FIFTH SECTION
CASE OF RYBÁŘSTVÍ TŘEBOŇ A.S. AND RYBÁŘSTVÍ TŘEBOŇ HLD. A.S.
v. THE CZECH REPUBLIC
(Applications nos. 18037/19 and 33175/22)
 
JUDGMENT
 
Art 1 P1 • Deprivation of property • Annulment of applicant companies’ ownership titles to privatised immovable property (fishponds and land) after over twenty years without compensation • Impugned legislation, as applied in applicants’ cases, served fundamental public interest of restoration of justice and respect for rule of law • No legitimate expectation of continued enjoyment of disputed land as privatisation transfer was void ab initio and made in bad faith • Domestic courts’ decisions not arbitrary or manifestly unreasonable • Wide margin of appreciation enjoyed by States in regulating complex property issues in transition from a communist regime to a democratic legal order and in restoring rule of law • In specific case-circumstances applicant companies did not bear an individual and excessive burden • Balance between competing interests not upset
 
Prepared by the Registry. Does not bind the Court. STRASBOURG
7 November 2024
 
FINAL
 
07/02/2025
 
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Rybářství Třeboň a.s. and Rybářství Třeboň Hld. a.s. v. the Czech Republic,
The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:
 Mattias Guyomar, President,
 Lado Chanturia,
 Stéphanie Mourou-Vikström,
 Stéphane Pisani,
 Úna Ní Raifeartaigh,
 Artūrs Kučs, judges,
 Pavel Simon, ad hoc judge,
and Victor Soloveytchik, Section Registrar,
Having regard to:
the applications (nos. 18037/19 and 33175/22) against the Czech Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two companies registered in the Czech Republic, Rybářství Třeboň a.s. and Rybářství Třeboň Hld. a.s, on 29 March 2019 and 22 June 2022 respectively;
the decision to give notice to the Czech Government (“the Government”) of the applications;
the parties’ observations;
Having deliberated in private on 8 October 2024,
Delivers the following judgment, which was adopted on that date:
INTRODUCTION
1. The applications concern the annulment without compensation of two privatisations of immovable property (fishponds and land) after about 26 and 25 years respectively. The applicant companies raised complaints under Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention. THE FACTS
2. The applicant companies, Rybářství Třeboň a.s. (“the first applicant company”) and Rybářství Třeboň Hld. a.s. (“the second applicant company”), are registered under Czech law. They were represented by Ms M. Šerá, a lawyer practising in Prague. 3. The Government were represented by their Agent, Mr P. Konůpka, from the Ministry of Justice. 4. The facts of the case may be summarised as follows. BACKGROUND TO THE CASE – PRIVATISATION PROCEEDINGS
5. The present case concerns immovable property located in Novosedly nad Nežárkou and Lutová with a total area of 232,312 m² (hereinafter “the land in question”), which had previously belonged to the legal predecessors of the Roman Catholic Parish of Lutová (hereinafter “the Lutová Parish”) and the Roman Catholic Parish of Novosedly nad Nežárkou (hereinafter “the Novosedly Parish”). 6. The Novosedly and Lutová Parishes were deprived of the land in question without compensation by the former Třeboň District National Committee (okresní národní výbor) on 3 March 1949 and 22 February 1949 respectively. It was subsequently managed by the State-owned enterprise Státní rybářství Třeboň (hereinafter “the State-owned enterprise”). 7. On 1 April 1992 the Transfer of State Property to Other Persons Act (Law no. 92/1991 - zákon o převodu majetku státu na jiné osoby – hereinafter “the Privatisation Act”) entered into force, allowing for the privatisation of State property following the transition from a communist to a market economy. The Act enabled the transfer of State property which had been under the administration of State enterprises, State monetary institutions and other State organisations, or under the administration of the Land Fund of the Czech Republic (Pozemkový fond České republiky), to Czech or foreign legal bodies and individuals. Section 3(1) of the Privatisation Act as in force before 31 December 2012 provided, inter alia, that property which had been transferred to the State after 25 February 1948 from the ownership of churches, religious orders, congregations and religious communities was not subject to this Act (“the blocking provision”; it was repealed by the Church Property Settlement Act with effect on 1 January 2013). 