applicant submitted an application to introduce the share titles on the Cyprus Stock Exchange.

The application was rejected by the Cyprus Stock Exchange Council on 13 February 2002.

On 6 November 2000 the investor company requested the reimbursement of the sum paid for the purchase of the shares as the share titles had not been introduced on the Stock Exchange.

On 11 September 2001 the investor company (“plaintiff”) brought civil proceedings against the applicant company (action no. 2781/01) before the District Court of Larnaca claiming the return of the sum of CYP 12,020 paid to the applicant company for the purchase of the shares. The claim was based on sections 58A (3) (b) and 58 (B) of the Securities and Cyprus Stock Exchange Law of 1993 as amended by Law 42(I)/2000 and on section 3 (3) of the latter law (see below). In paragraph 7 of its statement of claim the plaintiff referred to sections 58A (3) (b) and 3 (3).

In paragraph 7 of its statement of defence dated 7 November 2001, the applicant company alleged, inter alia, that the relevant law did not provide the plaintiff with the right to request reimbursement of the sums paid nor did it require the applicant to return this money. Further, in paragraph 8 of the statement of defence the applicant company alleged “that the law referred to in paragraph 7 of the statement of claim was unconstitutional or /and could not be applied”.

The plaintiff in its reply to the applicant’s statement of defence argued that Law 42(I)/2000 complied with the provisions of the Constitution and could be applied to the present case.

On 5 May 2003, during the hearing of the action, the applicant company’s lawyer in his submission to the court raised the question of constitutionality of the applicable law referring, inter alia, to Articles 23 and 25 (1) of the Constitution and the case of Lapertas Fisheries Ltd v. the Police (Criminal Appeals 7279 and 7289, judgment of 9 July 2002) in which the Supreme Court had found that section 3 (1) of Law 42(I)/2000 contravened the Constitution.

On 19 June 2003 the Larnaca District Court issued its judgment. It firstly examined the applicant company’s complaint that the law was unconstitutional. In this respect the court observed that the plaintiff had correctly pointed out that, in line with the jurisprudence, such an issue should be raised precisely and in full detail in the pleadings or should be set out in a detailed memorandum. There should be a reference to the specific Constitutional provision which was allegedly infringed by the law in question. The court further noted that there existed a presumption of constitutionality of every law and this was rebutted when the person who had the burden of proof established unconstitutionality. However, the relevant paragraph in the applicant’s statement of defence could not, in the light of the applicable jurisprudence, be considered to comply with the above-mentioned conditions. The complaint could not be examined, in view of the vague and general terms in which it had been raised.

The court observed, however, that section 3 (3) of Law 42(I)/2000 was in its operation dependent on section 3 (1), which made the submission of an application for introduction of the share titles on the Stock Exchange obligatory, and since the latter had been declared unconstitutional in Lapertas (cited above), it followed by implication that section 3 (3) should likewise be so considered. On the contrary, section 58A (3) (b) did not impose any imperative obligation for the submission of an application. This provision regulated the obligation to return sums received for the purchase of shares where an application for the introduction of share titles was either dismissed within three months from its submission or earlier, and titles that had been issued were not introduced on the Stock Exchange. The purchaser in such a case had the right to request the return of such sum and the issuer had a corresponding obligation to return it with interest, within ten days from the date of the request, while at the same time the titles of the shares would have to be returned.

As regards the substance of the case, the court observed that it was clear from the evidence and exhibits before it, and in any event an admitted fact, that the plaintiff’s request for reimbursement was made after the end of the three-month period from the submission of the application to introduce the share titles on the Cyprus Stock Exchange; that request had been refused on 13 February 2002. The titles had not been introduced on the Stock Exchange. Consequently, after the passing of the three-month period, the plaintiff’s right under section 58A (3) (b) to request the return of the sum paid and the corresponding obligation of the applicant company to return that sum were activated. The applicant company however had not complied.

The court therefore held that to the extent that the plaintiff claimed, on the basis of section 3, the sum of CYP 1,200 paid before the entry into force of the applicable law, this claim could not succeed in view of the Supreme Court’s judgment in the Lapertas case, but that, in so far as the sum of CYP 10,820 was concerned, as this had been paid after Law 42(I)/2000 had come into force, it fell within section 58A (3) (b) and was recoverable. Accordingly, the court awarded the plaintiff this sum with 6% interest from 14 June 2000, the date of the submission of the application to list the shares.

