CASE OF MIROVNI INŠTITUT v. SLOVENIA

1. The case originated in an application (no. 32303/13) 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 private institute, Mirovni Inštitut (“the applicant institute”), on 13 May 2013.
2. The applicant institute was represented by Ms N. Šorli and Mr T. Kovačič, lawyers practising in Ljubljana. The Slovenian Government (“the Government”) were represented by their Agent, Mr L. Bembič, State Attorney.
3. The applicant institute alleged that the lack of reasoning in a decision of the Administrative Court and the absence of an oral hearing before it amounted to a violation of the right to a fair trial under Article 6 § 1 of the Convention.
4. On 30 May 2016 the complaint concerning Article 6 was communicated to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.
I. THE CIRCUMSTANCES OF THE CASE
5. The applicant institute is a private institute that carries out research in the field of social sciences. Its registered office is in Ljubljana.
6. In June 2003, the Ministry of Education, Science and Sport (hereinafter “the Ministry”) made two calls for tenders for the purpose of making awards for scientific research projects; one call was directed at private entities and the other at public research organisations. The Ministry announced that in 2004 it would finance 100,000 research hours, which were estimated to amount to 750,000,000 Slovenian tolars (SIT – approximately 3,130,000 euros (EUR)). The research projects were to be evaluated under the Rules on Quality Assessment and Funding of the Public Research Organisation Programme. The applicant institute submitted a tender for research in the field of social sciences.
7. Subsequently, the Ministry seems to have joined the proceedings for the two tenders, but no formal decision regarding the joinder appears to have been made. On 17 February 2004 the Ministry decided that the applicant institute would not be awarded any funding.
8. The applicant institute applied to the Administrative Court of the Republic of Slovenia (“the Administrative Court”), seeking the setting aside of the Ministry’s decision. The action was granted by a decision of 4 April 2007 and the case was remitted to the Ministry for reconsideration.
9. On 19 October 2009 the applicant institute lodged another action before the Administrative Court on account of the Ministry’s failure to adopt a decision within the prescribed time-limit.
10. On 30 March 2010 the Ministry again decided that the applicant institute would not be awarded any funding. It explained that the institute’s research programme had been ranked fifth among the research programmes in the field of political sciences and that only four programmes in that group would receive funding. The Ministry pointed out that it was presumed that no conflict of interests existed, even when evaluators worked in the same institution whose tenders they were evaluating and that this was a common European practice. It was further noted that evaluators had signed a declaration of confidentiality and an undertaking to withdraw in the event that a conflict of interests was found.
11. In order to reflect the fact that the Ministry had adopted the decision of 30 March 2010, the applicant institute supplemented its action of 19 October 2009, which it had originally lodged on account of the Ministry’s failure to adopt a decision (see paragraph 9 above), with a request that the Ministry’s decision be set aside. It further urged the Administrative Court to decide that it would be awarded funding. It complained that the Ministry had joined the proceedings that had initially been intended for consideration of tenders from private research organisations to the proceedings for consideration of tenders from public research organisations, without issuing a formal decision to that effect. It also complained of errors in the evaluation of the competing programmes, because not all of the criteria specified in the Rules on Quality Assessment and Funding of the Public Research Organisation Programme had been taken into account. It argued, inter alia, that the evaluation procedure had been unfair because some of the evaluators had been biased, as they had been evaluating research programmes which were competing with the very programmes in which they themselves participated. This provoked a distortion of the results of the procedure, as shown by the fact that only those research programmes in which the evaluators were leaders or members of research teams obtained financing. The applicant institute expressly requested a hearing at which witnesses could be heard with regard to the alleged procedural errors in the evaluation of the programmes. Additionally, it submitted a letter of 2 December 2003 which one of the witnesses, K., had sent to the Minister of Education, Science and Sport and several other addressees. In the letter K. notified them of problems he had detected in the tender proceedings in which he had participated as an evaluator.