8. On 23 April 1992 the National Property Fund of the Czech Republic (Fond národního majetku České republiky – hereinafter “the NPF”) created the second applicant company in the form of private joint-stock company, based on a privatisation project approved on 8 April 1992 by the Ministry for the Administration and Privatisation of National Property (Ministerstvo pro správu národního majetku a jeho privatizaci, hereinafter “the MAPNP”). The land in question was included in the second applicant company’s registered capital (základní kapitál). The State-owned enterprise was dissolved without being liquidated and was removed from the Companies Register (obchodní rejstřík) on 31 May 1992. 9. The privatisation project was drawn up by the management of the State-owned enterprise under the direction of J.H., who subsequently became a member of the second applicant’s board of directors. It listed the plots of land that were to pass to the second applicant company. The method of acquisition of each specific plot of land was a vital element of the project and certain plots of land were stated to have belonged to the church prior to 1950. The record of the transfer and receipt of the property (zápis o předání a převzetí majetku) was signed by J.H. on behalf of the State-owned enterprise, which was transferring the land, and he also signed on behalf of the NPF, as the representative authorised to deal with the acquisition of the property, and subsequently J.H. signed again on behalf of the newly emerging second applicant company, as the representative of the party acquiring the property. 10. Between October 1994 and January 1995, the Supreme Audit Office (Nejvyšší kontrolní úřad – hereinafter “the SAO”) audited the privatisation in order to establish whether the assets had been transferred to the second applicant company lawfully. It found that the MAPNP should not have approved the privatisation project as it had included property that the State-owned enterprise did not have the right to manage (právo hospodaření) at the date of the privatisation or which had been subject to restitution. Under that project, State property worth at least 349,715,895 Czech korunas (CZK) (EUR 13,941,144 at that time) had been unlawfully transferred. The relevant parts of the SAO’s conclusions (kontrolní závěr) read as follows:
“The purpose of the audit was to examine the manner in which the privatisation of the [State enterprise] was carried out, and in particular whether the transfer of assets to [the second applicant] was carried out in accordance with the relevant legal provisions.
... The entities that were audited were the Ministry of Agriculture, the [MANPP] ..., the [NPF], the Ministry of Culture and the Ministry of Environment. The Land Fund ..., the relevant cadastral offices ... and the [second applicant company] provided the necessary documents and information to be used for the audit. No breaches of law were found in relation to these audited entities.
... A. The Ministry of Agriculture
The Ministry ..., as the body responsible for drawing up and assessing the draft of privatisation project no. 490/91/PP-510 acted in breach of the following legislation:
...
4.  section 2 of Law no. 92/1991
Reasons:
Ad A4
The [Ministry] admitted that the privatisation project had included plots of land which the [State enterprise] did not have the right to manage at the time of the privatisation or which was to be the subject of restitution. The size of these plots is at least 19,8552 ha.
... B. The [MANPP]
[The MANPP], as the body responsible for approving the draft of privatisation project no. 1229, acted in breach of the following legislation:
... 4. Section 2 of Law no. 92/1991
Reasons:
Ad B4
[The MANPP] approved [privatisation project] no. 1229, which included plots of land which the [State enterprise] did not have the right to manage at the time of the privatisation or which was to be the subject of restitution - reasons in Ad A 4 para. 1. As a result of the [MANPP] following an unlawful procedure, State property with a minimum value of CZK 349,715,895 was unlawfully transferred to the [NPF] and subsequently to the [second applicant company].
... C. The [NPF]
The [NPF], which was responsible for the implementation of privatisation project no. 1229, acted contrary to:
...