On 31 July 2003 the applicant company lodged an appeal with the Supreme Court (appeal no. 11770).

In its grounds of appeal the applicant company raised, inter alia, the question of the constitutionality of the relevant legislative provisions on which the application was based. It further claimed that the first-instance court had failed to order the return of the share titles.

On 9 November 2004 the Supreme Court dismissed the appeal and upheld the District Court’s judgment. It held as follows:

“The first-instance court decided that it could not examine the question of the unconstitutionality of the above laws because no details at all in support of this suggestion were given in the statement of defence, in which, indeed, such an allegation is put forward in vague and general terms. The Court however, as is settled practice, proceeded to decide on the substance of the case, so that the Supreme Court would have the court’s judgment on the whole case before it, in the event that the matter of unconstitutionality was examined by the Supreme Court. On the substance, judgment was delivered in favour of the respondents.

The grounds of appeal are devoted exclusively to the issue of the unconstitutionality of the above laws, with particular reference to and argument on the various articles of the Constitution which, according to the suggestion of the appellant’s lawyer, are violated by the legislation in question.

During the discussion of the appeal we indicated to the appellant’s lawyer that he was faced with a serious obstacle, namely that his arguments concerning the unconstitutionality of the laws could not be examined because this suggestion had not been put forward, as required, before the first-instance court. The jurisprudence on the matter is settled and strict. A question of unconstitutionality is raised in the pleading, in which the full details are given, such as the article or articles or part of the article of the law which contravenes the Constitution and, of course, which article [of the Constitution]. The reasoning in support of that suggestion follows. At the hearing, the burden of proof that a legal provision is unconstitutional is one beyond reasonable doubt (see....). In view of this conclusion, nothing else remains for examination.”

1. Relevant domestic law and practice concerning pleas/complaints of constitutionality before the domestic courts

“A party to any judicial proceedings, including proceedings on appeal, may, at any stage thereof, raise the question of the unconstitutionality of any law or decision or any provision thereof material for the determination of any matter at issue in such proceedings and thereupon the Court before which such question is raised shall reserve the question for the decision of the Supreme Constitutional Court and stay further proceedings until such question is determined by the Supreme Constitutional Court.”

The provisions of the above Article were rendered inoperative following the inter-communal problems in 1963. The procedure for reference under the above provision is no longer applicable. The Administration of Justice (Miscellaneous Provisions) Law 33/1964 was enacted in order to address a situation of emergency and to set up the necessary judicial machinery for the continued administration of justice. By virtue of this law, the two highest courts, that is, the Constitutional Court and the High Court, were merged into one, the Supreme Court of Cyprus, to which the jurisdiction and powers of the two pre-existing courts were transferred. The establishment and operation of the new Supreme Court was held to be in conformity with the Constitution on the basis of recognised principles of the Law of Necessity (the Attorney-General of the Republic v. Mustafa Ibrahim and others, (1964) C.L.R. 195). As the procedure for reference under Article 144 (1) is no longer applicable in cases other than those of the Family Courts, questions of alleged unconstitutionality are treated as issues of law in the proceedings, subject to revision on appeal in due course, in so far as the lower courts are concerned. All courts when dealing with a case are competent to examine questions of alleged unconstitutionality arising in the case which are material for the determination of any matter at issue.

In the case of the Improvement Board of Eylenja v. Andreas Constantinou (1967) 1 C.L.R. 167, Judge Josephides observed the following:

“Before concluding this judgment, however, I would like to make certain observations with regard to the procedure followed in this case in the District Court. As already stated, the question of the unconstitutionality of the Law was not raised in the pleadings and was not raised at all until the final address of the respondent’s counsel. It is true that following the decision of this Court in the case of the Attorney-General v. Ibrahim 1964 C.L.R. 195, at page 200 et seq., it is no longer necessary to follow the procedure for a reference, under Article 144 of the Constitution, by any Court to the Supreme Constitutional Court, and that all questions of alleged unconstitutionality should be treated as issues of law in the proceedings, subject to revision on appeal in due course. But that does not mean that questions of constitutional importance may be raised in an offhand way without giving the opportunity to the other side of being heard. I am of the view that where a party in a civil proceedings wishes to raise the question of the unconstitutionality of any law, he should follow one of two courses:

(a) he should either raise it specifically with full particulars in his pleading, and refer to the specific provision of the Constitution which is alleged to have been violated by the impugned statute, thus giving the opportunity to the other side of replying by his own pleading; or

(b) if he wishes to raise such a question at a later stage of the proceedings—and indeed it would seem that he has the right to raise such a question at any stage thereof - (see Article 144.1) - then he should do so formally in writing, formulating the question raised in detail, as in paragraph (a) above, so as to give the opportunity to the other side of being heard on the point.

