CASE OF INTERNATIONAL BANK FOR COMMERCE AND DEVELOPMENT AD AND OTHERS v. BULGARIA

Conclusions: Preliminary objection joined to merits and dismissed (Article 35-1 – Exhaustion of domestic remedies)
Remainder inadmissible Violation of Article 1 of Protocol No. 1 – Protection of property (Article 1 para. 2 of Protocol No. 1 – Control of the use of property) Violation of Article 1 of Protocol No. 1 – Protection of property (Article 1 para. 2 of Protocol No. 1 – Control of the use of property) Violation of Article 6 – Right to a fair trial (Article 6 – Civil proceedings Article 6-1 – Access to court Fair hearing
Adversarial trial) Violation of Article 1 of Protocol No. 1 – Protection of property (Article 1 para. 2 of Protocol No. 1 – Control of the use of property) Violation of Article 13 – Right to an effective remedy
Pecuniary damage – claim dismissed (Article 41 – Pecuniary damage
Just satisfaction) Non-pecuniary damage – claim dismissed (Article 41 – Non-pecuniary damage Just satisfaction)

FIFTH SECTION

CASE OF INTERNATIONAL BANK FOR COMMERCE AND DEVELOPMENT AD AND OTHERS v. BULGARIA

(Application no. 7031/05)

JUDGMENT

STRASBOURG

2 June 2016

Request for referral to the Grand Chamber pending

This judgment will become final in the circumstances set out in Article 44 ? 2 of the Convention. It may be subject to editorial revision.

TABLE OF CONTENTS
PROCEDURE 1
THE FACTS 3
I. THE CIRCUMSTANCES OF THE CASE 3
A. The bank?s shareholders and management 3
B. The general meetings of the bank?s shareholders on 24 and 27 June 2004 3
C. The Sofia City Court?s decisions to register the resolutions adopted at the two general meetings of shareholders 5
D. The criminal proceedings against Mr Bonev, Mr Panev and Mr Ivanov 6
1. The proceedings against Mr Bonev, Mr Panev and Mr Ivanov 6
2. The proceedings against Mr Panev and Mr Ivanov 7
E. The service contracts between the bank and Mr Panev, Mr Ivanov and Mr Radev and their attempt to take up office 8
F. The proceedings before the prosecuting authorities 8
G. The share transfer 10
H. The legal challenges against the Sofia City Court?s registration decisions 11
1. The requests for revision 11
2. The claims under section 74 of the Commerce Act 1991 11
I. Measures taken by the BNB in relation to the bank 12
J. The bank?s winding-up 15
K. The freezing of Mr Panev?s and Mr Ivanov?s bank accounts 16
II. RELEVANT DOMESTIC LAW 17
A. The register of companies and legal challenges against entries in it and against resolutions of the general meeting of a company?s shareholders 17
B. Powers of the prosecuting authorities under section 119(1)(6) of the Judiciary Act 1994 17
C. The BNB?s powers in relation to commercial banks and the rules governing bank insolvency 17
D. Freezing of the assets of managers of insolvent banks 19
THE LAW 19
I. PRELIMINARY PROCEDURAL POINTS 19
II. STANDING TO COMPLAIN ON BEHALF OF THE BANK 20
III. THE PROSECUTING AUTHORITIES? DECISIONS WITH RESPECT TO THE BANK?S MANAGEMENT 21
Article 1 of Protocol No. 1 (protection of property) 21
Article 6 ? 1 of the Convention (right to a fair hearing) 21
Article 13 of the Convention (right to an effective remedy) 21
A. The parties? submissions 22
B. The Court?s assessment 22
IV. THE REVOCATION OF THE BANK?S LICENCE 23
A. The parties? submissions 23
B. The Court?s assessment 24
V. THE PROCEEDINGS IN WHICH THE BANK WAS DECLARED INSOLVENT 25
A. The parties? submissions 25
B. The Court?s assessment 25
VI. THE FREEZING OF MR PANEV?S AND MR IVANOV?S BANK ACCOUNTS 27
A. The parties? submissions 27
B. The Court?s assessment 27
VII. THE CRIMINAL PROCEEDINGS 29
A. The parties? submissions 29
B. The Court?s assessment 29
VIII. THE TRAVEL BANS 31
A. The parties? submissions 31
B. The Court?s assessment 32
IX. OTHER ALLEGED VIOLATIONS OF THE CONVENTION AND PROTOCOL No. 1 32
X. APPLICATION OF ARTICLE 41 OF THE CONVENTION 34
A. Pecuniary damage 34
B. Non-pecuniary damage 36
C. Costs and expenses 37
D. Default interest 38
APPENDIX 41

In the case of International Bank for Commerce and Development AD and Others v. Bulgaria,
The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:
Angelika Nu?berger, President,
Khanlar Hajiyev,
Erik M?se,
Yonko Grozev,
S?ofra O?Leary,
Carlo Ranzoni,
M?rti?? Mits, judges,
and Claudia Westerdiek, Section Registrar,
Having deliberated in private on 26 April 2016,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 7031/05) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (?the Convention?) on 17 February 2005.
2. The application was in the first place lodged on behalf of OMISSIS (?the bank?), a company founded in 1991 that had its registered office in Sofia, Bulgaria. On 28 May 2005 the Bulgarian National Bank (?the BNB?) placed the bank under compulsory administration, and on 14 June 2005 revoked its licence (see paragraphs 64 and 67 below). On 29 June 2005 the Sofia City Court declared the bank insolvent and made an order for it to be wound up. On 17 August 2007 the same court closed the winding-up proceedings in respect of the bank and struck it out of the register of companies (see paragraph 72 below). The application was introduced on the bank?s behalf by the remaining applicants.
3. The first of those applicants, OMISSIS, is a Bulgarian and Swiss national born in 1960 and living in Sofia. He was a shareholder in the bank (see paragraph 11 below).
4. The second and third of those applicants, OMISSIS, are Bulgarian nationals born respectively in 1963 and 1937 and living respectively in Sofia and Varna. They said that on 24 and 27 June 2004 they had been appointed as members of the bank?s executive board (see paragraphs 16 and 17 below).
5. The fourth of those applicants, OMISSIS, is a Bulgarian national born in 1961 and living in Sofia. He said that on 24 and 27 June 2004 he had been appointed as executive director of the bank and chairman of its executive board (see paragraphs 16 and 17 below).
6. The application was initially lodged also on behalf of twenty companies which were likewise shareholders in the bank (see paragraph 11 below):
OMISSIS
In a letter of 16 November 2005 those companies said that they wished to withdraw their complaints because they had transferred all of their shares in the bank to Mr Bonev (see paragraph 51 below), and because OMISSIS?s failure to pay for those shares had become an internal issue between them following the placing of the bank in insolvent liquidation.
7. The applicants were represented by OMISSIS, lawyers practising in Sofia. The Bulgarian Government (?the Government?) were represented by their Agent, Ms M. Dimova, of the Ministry of Justice.