4.  ... instruction ... no. V/1-30 452/1991 of 30 December 1991 ... Reasons:
Ad C4
The [NPF] took over the assets of the [State enterprise] and transferred them to the [second applicant company] without checking that the description in the accounts of the assets being sold corresponded to reality, as can be seen from the record of the transfer and acquisition of the property of 27 May 1992. The record was signed on behalf of the [State enterprise] as the party transferring the property by Ing. [H.], its then director; on behalf of the [FNP] by Ing. H. as its authorised representative for the acquisition of the property; and subsequently by Ing. [H.] on behalf of the [second applicant company] as the recipient of the property from the NPF] ... It follows from the foregoing that Ing. [H.] signed the record on behalf of three legal entities, which made it impossible to verify the accuracy of the details of the transfer and acquisition of the property at that stage of the privatisation. As a result of the above-mentioned shortcomings, the assets of the former [State enterprise] were not properly transferred to the [second applicant company].
... Conclusions:
The results of the audit showed that in the course of the privatisation of the [State enterprise], the central entities of the State administration and the [FNP] did not proceed in accordance with the relevant regulations, resulting in an unlawful transfer of State property with a minimum value of CZK 349,715,895. The report shows that the above-mentioned shortcomings were made possible by insufficient controls in the privatisation process (preparation, approval and implementation of the privatisation project) being exercised by the central entities of the State administration and the [NPF]. Deficiencies were found in the procedures used by the [Ministry of Agriculture] as the founder of the [State enterprise] responsible for the preparation of the privatisation project, the [MPNPP] as the body responsible for its approval and the [NPF] as the body responsible for its implementation. None of these bodies checked whether the description of the assets being transferred as indicated in the privatisation project corresponded to reality or whether all the assets being transferred were capable of being privatised. During the transfer of State property to the [second applicant company], the State ([the Ministry of Agriculture and the NPF]) and the [second applicant company] were represented by the same person for the purposes of signing the record [on handover and acceptance of the property], which did not allow for objective control over how the transfer of the property was carried out.”
11. The second applicant company was split up with effect from 1 January 2007 on the basis of an agreement to divide it up by creating a spin-off (smlouva o rozdělení odštěpením). Assets taken from the second applicant company, including the Novosedly land, were transferred to the first applicant company as the successor company, that successor company having been created by a merger with another commercial entity. 12. On 1 January 2013 the Church Property Settlement Act (Law no. 428/2012) entered into force, enabling, inter alia, restitution of part of the property that had originally belonged to certain churches, which had been unlawfully deprived of it by the communist regime. The persons liable to surrender property under this Act included the State but not persons governed by private law. Churches had standing under the Act to bring court proceedings for the termination of State ownership of what had originally been church property if ownership of that property had been transferred to private persons in breach of the blocking provision in the Privatisation Act (see paragraph 7 above). PROCEEDINGS BROUGHT BY THE NOVOSEDLY PARISH
13. On 28 December 2015 the Novosedly Parish brought an action under the Church Property Settlement Act in the Jindřichův Hradec District Court (hereinafter “the District Court”) against the State and the first applicant company, seeking a declaration that the Novosedly land was owned not by the first applicant company but by the State. It claimed that the first applicant company had acquired the land in breach of the blocking provision and that the transfer was therefore void ab initio. Were the privatisation of the property to be declared null and void, that would mean that the owner was the State, which would mean the land was owned by a liable entity from which the original owner of the church property could seek restitution under the Church Property Settlement Act. 14. In a judgment of 30 November 2016, the District Court declared the privatisation of the land in question to have been void as it had been carried out in breach of the blocking provision. The court further held that because of its lack of good faith the first applicant company could not have become the owner of the Novosedly land by prescription over time as it must have known that the land in question had originally been church property. The District Court held, inter alia, that:
“The claimant’s legal predecessor ... was subjected to a property-related injustice after 25 February 1948 when it was deprived (pursuant to an order of the Třeboň District Council of 3 March 1949) of the land in question without compensation under Act no. 46/1948 on the new land reform. The land in question passed from State ownership to the ownership of [the first applicant company] under a decision of the [MANPP] of 8 April 1992 [which] ... approved the project to privatise [the State-owned enterprise]. This project resulted in the [NPF] attributing the property in question, which had originally been church property, to the registered capital of [the first applicant company] in breach of the second sentence of section 3(1) of Act no. 92/1991. That is an ‘incurably void act contra legem’ [against the law] ...’, so the land in question did not pass into the ownership of [the first applicant company] but remained the property of the State.”