It should perhaps be added that if such a question were raised in the course of the hearing, the trial Court might have to exercise its discretion of granting an adjournment to the other side to enable it to prepare its case. Needless to say, the question of unconstitutionality thus raised must be material for the determination of any matter at issue in such proceedings (Article 144.1).”

The Supreme Court has held in its subsequent case-law that questions of constitutionality have to be raised specifically by the parties, with full particulars in the pleadings, before the first-instance court (see for example, among many authorities, the Republic v. Boyiatzi, (1991) CLR 196; the Republic and others v. Koukkouri, (1993) 3 C.L.R. 598; Varnavas Nicolaou and Sons Ltd v. the Republic, (1998) 3 C.L.R. 862; Mavrommatis v. the Republic, 1998) 3 C.L.R. 910; and Andreas Nicolaou v. Vasou Vasiliou, (1999) 1 (C) C.L.R.. 1566).

In the case of the Republic v. Boyiatzi, (cited above), the Supreme Court held that:

“The constitutionality of a law is a legal issue of peculiar significance and importance. This fact was recognised in the case of The Improvement Board of Eylenja v. Andreas Constantinou (1967) 1 C.L.R. 167. The Court pointed out that the constitutionality of a law or regulation may become a question in issue only after the precise specification of the section or sections of the law which are in dispute and of the constitutional provisions which they violate.”

In the case of Mavrommatis v. the Republic (cited above) the applicant had not raised his complaint of unconstitutionality in his recourse before the Supreme Court (revisional - first-instance jurisdiction) and it was not therefore examined. On appeal the Supreme Court (appeal jurisdiction) agreed with the first-instance court. It further dismissed the appellant’s argument that the first-instance court should have examined the unconstitutionality of the law in question ex officio, irrespective of whether the matter had been raised in the recourse or not.

In the case of Andreas Nicolaou v. Vasou Vasiliou (cited above) the Supreme Court (appeal jurisdiction) stated the following:

“The appellant has not complied with the procedure which has been established by the case-law for raising an issue of unconstitutionality. He should have been raised the issue with precise and full details in his pleading or set it out in a detailed memorandum (see Improvement Board of Eylenja v. Constantinou (1967) 1 C.L.R. 167, Kyriakides and others v. Commissioner of V.A.T. (1999) 2 C.L.R. 75, Varnavas Nicolaou and Sons Ltd v. the Republic (1998) 3 C.L.R 862, the Republic v. Varnavide and others (1998) 3 C.L.R. 851 and Mavrommatis v. the Republic (1998) 3 C.L.R. 910).”

The parties to a case may seek leave to amend their pleadings. Rule 25.1 of the Civil Procedure Rules provides as follows:

“The Court or a Judge may, at any stage of the proceedings, allow either party to alter or amend his endorsement or pleadings, in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”

3. Relevant provisions of the Securities and Cyprus Stock Exchange Law of 1993 (as amended) and relevant case-law

Section 58A (3) (b) of the Securities and Cyprus Stock Exchange Law (Law 14(I)/1993) as amended by Law 42(I)/2000, which entered into force on 7 April 2000, provides as follows:

“Any interested purchaser who has paid any sum or other consideration to an issuer, a company or a person for the purchase of shares either in accordance with the provisions of sub-section (1) above or otherwise, may, after three months have elapsed from the date of the submission of an application for the introduction of the relevant titles on the Stock Exchange or earlier in the event of the rejection of the application, apply in writing for the return of the sum or consideration if the relevant titles have not been given to him or the relevant titles have been given to him but they have not as yet been introduced on the Stock Exchange. In such an event the issuer or company or person who received the sum or consideration must return it to the interested purchaser within ten days of the date when the interested purchaser asked for the return of the sum or consideration, with 6% interest calculated from the date when the application for the introduction of the said titles on the Stock Exchange was made, and return the relevant titles if they have been issued and given to the interested purchaser:

Provided that, notwithstanding the provisions of sub-section (2), the Council may bar an issuer or company which contravenes the provisions of this section from introducing titles on the Stock Exchange.”