8. The applicants alleged, in particular, that (a) the prosecuting authorities had unlawfully interfered with the bank?s management; (b) the revocation of the bank?s licence by the BNB had been unlawful; (c) the proceedings in which the bank had been declared insolvent had not been fair; and (d) the freezing of OMISSIS personal bank accounts had been disproportionate and not subject to review.
9. On 25 September 2012 the Court decided to give the Government notice of the application.
10. The Swiss Government, having been apprised of their right to intervene in the case in view of OMISSIS Swiss nationality (Article 36 ? 1 of the Convention and Rule 44 ? 1 of the Rules of Court), said, in a letter of 2 October 2012, that they did not wish to avail themselves of that opportunity.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
A. The bank?s shareholders and management
11. The bank was founded and entered in the register of companies in 1991. According to the BNB?s records, its shareholders on 31 March 2004 were the second applicant, OMISSIS, who held 4.98% of the shares; his brother, Mr P.E.B., who also held 4.98% of the shares; the twenty companies listed in paragraph 6 above, each of which held between 4.98% and 2.81% of the shares; a Mr B.P., who held 0.19% of the shares; and a Mr P.B., who held 1.20% of the shares (for a full breakdown, see the Appendix).
12. At the material time the bank had a two-tier management system, consisting of an executive board and a supervisory board. Mr Panev and Mr Ivanov were members of the executive board between 30 May 2003 and 5 April 2004. In May and June 2004 Mr B.P. (see paragraph 11 above) was member of the bank?s executive board and one of its executive directors.
B. The general meetings of the bank?s shareholders on 24 and 27 June 2004
13. In early 2004 tensions arose among the bank?s shareholders and between some of the shareholders and the bank?s management. On 18 March 2004 Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd, acting in their capacity as shareholders who had held more than five per cent of the bank?s shares for more than three months, asked the executive board to call a general meeting of shareholders with a view to adopting amendments to the bank?s articles of association, reducing the number of members of the bank?s executive and supervisory boards, and replacing some of the boards? members. The same day the executive board agreed to call such a meeting, but on 23 March 2004 the supervisory board set its resolution aside and called a general meeting of shareholders with a different order of business, to be held on 24 June 2004.
14. Thereupon Mr Bonev, Card Transaction Services Ltd, Flavors, Fragrances and Chemicals (FFCH) Ltd, Geneltech Ltd, General Foods Int?l Corp, Industrial Finance Int?l Corp, Megatours-A New Dimension in Travel-Inc, Petrofinance Ltd and V.V.V. Holdings Corp, acting in their capacity as shareholders who had held more than five per cent of the bank?s shares for more than three months, applied to the Sofia City Court for an order adding the points that they wished to have included on the general meeting?s order of business. On 14 May 2004 the chairman of the bank?s executive board and one of its executive directors objected to the request, saying that according to the bank?s register of shareholders, the persons who had made the request did not hold enough shares to be entitled to make one, and that the companies which had made the request had not produced proper credentials. On 8 June 2004 the Sofia City Court made an order in the terms sought by Mr Bonev and the companies, noting that they had proved that they had held the required number of shares for more than three months through notarised declarations.
15. Separately, Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd, again acting in their capacity as shareholders who had held more than five per cent of the bank?s shares for more than three months, asked the Sofia City Court to authorise them to call a separate general meeting of shareholders, with the order of business that they wished to have. To establish their capacity as shareholders, they enclosed with their request provisional share warrants issued in 2003. On 17 May 2004 the Sofia City Court upheld the request. On 20 and 26 May 2004 the chairman of the bank?s executive board and one of its executive directors, Mr B.P., asked the court to vary its order, arguing that the provisional share warrants had not been registered in the bank?s register of shareholders, and that the documents enclosed with the applicants? request had not been issued by persons authorised to act on the bank?s behalf. On 20 and 28 May 2004 the court refused to vary its order, holding that by law that was not possible.
16. On 24 June 2004 proxies representing the twenty companies listed in paragraph 6 above showed up at the bank?s premises with a view to taking part in the general meeting of shareholders. Mr P.E.B, Mr B.P. and Mr P.B., who between them held 6.37% of the bank?s shares, were also represented. The polling commission entrusted by the bank?s executive board to check the shareholders? credentials refused to accept the provisional share warrants through which the twenty companies sought to establish their capacity as shareholders. Concluding that only 6.37% of the shares were duly represented, the commission decided to adjourn the meeting for another date. A dispute ensued, and the twenty companies? proxies held a parallel general meeting in the stairwell of the bank?s building. They resolved to amend the bank?s articles of association, reduce the number of members of its executive and supervisory boards from five to three, remove four members of the supervisory board and four members of the executive board, including Mr B.P., and appoint two new members of the supervisory board and three new members of the executive board, who were to be also executive directors: the applicants Mr Panev, Mr Ivanov and Mr Radev.
17. On 27 June 2004 Mr Bonev?s and the twenty companies? proxies tried to hold another general meeting of shareholders at the Sofia Hilton hotel, as authorised by the Sofia City Court (see paragraph 15 above). Mr P.E.B, Mr B.P. and Mr P.B. were also represented. The police showed up, trying to seize the provisional share warrants which Mr Bonev?s and the twenty companies? proxies were supposed to use to establish their capacity as shareholders, but could apparently not find them. The police were acting on an order issued by the prosecuting authorities in connection with criminal proceedings concerning the genuineness of those warrants, which they had opened pursuant to complaints by Mr B.P. (see paragraph 22 below). In view of the failure of the proxies to produce valid share warrants, the polling commission entrusted by the bank?s executive board to check the shareholders? credentials found that only 6.37% of the shares were duly represented and decided to adjourn the meeting for another date. However, Mr Bonev?s and the twenty companies? proxies held a parallel general meeting in an adjoining room, and adopted the same resolutions as the ones adopted on 24 June 2004.
C. The Sofia City Court?s decisions to register the resolutions adopted at the two general meetings of shareholders
18. On 16 August 2004 the Sofia City Court, sitting in private, decided to enter the changes resolved upon at the general meeting on 24 June 2004 (see paragraph 16 above) in the register of companies. The court found that the change in the bank?s management and the amendment of its articles of association had been duly carried out. It registered the amendment to the bank?s articles of association and the reduction of the number of members of its executive and supervisory boards from five to three. The court also struck out of the register four members of the supervisory board and four members of the executive board, including Mr B.P., and registered two new members of the supervisory board and three new members of the executive board, who were also to be executive directors: the applicants Mr Panev, Mr Ivanov and Mr Radev. Lastly, the court registered Mr Panev as chairman of the executive board. The court specified that its decision was to be entered in the register of companies and published, and that it was not subject to appeal.
19. The court?s decision was entered in the register of companies the afternoon of the following day, 17 August 2004. In the morning a notary sent to the register of companies by Mr B.P. certified that the decision had not yet been entered in the register. The same day the court issued a certificate reflecting the changes in the bank?s registration.
