FIRST SECTION
CASE OF FU QUAN, S.R.O. v. THE CZECH REPUBLIC
(Application no. 24827/14)
 
 
JUDGMENT
 
Art 1 P1 • Control of the use of property • Unlawful retention of applicant company’s merchandise, for almost a year and a half, after acquittal of director and associate in criminal proceedings in the context of which it had been seized
 
STRASBOURG
 
17 March 2022
 
 
 
THIS CASE WAS REFERRED TO THE GRAND CHAMBER WHICH DELIVERED JUDGMENT IN THE CASE ON 01/06/2023
 
 
This judgment may be subject to editorial revision. In the case of FU QUAN, s.r.o. v. the Czech Republic,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
 Krzysztof Wojtyczek, President,
 Armen Harutyunyan,
 Pauliine Koskelo,
 Tim Eicke,
 Linos-Alexandre Sicilianos,
 Ksenija Turković,
 Aleš Pejchal, judges,
and Renata Degener, Section Registrar,
Having regard to:
the application (no. 24827/14) 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 a Czech limited liability company, FU QUAN, s.r.o. (“the applicant company”), on 25 March 2014;
the decision to give notice to the Czech Government (“the Government”) of the application;
the parties’ observations;
Having deliberated in private on 8 February 2022,
Delivers the following judgment, which was adopted on that date:
INTRODUCTION
1. The case concerns damage to a merchandise of the applicant company alleged to have been caused by the seizure of its property in the course of the criminal proceedings against its associates. The applicant company also alleged that it was deprived of access to a court on account of a formalistic and restrictive interpretation of the national law. THE FACTS
2. The applicant company, FU QUAN, s.r.o., is a Czech limited liability company incorporated under Czech law with its registered office in Prague. 3. The applicant company was represented by Mr J. Stránský, a lawyer practising in Prague. 4. The Czech Government (“the Government”) were represented by their Agent, Mr V.A. Schorm, of the Ministry of Justice. 5. The applicant company alleged that its rights under Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention had been violated. 6. On 15 December 2015 notice of the application was given to the Government. 7. The facts of the case, as submitted by the parties, may be summarised as follows. Criminal proceedings
8. On 25 April 2005 the applicant company’s only two associates (společník), one of whom was also its managing director (jednatel), were accused of tax evasion. They were arrested on 26 April 2005 and two days later the Prague 2 District Court (obvodní soud) remanded them in custody. 9. On 27 April 2005 the Prague Municipal Prosecutor Office (městské státní zastupitelství) ordered, under Article 347 § 1 of the Code of Criminal Procedure, the seizure of property belonging to the applicant company, including merchandise (clothing) and a vehicle leased under a contract. It banned the accused associates from disposing of the property seized unless such action aimed to prevent an imminent risk of damage. The merchandise was seized between 2 May and 27 June 2005 in the presence of the applicant’s managing director. It was entrusted to the Office for Government Representation in Property Matters (Úřad pro zastupování státu ve věcech majetkových – hereinafter “the OGRPM”) in boxes on pallets. According to an expert report, the value of the merchandise was 62,424,027 Czech korunas (CZK – 2,393,100 euros (EUR)). 10. The applicant company’s two associates, one acting in his capacity as managing director, filed complaints against the seizure of the property, but on 9 June 2005 the Prague Municipal Court (městský soud) dismissed them as unfounded. The Municipal Court stated that one of the associates did not have any family or social connections in the Czech Republic and maintained regular contact with his family in China and that the second associate did not even have a valid residence permit in the Czech Republic. It went on to conclude that in the view of the connections of the accused with China and in the view of the nature of their criminal conduct in question there was a suspicion that the accused would transfer the property to China. 11. On 14 November 2005 the police returned to the accused associates several electronic devices, bank cards and other personal items, stating that they were not necessary for the purposes of the criminal investigation and proceedings and that there was no prospect of their forfeiture or confiscation. On 21 November 2005 the car was returned to the leasing company. 12. On 12 April 2006 the municipal prosecutor’s office filed an indictment against the two associates. 13. On 16 March 2007, during the trial, the two men were released from custody. 14. On 2 November 2006, 16 July 2007 and 2 May 2008 the Prague Municipal Court repeatedly found the applicant company’s associates guilty of tax evasion. 15. On 16 March 2007 and 25 January 2008 the Prague High Court (vrchní soud) quashed the first two convictions of the two associates, remitting the case to the first-instance court, and eventually acquitted them on 27 February 2009. In its last judgment, which became final on the same day, the appellate court stated:
“... it has not been proved that the events for which the accused are being prosecuted happened. That means that even though the events described most probably happened, it has not been established that they happened in a manner that would justify that a specific act be attributed to the accused, neither separately nor together, and therefore it may not be found that they committed such an act either separately or as accomplices, and it is, hence, not possible to conclude that any of the accused committed an act that could be regarded as a crime specified in the indictment, that is to say, the crime of tax evasion in relation to the seized merchandise and the money transferred.”