“3 (1) Any issuer, company, member of the board of a company or person who has received or has bound any sum or has received any consideration for the sale or offer for sale or acceptance of an offer for the purchase of titles on their behalf or on behalf of any company incorporated or being incorporated before the entry into force of the Securities and the Cyprus Stock Exchange (Amending) (No. 4) Law of 2000, with the prospect and/or representations that the said titles would be introduced on the Stock Exchange, shall within two months or within any other period which will be decided by two-thirds of the interested purchasers and which shall not in any case exceed eight months from the date of entry into force of the Securities and Cyprus Stock Exchange (Amending) (No. 4) Law of 2000 take all the necessary actions for the submission of a duly substantiated and documented application (in accordance with the present Law and the Regulations issued thereunder) for the introduction of the relevant titles on the Stock Exchange.

(2) An omission by an issuer, company, member of the board of a company or any person to act in accordance with the provisions of sub-section (1) above is a criminal offence punishable by imprisonment of up to two years or a fine of up to fifty thousand pounds and/or with both these penalties and entails the compulsory return of any sum or consideration received or the release of any bound sum, with interest of 6%, to the interested purchaser with the return at the same time of the relevant titles if they have been issued and given to the interested purchaser.

(3) Any issuer, company, member of the board of a company or person who has received any sum or any consideration from the sale or offer for sale or acceptance of an offer for the purchase of titles on behalf of any company incorporated or being incorporated before the entry into force of the Securities and the Cyprus Stock Exchange (Amending) (No. 4) Law of 2000, with the prospect or representations that the said titles would be introduced on the Stock Exchange, shall if the relevant titles are not introduced for any reason on the Stock Exchange within three months of the date of the submission of the application for their introduction on the Stock Exchange, or earlier in the event of rejection of the application, and if the interested purchaser asks for it in writing, return the sums or consideration to those who gave them within ten days of the date when the interested purchaser asked for the return of the sum of money or consideration which he paid with 6% interest, calculated from the date of the submission of the application, at the same time as the return of the relevant titles:

Provided that, if the Council ascertains that the application under consideration is duly and sufficiently substantiated and documented in accordance with the Stock Exchange Regulations and that there is no prima facie substantial obstacle to the approval of the application and that the delay in approving the application is not due to the applicant, it may grant a reasonable extension of time to the applicant with regard to the return of the sums received.”

Section 3 (1) above imposes an obligation on any “issuer, company, member of the board of a company or person” to submit an application for the introduction of shares on the Stock Exchange within eight months of the date of entry into force of amending Law 42(I)/2000. Failure to submit such an application is a criminal offence. In the case of Lapertas Fisheries Ltd v. the Police (cited above) the Supreme Court found that the penalisation of failure to submit an application for introducing titles on the Stock Exchange within a fixed time-limit, and in an absolute manner, was an impermissible interference with the right protected by Article 25 (1) of the Constitution and nullified the freedom which that provision guaranteed. It accordingly held that section 3 (1) was unconstitutional.

“1. Every person, alone or jointly with others, has the right to acquire, own, possess, enjoy or dispose of any movable or immovable property and has the right to respect for such right.

2. No deprivation or restriction or limitation of any such right shall be made except as provided in this Article.”

“1. Every person has the right to practise any profession or to carry on any occupation, trade or business. “

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

The Government submitted that the proceedings before the domestic courts did not disclose a violation of Article 6 of the Convention. The applicant company had not raised the question of the unconstitutionality of the relevant law before the domestic courts in compliance with the settled procedure as established by the case-law. In particular, the applicant company had not raised the matter in its pleadings by giving the details required, such as the section or sections of the law in question with the reasons supporting its complaint. This was clear from the Supreme Court’s judgment.

The applicant company disputed the Government’s submissions. It maintained that although the question of unconstitutionality had been raised in a general manner in its statement of defence, this had been expanded upon in the course of the hearing and the plaintiff had been given the opportunity to reply. Furthermore, in the light of Article 144 (1) of the Constitution, the applicant company had raised the matter on appeal in an elaborate and exhaustive manner. Despite this the Supreme Court had refused to examine its complaint, on the ground that it had not been raised properly before the first-instance court. In the applicant company’s view the Supreme Court had incorrectly applied the judgment in the case of Andreas Nicolaou v. Vasou Vasiliou (see above). Consequently, the applicant company claimed that it had been denied proper access to court.