20. On 24 August 2004 the Sofia City Court, sitting in private, decided to enter the changes and amendments resolved upon at the general meeting on 27 June 2004 (see paragraph 17 above) in the register of companies. The court found that the changes in the bank?s management and the amendment of its articles of association had been duly made. The changes registered by the court were identical to the ones registered with its decision of 16 August 2008 (see paragraph 18 above).
21. Subsequently, Mr B.P. and Mr P.B. sought revision of those two decisions and brought claims for the annulment of the shareholder resolutions whose registration they ordered (see paragraphs 52-58 below).
D. The criminal proceedings against Mr Bonev, Mr Panev and Mr Ivanov
1. The proceedings against Mr Bonev, Mr Panev and Mr Ivanov
22. On 19 May 2004 Mr B.P. wrote to the police and to the Sofia District Prosecutor?s Office, alleging that the provisional share warrants on which Mr Bonev and Flavors, Fragrances and Chemicals (FFCH) Ltd had relied to obtain the court order of 17 May 2004 (see paragraph 15 above) were false and did not correspond to the entries in the bank?s register of shareholders. He pointed out that the warrants had been signed by Mr Panev and Mr Ivanov, and asked the authorities to open criminal proceedings and check whether any criminal offences had been committed in relation to that.
23. On 4 June 2004 the police issued an order for Mr Panev?s arrest for twenty-four hours. He was arrested and released later the same day. It does not appear that he has attempted to seek judicial review of his detention.
24. In the following days Mr Panev and Mr Ivanov were charged with making false private documents. Mr Bonev was, for his part, charged with using a false official document. The charges were later amended: Mr Panev and Mr Ivanov were charged with making false official documents, and Mr Bonev was charged with knowingly using a false document.
25. On 11 June 2004 the Sofia District Prosecutor?s Office, noting that Mr Panev and Mr Ivanov had in the past four years travelled extensively out of the country, which in its view meant that they could seek to evade criminal liability by fleeing abroad, banned them from leaving the country. On 23 July 2004 it made the same decision with respect to Mr Bonev.
26. On 29 December 2004 the Sofia District Prosecutor?s Office turned down Mr Bonev?s, Mr Panev?s and Mr Ivanov?s requests that the travel bans be lifted. It reasoned that, in view of the advanced stage of the pre-trial proceedings, their prolonged absence from the country might cause delays.
27. The preliminary investigation was completed in the end of December 2004 and on 11 January 2005 the three applicants were indicted. However, finding that the indictment suffered from various defects, on 25 January 2005 the Sofia District Court referred the case back to the prosecuting authorities.
28. On 14 June 2005 the Sofia District Prosecutor?s Office turned down a request by Mr Bonev to be allowed to travel to Switzerland for business meetings in July, August, September and October 2005.
29. On 27 June 2005 the Sofia District Prosecutor?s Office re-submitted the indictment, and on 22 July 2005 the Sofia District Court set the case down for trial on 6 December 2005.
30. In the meantime, on 11 July 2005 the Sofia District Court refused a request by Mr Bonev to be allowed to travel to Switzerland for business meetings. It held that there was no evidence that he had a pressing need to travel there. However, on 21 September and 19 October 2005 the court allowed Mr Bonev to travel abroad in October and the first half of November 2005 respectively. On 27 October 2005 it allowed him to travel to Turkey in the end of November 2005 for a business seminar.
31. The Sofia District Court heard the case on 6 December 2005 and 14 March, 5 June and 19 October 2006.
32. At the hearing on 6 December 2005, noting that Mr Bonev had duly appeared and had not attempted to flee during the investigation, the court allowed him to travel abroad during the period until the following hearing. On 17 February 2006 the court allowed Mr Bonev to travel to Belgium in the second half of March 2006 for business meetings.
33. On 4 April, 26 April and 5 May 2006 respectively the Sofia District Court lifted the travel bans imposed on Mr Bonev, Mr Panev and Mr Ivanov.
34. On 19 October 2006 the Sofia District Court acquitted Mr Panev, Mr Ivanov and Mr Bonev. Its judgment was not appealed against and became final on 4 November 2006.
2. The proceedings against Mr Panev and Mr Ivanov
35. On 14 and 18 October 2004 respectively Mr Ivanov and Mr Panev were charged with forgery offences in connection with their participation in the general meeting of shareholders of the bank on 24 June 2004 (see paragraph 16 above). On 18 January 2005 the Sofia District Prosecutor?s Office banned them from leaving the country. Four other persons were charged as well.
36. On 13 April 2005 Mr Panev, Mr Ivanov and their co-accused were indicted. However, finding that the indictment suffered from various defects, on 3 June 2005 the Sofia District Court referred the case back to the prosecuting authorities.
37. On 27 November 2005 the Sofia District Prosecutor?s Office re submitted the indictment. The Sofia District Court heard the case on four unspecified dates in 2005-06.
38. On an unspecified date in the autumn of 2005 Mr Panev and Mr Ivanov asked the Sofia District Court to lift the travel bans. In a decision of 24 November 2005 the court refused their request, but on 4 April 2006 lifted the bans.
39. On 11 July 2006 the Sofia District Court acquitted Mr Panev, Mr Ivanov and their four co-accused. On 25 July 2006 the prosecution appealed but then withdrew its appeal, and on 18 December 2006 the Sofia City Court discontinued the appeal proceedings.
E. The service contracts between the bank and Mr Panev, Mr Ivanov and Mr Radev and their attempt to take up office
40. On 16 August 2004 Mr Panev, Mr Ivanov and Mr Radev entered into service contracts with the bank, represented by a member of its supervisory board. They undertook to sit on the bank?s executive board for three years following the registration of the resolutions of the general meeting of shareholders to appoint them as members of that board. In return, each of them was to receive a monthly salary of 10,000 Bulgarian levs (BGN) plus a host of other benefits.
41. The same day Mr Panev and Mr Ivanov tried to take up their duties, but the bank?s former management refused to vacate their offices and called the police, saying that they were not aware of any resolution to remove them. The next day, 17 August 2004, the bank?s former management forced the applicants out of the bank?s building, with help from the police. It appears that the police were acting on orders from the prosecuting authorities (see paragraph 42 below).
F. The proceedings before the prosecuting authorities
42. On 17 August 2004 the Sofia City Prosecutor?s Office ordered the police to assist Mr B.P. in preventing any changes in the status quo in the bank?s management and operations, and to warn Mr Panev, Mr Ivanov and Mr K.Y., a newly registered member of the bank?s supervisory board, to refrain from any actions in relation to that until the matter had been duly resolved by the competent authorities. It relied on section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below), and reasoned that the Sofia City Court?s decision of 16 August 2004 (see paragraph 18 above) was being verified by the Sofia District Prosecutor?s Office, that the record drawn up by the notary public (see paragraph 19 above) made it apparent that that decision had not been entered in the register of companies, which meant that it did not in fact exist, that Mr B.P. had applied to the Supreme Court of Cassation to reopen the proceedings and annul that decision (see paragraph 52 below), and that by trying to put the decision into effect Mr Panev, Mr Ivanov and Mr K.Y. were interfering with the bank?s normal business. The prosecutor found that, in view of the possibility for them to dispose of the bank?s documents and assets and imperil the interests of the bank?s depositors, that gave rise to a real risk of irreparable damage.
43. Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Sofia Appellate Prosecutor?s Office, arguing that the order was unlawful and arbitrary. They pointed out that the Sofia City Court?s decision was valid and immediately enforceable, that no appeal lay against it to the Supreme Court of Cassation, and that the prosecuting authorities had no power to stay its enforcement. The question whether a judicial decision had been entered in the register of companies was to be established on the basis of official documents issued by the competent court, not of a record drawn up by a notary public outside his competence. The certificate issued by the Sofia City Court (see paragraph 19 above) showed that its decision had in fact been duly entered in the register of companies.
44. On 23 August 2004 the Sofia Appellate Prosecutor?s Office dismissed the appeal. It noted that the Sofia City Prosecutor?s Office had been spurred into action by information, given to it by the Sofia District Prosecutor?s Office, that the Sofia City Court?s decision to make changes in the bank?s registration might have been based on false documents. At the time when the Sofia City Prosecutor?s Office had issued its order, the Sofia City Court?s decision had not yet been entered in the register of companies. Proceedings against that decision were pending before the Supreme Court of Cassation. All of that showed that until the Sofia District Prosecutor?s Office had completed its inquiry into the matter or until the Supreme Court of Cassation had given judgment, there would continue to exist a risk of changes in the status quo and irreparable damage to the bank.
45. Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Supreme Cassation Prosecutor?s Office, reiterating their arguments.
46. On 7 September 2004 the Supreme Cassation Prosecutor?s Office dismissed the appeal. It reasoned that it was beyond doubt that the prosecuting authorities were faced with a judicial decision under challenge and with evidence that that decision had been obtained through the use of false documents. Moreover, the decision had been issued in spite of a decision staying the registration proceedings and the existence of pending contentious proceedings. The appellants? argument that the Supreme Court of Cassation had no jurisdiction to hear a legal challenge against the Sofia City Court?s decision was unavailing because the prosecuting authorities were not competent to make pronouncements on such points. Faced with pending judicial proceedings and a pending criminal investigation, they were bound to take measures to prevent changes in the status quo before any judicial resolution of the matter. The appellants? attempts to change that status quo were premised on rights acquired through a judicial decision based on false documents. It was necessary for the judiciary to check the lawfulness of that decision and for the investigating authorities to gather evidence with a view to uncovering the truth. The bank had to be protected against damage flowing from offences that had already been committed and from the risk of future offences. The prerequisites of section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below) were therefore in place.
47. Mr Panev, Mr Ivanov and Mr K.Y. appealed to the Chief Prosecutor, arguing that the prosecuting authorities had acted in a patently unlawful way and in excess of their powers. Their decisions had been based on false findings of fact, and on the finding ? not based on a final conviction ? that offences had been committed by them.
48. On 28 September 2004 the head of the economic crime division of the Supreme Cassation Prosecutor?s Office, to whom the case had been assigned, dismissed the appeal. He reasoned that the prosecuting authorities had acted lawfully and within their powers under section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 below). The Sofia District Prosecutor?s Office was investigating the making of false documents with a view to obtaining changes in the bank?s registration, and the Sofia City Court?s decision had been challenged before the Supreme Court of Cassation. There had therefore been a need to preserve the status quo with a view to ensuring the normal operation of the bank.
49. The same day, 28 September 2004, the Sofia District Prosecutor?s Office ordered the police to take measures to ensure compliance with the Sofia City Prosecutor?s Office?s order of 17 August 2004 (see paragraph 42 above) and the preservation of the status quo in the bank. It noted that criminal proceedings had been instituted against members of the bank?s newly appointed management in relation to documentary offences, and that information existed that a group of persons had tried to enter the bank?s premises. Mr B.P. and the applicants Mr Panev and Mr Ivanov had complained to the prosecuting authorities in relation to that. Since the criminal proceedings concerned allegations of using false documents to obtain judicial decisions to make entries in the register of companies, it was appropriate to maintain the status quo pending the resolution of the case. Indeed, this had already been ordered by the higher prosecutor?s offices, whose decisions were mandatory for the Sofia District Prosecutor?s Office. The decision did not mention the legal provisions on which it was based.
50. In the following months Mr Bonev wrote a number of letters to the Chief Prosecutor and tried to meet him in person with a view to obtaining the quashing or varying of the above prosecutors? decisions, to no avail. He also lodged complaints with the Minister of Justice and the Supreme Judicial Council.
G. The share transfer
51. On 25 August 2004 the twenty companies listed in paragraph 6 above transferred their shares to Mr Bonev by endorsing the provisional share warrants issued in 2003. As a result, he became the owner of 93.63% of the bank?s shares. The companies submitted that Mr Bonev paid part of the shares? price immediately and undertook to pay the remainder when the transfer would be registered in the bank?s register of shareholders. The companies submitted that they could not obtain the remainder of the price because the bank?s former management, who were de facto running the bank by virtue of the prosecutors? decisions outlined in paragraphs 42-49 above, refused to register the transfer.
H. The legal challenges against the Sofia City Court?s registration decisions
1. The requests for revision
52. On an unspecified date in 2004 Mr B.P. and Mr P.B. sought revision of the Sofia City Court?s decisions of 16 and 24 August 2004 (see paragraphs 18 and 20 above).
53. In two decisions of 4 February 2005 (???. ? 6 ?? 04.02.2005 ?. ?? ??. ?. ? 554/2004 ?., ???, ? ?. ?., and ???. ? 7 ?? 04.02.2005 ?. ?? ??. ?. ? 483/2004 ?., ???, ? ?. ?.) a three-member panel of the Supreme Court of Cassation refused to examine the requests, holding that judicial decisions making entries in the register of companies were not subject to revision. Such decisions did not determine disputes between opposing litigants and did not enjoy res judicata. The proper way to contest entries in the register of companies obtained by criminal means was by way of a claim under Article 431 ? 2 of the Code of Civil Procedure 1952 aiming to have the entries erased under Article 498 of that Code (see paragraph 76 below). Mr B.P. and Mr P.B. appealed. In two decisions of 28 June 2005 (???. ?? 28.06.2005 ?. ?? ??. ?. ? 53/2005 ?., ???, ?????. ?-?, and ???. ? 28 ?? 28.06.2005 ?. ?? ??. ?. ? 52/2005 ?., ???, ?????. ?-?) a five-member panel of the Supreme Court of Cassation upheld the three-member panel?s rulings, fully agreeing with them.