12. After the parties had exchanged a number of written submissions, the Administrative Court, without holding a hearing, dismissed the action. In its decision of 2 February 2011 the court gave an extensive account of the proceedings before the Ministry and the submissions of both parties. The reasons for the decision were given on a single page. Invoking section 71(2) of the Administrative Dispute Act ( Zakon o upravnem sporu – hereinafter “the ADA”, see paragraph 23 below), the Administrative Court chiefly referred to the submissions of the Ministry. It considered, among other things, that the Ministry had not acted unlawfully in joining the proceedings. It accepted the Ministry’s submission that its decision had been dictated by the nature of the research and infrastructural programmes, taking into account the guidelines of the National Research and Development Programme. The court also pointed out that the procedural rules for the evaluation of research programmes adopted by the National Scientific and Research Council clearly defined the stages of the evaluation procedure, the participants in it and their tasks. Regarding the alleged conflict of interests, the court stated that it agreed with the Ministry as to why no such conflict existed and cited section 71(2) of the ADA (see paragraph 23 below). As to the alleged errors in the evaluation of the competing programmes, the court merely disagreed with the applicant institute that not all criteria had been taken into account and again cited section 71(2) of the ADA.
13. No reasons were given for not holding a hearing. None of the evidence relied on by the applicant institute in their appeal (see paragraph 11 above) was acknowledged or referred to in the court’s reasoning.
14. On 31 March 2011 the applicant institute lodged an appeal on points of law. It complained that the Administrative Court had not held a hearing even though the facts of the case had been contested and the applicant institute had explicitly requested a hearing at which witnesses could be heard. It also argued that the Administrative Court had failed to address its allegations that errors had been made in the evaluation procedure, and complained that insufficient reasoning had been given for the decision.
15. On 1 September 2011 the Supreme Court rejected the appeal as inadmissible. No reasons were given in its decision on the merits of the applicant institute’s complaints.
16. The applicant institute then lodged a constitutional complaint, arguing, among other things, that the decisions of the Ministry and the domestic court had been arbitrary and that the courts had failed to address its allegations that errors had been made in the evaluation procedure. It reiterated that the witnesses it had proposed had not been heard and that no hearing had been held.
17. On 19 November 2012 the Constitutional Court dismissed the applicant institute’s complaint, finding that it did not concern an important constitutional question or entail a violation of human rights with serious consequences for the applicant institute.
18. Section 1 of the Administrative Disputes Act (“the ADA”) reads:
“In an administrative dispute against decisions and actions of State authorities, local authorities and holders of positions of public authority, the rights and legal interests of individuals and organisations will be protected in accordance with the methods and procedures laid down in this Act, unless any other form of due process is provided for by the law for a particular matter ...”
19. Section 2 of the ADA reads:
“In an administrative dispute the Administrative Court rules on the legality of final administrative decisions that interfere with the legal status of the complainant ...”
20. Section 83 of the ADA, as it stood at the material time, read as follows:
“(1) A judgment of a first-instance court may be challenged by an appeal on points of law, which shall be lodged within thirty days of the service of the judgment on the party.
(2) The appeal on points of law is admissible if:
1. the value of the contested part of the final administrative act or final ruling, when the court took a decision on merits, in matters where the right or obligation of a party is expressed in monetary terms, exceeds EUR 20,000;
2. it concerns an important legal question or if the ruling of the court of first instance deviates from the case-law of the Supreme Court with regard to a legal issue that is essential for the decision, or if there is no uniform position concerning this legal issue in the case-law of the court of first instance and the Supreme Court has not yet adjudicated on the matter;
3. the impugned decision has serious consequences for the party;
“(1) An appeal on points of law can be lodged:
1. on account of a significant violation of the administrative dispute procedure as described in subsections (2) and (3) of section 75 of this Act;
2. on account of errors in substantive law.
(2) An appeal on points of law cannot be lodged on account of erroneous or incomplete establishment of the facts of the case.
21. Section 20 of the ADA reads:
“(1) The Administrative Court assesses or examines the facts within the limits of the complainant’s submissions.
(2) The Administrative Court is not bound by the evidence adduced by the parties to the proceedings and may examine all evidence in so far as it is relevant for clarification of the matter and may contribute to the establishment of a legal and correct decision.
22. Section 59 of the ADA reads:
“(1) The Administrative Court may issue a decision without holding a hearing if the facts on which the administrative decision is based are uncontested.
(2) Regardless of the provision in subsection (1) above, the court may also decide without holding a hearing in the following circumstances:
- if, on the basis of the action, the impugned legal act and the administrative case files, it is apparent that it is necessary to grant the complainant’s request;
- if the facts are contested by the parties, but new facts and evidence submitted by the parties in their action before the Administrative Court are inadmissible (in accordance with section 52 of the ADA) or not relevant for the decision;
- if the court has already decided on a dispute between the same parties on the same factual and legal basis.