Furthermore, the applicant company maintained that as a result of the Supreme Court’s judgment it had been denied a fair trial. In particular, that court had failed to ensure that the principle of equality of arms had been respected and to rectify the error committed by the first-instance court, which had not agreed to examine its constitutional complaint.

The Court reiterates that Article 6 § 1 secures to everyone the right to have any claim relating to his or her civil rights and obligations brought before a court or tribunal. This “right to a court”, of which the right of access constitutes one aspect, may be relied on by anyone who considers on arguable grounds that an interference with the exercise of his civil rights is unlawful and complains that he has not had the opportunity to submit that claim to a tribunal meeting the requirements of Article 6 § 1 (see, inter alia, Golder v. the United Kingdom, judgment of 21 February 1975, Series A, no. 18, § 36).

In the present case it is undisputed that the applicant company could have raised its complaints of unconstitutionality before the domestic courts. The question is whether the domestic procedural rules for specifying a complaint of unconstitutionality were justified or not.

In this respect, the Court reiterates that the right to a court is not absolute; it is subject to limitations permitted by implication, in particular where the conditions of admissibility of an application are concerned, since by its very nature it calls for regulation by the State, which enjoys a certain margin of appreciation in this regard. However, these limitations must not restrict or reduce a person’s access in such a way or to such an extent that the very essence of the right is impaired; lastly, such limitations will not be compatible with Article 6 § 1 if they do not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (see, among other authorities, Prince Hans-Adam II of Liechtenstein v. Germany [GC], no. 42527/98, § 44, 12 July 2001, ECHR 2001-VII; Edificaciones March Gallego S.A. v. Spain, judgment of 19 February 1998, Reports 1998-I, § 34; Brualla Gómez de la Torre v. Spain, judgment of 19 December 1997, Reports, § 33; and Levages Prestations Services v. France, judgment of 23 October 1996, Reports 1996-V, § 40).

Furthermore, the Court considers that in accordance with the principle of subsidiarity the complaints lodged before it must have been previously raised before the national authorities at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law (see, mutatis mutandis, Fressoz and Roire v. France [GC], no. 29183/95, § 37 ECHR 1999 I; Castells v. Spain, 23 April 1992, § 27, Series A no. 236; and Akdivar and Others v. Turkey, Reports 1996-IV, §§ 65-69).

The Court observes that the Supreme Court has set out in its case-law the conditions for lodging a complaint of unconstitutionality before the domestic courts. It is clear from these that in order for such a complaint to be examined by the competent court, litigants should specify such a complaint with details in their pleadings or set it out in a detailed memorandum before the first-instance court. In the Court’s view it cannot be said that this requirement is such that it impairs the very essence of the right of access to the domestic courts but on the contrary it is legitimate and reasonable considering the significance of matters of constitutionality.

In the present case, the domestic courts did not examine the applicant company’s complaint as it had not complied with the above procedural requirements. As the Supreme Court noted, upholding the decision of the District Court, the applicant company’s complaint at first instance had been formulated in vague and general terms in its statement of defence and did not contain an indication of the articles of the law of which the complaint was made and of the constitutional provisions which they allegedly violated. As it transpires from the judgment of the Supreme Court a matter of constitutionality not raised at first instance cannot be raised on appeal.

The Court points out in this connection that it is in the first place for the national authorities, and notably the courts, to interpret domestic law and that the Court will not substitute its own interpretation for theirs in the absence of arbitrariness (see, mutatis mutandis, Brualla Gómez de la Torre v. Spain, § 31; and Edificaciones March Gallego S.A. v. Spain, § 33, both cited above). This applies in particular to the interpretation by courts of rules of a procedural nature (see Tejedor García v. Spain, 16 December 1997, § 31, Reports 1997 VIII, and Em Linija D.O.O. v. Croatia (dec.), no. 27140/03, 22 November 2007).

Furthermore, the Court observes that the applicant company, which was represented by a lawyer throughout the whole of the domestic proceedings, as well as in the proceedings before the Court, has failed to provide any reasons to justify its failure to set out the relevant complaints in the required manner in its statement of defence, which could have been amended even later to include them (see, mutandis mutandis, Kontos v. Greece, (dec.), no. 18933/03, 26 May 2005).

In the circumstances of the case the Court does not see any reason to find that in reaching its decision not to examine the applicant company’s complaints the Supreme Court acted in an arbitrary manner.

Hence, in the Court’s opinion, it cannot be said that the essence of the applicant company’s right of access to a court was impaired or that the proportionality principle was not respected in the present case.