15. The District Court addressed the question of good faith as follows:
“The ... privatisation project was drawn up by the management of [the State-owned enterprise], with members of that management subsequently becoming members of [the first applicant company]’s governing bodies. The management of the State-owned enterprise ... was required to observe and respect the law, and in this case the ‘blocking’ section 3 of that Act. [J.H.], the State-owned enterprise’s executive officer (who subsequently became a member of the joint-stock company’s board of directors), and others who had prepared the privatisation project, were required to respect the blocking provision and not to include the land in question in any privatisation, as it could not be privatised. [J.H.] drew up a list of the plots of land belonging to the State-owned enterprise that were to pass to the joint-stock company, from which it can be inferred that he was aware that the privatisation included the plots of land that had been church property prior to 1950. It is evident from the foregoing that not even the customary caution which may be required of anyone was exercised when this property was included in the privatisation. [J.H.] knew that some of the property had been church property before 1950. However, despite this compromising knowledge, he did not investigate how or when the land had passed into the ownership of the State ....
... This finding is corroborated by the fact that, in 1994, the [SAO] had audited the privatisation of [the State-owned enterprise] under audit no. 46/94. Point A4 of the audit report explicitly states that the [Ministry of Agriculture] had allowed the privatisation project to include land that ought to have been subject to restitution. This same fact is repeated under point B4, where it is further stated that that incorrect procedure by the [MANPP] had resulted in the unlawful transfer of State property worth at least CZK 349,715,895. Such findings must have caused [the first applicant company] to have grave doubts as to the correctness of the privatisation of the property in question ....”
16. On 23 June 2017 the České Budějovice Regional Court (hereinafter “the Regional Court”), on appeal by the first applicant company, upheld the District Court’s judgment. As to the question of good faith, it stated specifically:
“The purpose of [section 3 of the Privatisation Act] was to protect property that had originally belonged to the church from dispositions that might jeopardise the long-term, well-considered elimination of property wrongs inflicted on the churches and religious communities by the undemocratic regime, pending the adoption of a special law to remedy those wrongs.
... The appellate court, in agreement with the court of first instance, holds that the above facts, that is, the lack of good faith of those members of the [first applicant company]’s board of directors who had worked on the privatisation project and who must have become aware of the fact that the land in question which had been included in the privatisation project had originally been church property, cast doubt on the [first applicant company]’s good faith. The conclusion that [its] good faith could not have been compromised if an absolute majority of the board of directors at the time in question had not learned of the church origins of the property and of the fact that it had passed to the State after 25 February 1948 cannot be accepted. Therefore, the [first applicant company]’s objections as raised in the appeal in this respect are irrelevant, as are the objections relating to [SAO]’s audit report no. 46/94 and the [first applicant company]’s complaint ... that the [SAO]’s file on audit mission no. 46/94 was not produced in evidence. While the appellate court is aware that confidence in the conformity of the State’s actions with the law is a protected value ..., it also takes into account the fact that the transfer of the property was carried out by [J.H.] in his capacity as director of the State-owned enterprise when it was being privatised, and then as a representative of the [first applicant company], that is, the entity acquiring the property, and also as the authorised representative of the [NPF] (see the conclusions of the audit of the privatisation of [the State-owned enterprise], no. 46/94, published in the Gazette [Věstník] of the [SAO] release [částka] 2 of year 1995). The involvement of the [NPF] which, as the founder of the [first applicant company], attributed the disputed property to it as part of its registered capital, that is, [the involvement of the NPF as the State authority] in the unlawful transfer of the disputed property which had previously been church property, does not justify overriding the block on the disposal of property that was historically the church’s. Any finding to the contrary would entirely nullify the blocking effects of ... 3(1) of Act no. 92/1991 and negate its meaning ....”