16. According to the Government, on 9 June 2009 the presiding judge of the Municipal Court asked the Municipal Prosecutor’s Office to request a decision regarding the pieces of evidence that had been seized from the applicant’s warehouse on Kolbenova Street. 17. Furthermore, in a letter dated 13 August 2009 addressed to the Municipal Court, the OGRPM asked when a decision terminating the custody of the applicant’s seized goods would be made. 18. The Government also stated that on 9 September 2009 the above-mentioned presiding judge had asked the applicant’s corporate agent, who had previously declared that there had also been goods belonging to other companies in the applicant’s warehouse, to identify the applicant’s property within 14 days of receipt of the letter. However, the letter was not served because the addressee was unknown at the address given. 19. By a decision of the Municipal Court of 9 September 2009 the funds seized during the criminal proceedings were deposited in an escrow account of the Prague 2 District Court. Following a complaint by one of the defendants, on 30 March 2010 the High Court quashed that decision, instructing the Municipal Court to reconsider the case and adopt a new decision. The case file in question was returned to the Municipal Court on 3 May 2010. 20. On 22 September 2009 the applicant’s corporate agent stated that “all of the seized goods ... are now the property of FU QUAN, s.r.o.”. 21. By a decision of 17 May 2010 the Municipal Court returned the funds seized in the criminal proceedings to the former defendants, G.G. and J.G. 22. The case file was subsequently sent to the Ministry of Justice for examination of claims for damages raised following the acquittal, and was returned to the Municipal Court on 1 July 2010. 23. On 13 July 2010 the Municipal Court, following a complaint by G.G. and J.G., delivered a new decision concerning the return of the seized goods. 24. On 22 July 2010 the Municipal Court decided to return the seized merchandise to the applicant company, pursuant to Article 80 of the CCP. On 17 August 2010 the decision became final. 25. On 6 September 2010 the seized goods were inspected in the warehouse of the OGRPM. The applicant’s corporate agent and the representative of the OGRPM agreed that the goods would be handed back over several days, to be specified in advance by the applicant’s corporate agent to the OGRPM. Each day a record of the handover of goods would be drawn up and signed by both parties and would state the number of pallets handed over. The applicant’s corporate agent then labelled the pallets with seals and a stamp. 26. Between 14 and 23 September 2010, over a total of six days, the seized goods were handed over to the applicant’s corporate agent. As agreed, the handovers were recorded in reports and photographs were taken which, according to the Government, clearly showed that the goods had normally been stored in cardboard boxes wrapped in plastic sheeting or in plastic bags. Compensation proceedings
27. On 27 January 2011 the applicant company sought compensation from the Ministry of Justice under the State Liability Act (Act no. 82/1998), claiming CZK 63,294,609 (EUR 2,426,475). It primarily claimed 61,887,364 CZK (2,404,201 EUR) for damage caused by the five‑year storage of its merchandise, corresponding to the difference between the original value of the seized merchandise (CZK 62,424,027 – EUR 2,425,082) and the amount obtained by selling part of the merchandise (CZK 536,663 – EUR 20,849). It argued, among other things, as follows:
“By a decision of the presiding judge at the Prague Municipal Court ... of 22 July 2010, it was decided that the merchandise would be returned. Part of it was handed over in natura. After taking back the merchandise, we discovered that the returned goods were in a deplorable condition. The merchandise had been seized for five years! The merchandise consisted of clothing, which is highly perishable when stored for a long period of time. Furthermore, after five years, any clothing becomes unsaleable due to changing fashion trends (regardless of the truly catastrophic condition of the merchandise). Our company was able to sell some of the goods, but (because of its condition) for a fraction of the original price.”