2. The claims under section 74 of the Commerce Act 1991
54. In the meantime, Mr B.P. and Mr P.B. brought claims against the bank under section 74 of the Commerce Act 1991 (see paragraph 76 below), asking the Sofia City Court to annul the resolutions of the general meetings of shareholders held on 24 and 27 June 2004 (see paragraphs 16 and 17 above).
55. In two judgments of 28 February and 7 March 2005, the Sofia City Court allowed the claims and annulled all resolutions adopted by the two meetings. It found that the meetings had been adjourned by the polling commission for lack of quorum and had not taken place, and that the parallel meetings had not been valid, chiefly because the persons who had taken part in them had not established their capacity as shareholders on the basis of valid provisional share warrants.
56. Following appeals by the bank, represented by the management appointed in June 2004 (see paragraphs 16 and 17 above) and registered by the Sofia City Court in August 2004 (paragraphs 18-20 above), on 16 and 19 June 2006 respectively the Sofia Court of Appeal quashed those judgments and dismissed the claims. It found that the persons who had held the parallel meetings had in fact represented 93.62% of the bank?s capital. The bank?s records, which fully matched those of the BNB, and a document issued by Mr B.P. in his capacity as executive director on the day of the meeting, showed that they had indeed been shareholders in it.
57. On appeals by Mr B.P. and Mr P.B., in two judgments of 7 June and 3 July 2007 (???. ? 111 ?? 07.06.2007 ?? ?. ?. ? 598/2006 ?., ???, ? ?. ?., and ???. ? 113 ?? 03.07.2007 ?? ?. ?. ? 600/2006 ?., ???, ? ?. ?.) the Supreme Court of Cassation quashed the Sofia Court of Appeal?s judgments and annulled the resolutions of the two general meetings. It held that, where nominative shares which had still not been issued were concerned, the only way of proving that a person was a shareholder entitled to take part in a general meeting was by producing a valid provisional share warrant. This had not happened at the two meetings. They had therefore been held by persons whose capacity as shareholders had not been duly established, and all resolutions adopted by them were unlawful.
58. On 27 June and 18 July 2007 the Sofia City Court, acting of its own motion (see paragraph 76 below), and noting that the resolutions of the general meetings of 24 and 27 June 2004 had been ultimately annulled by the Supreme Court of Cassation, erased the entries in the register of companies relating to those resolutions.
I. Measures taken by the BNB in relation to the bank
59. Between September 2004 and April 2005 the applicants repeatedly asked the BNB to exercise its supervisory powers and take measures to resolve the bank?s situation. On 4 October 2004 the BNB wrote to the Chief Prosecutor with a view to elucidating the effect of the prosecutors? decisions outlined in paragraphs 42-49 above on the bank?s management, but apparently did not receive a reply.
60. On 10 February 2005 the BNB?s deputy-governor in charge of banking supervision noted that Mr Panev and Mr Ivanov, who had been duly registered as members of the bank?s executive board, were being prevented from carrying out their duties as a result of the decisions of the prosecuting authorities (see paragraphs 42-49 above). That made it impossible for the bank?s executive board to function. The attempts to approach the Chief Prosecutor with a view to solving the problem had proved unfruitful. At the same time, a check of the bank?s finances carried out in December 2004 showed that its credit portfolio was deteriorating due to the ever more frequent failure of its debtors to service considerable loans extended by the bank, and that the bank was not carrying out proper credit risk assessments. All of that seriously affected its stability and the interests of its creditors and depositors. It was therefore necessary to take urgent measures to solve the problem with the bank?s management. The BNB?s deputy-governor accordingly decided to call a meeting of the bank?s supervisory board on 11 February 2005 with a view to taking measures, possibly including replacing the members of the bank?s executive board, that could allow the bank to be effectively managed. The order specified that it was immediately enforceable and not subject to judicial review.
61. The next day, 11 February 2005, the bank?s supervisory board held a meeting at which it resolved to relieve Mr Ivanov of his duties as executive director of the bank and member of its executive board, and to appoint a Mr S.S. in his stead. The board noted that Mr Ivanov?s removal was not due to any failure on his part but to factors beyond the bank?s control. The next day, 18 February 2005, the BNB informed the bank that it gave its regulatory approval to the changes in the bank?s executive board.
62. On 18 February 2005 Mr Panev and Mr S.S. asked the Sofia City Court to register the supervisory board?s resolution. On 17 March 2005 Mr B.P. and Mr Bonev?s brother, Mr P.E.B., acting in their capacity as shareholders in the bank, asked the court not to proceed with the registration pending the outcome of the proceedings in which Mr B.P. and Mr P.B. had challenged the resolutions of the general meetings of shareholders of 24 and 27 June 2004 (see paragraph 54 above). On 21 March 2005 the court upheld that latter request, noting that the general meeting?s resolutions under challenge included the one to appoint the supervisory board whose resolution the court was being asked to enter in the register of companies. This registration was therefore to be adjourned pending the outcome of the proceedings against the general meeting?s resolutions.
63. In the following months the BNB repeatedly instructed the bank to take steps to overcome its financial difficulties. On 4 May 2005 it noted that, contrary to a statutory rule prohibiting banks from exposing more than a quarter of their capital to any one debtor, the bank had, as early as July 2004, extended a large loan to a company. In spite of the BNB?s instructions to fix that, the bank later had, on the contrary, vastly increased its exposure to that company. It was also overly exposed to other debtors, and faced with a serious deterioration of its credit portfolio, with ever more frequent failures by its nine principal debtors to service their loans. That required the bank to increase its non-performing loan provisions, but doing so would deplete its capital to a level requiring revocation of its licence. The BNB therefore asked all persons engaged with running the bank to join efforts to remedy its situation, and instructed the bank immediately to bring its exposure into line with the statutory requirements and collect its overdue loans from nine companies and all of its loans from another company. The BNB also barred the bank from taking in new term deposits, except from shareholders, and warned it that failure to comply with those instructions would lead to harsher measures, including the appointment of special administrators or revocation of its licence.
64. On 28 May 2005 the BNB?s deputy-governor in charge of banking supervision decided to place the bank under compulsory administration and to appoint two special administrators to run it for three months. She noted that it had already been established that the bank?s financial situation had substantially deteriorated and that its capital was below the amount required by law, which called for immediate remedial action; in particular, the collection of some of the loans extended by the bank. Despite instructions to that effect by the BNB and a warning that failure to act would trigger harsher measures, the bank?s management had not taken such action. A report by an inspector appointed by the BNB showed that the bank?s liquidity was worsening daily. The bank was therefore at risk of insolvency that its shareholders and management had not taken steps to avert. There was uncertainty in relation to the persons running the bank: those actually doing so no longer featured in the register of companies and were not in law entitled to act on the bank?s behalf, whereas those featuring in the register could not in fact do so because of the decisions of the prosecuting authorities (see paragraphs 42-49 above). That threw doubt on the reliability of the reports which the bank was submitting to the BNB; there were reasons to believe that its financial situation was worse than transpiring from these reports. At the same time, the infighting between the bank?s shareholders precluded outside assistance. All that showed that the interests of the bank?s depositors were at serious risk, and the BNB had no choice but to place it under administration and appoint special administrators to run it. The BNB specified that its order was immediately enforceable and not subject to judicial review.