17. On 14 March 2018 the Supreme Court (Nejvyšší soud) dismissed an appeal on a point of law (dovolání) by the first applicant company. The court held that the disputed points of law had been resolved by the Regional Court in a manner consistent with the Supreme Court’s established judicial practice and found no reason to depart from it in the present case. It pointed out, in particular, that restitution claims took precedence, stating:
“In this regard, it should also be underlined that case law has long treated restitution claims as overriding claims, the enforcement of which justifies interference even with property transfers that have already been legally completed, since a contrary interpretation would render the ... blocking provisions protecting persons entitled to restitution completely worthless ....”
18. As to the assessment of the good faith of members of the first applicant company’s governing body, the Supreme Court further made the following observations:
“... Whether or not a possessor of property, taking into account all the circumstances, believes in good faith that a thing or right belongs to it must always be assessed objectively and not only from the subjective point of view (personal belief) of the party itself. When examining good faith, it is always necessary to take into account whether the possessor, acting with the ordinary (normal) caution that may be required of anyone in the circumstances and as appropriate to the nature of the case, did not have, or could not have had, any reasonable doubt, throughout the period of possession, that the thing or right belongs to it .... A possessor does not act in good faith ‘in the light of all circumstances’ if it is subjectively convinced that a thing or right belongs to it, but, had it exercised ordinary caution, would have known that it did not. Since good faith needs to be judged objectively, it is impossible to conclude that, in one and the same situation, one person would be acting in good faith thus described and another would not ....”
19. On 5 June 2018 the first applicant company filed a constitutional appeal, alleging a violation of its property right and its right to a fair trial. It argued, in particular, that the ordinary courts
(i) had not sufficiently considered the conflict between its property rights and those of the Novosedly Parish, which had been awarded lump sum financial compensation, including compensation for the land in question, under section 15 of the Church Property Settlement Act;
(ii) had erred in their assessment of the first applicant company’s good faith; and
(iii) had allowed the applications without having examined, as a preliminary question, whether the property could be transferred to the Novosedly Parish in subsequent restitution proceedings. 20. In a ruling (usnesení) of 2 October 2018 the Constitutional Court (II. ÚS 1953/18) (Ústavní soud) dismissed the first applicant company’s constitutional appeal as manifestly ill-founded. The court found that the ordinary courts had carefully considered the first applicant company’s allegations and had resolved the vast majority of them in a manner that could be referred to without further comment. It commented in more detail on the overriding of the blocking provision. Specifically, it made the following observations:
“[8]  First of all, the ordinary courts examined whether there were any extraordinary circumstances that would justify the rejection of the action ..., but after taking evidence they reasonably and constitutionally concluded that no such circumstances existed. In this context, the Constitutional Court points out that, under the Supreme Court’s settled case law (accepted by the Constitutional Court), only circumstances of a truly exceptional nature and very strongly in favour of the granting of legal protection to persons to whom buildings originally belonging to churches have been transferred in breach of the law could justify the rejection of an action for a declaratory judgment, for example, the acquisition, in good faith, of property in respect of which the prerequisites for restitution in rem have clearly not been met (see, e.g. ... judgment of the Constitutional Court no. III. ÚS 1862/16 of 21 June 2017).”
21. The Constitutional Court was satisfied with the way in which the ordinary courts had assessed the issue of good faith. In this regard, it observed:
“[9]  The Constitutional Court also considers the manner in which the ordinary courts treated the matter of the existence of the [first applicant company’s] good faith to be consistent with the constitutional order, in that their finding of an absence of good faith is largely premised on the argument that the author of the privatisation project (in the annexes to which the land in question was explicitly identified as church property prior to 1950, and therefore this specification was entirely clear to all then and subsequent members of the governing bodies of the legal persons involved) was [the State-owned enterprise] acting through its then director, [J.H.], who, at the time the land in question was transferred and for a long time thereafter, was also a member of the governing body of the [first applicant company]’s legal predecessor.”