(3) Regardless of subsection (1), the court shall decide at a hearing if:
- [it concerns] a person who should have participated in the administrative proceedings as party or a third party and it is not a case provided for in subsection (2) of section 229 of the Administrative Procedure Act or a substantially identical provision of another statute governing the procedure of issuing the administrative act;
- in the administrative proceedings a party was not able to make a statement on the facts relevant for the contested decision.
23. Section 71 of the ADA reads:
(2) The Administrative Court does not have to give reasons for a decision if it agrees with the reasoning of the contested administrative decision and finds so in its own judgment.
24. Section 55b(2) of the Constitutional Court Act reads as follows:
“(2) A constitutional complaint shall be accepted for consideration:
- if there is a violation of human rights or fundamental freedoms which has serious consequences for the complainant;
- if it concerns a constitutional question the importance of which exceeds that of the particular case in issue.”
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
25. The applicant institute complained under Article 6 § 1 of the Convention that its right to a fair trial had been infringed on account of the absence of an oral hearing before the Administrative Court and the lack of reasoning in that court’s decision.
26. In so far as relevant, Article 6 § 1 of the Convention reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
27. The Court notes that no plea of inadmissibility for incompatibility ratione materiae with the provisions of Article 6 § 1 of the Convention was made by the Government in their observations. However, since this is a matter which goes to the Court’s jurisdiction, the Court may examine it of its own motion (see Blečić v. Croatia [GC], no. 59532/00, § 67, ECHR 2006 III).
28. In this connection, the Court notes that the applicant institute submitted a tender for research following a call for tenders made by the Government (see paragraph 6 above). While it is true that the applicant institute did not have a right to be awarded the sum of money offered by the Government and that, in applying the Rules on Quality Assessment and Funding of the Public Research Organisation Programme (see paragraph 6 above) in order to determine which was the best scientific research programme, the domestic authorities enjoyed a certain discretionary power, it is not disputed by the parties that the participants in the tender had the right to a lawful procedure for examination of their tenders. The Court further recalls that it has recently stated the principles pertaining to the application of Article 6 § 1 of the Convention in its judgment in the case of Regner v. the Czech Republic ([GC], no. 35289/11, ECHR 2017 (extracts)). It distinguished four different situations where Article 6 § 1 is applicable, one of them regarding certain decisions where the authorities have a purely discretionary power to grant or refuse an advantage or privilege, with the law conferring on the person concerned the right to apply to the courts, which, where they find that the decision was unlawful, may set it aside. In such a case Article 6 § 1 of the Convention is applicable, on condition that the advantage or privilege, once granted, gives rise to a civil right (ibid., § 105).
29. It is true that in some decisions, adopted before the Regner judgment, the Court had excluded the applicability of Article 6 to procedures concerning a call for tenders by the domestic authorities, pointing out that the latter enjoyed a discretionary power and that the substantive law of the State concerned did not confer to the applicants a right to be awarded the tender (see, in particular, Marti AG and Others v. Switzerland (dec.), no. 36308/97, ECHR 2000 VIII; SKYRADIO AG and Others v. Switzerland (dec.), no. 46841/99, 31 August 2004; I.T.C. LTD v. Malta (dec.), no. 2629/06, 11 December 2007; and S.C. Black Sea Caviar S.R.L. v. Romania (dec.) [Committee], no. 13013/06, 31 May 2016). However, the Court considers the principles stated in Regner to be relevant for the present case, where the applicant institute clearly enjoyed a procedural right to the lawful and correct adjudication of the tenders. Should the tender be awarded to the applicant institute, the latter would have been conferred a civil right. In this connection, it is to be recalled that there has been a shift in Court’s case-law towards applying the civil limb of Article 6 to cases which might not initially appear to concern a civil right but which may have direct and significant repercussions on a private right belonging to an individual (see De Tommaso v. Italy [GC], no. 43395/09, § 151, ECHR 2017 (extracts)).
30. In the light of the above, the Court does not have any reasons to doubt the applicability of the civil limb of Article 6 § 1 of the Convention in the present case.
31. The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
32. The applicant institute argued that the Court had already held that only exceptional circumstances justified not holding a hearing. The Slovenian Supreme Court had also held in several cases that unless reasons for not holding a hearing were given, the right to a fair hearing risked being violated.