65. In the following days the special administrators invited the bank?s management and shareholders to take steps to resolve the bank?s situation. Mr Bonev entered into settlements with the other shareholders ? his brother, Mr B.P. and Mr P.B. ? whereby they agreed to resolve the disputes between them. Mr Bonev also tried to find companies which would take over the non-performing loans extended by the bank. However, on 8 June 2005 the special administrators wrote to Mr Bonev, advising him that the results of an audit that they had ordered showed that the only way to prevent the bank from sliding into insolvency was to sell its risky loans immediately. The administrators went on to say that if Mr Bonev was serious about preventing that from happening, he had to buy those loans before 5 p.m. the next day, 9 June 2005. Otherwise, the administrators would be bound to notify the BNB that the bank was insolvent.
66. On 14 June 2005 the applicants wrote to the BNB?s governor and deputy-governor, complaining of undue pressure and improper conduct on the part of the special administrators, and saying that one of them was forcing Mr Bonev to sell his shares in the bank on very unfavourable terms.
67. The same day, 14 June 2005, the BNB?s governor, relying on section 21(2) and (5) of the Banks Act 1997 (see paragraph 78 below), and acting on a recommendation by the deputy-governor in charge of banking supervision, revoked the bank?s licence and extended the term of office of the two special administrators previously appointed to run the bank (see paragraph 64 above). He noted that a report by those administrators filed the previous day and the documents enclosed with it, all of which had been drawn up in line with the BNB?s requirements, showed that the bank?s liabilities exceeded its assets by BGN 19,181,000 and that its capital was negative ? minus BGN 19,184,000. It was thus clear that the bank was insolvent, and that the BNB had to revoke its licence and petition the courts to open winding-up proceedings against it. The special administrators previously appointed to run the bank were to continue to carry out their duties pending the appointment of liquidators by the court. The governor specified that his decision was immediately enforceable and not subject to judicial review.
J. The bank?s winding-up
68. Following its decision to revoke the bank?s licence, on 15 June 2005 the BNB petitioned the Sofia City Court to declare the bank insolvent and wind it up. As required by law (see paragraph 79 below), in those proceedings the bank was represented by the special administrators previously appointed by the BNB (see paragraphs 64 and 67 above and paragraph 79 below).
69. Mr Bonev sought leave to intervene as a third party, citing concerns that the special administrators would not strive to protect the bank?s best interests. On 27 June 2005 the Sofia City Court turned down his request, holding that the Bank Insolvency Act 2002 set out in an exhaustive manner the persons entitled to take part in such proceedings (see paragraph 79 below). Mr Bonev appealed, arguing that he had an interest to take part in the proceedings in his capacity as shareholder in the bank. In a final decision of 11 October 2005, the Sofia Court of Appeal dismissed the appeal. It agreed with the lower court, and added that Mr Bonev did not have an interest to take part in the proceedings because, being merely a shareholder in the bank, he would not himself be bound by the courts? decisions in relation to it.
70. In a decision of 29 June 2005, the Sofia City Court granted the BNB?s petition, declared the bank insolvent, made an order for it to be wound up, divested its decision-making bodies of their powers and the bank of the right to administer its property, and ordered the sale of its assets. Relying on the Supreme Court of Cassation?s judgment at issue in Capital Bank AD v. Bulgaria (no. 49429/99, ? 33, 24 November 2005), the court held that, unlike the position with regular companies, the fact that a bank was insolvent was conclusively determined by the BNB. The construction of the applicable statutory provisions (see paragraph 79 below) showed that the insolvency court could not scrutinise that determination, and, faced with a decision by the BNB to revoke a bank?s licence and a facially valid winding-up petition lodged by the BNB, it was bound to declare the bank insolvent and make an order for it to be wound up. The decision was not appealed against. Immediately after it the Deposit Insurance Fund appointed liquidators from among the list of persons eligible to serve as liquidators kept by the BNB (see paragraph 81 below).
71. On 23 May 2007 Central Cooperative Bank AD bought all of the bank?s assets for one Bulgarian lev and undertook to satisfy the claims of its creditors which had been accepted by its liquidators. On 2 July 2007 the Sofia City Court approved the transaction. It found that it would result in a higher rate of repayment of the bank?s debts than if its assets were to be sold piecemeal over a protracted period of time.
72. On 17 August 2007 the Sofia City Court closed the winding-up proceedings in respect of the bank and struck it out of the register of companies.
K. The freezing of Mr Panev?s and Mr Ivanov?s bank accounts
73. On 24 June 2005 the BNB informed Mr Panev and Mr Ivanov that following the revocation of the bank?s licence, all of their bank accounts were being frozen, as required under paragraph 4(1) of the transitional and concluding provisions of the Bank Deposits Guarantee Act 1998 (see paragraph 83 below). They would be unfrozen six months after the BNB had applied for the opening of insolvency proceedings against the bank, unless in the meantime Mr Panev and Mr Ivanov had been charged with a criminal offence in relation to that, or unless the bank?s liquidators had brought a claim against them.
74. On 16 August 2005 Mr Ivanov and Mr Panev protested against the freeze, pointing out that as a result of the prosecuting authorities? decisions set out in paragraphs 42-49 above they had in effect never been able to take up their duties and therefore did not fall under that provision. On 31 August 2005 the BNB replied that it did not have discretion to unfreeze the accounts.
75. On 12 January 2006 Mr Panev and Mr Ivanov asked the BNB to unfreeze their accounts as the six-month period laid down in paragraph 4(1) of the transitional and concluding provisions of the Bank Deposits Guarantee Act 1998 (see paragraph 83 below) had expired. Finding that no criminal proceedings or claims by the bank?s liquidators had been brought against Mr Panev or Mr Ivanov within those six months, on 20 January 2006 the BNB unfroze the accounts.
II. RELEVANT DOMESTIC LAW
A. The register of companies and legal challenges against entries in it and against resolutions of the general meeting of a company?s shareholders
76. The law governing the register of companies, legal challenges against entries in that register, and legal challenges against resolutions of the general meeting of a company?s shareholders has been set out in Shesti Mai Engineering OOD and Others v. Bulgaria (no. 17854/04, ?? 49-51, 56 and 58, 20 September 2011).
B. Powers of the prosecuting authorities under section 119(1)(6) of the Judiciary Act 1994
77. The powers of the prosecuting authorities under section 119(1)(6) of the Judiciary Act 1994 have set out in Zl?nsat, spol. s r.o. v. Bulgaria (no. 57785/00, ?? 38 and 41-43, 15 June 2006). In 2007 that provision was superseded by section 145(1)(6) of the Judiciary Act 2007, which is almost identically worded.