The amount sought also included compensation for equipment that had remained at its offices after its managing director had been detained, but which had been stolen because the police had not secured it. The applicant company further argued that the arrest of its managing director and seizure of its financial assets had left it unable to pay its telephone bills, which had led to enforcement action being taken against it. It had also been unable to make its payments under the leasing contract, which had resulted in the imposition of a contractual penalty and to it being unable to acquire ownership of the vehicle. 28. The Ministry dismissed the applicant company’s claims on 26 May 2011. With respect to the damage allegedly caused to the seized merchandise, the Ministry stated:
“The Ministry ... is not responsible for the passing of time as such. The alleged depreciation of the merchandise is not in any way substantiated. Nowhere is it said that the merchandise in question could not have been sold by the applicant at a higher price after being returned by the law enforcement authorities or that all the merchandise would have been sold at the alleged price if the managing director had not been prosecuted. Accordingly, this claim appears to be purely speculative and unsubstantiated.”
The Ministry further dismissed all the other compensation claims raised by the applicant. 29. On 2 June 2011 the applicant company initiated compensation proceedings before the Prague 2 District Court. With respect to the seized merchandise, it claimed:
“The Ministry completely ignored the [applicant company’s] claim for compensation for damage caused in connection with the custody of its managing director and other associate, which completely paralysed the operations of the company.”
It then proceeded to reassert the claim it had raised before the Ministry and further added, inter alia:
“[The applicant company] considers that the storage of the goods for five years caused damage corresponding to the difference between the original value of the seized merchandise ... and the sale price obtained ...
...
[The applicant company] is not claiming that the Ministry is responsible for ‘the passing of time’. [It] is claiming damages for the objective destruction of the seized merchandise which was caused in connection with the exercise of State authority. According to [the applicant company], it is irrelevant whether the merchandise could have been sold for a higher price and it is impossible to prove whether the merchandise would have been sold in real time. [The applicant company] does not accept the conclusion that its claim is speculative. As has already been stated, the merchandise was returned to the [applicant company] following its five-year storage in a totally deplorable condition. This ... was caused by the decision of the criminal justice authority; therefore, the causal link with the damage is established.”
30. On 13 December 2011 the applicant company withdrew its claim for CZK 2,782,682.63 (EUR 106,677) corresponding to the amount obtained by selling another part of the merchandise. It appears that the proceedings relating to that part of the claim were discontinued by a decision (usnesení) of 28 December 2011. 31. On 28 December 2011 the District Court dismissed the action as unfounded and stated:
“[T]he court concluded, following an assessment of the evidence, that the action was [unfounded]. The preconditions for the State to incur legal liability for damage caused by the exercise of public power by a decision or maladministration are the existence of an unlawful decision or maladministration, damage [suffered by] the injured party and a causal link between the maladministration or unlawful decision and the damage. In the present case, first and foremost, the court has found that [the applicant company] does not have locus standi as a plaintiff, because it was not party to the above-described criminal proceedings initiated in order to prosecute its managing director and associate. [The applicant company] cannot therefore have suffered any damage in connection with the criminal prosecution of its managing director and associate. Such a conclusion was already reached in a judgment of the Supreme Court (Nejvyšší soud) of 15 December 2005, no. 25 Cdo 1956/2004, which stated that a company had no right ... to compensation for damage caused by an unlawful decision issued in connection with the criminal prosecution of its managing director ... Therefore, there is no causal link between the damage claimed by [the applicant company] as a plaintiff and the criminal prosecution of its managing director and associate.”