33. As to the lack of reasoning the applicant institute pointed out that the right to adversarial trial was effective only insofar as the courts’ reasoning was adequate. In the present case the reasoning of the Administrative Court did not fulfil that condition. The applicant institute had been unable to prove its claims because, instead of taking the requested evidence, the Administrative Court had relied on the administrative decisions of the opposing party and had accepted them as facts. The evidence the applicant institute had adduced had not been mentioned in the Administrative Court’s decision, and no reasons had been given for not taking it into account.
34. The Government pointed out that it was not obligatory under the domestic law to hold a hearing in an administrative dispute and that the law set clear conditions under which holding a hearing was not necessary. While acknowledging that no reasons had been given for not holding a hearing, the Government argued that this had not constituted a significant violation of the administrative dispute procedure. Although the Government agreed that the facts had been disputed between the parties, they contended that the applicant institute had failed to substantiate the relevance of the adduced evidence. As to the court’s failure to hear the witness K. (see paragraph 11 above), the Administrative Court had had his letter of 2 December 2003 at its disposal and had been able to take it into account. Lastly, the Government expressed their belief that the documents in the case file had provided a sufficient basis for ruling on the case.
35. As to the lack of reasoning, the Government argued that before the Administrative Court the parties had been able to respond to each other’s submissions, which had ensured that the proceedings were adversarial in nature. In administrative disputes the domestic law allowed the court not to give its own reasoning, but to refer to the reasoning of the lower instance if it concurred with it.
36. The Court reiterates that, in proceedings before a court of first and only instance, the right to a “public hearing” within the meaning of Article 6 § 1 entails an entitlement to an “oral hearing” unless there are exceptional circumstances that justify dispensing with such a hearing (see Göç v. Turkey [GC], no. 36590/97, § 47, ECHR 2002-V, with further references). In proceedings before two instances, at least one instance must, in general, provide such a hearing if no such exceptional circumstances are at hand (see Salomonsson v. Sweden, no. 38978/97, § 36, 12 November 2002). This public character protects litigants against the administration of justice in secret with no public scrutiny; it is also one of the means whereby confidence in the courts can be maintained. By rendering the administration of justice transparent, an oral hearing in public contributes to the achievement of the aim of Article 6 § 1, namely a fair trial, the guarantee of which is one of the fundamental principles of any democratic society, within the meaning of the Convention (see Mehmet Emin Şimşek v. Turkey, no. 5488/05, § 28, 28 February 2012, and Szücs v. Austria, 24 November 1997, § 42, Reports of Judgments and Decisions 1997-VII).
37. The exceptional character of the circumstances that may justify dispensing with an oral hearing in proceedings concerning a “civil” right essentially comes down to the nature of the issues to be decided by the competent national court, not to the frequency of such situations (see Madaus v. Germany, no. 44164/14, § 23, 9 June 2016, and also Jussila v. Finland [GC], no. 73053/01, § 42, ECHR 2006-XIV, which concerned the criminal limb of Article 6 § 1 of the Convention). This does not mean that refusing to hold an oral hearing may be justified only in rare cases (see Miller v. Sweden, no. 55853/00, § 29, 8 February 2005). The Court has accepted exceptional circumstances in cases where the proceedings concerned exclusively legal or highly technical questions (see Schuler ‑ Zgraggen v. Switzerland, 24 June 1993, § 58, Series A no. 263; Varela Assalino v. Portugal (dec.), no. 64336/01, 25 April 2002; and Speil v. Austria (dec.), no. 42057/98, 5 September 2002). There may be proceedings in which an oral hearing may not be required: for example, where there are no issues of credibility or contested facts which necessitate a hearing and the courts may fairly and reasonably decide the case on the basis of the parties’ submissions and other written materials (see Jussila, cited above, § 41, with reference to Döry v. Sweden, no. 28394/95, § 37, 12 November 2002, which concerned the civil limb of Article 6 § 1 of the Convention).
38. Turning to the circumstances of the present case, the Court observes that it is undisputed between the parties that no hearing took place before the Administrative Court or before another authority and that no reasons were given for the former (see paragraph 34 above). Therefore, it needs to be examined whether there were any exceptional circumstances which justified dispensing with an oral hearing in the instant case.
39. The Court notes that the Administrative Court acted as the first judicial instance. It was also the only judicial instance with full jurisdiction, that is to say jurisdiction that was not limited to matters of law, but also extended to factual issues (see paragraphs 21-22 above). The scope of the judicial review before the Supreme Court and the Constitutional Court was, on the contrary, limited to the legal matters and issues of constitutional law (see paragraphs 20 and 24 above).