C. The BNB?s powers in relation to commercial banks and the rules governing bank insolvency
78. The provisions of the Banks Act 1997 governing the BNB?s supervisory and enforcement powers in relation to commercial banks (in particular, to appoint special administrators and revoke a bank?s licence), the law governing judicial review of the BNB?s decisions, and the provisions of the Banks Act 1997 and other statutes governing bank insolvency have been set out in Capital Bank AD (cited above, ?? 46-67).
79. In December 2002 the provisions of the Banks Act 1997 governing bank insolvency were superseded by the Bank Insolvency Act 2002. Sections 9(2) and 13(1) of that Act are almost identical to sections 79(3) and 82 of the 1997 Act. Section 11(3) of the 2002 Act, as originally enacted, provided that in proceedings in which the court was to decide whether to grant the BNB?s petition to open insolvency proceedings against a bank, the bank was to be represented by the special administrators appointed by the BNB. A new subsection (4), added in 2006, now provides that shareholders who at the time of revoking of the bank?s licence hold more than five per cent of its shares are entitled to take part in the proceedings. However, section 16(1) in fine provides that only the BNB, the special administrators appointed by it, and the public prosecutor may appeal against the insolvency court?s decision on the winding-up petition against the bank. In a decision of 11 January 2016 (???. ? 4 ?? 11.01.2016 ?. ?? ?. ?. ? 3343/2015 ?., ???, I ?. ?.), given in the case of a bank whose licence was revoked by the BNB on 6 November 2014, the Supreme Court of Cassation asked the Constitutional Court to declare sections 11(3) and 16(1) unconstitutional and contrary to Article 6 ? 1 of the Convention in the light of this Court?s judgment in Capital Bank AD (cited above, ?? 117-18). On 4 February 2016 the Constitutional Court admitted the request for examination in so far as it concerned the constitutionality of those sections, but turned it down in so far as it concerned their compatibility with Article 6 ? 1 of the Convention, on the basis that under the applicable rules of procedure the Supreme Court of Cassation only had standing to seek pronouncements on the constitutionality of statutes, not their compatibility with international treaties (see ???. ?? 4 ???????? 2016 ?. ?? ?. ?. ? 1/2016 ?., ??). The proceedings on the merits are still pending.
80. By section 92(5) of the Bank Insolvency Act 2002, the bulk sale of the assets of an insolvent bank to another bank automatically entails the termination of all rights of its shareholders, save for the right to receive any monies payable upon liquidation if the purchasing bank has undertaken to make such payment.
81. One small difference between the Banks Act 1997 and the Bank Insolvency Act 2002 is that under the former, the liquidators were, by section 82(8), appointed directly by the insolvency court, whereas under the latter they are, by section 26, appointed by the Deposit Insurance Fund immediately after the declaration of insolvency by the insolvency court. The liquidators still have to be persons featuring on a list kept by the BNB (section 25(1)(12) of the 2002 Act).
82. In the beginning of 2007 the remainder of the Banks Act 1997 was superseded by the Credit Institutions Act 2006. Sections 36(6) and 103(3) and (4) of that Act are almost identical to section 21(5) of the 1997 Act (see paragraph 78 above), but section 151(3) provides that the BNB?s decision to revoke a bank?s licence is subject to review by the Supreme Administrative Court. When dealing with legal challenges against the decision of the BNB on 6 November 2014 to revoke the licence of a bank (see paragraph 79 above), that court held that its shareholders did not have standing to bring claims under section 151(3) on their own behalf (see ???. ? 3725 ?? 02.04.2015 ?. ?? ???. ?. ? 3438/2015 ?., ???, ?????. ?-?). In a parallel case, it held that the bank?s managers, who had earlier been replaced by special administrators appointed by the BNB, did not have such standing either (see ???. ? 2038 ?? 25.02.2015 ?., ?? ???. ?. ? 1813/2015 ?., ???, ?????. ?-?). In the wake of those decisions, on 9 March 2015 the President of the Supreme Bar Council asked that court to give an interpretative decision on these points, arguing that its rulings were contrary to, inter alia, Article 6 ? 1 of the Convention and Article 1 of Protocol No. 1. The plenary court deliberated on the admissibility of the request (????. ?. ? 4/2015 ?., ???, ??) on 29 March 2016.
D. Freezing of the assets of managers of insolvent banks
83. By paragraph 2(1) of the transitional and concluding provisions of the State Protection of Deposits and Accounts in Commercial Banks Whose Insolvency Has Been Sought by the BNB Act 1996, when petitioning the courts to declare a bank insolvent, the BNB had to freeze the assets of the members of its management. In 1998 that provision was superseded by the similarly worded paragraph 4(1) of the transitional and concluding provisions of the Bank Deposits Guarantee Act 1998, which provided that when seeking the opening of insolvency proceedings against a bank the BNB?s governor had to ask the investigating authorities to check whether members of the bank?s executive and supervisory boards had committed offences, and freeze their bank accounts and immovable property. By paragraph 4(3), these were to be later unfrozen, unless within six months after the BNB had lodged the winding-up petition the investigating or prosecuting authorities informed it that they had opened criminal proceedings in connection with the insolvency, or the bank?s liquidators informed it that they had brought a claim against the boards? members.
84. Although the courts have not directly dealt with the question whether the decisions of the BNB in this respect are amenable to judicial review, they appear to assume so (see ???. ? 8834 ?? 06.10.2003 ?. ?? ???. ?. ? 7953/2003 ?., ???, ?????. ?-?, and ???. ? 1743 ?? 23.06.2015 ?. ?? ?. ??. ?. ? 1588/2015 ?., ???). There are no reported cases under the 1996 or the 2002 Acts in which such a freeze has been set aside.
THE LAW
I. PRELIMINARY PROCEDURAL POINTS
85. On 16 November 2005 the twenty companies listed in paragraph 6 above stated that they wished to withdraw their complaints because they had transferred all of their shares in the bank to the second applicant, Mr Bonev (see paragraphs 6 and 51 above). These companies may accordingly be regarded as no longer intending to pursue their application (Article 37 ? 1 (a) of the Convention). As the issues raised by them were also raised by the remaining applicants, respect for human rights, within the meaning of Article 37 ? 1 in fine, does not require the Court to continue examining the application in so far as it concerns these companies (see Shesti Mai Engineering OOD and Others, cited above, ? 62). This part of the application is to be therefore struck out of the list of cases.
86. The Government submitted that, in so far as it had been lodged on behalf of the bank, the application had to be struck out of the Court?s list of cases because the bank, having been struck out of the register of companies after the conclusion of the winding-up proceedings (see paragraph 72 above), no longer existed and could not pursue it.
87. The applicants replied that the complaints made on behalf of the bank concerned the revocation of its licence and its ensuing liquidation, which had eventually led to its striking out of the register of companies and its disappearance as a legal person. This situation was exactly the same as that in Capital Bank AD (cited above), and there was no reason to reach a different conclusion in relation to it.