22. As to the allegation that it was necessary to examine whether the conditions for the surrender of immovable property under the Church Property Settlement Act had been met, the Constitutional Court stated the following:
“[10]  Finally, the Constitutional Court considers the claim concerning the interpretation and application of section 18(1) of the Church Property Settlement Act to be manifestly ill-founded. [It] agrees with the ordinary courts’ position ... that this provision lays down a special type of action for a declaratory judgment, in respect of which ‘legal interest’ is not the decisive factor and that it is possible to rule on an action for a declaratory judgment brought pursuant to this provision without examining whether conditions within the meaning of section 7(1) of the Church Property Settlement Act have been satisfied.
...
[12]  In addition to what we have said above, the Constitutional Court makes the following observations. The [first applicant company] may justifiably say that the legal situation in which it finds itself is due, at least in part, to the State’s inertia in the privatisation process. The [first applicant company] submits that, even if the limitation period has expired, it has no claim against the State in damages or unjust enrichment or for any other remedy in connection with the declaration that the privatisation of the [land concerned] is null and void. However, even in this situation, the situation cannot be ‘put right’ by a decision that would be detrimental to a successful applicant under the Church Property Settlement Act. This is all the more true given that the case law of the Constitutional Court allows, in certain circumstances, for such an action to be successfully brought against the State without prejudice to the rights of parties claiming restitution. ...”
PROCEEDINGS BROUGHT BY THE LUTOVÁ PARISH
23. On 28 December 2015, pursuant to the Church Property Settlement Act, the Lutová Parish brought an action in the District Court (“the District Court”) against the State and the second applicant company seeking a declaration that the Lutová property was owned not by the second applicant company but by the State. 24. On 28 December 2016 the District Court decided in favour of the Lutová Parish, basing its decision on the same grounds as those of its judgment regarding the Novosedly property. It appears from the court’s judgment that the SAO, having been asked to produce the file from the audit of the privatisation of the State-owned enterprise informed the court that in 2012 the file had been passed to the national archives. 25. In a judgment of 29 August 2017, the Regional Court upheld the first instance judgment. 26. On 30 May 2018 the Supreme Court dismissed an appeal on points of law by the second applicant. 27. In a judgment (nález) of 30 November 2021 the Constitutional Court (I. ÚS 3179/18) dismissed a constitutional appeal by the second applicant company in which it had alleged a violation of its rights to property and right to a fair trial. The Constitutional Court also examined the applicant company’s complaints on the merits, which it had not done in the Novosedly Parish case, since in the meantime a judgment had been given in another of the second applicant company’s cases which had to be considered in the present case. The Constitutional Court addressed that judgment as follows:
“[24]  Article 89 § 2 of the Constitution makes enforceable decisions of the Constitutional Court binding upon all; bodies and persons. It is not only the operative part of the judgment that is binding, but also the reasoning, or, more precisely, those parts of it that contain the ‘substantive’ reasoning .... The binding nature of the decision ... not only has an effect on other bodies, but also has a definite bearing on the decision-making of the Constitutional Court itself ....
[25]  The constitutional obligation to respect the binding nature of the substantive reasoning set out in its own case law (judgments) is also expressed in section 23 of the Constitutional Court Act, which provides that if a chamber ‘in the course of its decision-making activities arrives at a legal opinion deviating from the legal opinion of the Constitutional Court in a published judgment, it shall submit the question to the plenary of the Constitutional Court for consideration. The chamber shall be bound by the opinion of the plenary in further proceedings.’ If a chamber of the Constitutional Court, in a case with similar facts, were to decide other than as dictated by the substantive reasoning of a previous judgment of the Constitutional Court, it would be engaging in constitutionally prohibited arbitrariness.
[26]  In this context, the Constitutional Court did not disregard the fact that, in another case, the [second applicant company’s] constitutional appeal had been allowed by judgment III. ÚS 2707/18[1]. As summarised above, the Constitutional Court’s first chamber came to the conclusion in its decision-making process that in the present case the constitutional appeal should be dismissed. The question arises, however, as to whether the dismissal of the constitutional appeal is, strictly speaking, based on a ’divergent legal opinion’ or whether the present case is distinguishable on its facts from the case heard under number III. ÚS 2707/18. Only if the dismissal were based on would the Constitutional Court be able (and obliged) to submit the case to the plenary for an opinion ....
