Article 6
Civil proceedings
Article 6-1
Access to court
Mandatory 10% fine for unsuccessful challenge to forced sale at public auction: violation
Facts – Section 134(2) of the Enforcement and Bankruptcy Act (Law no. 2004) provided for the imposition of a fine amounting to 10% of the value of the successful bid when a debtor made an unsuccessful attempt to obtain the annulment of a public auction.
The applicant company was fined the equivalent of EUR 140,000 after unsuccessfully applying for a court order annulling the enforced auction of its land. Although the domestic courts found in the course of the proceedings that the successful bid had not reached the statutory minimum, as it failed to include the costs and expenses of the sale, they ultimately decided not to set aside the auction after the claim for costs and expenses was waived.
In its application to the European Court, the applicant company complained that the heavy fine it had been ordered to pay constituted a breach of its right of access to a court.
Law – Article 6 ss 1: Although the imposition of a fine in order to prevent a build-up of cases before the domestic courts and to ensure the administration of justice was not, as such, incompatible with the right of access to a court, the amount of the fine was a material factor in determining whether or not the right was effective.
Even where, as here, the applicant had had access to all stages of the proceedings the imposition of a considerable financial burden after the conclusion of the proceedings could act as a restriction on the right to a court and would only be compatible with Article 6 ss 1 if it pursued a legitimate aim and was proportionate. The fine imposed pursuant to section 134 of Law no. 2004 pursued the legitimate aims of ensuring the proper administration of justice and protecting the rights of others. However, it could not be considered proportionate. The proceedings initiated by the applicant company had not been frivolous as they had revealed a shortcoming in the auction proceedings, even if it had later been remedied. Importantly, the financial burden imposed on the applicant company was particularly significant (EUR 140,000) and the imposition of a fine had been mandatory without any discretion being left to the domestic courts. In these circumstances, the restriction on the applicant company’s right of access to a court could not be considered proportionate to the legitimate aims pursued.
Conclusion: violation (unanimously).
Article 41: Finding of a violation sufficient just satisfaction in respect of any non-pecuniary damage; claim in respect of pecuniary damage dismissed.
20577/05 – Legal Summary, [2013] ECHR 1169
Bailii
European Convention on Human Rights
Human Rights, Insolvency
Updated: 26 November 2021; Ref: scu.518431