The District Court further dismissed the applicant company’s claims concerning other alleged damage caused in connection with the criminal proceedings of the applicant company’s managing director and associate. 32. On 15 May 2012 the Municipal Court upheld the first-instance judgment. The court examined the issue of whether or not the applicant company had suffered damage as a result of the detention decision and unlawful criminal proceedings concerning its managing director. It held, in particular, that:
“According to the factual description of the action, the applicant [company] seeks compensation for the damage caused to it ‘by the managing director and other partner’s placement in custody’. ... The applicant claims that [because of] the managing director and partner’s placement in custody, its operations were completely paralysed and it was deprived of its effective human potential.
[The applicant company] filed a total of [four] separate claims for compensation, specifying that the alleged damage consisted of: 1. expenses incurred as a result of the non-payment of telecommunications services of CZK 23,245 because of the managing director’s time in custody; 2. the reduced value of the merchandise seized in the criminal proceedings of CZK 61,887,364 (after the partial withdrawal of CZK 59,104,681.37); 3. the theft of office equipment and the disposal of personal belongings as a result of the managing director’s custody of CZK 684,000, and 4.compensation for the unfulfilled vehicle leasing contract owing to the managing director being in custody ... According to the facts as presented ... it is necessary to legally classify the claimant’s claim (as the claimant itself does, referring to section 33 of the State Liability Act) as a claim for compensation for damage caused by a decision on custody, in other words, caused by an unlawful decision ... Section 9 of the State Liability Act provides that ... a person entitled to compensation for damage [caused by a] detention decision [is] a person [who was detained]. [This] provision provides that a person fully unequivocally and undoubtedly entitled [to compensation] is a person who has been prosecuted in detention, which [may only be the case with] a physical person. Certainly, a company cannot be considered to be a person who has suffered damage caused by pre-trial detention ... It can be concluded that if the pre-trial detention of a particular [individual] is formulated as the reason (the cause of the damage), then it is necessary to consider the claim under section 9 of the State Liability Act as belonging solely and exclusively to that particular [individual]. While the claimant has not asserted that the damage resulted from the unlawful criminal proceedings ... brought against its managing director and associate, the [present] claim ... can also be considered on this basis ... In judicial practice, [it] has already been established that termination of a criminal prosecution or an acquittal ... has the same consequences as the annulment of an unlawful decision under section 8(1) of the State Liability Act. The person having] legal standing to [bring] such a claim is ‘the party’ in the proceedings in which the unlawful decision was issued. In the present case, there is no doubt that the communication of the charges (unlawful decision) and the acquittal (decision quashing the unlawful decision) concerned physical persons, namely the managing director or partner of [the applicant company], where these individuals were parties to the criminal proceedings. The [applicant company], as a legal person, cannot be regarded as a party to the criminal proceedings, since it has not been prosecuted. It cannot be considered such a person, even taking into account that the individual prosecuted is the sole managing director or partner of a trading company. The individual can therefore be a member, official or statutory representative of various legal entities, and the influence of that person within that legal entity can be absolutely extraordinary, unique or irreplaceable. There is no doubt that in such a case the criminal prosecution of an individual has a fundamental influence or impact on the functioning of a legal person. However, this cannot alter the fact that the injured person under the State Liability Act, [as a result of] an unlawful decision on the communication of the charges, is a person who has been prosecuted; in this case, the managing director or associate of the [applicant company].