[27]  Accordingly, the Constitutional Court considered whether the facts of the present case are essentially similar to the facts of the case heard under number III. ÚS 2707/18 ....
[31]  However, the primary reason for upholding the appeal was clearly ... that the ordinary courts had not made a sufficient assessment of whether the land in question had actually passed to the State in the relevant period, that is, whether the transfer had been after 25 February 1948 or earlier. ... In other words, the operative part of judgment III. ÚS 2707/18 was based on very specific substantive reasons relating to particular facts. In that judgment, the Constitutional Court criticised the ordinary courts for their wholly inadequate assessment of whether the blocking provision applied to the property in question at all, and that assessment was then (again, inadmissibly, in the Constitutional Court’s opinion) followed by the ordinary courts’ purely perfunctory assessment of whether the parties had been in good faith and the importance of the principle of the protection of an individual’s confidence in the actions of public authorities.
[32]  The facts outlined above relating to the uncertainty surrounding the date on which the property passed to the State were not at issue in the present case. ... To that extent, the ordinary courts proceeded in a constitutionally compliant manner in establishing the facts of the case, and the Constitutional Court holds that it was established in the proceedings that the property in question had passed to the State during the relevant period (that is, after 25 February 1948).
[33]  This fact alone establishes a fundamental distinction between the present case and the case addressed by judgment III. ÚS 2707/18 ....
[35]  ... In judgment III. ÚS 2707/18, the (alleged) good faith and confidence in the correctness of an action effected by the State did not stand ‘alone’, but were linked to significant doubt as to whether section 29 of the Land Ownership Act applied to the property in question at all. It was this combination which then resulted in a judgment being given in favour of the appeal ....”
28. The Constitutional Court then dismissed the second applicant company’s constitutional appeal on the following grounds:
“[36]  Given the above-mentioned fact that the Constitutional Court finds it established that the transfer of property to the State (and the related application of the ‘blocking provision’) occurred after 25 February 1948, the decisive issue in assessing the constitutionality of the contested decisions was whether the possibility that there had been ‘genuinely exceptional circumstances’ affecting the [second applicant company] had been given appropriate weight and whether a fair balance had been struck between the interests of the [second applicant company] on the one hand and those of the [Lutová Parish] on the other.
[37]  The Constitutional Court finds that the conclusion of the courts of first instance that there were no such exceptional circumstances is consistent with the constitution. It finds that no special circumstances had come to light in the course of the proceedings which would preclude the restitution in rem of the land in question, and that the [second applicant company] had not acquired the land in question in good faith, and only a combination of good faith and the impossibility of restitution in rem could be regarded as a truly exceptional circumstance.
[38]  However, even if good faith on the part of the [second applicant company] had been established in the present case, that would not in itself have outweighed the legitimate expectation of a church entity to restitution of its historical property. Indeed, neither good faith alone nor good faith combined with reliance on an act of the State constitutes truly exceptional circumstances within the meaning of the judgments in case nos. III. ÚS 1862/16 and I. ÚS 349/17 .... Furthermore, in view of the doubts about the privatisation process and the personal link between the State and a member of the [second applicant company]’s governing body (which led the courts to conclude that the [second applicant company] was not in good faith), the scales tip even further against the [applicant company] in the search for a fair balance.
[39]  The Constitutional Court cannot agree with the [second applicant company]’s objection that the historical claims of the church are not at issue at all since the Czech Republic has no interest in owning the land concerned and is probably incapable of managing it properly and its attitude to date suggests that it will not hand it over to the [Lutová Parish]. These considerations are entirely speculative and cannot be determinative of the outcome of the proceedings on the action under section 18 of the Church Property Settlement Act.”
