“This case is unusual, yet important and also familiar”, was the opening statement by Mr. Jeremy McBride (Croatian counsel) at the admissibility hearing before the Grand Chamber of the European Court of Human Rights (the Court or ECtHR) in the case of Slovenia v. Croatia held on June 12. The case is also hot since Slovenia expects the Court’s decision on the admissibility by the end of 2019 or in the first half of 2020.
The case is unusual because it is the first EU inter-state application case and it is all about the rights of a legal person which can be classified as a governmental organization. Namely, Slovenia sued Croatia before the Court for alleged human rights violations of the state-owned bank Ljubljanska banka (LB) in Croatia. The case is familiar because the Court previously decided that LB is a governmental organization and therefore it does not have locus standi under Art 34 of the European Convention on Human Rights (the Convention) (see cases Ališić and Ljubljanska banka). The problem occurred during the era of Socialist Federal Republic Yugoslavia. It concerns Yugoslav banking system problems which emerged after the dissolution of Yugoslavia.
Slovenia states that the purpose of the case is a just solution for the old foreign-currency savings problem. By virtue of the Ališić judgment, Slovenia was obliged to pay the vast majority of old foreign-currency savings in Yugoslavia. Relying on the findings in that case, Slovenia expects the Court to remedy violation of LB’s rights committed by Croatia.
The factual background and the Court’s findings in Ališić and Ljubljanska banka cases are explained in detail in Janja Hojnik’s post on this blog. Therefore, I will not elaborate on the facts further, nor will I consider whether Croatian courts violated LB’s rights and denied justice. Instead, I will focus on one issue of importance: whether a state can bring an inter-state application before the ECtHR while at the same time the alleged victim cannot file an individual application
One important issue for the Court to resolve
Can Slovenia claim that Croatia violated LB’s rights under the Convention even though LB itself is not authorized to file an individual application?
Slovenia claims that Art. 33 (an inter-state application) and 34 (an individual application) are not interdependent. In a case in which a subject (legal person) cannot file an individual application against the State X, then the State Y is entitled to file an inter-state application against State X. Why? Because Art. 34 is a procedural provision. It refers solely to the question of locus standi before the Court. It has nothing to do with substantive rights guaranteed by the Convention. Slovenia further argues that under Art. 1 everyone enjoys rights under the Convention. Everyone is used in Art. 6 and every natural or legal person is contained in Art. 1 of the Protocol 1. Slovenia insists on the claim that an entity which is not a non-governmental organization can enjoy Convention rights, even though it is not one of the High Contracting Parties and if it is not its organ. The Convention protects LB since it is not a Slovenian organ and does not form part of the Government. A contrario, Croatia argues that this case is all about the economic interest of a state (Slovenia) and that it would be illogical to think that LB can enjoy rights under the Convention since it is a public law subject and controlled by the Slovenian Government.
Thus, the Court should decide on two questions: (1) who is everyone under Art. 1 of the Convention? and (2) is the first question a question of merits or a question of admissibility?
Who is everyone?
The first and probably the most persuasive argument for the Croatian side is the practical and effective rights principle. In the famous Artico case, the Court established that “the Convention is intended to guarantee not rights that are theoretical or illusory, but rights that are practical and effective”(Artico v. Italy, § 33). Even though this holds primarily for the rights of individuals vis-à-vis states and forbids the High Contracting Party to abuse the right to establish the national legal system in a certain model, I think it can be applied in toto in this case. What is more illusionary than to say that one enjoys rights, but that it cannot protect them before the Court? That would be the case if we accept that LB can enjoy rights (e.g. the right to a fair trial or property), but is not entitled to bring a claim before the Court. It simply contravenes the power of logic.
The second argument in favor of Croatia concerns the treaty interpretation. Art. 31 of the Vienna Convention on the Law of Treaties (VCLT) stipulates that a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose. The ordinary meaning of everyone is literarily every single person. Nevertheless, the context is also relevant. The main component of the context is a text of a treaty. As professor Kolb states – the ordinary meaning is the starting point in an interpretation process, but it is not “necessarily its point of arrival” (R. Kolb,The Law of Treaties: An Introduction, p. 136). Furthermore, the Court often relies on the VCLT and affirms the systematic (contextual) interpretation: “the Convention must also be read as a whole, and interpreted in such a way as to promote internal consistency and harmony between its various provisions” (Magyar Helsinki Bizottság v. Hungary, §120). Bearing that in mind, Art. 34 is the constituent part of the context for the sake of interpretation of Art. 1. Therefore, professor Schabas states that the word everyone “should be read in conjunction with Article 34” (European Convention on Human Rights: Commentary, p. 92). Austrian judge and professor Grabenwarter argues that “Art. 34 determines who is subjected to the rights of the Convention” (European Convention on Human Rights: Commentary, p. 3). Thus, the internal consistency and harmony interpretation approach results in the symbiotic tie between Art. 1 and Art. 34.