... With respect to the [applicant company’s] claim for the payment of [compensation for] damage resulting from ‘the five-year storage of the merchandise’ which was seized during the criminal proceedings, it has to be further noted that apart from the above-mentioned lack of locus standi of [the applicant company], there is no causal link between the unlawful decision on custody or indictment of its managing director or associate and the alleged damage caused in connection with ‘the five-year storage of the merchandise’. ... If the merchandise had been seized... and later returned to the managing director of [the applicant company], it may not be automatically concluded that the State is liable ... for the loss of value of the merchandise caused by the mere passing of time. The mere fact that the proceedings resulted in an acquittal cannot lead to the conclusion that all the acts carried out in the course of those proceedings (such as the seizure of the goods and their return to the representative) constituted an unlawful decision or irregular official conduct (which the claimant has not even argued).”
33. On 15 November 2012 the Supreme Court dismissed an appeal on points of law (dovolání) lodged by the company as inadmissible. It stated, inter alia:
“When the criminal prosecution of a person is not concluded by a verdict of guilty in a judgment of a criminal court, any claims for compensation for damage caused in connection with the prosecution are to be assessed under the relevant provision on compensation for unlawful decisions ... Under section 7 of the State Liability Act, only a party to the proceedings in which an unlawful decision has been issued has the right to compensation for damage caused by that decision ... It was therefore established in case-law that a company does not have a right to compensation for damage caused by an unlawful decision issued in connection with the criminal prosecution of its managing director ...”
34. On 16 January 2013 the applicant company lodged a constitutional complaint (ústavní stížnost), alleging a violation of its right to a fair trial and to the peaceful enjoyment of its possessions. 35. On 26 September 2013 the Constitutional Court (Ústavní soud) dismissed the constitutional complaint as manifestly ill-founded, finding that the courts had duly responded to the objections raised by the applicant company and that their conclusions had not been tainted by arbitrariness. 36. Upon request, the Director General of the OGRPM sent a letter to the Government Agent on 19 February 2016, which stated, inter alia:
“[The applicant] company ... began communicating with the Office in respect of the seized [merchandise] following the decision of the Prague Municipal Court ... of 22 July 2010 ... When taking the [merchandise] back, the [applicant] company ... did not claim that it was damaged; on the contrary, it confirmed that the property was in good condition and the merchandise undamaged ... At the same time, the Office considers it appropriate to note that some articles were identified as counterfeit.”
RELEVANT LEGAL FRAMEWORK
Charter of Fundamental Rights and Freedoms
Article 36
“1. Everyone may assert, through the prescribed procedure, his or her rights before an independent and impartial court or, in specified cases, before another body. 2. Unless a law provides otherwise, a person who claims that his or her rights were curtailed by a decision of a public administrative authority may turn to a court for review of the legality of that decision. However, judicial review of decisions affecting the fundamental rights and freedoms listed in this Charter may not be removed from the jurisdiction of courts. 3. Everybody is entitled to compensation for damage caused by an unlawful decision of a court, other State bodies, or public administrative authorities, or as the result of an incorrect official procedure. 4. Conditions therefor and detailed provisions shall be set by law.”
Code of Criminal Procedure (Act no. 141/1961), as in force at the material time
37. The relevant part of the Code of Criminal Procedure (hereinafter “the CCP”) reads as follows:
Article 48
“1. The court or, in preparatory proceedings, the public prosecutor shall [cancel] a seizure [order] if:
(a)  the reason for which it was [granted] ceases to apply;
(b)  the criminal prosecution has been discontinued or has ended in an acquittal;
(c)  four months have elapsed since the judgment convicting the accused became final or since the decision referring the case to another authority came into effect. 2. The seizure [order] must be limited if it is no longer necessary to the same extent. 3. The court or, in preparatory proceedings, the public prosecutor, may, at the request of the accused, authorise the execution of an act in respect of the seized property. 4. The accused has the right to request, at any time, the limitation or cancellation of the ordered seizure; in such cases the court or the public prosecutor shall inform the injured party whose claim has been secured. If the request is dismissed, the accused may, if no new reasons have been given, only resubmit it after [thirty] days have elapsed since the decision came into effect.”
