Applicant (AP1): Thank you Mr. President, distinguished judges of the court. It is our submission that the striking off of the company from the court register and the automatic, personal, and unlimited liability of the applicant for the company's debt amount to an interference with the rights guaranteed by Article 1 of Protocol 1. This interference is not foreseeable and it is not proportionate to the public interest. I'm going to deal with the following three points. First, the unfettered character of Article 27, paragraph 4 of the FOCA, which provides for the shareholders' liability as an automatic consequence of the striking off of the company. Second, the vague distinction between active and passive shareholders established by the Constitutional Court decision number 135 of 2002. And third, the lack of the required guarantees in the enforcement proceedings against the applicant. These three points will lead me to the conclusion that as in Jokila versus Finland, the combined effect of the striking off and of the applicant's ensuing liability breached his general right to peaceful enjoyment of possessions as guaranteed by the first sentence of the first paragraph of Article 1, and that the Constitutional Court decision of 2002, as applied in the applicant's case, did not remedy the shortcomings of the contested legislation. My first point focuses on the letter of Article 27, paragraph 4 of the FOCA. This article does not contain an express provision on personal liability. It simply states that shareholders are deemed to have filed a certified statement provided by Article 394, paragraph 1 of the Companies Act of 1993, that is to say, the statement that they accept personal and unlimited liability for the debt of the struck-off company. Under Article 394, however, the statement was a precondition for the opening of voluntary striking off proceedings at the request of the shareholders. As such, it reflected their actual will to accept personal liability and the full knowledge of its consequences. Moreover, the Slovenian Parliament passed the FOCA through summary procedure. In that context, personal and unlimited liability was never discussed and eventually came as a surprise. This is confirmed by the minutes of parliamentary hearings and even by the Constitutional Court decision of 2002. This is further confirmed by the introductory notes to the FOCA that the government has now submitted. These notes do refer to the protection of creditors and the legal consequences of striking off, but they completely omit to set out what these consequences would actually be. The truth is, the consequences of the contested measure were all but foreseeable for the applicant and for all the other shareholders concerned. Therefore, the conclusions of the Chamber on this point are to be reviewed with the utmost care. The same goes for the Chamber's assessment of the proportionality of the interference. In fact, Article 27, paragraph 4 does not strike a fair balance between the competing interests of shareholders and companies' creditors, first and foremost because personal liability is an automatic consequence of the law. In Papakellas v. Greece, the Grand Chamber found that a legal presumption taking no account of the diversity of situations is too inflexible to comply with the requirements of Article 1. Strictly speaking, Article 27, paragraph 4 does not even qualify as a presumption. It is pure legal fiction. The question in the present case is not whether or not the shareholders are able to prove that they did not provide the liability statement. There is no such statement. And the government do not deny this obvious fact. After all, the system envisaged by the FOCA would not have worked otherwise. But this system is affected by a fundamental defect in terms of Conventional Standards, a defect which, and I turn to my second point, has not been remedied by the Constitutional Court decision of 2002. Indeed, the distinction between active and passive shareholders is based on criteria which are far from being clear, accessible, and foreseeable within the meaning of this Court's case law. The Constitutional Court decision only contains a non-exhaustive list of miscellaneous considerations which eventually boil down to the shareholders' involvement in the company's management and his influence in making the debt. This list is open, is vague, and does not offer clear and objective guidance. It rather leaves to lower courts to establish the shareholders' personal liability at their ultimate discretion. This leads me to my third point. The enforcement proceedings against the applicant did not measure up to the standards of adversarial proceedings required for an interference to comply with Article 1 of Protocol 1, according to the constant case law of the Court, and I refer to Antrish v. France as an example. In the present case, the enforcement proceedings have been no more than a paper exercise. No public hearing was held before domestic courts, and the decision was taken only on the basis of documents, the main document being, of course, the final decision to strike off the company. Against this background, the vague criteria laid down by the Constitutional Court carried no actual weight in the applicant's case. On the one hand, the domestic courts acknowledged that the contested debt was incurred at a time when the applicant had not yet acquired his share in the company. But this fact was deemed to be completely irrelevant. On the other hand, the domestic court stressed that the applicant had served as acting and then managing director of the company from 1993 to 1996, but they stated that, and I quote from the decision of the higher court of 2006, in the assessment of the member's passivity, it is not legally decisive whether or not the member performed any managerial function at all. End of quote. This means that the applicant's liability would have been established even if he had never performed any managerial function. And as a matter of fact, among the former shareholders of the company, only the deceased ones have been exonerated from personal liability. All the others have been held personally liable, whether they had been managers or not. Rather than on the basis of the criteria laid down by the Constitutional Court, the applicant's liability was established on the basis of yet another presumption, the presumption that a shareholder can influence a company in which he holds 10 percent share or more. This presumption is based on Articles 445 and 446 of the Companies Act, which provide shareholders holding at least 10 percent share in a company with some minority rights, such as the right to require a general meeting and a vote on a particular matter and the right to information. In spite of the limited scope of these rights, the domestic courts presumed that by making use of them, any given minority shareholder could have theoretically ensured the payment of the company's debts. With his 11.11 percent share, the applicant was therefore sanctioned with personal and unlimited liability for having allegedly failed to do so, regardless of his efforts to wind up the company back in 1997. It follows that, far from remaining exceptional, presumptions are rife in this case. They move from the company's purported inactivity and result into the shareholder's personal and unlimited liability. The last and crucial link of this chain of presumptions is neither laid down in the FOCA nor established by the Constitutional Court decision of 2002. This chain of presumptions leads to the automatic imposition of what the domestic courts and the Chamber itself qualified as a sanction. Yet, as conceded by the Constitutional Court at paragraph 73 of its decision, the imposition of this sanction is based on no more than an abstract risk. Mr. President, it is a respectful submission that these are pivotal arguments to reverse the Chamber's findings. The FOCA clearly fails the Convention's standards of foreseeability, proportionality, and procedural safeguards against abuse. This conclusion should not be taken in any way as seeking to minimize or understate the importance of the reasons which are relied by the Government. We do not deny that the State has the power to take legislative action to foster good corporate governance, all the more after a transition to market economy. But this power must be exercised in full compliance with the Convention, and any measure interfering with shareholders' rights must be properly assessed against the Convention's standards. Yet Slovenian courts never assessed whether the FOCA complied with the Convention. Quite simply, in 2002, the Constitutional Court excluded that the shareholders' liability amounted to an interference with Article I of Protocol 1. It therefore never assessed the proportionality of the FOCA from the standpoint of the Convention and never explained why the public interest could not be met by other, less intrusive, available means. This is all the more unjustified, considering that in 2007, the Constitutional Court found that Article I of Protocol 1 did, conversely, protect the legitimate expectations of those who