88. The Court was faced with, and rejected, almost identical submissions in Capital Bank AD (cited above, ?? 74-80), OAO Neftyanaya kompaniya Yukos v. Russia ((dec.), no. 14902/04, ?? 439-44, 29 January 2009), S?zer and Eksen Holding A.?. v. Turkey (no. 6334/05, ?? 80 and 92, 23 October 2012) and S.C. ? Asul de Aur ? Aranyaszok ? S.R.L. and Fodor Barabas v. Romania (no. 35720/06, ?? 34 and 39, 3 March 2015). It sees no reason to do otherwise in this case.
II. STANDING TO COMPLAIN ON BEHALF OF THE BANK
89. The application was lodged on behalf of the bank by shareholders and by persons appointed to its management in resolutions of the general meeting of its shareholders later annulled by the courts (see paragraphs 3-5, 11, 16, 17 and 54-58 above), shortly before the BNB appointed special administrators to represent and manage the bank instead of its bodies, who were in turn replaced by liquidators appointed by the Deposit Insurance Fund after the Sofia City Court declared the bank insolvent (see paragraphs 1, 64 and 70 above).
90. In Capital Bank AD (cited above) the Court was likewise faced with complaints raised on behalf of a bank placed in compulsory administration, and then insolvency, by its shareholders and former managers. In its admissibility decision in that case (see Capital Bank AD v. Bulgaria (dec.), no. 49429/99, 9 September 2004), it held that in as much as the complaints related to the chain of events leading to the appointment of special administrators and liquidators and to their role in the proceedings in which the bank was declared insolvent, its shareholders and former management were exceptionally entitled to complain on its behalf (see also Credit and Industrial Bank v. the Czech Republic (no. 29010/95, ?? 46-52, ECHR 2003 XI (extracts)).
91. The present case is almost identical. The complaints made on behalf of the bank concern the interference of the prosecuting authorities with its management, the revocation of its licence, and the fact that in the proceedings in which it was declared insolvent it was only represented by the special administrators appointed by the BNB (see paragraphs 93, 101 and 109 below). Mr Bonev, who following the share transfer on 25 August 2004 appears to have held 93.63% of the bank?s shares (see paragraphs 6, 11 and 51 above), is therefore entitled to complain on its behalf in relation to these matters.
92. In view of this conclusion, the Court does not have to decide whether Mr Ivanov, Mr Radev and Mr Panev, whose appointment to the bank?s management was later annulled by the courts (see paragraphs 57 and 58 above), were likewise entitled to complain on its behalf.
III. THE PROSECUTING AUTHORITIES? DECISIONS WITH RESPECT TO THE BANK?S MANAGEMENT
93. A complaint was made on behalf of the bank that the prosecuting authorities had prevented the persons appointed to its management in June 2004 from taking up their duties, with the results that the Sofia City Court?s decisions to register the resolutions of the general meeting of its shareholders to appoint those persons were not put into effect and that the bank?s financial situation was irretrievably prejudiced. It was further complained on behalf of the bank that it had not had an effective domestic remedy in that respect. The complaints were made under Article 1 of Protocol No. 1 and Articles 6 ? 1 and 13 of the Convention, which provide, in so far as relevant:
Article 1 of Protocol No. 1 (protection of property)
?Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.?
Article 6 ? 1 of the Convention (right to a fair hearing)
?In the determination of his civil rights and obligations …, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. …?
Article 13 of the Convention (right to an effective remedy)
?Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.?
A. The parties? submissions
94. The Government submitted that the prosecutors? decisions with respect to the bank?s management had been prompted by information about irregularities in its operations and the need to elucidate whether the persons appointed as its managers had committed offences. Both criminal and civil proceedings had been instituted in relation to the decisions of the Sofia City Court to register the changes in the bank?s management. In those circumstances, the competent prosecutors, who had an overarching duty to ensure compliance with the law, had been under a duty to preserve the status quo and avert damage to the bank. The applicants had appealed against their decisions in that respect before higher prosecutors, who had fully upheld them.
95. The applicants submitted that the prosecutors? decisions were manifestly arbitrary and based on a vaguely worded statutory provision enabling the prosecuting authorities to act in relation to any matter in any way they saw fit. Those authorities had in effect determined who was to manage the bank, arrogating to themselves powers normally belonging to the courts and the BNB. Their decisions had not pursued a legitimate aim, and had not specified the offence whose commission they sought to prevent. They could not be justified by the pendency of proceedings against the registration decisions of the Sofia City Court, or of criminal proceedings against Mr Bonev, Mr Panev and Mr Ivanov. They had amounted to an attempt to circumvent the proper legal channels for dealing with such situations, all of which required judicial involvement. There had moreover been no possibility effectively to challenge those decisions, which had in effect nullified the registration decisions of the Sofia City Court.
B. The Court?s assessment
96. The complaints are not manifestly ill-founded within the meaning of Article 35 ? 3 (a) of the Convention or inadmissible on any other grounds. They must therefore be declared admissible.
97. The complaint under Article 1 of Protocol No. 1 is almost identical to that examined in Zl?nsat, spol. s r.o. (cited above, ? 99), where the Court found that decisions made by the prosecuting authorities in the exercise of their vaguely defined and unbridled powers under section 119(1)(6) of the Judiciary Act 1994 (see paragraph 77 above) in relation to a limited liability company had not been surrounded by sufficient guarantees against arbitrariness and could not be regarded as lawful within the meaning of Article 1 of Protocol No. 1.
98. The Court sees no reason to hold otherwise in this case, in which the prosecuting authorities relied on the same provision to block the implementation of two decisions whereby the Sofia City Court registered changes in the bank?s management resolved upon at general meetings of the bank?s shareholders (see paragraphs 42-49 above). Bulgarian law laid down specific remedies in respect of resolutions of the general meeting of shareholders of a company and of the courts? decisions to enter them in the register of companies, and the aggrieved persons resorted to those remedies (see paragraphs 54-58 and 76 above). The law did not, by contrast, make any provision for the prosecuting authorities to interfere with such matters. As evident from the unfruitful inquiries made by the BNB in the wake of the prosecutors? decisions, they gave rise to considerable uncertainty about the persons authorised to manage the bank and act on its behalf (see paragraphs 59, 60 and 64 above).
99. There has therefore been a breach of Article 1 of Protocol No. 1.
100. In view of this conclusion, there is no need to examine the same issues by reference to Article 6 ? 1 or Article 13 of the Convention.
IV. THE REVOCATION OF THE BANK?S LICENCE
101. A complaint was made on behalf of the bank that the BNB?s decision to revoke its licence had not been surrounded by sufficient safeguards against arbitrariness. The complaint was made under Article 1 of Protocol No. 1, whose text has been set out in paragraph 93 above.
A. The parties? submissions
102. The Government submitted that the BNB?s decision to revoke a bank?s licence had been surrounded by sufficient sa