Who is everyone – the question of the merits or the admissibility?
If one accepts that the Croatian argumentation is more persuasive and that LB cannot be the beneficiary of the Convention rights, does this mean that the Court should declare the inter-state application inadmissible? Does it mean that the application is manifestly ill-founded or incompatible with the Convention ratione materiae? By virtue of Art. 35, this cannot be the case. Art. 35 stipulates only two conditions for dismissing an inter-state application: (1) non-exhaustion of domestic remedies and (2) six months rule. The European Commission on Human Rights confirmed that an inter-state application cannot be declared manifestly inadmissible or inadmissible for any reason stated in the Art. 35 (3) (Ireland v. the United Kingdom). Only an individual application can. The Commission stated that Article 27 para. 2 [new Art. 35 (2)] “which permits the Commission to reject applications inter alia on the ground that they are incompatible with the provisions of the Convention, does not apply in respect of applications submitted under Article 24 [new Art. 33].”.
Nevertheless, the Court left a possibility to dismiss an inter-state application in exceptional cases. It decided that the above-mentioned rules “cannot prevent the Court from establishing already at this preliminary stage, under general principles governing the exercise of jurisdiction by international tribunals, whether it has any competence at all to deal with the matter laid before it.” (Georgia v. Russia (III), § 64). What are general principles governing the jurisdiction exercise of the Court? Is it possible to argue that the Court does not have any competence to deal with this inter-state application since the Convention does not guarantee rights to LB? I would not go that far. Art. 33 stipulates that “the jurisdiction of the Court shall extend to all matters concerning the interpretation and application of the Convention and the Protocols”. The answer to the question whether LB can enjoy Convention rights or not is a matter of “interpretation of the Convention”. Therefore, I do not see any reason why this particular inter-state application should be declared inadmissible solely on this ground. At this point, the Slovenian conclusion that this is not an issue that is decisive for the admissibility stage is quite correct. Risini claims the same – this question “must be decided at the level of the merits” (The Inter-State Application under the European Convention on Human Rights: Between Collective Enforcement of Human Rights and International Dispute Settlement, p. 53).
CJEU’s case-law – conflict between two European courts?
During the hearing, Slovenia relied on the CJEU’s decision that it is irrelevant if a person is State entity or not for fundamental rights protection cases (see Bank Saderat Iran, par. 47 and 50; Bank Mellat, par. 49 and 51). These findings hold for the application of the Charter of Fundamental Rights of the European Union (the Charter). The General Court explained this conclusion in more detail. It first considered the text of the Charter and EU treaties. It noted that there are not “any provisions which state that legal persons which are emanations of States are not entitled to the protection of fundamental rights” and that the provisions which the bank had invoked contain the word everyone. It certainly used the ordinary meaning interpretation method. Secondly, it stated that Art. 34 of the Convention is a procedural provision and it cannot be applied before the Luxembourg court. It also referred to the Court’s case-law (Islamic Republic of Iran Shipping Lines v Turkey, § 81) and claimed that the intention of Art. 34 “is to ensure that a State which is a party to the ECHR is not both applicant and defendant before that court” (General Court, Bank Sadeet Iran, par. 34-36). Considerations of space do not permit me to discuss the CJEU’s reasoning and the issue whether a State entity can benefit from human rights treaties.
Still, it is useful to explain the possible Court’s response to the Slovenian argument. If one assumes that the Court is going to find that LB cannot enjoy Convention rights, then there is a potential conflict (negative aspect of international law fragmentation) between the Court and the CJEU. To avoid this, the Court can use argumentum a contrarioon the CJEU’s reasoning. Namely, CJEU emphasized that there is no provision in EU Law which limits governmental organizations. Argumentum a contrario – such limitation exists by the virtue of Art. 34 of the Convention. EU courts apply the Charter, but the Court applies the Convention. Thus, there can be no conflict here since the Charter and the Convention, while similar, are still different instruments.
I think that Croatian arguments regarding LB’s status are more persuasive. Nevertheless, this cannot be an obstacle to proceeding to the merits phase. Whether LB can enjoy substantive Convention rights is a question for the merits. Regarding the CJEU’s case-law, there may be a potential problem. If the Court decides in favour of Croatia in the merits (by answering on who is everyone), then we will face the following situation – within the European legal space, there will be two opposite rules on who can be a beneficiary of human rights treaties. The described argumentation model can be a practical tool and a smooth way for the Court to avoid the discussion whether it is possible and logical to allow State entities to claim human rights violations.