For these reasons the Court rejects the applicant company’s complaint under Article 6 § 1 of the Convention as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4.

The Government submitted that the applicant company had not exhausted domestic remedies as required by Article 35 § 1 of the Convention. With regard to the first complaint under this head the Government maintained that the applicant company had not given the domestic courts the opportunity to examine the matter as it had not raised this complaint properly before them. With regard to the second complaint, they stated that the applicant company had not properly raised the issue of return of the shares before the domestic courts. In any event, the Government noted that the applicant could have brought separate civil proceedings against the investor claiming the return of the share titles.

The applicant company disagreed with the Government’s submissions and submitted that it had raised its complaints before the Supreme Court in its grounds of appeal. The Supreme Court had, however, refused to examine these complaints and had dismissed the appeal in its entirety. It could not be said therefore that the applicant company had not brought its complaints before the domestic courts. The applicant company maintained that it had exhausted all possible remedies.

With regard to the substance of the case, the applicant company claimed that there had been an interference with its rights under Article 1 of Protocol No. 1. In the applicant company’s view this interference had not been in accordance with the relevant domestic law, as this had not been in force when the applicant had offered its shares to the public, and did not pursue a legitimate aim. In any event, the applicant company argued that the requirement of proportionality under this provision had not been met. Finally, the applicant company submitted that it had not received any compensation for deprivation of its property rights.

The Court reiterates that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention requires applicants first to use the remedies provided by the national legal system before turning to the Court. The rule is based on the assumption that the domestic system provides an effective remedy in respect of the alleged breach. While in the context of machinery for the protection of human rights the rule of exhaustion of domestic remedies must be applied with some degree of flexibility and without excessive formalism, it does not require merely that applications should be made to the appropriate domestic courts and that use should be made of remedies designed to challenge impugned decisions which allegedly violate a Convention right. It normally requires also that the complaints intended to be made subsequently at the international level should have been aired before those same courts, at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law (see, among many other authorities, Fressoz and Roire v. France, § 37, cited above).

With regard to the first part of the applicant company’s complaint the Court refers to its findings concerning the applicant’s complaint under Article 6 of the Convention. In particular, it points out that the applicant company had failed to comply with the procedural requirements for raising its constitutional complaints before the first-instance court. Further, with regard to the second part of the applicant company’s complaint, as the Government submit, the issue of return of the shares was not properly raised in the domestic proceedings. In any event, as the Government also point out, the applicant could have brought separate civil proceedings requesting the return of the share titles. The applicant company however did not bring such proceedings and did not question their effectiveness. Moreover, the applicant company has not put forward any reason absolving it from exhausting this remedy.

Consequently, the Court considers that the complaint under this provision must be rejected for non-compliance with the rule of exhaustion of domestic remedies pursuant to Article 35 § 1 of the Convention.

The applicant company, however, argued that it did not have an effective domestic remedy at its disposal for the violation of its constitutional rights.

The Court notes that it has found the applicant’s complaint under Article 6 of the Convention to be manifestly ill-founded. It reiterates in this respect that Article 13 guarantees the availability of a remedy at a national level to enforce - and hence to allege non-compliance with - the substance of Convention rights and freedoms in whatever form they may happen to be secured in the domestic legal order. However, Article 13 cannot reasonably be interpreted so as to require a remedy in domestic law in respect of any supposed grievance under the Convention that an individual may have, no matter how unmeritorious his complaint may be: the grievance must be an arguable one in terms of the Convention (see Boyle and Rice v. the United Kingdom, Series A no. 131, p. 23, § 52). In view of its conclusion above, the Court considers that the applicant company has no arguable claim of a violation of its rights under Article 6, which would have required a remedy within the meaning of Article 13.

The Court further observes that it has concluded that the applicant company’s complaint under Article 1 of Protocol No. 1 is inadmissible for non-exhaustion of domestic remedies. It follows that the applicant company had remedies at its disposal which were compatible with the guarantees of Article 13 of the Convention (see Akdivar,§ 65, cited above).

Accordingly, this part of the application is manifestly ill-founded within the meaning of Article 35 §§ 3 and 4 of the Convention.

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You are here: BAILII >> Databases >> European Court of Human Rights >> INVESTYLIA PUBLIC COMPANY LTD v Cyprus - 13832/05 [2009] ECHR 1519 (17 September 2009) URL: http://www.bailii.org/eu/cases/ECHR/2009/1519.html Cite as: [2009] ECHR 1519