FOURTH SECTION
 
 
 
 
 
 
CASE OF PREBIL v. SLOVENIA
 
(Application no. 29278/16)
 
 
 
 
 
 
 
 
 
JUDGMENT
 
 
STRASBOURG
 
19 March 2019
 
 
FINAL
 
19/06/2019
 
 
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Prebil v. Slovenia,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
 Jon Fridrik Kjølbro, President,
 Paulo Pinto de Albuquerque,
 Egidijus Kūris,
 Iulia Antoanella Motoc,
 Georges Ravarani,
 Marko Bošnjak,
 Péter Paczolay, judges,
and Marialena Tsirli, Section Registrar,
Having deliberated in private on 26 February 2019,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 29278/16) against the Republic of Slovenia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Slovenian national, Mr Andrej Prebil (“the applicant”), on 10 May 2016. 2. The applicant was represented by Mr M. Šušmelj, a lawyer practising in Ljubljana. The Slovenian Government (“the Government”) were represented by their Agent, Mrs V. Klemenc, State Attorney. 3. The applicant alleged, in particular, that he had not been able to participate in the proceedings against him in breach of Article 6 § 1. 4. On 14 January 2018 notice of the complaints concerning the applicant’s inability to participate in proceedings against him was given to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court. THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
5. The applicant was born in 1974 and lives in Ljubljana. 6. The applicant was a member of the supervisory board of company A from 11 November 2013, with a four-year term. 7. On 12 March 2014, the chairman of the supervisory board of company A resigned: following this the supervisory board had only three members (of the required statutory six members). 8. On 20 March 2014, the Ljubljana District Court in Ljubljana adopted a decision on the initiation of “preventive restructuring” of company A (see paragraph 24 below). 9. On 13 May 2014 a session of the supervisory board of company A was held. One of the members, T. H., proposed to extend the agenda with a point on the dismissal of the chair of the management board. Allegedly, physical violence occurred between the members of the supervisory board, as some of them did not allow one member to leave the premises, to maintain the required quorum. It would appear that a resolution was passed dismissing the chair of the management board. 10. On 15 May 2014, a claim was brought before the Ljubljana District Court seeking to establish nullity of the supervisory board’s resolution of 13 May 2014. Company A agreed to the claim and the court consequently issued a decision annulling the impugned resolution. 11. In the meantime, on 29 May 2014, company P, who held a 91.42% share in company A, filed a motion to deprive the applicant and another supervisory board member, T.H., of their membership, and appoint provisional members. The motion was lodged against the applicant and T.H., who acted as opposing parties (nasprotna udeleženca). Company P relied on, inter alia, section 276 (2) of the Companies Act (see paragraph 24 below) and grounded the motion on the allegedly unacceptable personal qualities of the applicant and T.H., referring in particular to the incident that had occurred during a supervisory board meeting on 13 May 2014 (see paragraph 9 above). It requested the court to proceed to a decision without delay, without notifying the opposing parties of the proceedings and without holding a hearing. In particular, company P argued as follows: the applicant’s and T.H.’s conduct was unacceptable and therefore they should have not continued with their four-year mandate; there were well-founded reasons for depriving them of their membership; their membership should be terminated immediately and they should be replaced by provisional members so as to ensure lawful functioning of the supervisory board and company A; though company P had enough shares to request the management board to convene a general meeting of shareholders this was impossible due to the uncertainty as to who was the company manager; company A was undergoing reconstruction and there were deadlines to be met in this connection; calling a general meeting would thus not ensure a sufficiently prompt response to the situation; and so the court’s intervention was necessary. 12. On 4 June 2014 the Ljubljana District Court upheld company P’s motion. Referring to company P’s submissions and the case file in the proceedings concerning nullity of the resolution of 13 May 2014 (see paragraph 10 above) the court established that one member of the supervisory board had not been voluntarily present at the session of the supervisory board on 13 May 2014 (see paragraph 9 above) because of the conduct of the two remaining members of the supervisory board. In particular, it established that the applicant had clearly allowed T.H.’s conduct, had agreed with it, and had fully cooperated with her. The court explained that the law required that the supervisory board’s members act diligently and responsibly, and that this was particularly important in the present case, where company A was undergoing a process of “preventive restructuring”. It found that the conduct of two of the supervisory board members was harmful to company A’s functioning and that they should therefore not continue in their function until the end of their four-year term. It considered the case to be of an urgent nature, because company A was at risk, and the supervisory board with the applicant and T.H. as members was not in a position to perform its function until the first general meeting of company A. The decision also contained notice that an appeal was allowed against it within eight days of the notice of the decision. The court noted that the decision was effective immediately, and that any appeal would not stay its execution. 13. On 5 June 2014 a journalist asked the applicant to comment on the aforementioned decision. According to the applicant, he received a copy of it only a few days later. 14. On 24 June 2014 the applicant lodged an appeal arguing, inter alia, that he had been unlawfully denied the opportunity to participate in the proceedings. He referred to, inter alia, section 4 of the Non-Litigious Civil Procedure Act (see paragraph 25 below). He also disputed company P’s allegations concerning his conduct during the incident of 13 May 2014 (see paragraph 9 above), and gave his own version of events. He argued that the court’s intervention was not called for and that no grounds had been given for his dismissal. He also emphasised that the protection of his reputation required that he be involved in the proceedings and able to submit evidence. 15. On 3 July 2014 company P replied to the appeal, arguing that the case had been of an urgent character because it could have incurred losses had company A gone into insolvency. In its view, the impugned decision was a kind of interim injunction, and the adversarial principle could be ensured through appeal proceedings. 