PROCEEDINGS ON THE SURRENDER OF THE PROPERTY CONCERNED TO THE CHURCH
29. After the Novosedly Parish and the Lutová Parish had obtained a declaration that the State was the owner of the property in question, they made a formal request to the State for its transfer to them under the Church Property Settlement Act. The Office for Government Representation in Property Affairs (Úřad pro zastupování státu ve věcech majetkových) did not grant that request. In the case of the Novosedly Parish, it found that the condition that there should be a functional link between the property in question and other church property within the meaning of section 7(1) of the Church Property Settlement Act had not been met. 30. On 6 June 2019 the Novosedly Parish made an application to the appropriate land office to initiate administrative proceedings for the surrender of the Novosedly land pursuant to section 9(6) of the Church Property Settlement Act. The South Bohemia Regional Land Office (krajský pozemkový úřad pro Jihočeský kraj) (“the Land Office”) granted the application and on 2 June 2020 it ordered the State, represented by the Office for Government Representation in Property Affairs, to surrender the Novosedly land to the Novosedly Parish. It stated, in particular:
“The formal request for transfer of the property ... was notified on 12 June 2018 to the State Land Office, which forwarded it to the Office for Government Representation in Property Affairs on 9 August 2018, because the property in question was registered as [deed of ownership] 60000 [which vested the power to manage the property in the Office for Government Representation in Property Affairs], despite the fact that it was agricultural property. The legislator, when defining the scope of property to be subject to restitution, made a clear distinction between State property administered by the Land Fund of the Czech Republic (now the State Land Office) or by the State Forestry of the Czech Republic, and property administered by other entities, that is, other State bodies ... Although property which had originally belonged to the church before passing into the ownership of the State and under the management of the legal persons obliged to make restitution as listed in section 4 a) and b) [of the Church Property Settlement Act] will be surrendered when the general restitution conditions are fulfilled, that is, without further examination of the purpose for which the property will be used, other State property is surrendered only as an exception and to a limited extent, on the fulfilment of certain other conditions laid down by law and relating to the nature of the ... land concerned. ... The Office for Government Representation in Property Affairs is a legal person obliged to make restitution under section 4 c) of the Church Property Settlement Act: therefore, when surrendering its property, it is required to proceed according to section 7 and ... [to examine] whether the conditions mentioned in section 7(1)(a) have been fulfilled.
... The legal person entitled has proved its right to the restitution of the property in question. All the conditions for restitution provided for in the Church Property Settlement Act have been met. ...”
31. On 18 September 2019 the Lutová Parish also made an application to initiate administrative proceedings for the surrender of the Lutová land. On 18 July 2022 the Land Office ordered the State, represented by the Office for Government Representation in Property Affairs, to surrender the Lutová land to the legal successor of the Lutová Parish. 32. In both cases, it was proved that the original owner of the land was the legal predecessor of the Lutová Parish or the Novosedly Parish, and that a property-related injustice had been committed. The Land Office found that all the statutory conditions for the surrender of the land had been met, including the condition of a functional link. On the basis of these decisions, the church, or its legal successor, was recorded in the land register as the owner of the land in question. 33. On 28 July 2020 the State, represented by the Office for Government Representation in Property Affairs, brought an action under the Fifth Part of the Code of Civil Procedure (which governs court procedure in cases decided by the administrative authorities) against the decision in the Novosedly Parish case, seeking to have the Land Office’s decision set aside. The State’s case was that the Land Office had wrongly assessed whether the functional link required by section 7(1) of the Church Property Settlement Act had been fulfilled, which in the State’s opinion it had not. The legal successor of the Novosedly Parish was a party to the proceedings. 34. On 15 August 2022 the Regional Court dismissed that action, stating, inter alia:
“... 28. The court concluded that the disputed land was agricultural in nature at the date of 24 June 1991, since it was being used by the formerly State-owned company for fishing and fishery purposes and formed a unified parcel consisting of the pond and the adjoining land... 29. Agricultural land under section 2 of the Church Property Settlement Act is administered by the Land Fund of the Czech Republic. 30. The Land Fund of the Czech Republic is a legal person obliged to make restitution under section 4(a) of the Church Property Settlement Act, for which no functional link within the meaning of section 7(1) of the Act is required.
31.

Article of the Convention at issue: Article 1
Outcome: no_violation