Article 78 § 1
“Anyone in possession of an item important for criminal proceedings shall present it to the court, the public prosecutor or the police upon request; if it is necessary to secure the item for the purposes of criminal proceedings, he or she shall hand it over to the authorities listed. The person shall be informed in the request that in the event of non-compliance, the article may be seized and other consequences may arise (Article 66).”
Article 79 § 1
“If an important item is not handed over by the person in possession of it upon request, [it] may be seized pursuant to a warrant issued by the president of a chamber of a court or, in preparatory proceedings, pursuant to a warrant issued by the public prosecutor or the police. The police shall, in order to issue such a warrant, seek the prior consent of a public prosecutor.”
Article 80 § 1
“If an item that has been handed over pursuant to Article 78 or seized pursuant to Article 79 is no longer necessary for the purposes of criminal proceedings and there is no prospect of its forfeiture or confiscation, it shall be returned to the person who handed it over or from whom it was seized ...”
Article 147 § 1
“When deciding a complaint, the superior authority shall review:
(a)  the accuracy of the decision at issue against which the complainant may lodge a complaint; and
(b)  the proceedings preceding the decision at issue.”
Article 347
“1. If an accused is prosecuted for a criminal offence for which, given [its] nature and seriousness and the circumstances of the accused, the sentence of confiscation of property may be expected and there is concern that the execution of such a sentence shall be obstructed or made difficult, the court or, in preparatory proceedings, the public prosecutor may seize the property of the accused ... 2. A complaint against a seizure order is admissible.”
Article 349[1]
“1. The [court] or, in preparatory proceedings, the public prosecutor shall cancel or limit the seizure if the grounds for which the property or specific part were seized have ceased to exist or if the seizure is no longer necessary to the extent ordered.
... 3. Once the [seizure order] becomes final, the accused may request cancellation or limitation of the seizure at any time. The court or, in preparatory proceedings, the prosecutor shall decide the request without delay. If the request is rejected, the accused may not repeat it until [thirty] days after the decision becomes final, unless new reasons are given.
...”
Act no. 279/2003 on the seizure of property and items in criminal proceedings
38. Section 10(1) provides that an administrator must act in accordance with the law in order to prevent depreciation or reduction of the seized property. Under section 10(2), an administrator must properly secure movable property handed over by [or taken from] the accused and protect it from depreciation, in particular damage, destruction, loss, theft or misuse. He or she must also take the action necessary to preserve the value of the items. State Liability Act (Act no. 82/1998)
39. The relevant parts of the State Liability Act read as follows:
Section 5
“The State is liable, under the conditions set out in the Act, for any damage caused by:
(a)  an unlawful decision delivered in civil proceedings, administrative proceedings, proceedings conducted under the Code of Administrative Court Procedure or criminal proceedings;
(b)  irregular official conduct.”
Section 7(1)
“Any party to proceedings in which an unlawful decision has been delivered is entitled to compensation for any damage caused by the unlawful decision.”
Section 8(1)
“Compensation for damage caused by an unlawful decision may only be claimed if the decision in question has been quashed or changed for being unlawful; unless the Act provides otherwise ...”
Section 9(1)
“Anyone who has been held in custody and has suffered damage caused by a decision on such custody may claim compensation for such damage in the event of acquittal, if the criminal proceedings have been discontinued or if the case has been referred to a different authority.”
Section 13
“1. The State is liable for any damage caused by irregular official conduct. Failure to take action or to deliver a decision within a specific time-limit is considered irregular official conduct. If there is no time-limit set for a specific action or decision, failure to take action or to deliver a decision within a reasonable time constitutes irregular official conduct. 2. Anyone who has suffered damage caused by irregular official conduct is entitled to compensation.”