16. On 5 August 2014 company P informed the court that, on 4 August 2014, company A had held an assembly and appointed two new members to replace the applicant and T.H. It invited the court to reject the appeal, because the applicant could not be considered to have any legal interest in its outcome. 17. The applicant replied to the above pleadings on 25 August 2014. He argued that the supervisory board’s member’s dismissal at a general meeting of the shareholders could not be equated with the judicial termination of his term of office, because for the latter there had to be well-founded reasons, which had not been established in his case. 18. On 3 November 2014 the applicant submitted examples of the domestic jurisprudence, with a view to demonstrating that the domestic law had required that he be given an opportunity to participate in the proceedings. 19. On 21 January 2015 the Ljubljana Higher Court rejected the applicant’s appeal, finding that he could not have had any legal interest in the outcome of the proceedings because in the meantime company A had at its general meeting appointed new members to replace him and T.H. It noted that the appointment and dismissal of the members of the supervisory board, whose role it was to represent the interests of the shareholders, fell within the discretion of the assembly. The latter could dismiss supervisory board members any time during their term of office without having to provide any reason for doing so. Therefore, in the court’s view, even had the applicant succeeded in the appeal proceedings he could not have obtained reinstatement in his previous position. 20. The applicant lodged a constitutional complaint. Relying on, inter alia, Articles 6 and 13 of the Convention, he complained about being unable to participate in the proceedings. He argued that had he had an opportunity to reply to company P’s allegations the court would have reached a different conclusion. 21. On 10 November 2015 the Constitutional Court decided not to accept the applicant’s constitutional complaint for consideration pursuant to section 55b (2) of the Constitutional Court Act (see paragraph 27 below). This decision was served on the applicant on 13 November 2015. 22. A major Slovenian financial newspaper, Finance, reported the court’s dismissal of the applicant from its membership in company A’s supervisory board and the issues on which it had been based. II. RELEVANT DOMESTIC LAW
23. The Slovenian Constitution (Official Gazette no. 33/91) provides in its Article 21:
(Protection of Human Personality and Dignity)
“Respect for human personality and dignity shall be guaranteed in criminal and in all other legal proceedings, as well as during the deprivation of liberty and enforcement of punitive sanctions. Violence of any form against any person whose liberty has been restricted in any way is prohibited, as is the use of any form of coercion in obtaining confessions and statements.”
24. The relevant provisions of the Companies Act (Official Gazette no. 42/2006) provide as follows:
Section 50
(Cases decided by the court in a non-litigious civil procedure)
“The court shall decide the following matters by non-litigious civil procedure:
...
appointment or dismissal of members of the management or supervisory bodies (256 and second paragraph of Article 276) ...”
Section 256
(Appointment by the court)
“If ... one or more of the members of the management or supervisory body are not appointed, a court should when urgent appoint a member upon a proposal from interested persons. The position of a court-appointed member of the management or supervisory body shall cease when a new member is appointed in his place in accordance with the articles of association. Court-appointed members of the management or supervisory body shall be entitled to receive payment for their work and reimbursement of expenses ...”
Section 262
(Contract with a member)
“(1) The rights and obligations of a member of a management or supervisory body which are not laid down by this Act shall be defined in a contract concluded with the company. (2) The contract shall be approved by the supervisory board or the board of directors; otherwise the member of a management or supervisory body shall return the benefits arising therefrom.”
Section 263
(Diligence and responsibility)
“(1) In the performance of their duties on behalf of the company, members of a management or supervisory body shall act with the diligence of a conscientious and fair manager and shall safeguard the trade secrets of the company ...”
Section 274
(Election of supervisory board members)
“(1) Members of the supervisory board, which represents the interests of the shareholders, are elected by the [shareholders’] assembly ...”
Section 275
(Dismissal of supervisory board’s member)
“(1) [Shareholders’] assembly may recall members of a supervisory board ... before the expiry of their term of office. [Such a decision] ... requires at least 75% of the votes casted. The articles of association may set a higher majority and other requirements ...”
Section 276
(Appointment and dismissal of supervisory board members by a court)
“(1) In the event that the number of members present is insufficient for a quorum, the management board shall immediately submit a proposal for the appointment of a member of the supervisory board to the court. (2) Where good reasons exist for doing so, a court may dismiss a member of the supervisory board at the request of the supervisory board itself or of shareholders whose shares account for at least 10% of the share capital.”
25. Section 4 of the Non-Litigious Civil Procedure Act (Official Gazette of the Socialist Republic of Slovenia no. 30/86, with relevant amendments) provides that the courts should, unless otherwise provided in law, afford participants an opportunity to comment on the allegations of other participants and to participate in the evidence-taking procedure. 26. Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (Official Gazette no. 13/14 - official consolidated text, and further relevant amendments, hereinafter “the Financial Operations Act”) provides, inter alia, for the procedure of “preventive reconstruction”, which is aimed at enabling a company at risk of insolvency to take measures aimed at avoiding insolvency proceedings. The Financial Operations Act also stipulates the principle of promptness of proceedings, which binds courts to treat as a priority matters which involve a debtor in insolvency as a party to proceedings, or when the results affect the progress of insolvency proceedings. 27. Section 55b, paragraph 2, of the Constitutional Court Act (Official Gazette no.

Outcome for Article 6: violation