40. The Court observes in this connection that, as it appears from the applicant institute’s submissions to the Administrative Court, its claims were capable of raising issues of both fact and law in relation to the Ministry’s decision of 30 March 2010 (see paragraph 11 above). The applicant institute consistently claimed that the evaluators were in a situation of institutional bias which had resulted in substantive errors in the proceedings for consideration of tenders and in the evaluation of the programmes (see paragraphs 10, 11, 14 and 16 above).
41. It is further noted that the Government acknowledged in their observations that the facts of the case were disputed between the parties (see paragraph 34 above).
42. The Court therefore accepts that the issues pending before the Administrative Court related also to the facts.
43. The Court observes that the applicant institute expressly requested that a hearing be held. Its request referred to concrete evidence which it asked the court to take, namely to hear a certain K. in respect of facts relevant for the assessment of the impartiality of persons involved in the determination of the tender. The Court is of the view that this aspect of the case can be said to have been relevant for the outcome of the proceedings (see paragraph 11 above) and that these matters were disputed between the parties (see paragraph 34 above).
44. The Court is well aware that the domestic law does not always require that a hearing be held before the Administrative Court. However, this is permissible only in a limited number of situations (see paragraph 22 above). In this regard, the Court observes that the Administrative Court – except in the summary of the parties’ submissions – neither acknowledged the applicant institute’s request that a hearing be held, nor gave any reasons for not granting the request (see paragraphs 12 and 13 above). Hence, in the absence of any explanation as to why the Administrative Court considered that it was not necessary to hold a hearing, it is difficult for the Court to ascertain whether it simply neglected to deal with the applicant institute’s request for such a hearing or whether it intended to dismiss it and, if that were its intention, what its reasons were for so deciding. It is also difficult for the Court to draw any conclusions as to which legal provision was regarded by the Administrative Court to form a legal basis for not holding a hearing and how this legal provision was interpreted against the factual background of the case (see, mutatis mutandis, Hiro Balani v. Spain, 9 December 1994, § 28, Series A no. 303-B, and Tabor v. Poland, no. 12825/02, § 45, 27 June 2006).
45. Having regard to the above considerations, the Court concludes that the proceedings were not fair and that, accordingly, there has been a violation of Article 6 § 1 of the Convention.
46. Having regard to the facts of the case, the submissions of the parties and its above finding under Article 6, the Court considers that it has examined the main legal questions raised in the present application and that there is no need to give a separate ruling on the remaining complaints (see, among other authorities, Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014 and Kamil Uzun v. Turkey, no. 37410/97, § 64, 10 May 2007).
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
47. Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
48. The applicant institute claimed 1,871,870 euros (EUR) in respect of pecuniary damage. The claim represents the amount of financing the applicant institute estimates it would have received had it been successful in the tendering procedure. It also claimed EUR 100,000 in respect of non ‑ pecuniary damage on account of the frustration suffered by its management and loss of reputation.
49. The Government insisted that the applicant institute was not entitled to any just satisfaction.
50. As to the alleged pecuniary damage, the Court cannot speculate as to what the outcome of the proceedings complained of would have been, had the violation of the Convention not occurred. There are accordingly no grounds for making any award under that head (see, mutatis mutandis, Yvon v. France, no. 44962/98, § 44, ECHR 2003-V).
51. The Court notes that, like commercial companies, private institutes may be awarded pecuniary compensation for non-pecuniary damage. Non-pecuniary damage suffered by such institutes may include heads of claim that are to a greater or lesser extent “objective” or “subjective”. Among these, account should be taken of the institute’s reputation, uncertainty in decision-planning, disruption in the management of the institute (for which there is no precise method of calculating the consequences) and lastly, albeit to a lesser degree, the anxiety and inconvenience caused to the members of the management team (see, mutatis mutandis, Comingersoll S.A. v. Portugal [GC], no. 35382/97, § 35, ECHR 2000-IV). Having regard to these criteria, the Court awards the applicant institute EUR 4,800 in respect of non ‑ pecuniary damage.
52. The applicant institute also claimed EUR 11,995.26 for the costs and expenses incurred before the domestic authorities and EUR 2,468.80 for those incurred before the Court.
53. The Government disputed the amount of costs and expenses actually incurred in the domestic proceedings. Moreover, it pointed out that the applicant institute had submitted with its observations a set of documents that differed from those submitted with the application.