Case-law of the Supreme Court
40. The Supreme Court has held in various decisions (notably nos. 25 Cdo 1956/2004 of 15 December 2005, 30 Cdo 2767/2013 of 26 August 2014 and 30 Cdo 4086/2015 of 8 March 2016) that a claimant lacks locus standi in proceedings against the State seeking compensation for damage caused by an unlawful decision delivered in proceedings to which he or she has not been a party. 41. In judgment no. 25 Cdo 356/2003 of 26 May 2004 the Supreme Court noted:
“Where items taken away from the accused within criminal proceedings suffered destruction during storage and could not be returned to a person entitled constitutes incorrect official procedure by a State authority.”
42. In its judgment no. 25 Cdo 2809/2006 of 19 February 2009 the Supreme Court noted:
“The right to compensation belongs to a person who has suffered damage as a result of the incorrect official procedure at any time, regardless of whether he or she was a party to the proceedings.”
43. In decision no. 25 Cdo 1627/2008 of 21 October 2010 the Supreme Court stated that a failure to protect seized items constituted irregular official conduct and that the owners, regardless of whether or not they had been party to the criminal proceedings in a case, could claim compensation from the State. Case-law of the Constitutional Court
44. In judgment no. I. ÚS 201/01 of 10 October 2001 the Constitutional Court examined a constitutional appeal by a company concerning police interference that had consisted of a search of its registered office and the seizure of documents. The Constitutional Court found a violation of the company’s rights and ordered the police to restore the situation that existed prior to the violation and to return the seized documents. That reasoning was followed by the Constitutional Court in other decisions (for example, nos. II. ÚS 298/05 of 6 October 2005, II. ÚS 362/06 of 1 November 2006, IV. ÚS 3370/10 of 23 February 2012 and II. ÚS 2979/10 of 29 March 2012). THE LAW
ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
45. The applicant company complained that it had been paralysed in its operations for about five years and wrongfully deprived of its property owing to the acts of the authorities in the criminal proceedings brought against its managing director and associate, without having been able to prevent or mitigate the resulting damage to the company. It relied on Article 1 of Protocol No. 1, which provides as follows:
“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.”
AdmissibilityThe parties’ submissions

46. The Government argued that the applicant company had not exhausted domestic remedies as it had never challenged the seizure of its property before the Constitutional Court. Furthermore, the managing director had neither objected to the Municipal Court’s decision of 9 June 2005 by way of a constitutional complaint nor applied to cancel or limit the seizure order under Article 349 § 1 of the CCP. In their additional observations, the Government admitted that at the relevant time, this provision had not existed in the same wording, as the applicant claimed (see paragraph 48 below). Nonetheless, they referred to Article 48 of the CCP which had been in force at the relevant time and to the settled practice, according to which the courts were informed if the seizure was excessive or of a lack of grounds by means of a request filed by the parties to the proceedings, and were consequently obliged to decide on the matter (see BENet Praha, spol. s r.o. v. the Czech Republic, no. 33908/04, 24 February 2011, §§ 16, 45, 50 etc.)
47. In addition, they maintained that in the proceedings for damages, the applicant company had failed to describe the cause of the damage, as required by domestic case-law, and had prevented the domestic courts from assessing whether its claims were well-founded. Moreover, even after the dismissal of the applicant company’s action, it could have brought a new action specifying the cause of the damage. That option had been available to the applicant company for a further four months after the decision in the compensation proceedings had become final. 48. The applicant company submitted that the constitutional complaint had been inaccessible and ineffective and had offered no reasonable prospects of success. It also pointed out that Article 349 § 3 of the CCP, referred to by the Government, as well as Article 349 § 4 of the CCP had not been included in the CCP until 1 June 2015. The applicant company further argued that it had been the task of the courts to consider its claim under the State Liability Act under a different legal provision, but they had failed to do so.

Outcome for Article P1-1: violation