MHZ KFT. v. HUNGARY

 
 
 
 
FOURTH SECTION
DECISION
Application no. 47872/15
MHZ KFT.
against Hungary
 
The European Court of Human Rights (Fourth Section), sitting on 30 April 2019 as a Committee composed of:
Paulo Pinto de Albuquerque, President,
Faris Vehabović,
Carlo Ranzoni, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above application lodged on 17 September 2015,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant company,
Having deliberated, decides as follows:
THE FACTS
1.  The applicant company, MHZ Kft., is a limited liability company with a registered office in Szolnok, Hungary. It was represented before the Court by Mr A. Fodor, a lawyer practising in Békéscsaba.
2.  The Hungarian Government (“the Government”) were represented by their Agent, Mr Zoltán Tallódi, Ministry of Justice.
A.  The circumstances of the case
3.  The facts of the case, as submitted by the parties, may be summarised as follows.
4.  Since 1992, the applicant company carried out liquidation activities as its main activity. Since 11 December 2009 liquidation activities may only be carried out by companies that are on the register of liquidators. Pursuant to section 3(1) of Governmental Decree 114/2006. (V. 12.) on the Register of Liquidators, a tender for the renewal of the register of liquidators has to be issued every seven years.
1.  Tender application and the first ranking decision
5.  Following a call for tenders published by the Government on 15 April 2013, the applicant company, on 14 June 2013, submitted a tender in order to be placed on the register of liquidators. The tenders were examined upon the proposal of a committee of nine members (hereinafter “the Evaluation Committee”) by the Office of Public Administration and Justice (hereinafter “the Office”).
6.  On 13 December 2013, based on the tender evaluation – that is, the score obtained by the applicant company –, the Office rendered a decision on its ranking (hereinafter “the first ranking decision”), finding that the applicant company’s tender ranked 134 out of the 344 tenders, which was insufficient for it to be included on the new register of liquidators. No appeal lay against this decision, which was therefore binding.
2.  Judicial review proceedings concerning the first ranking decision and the related interim injunction
7.  On 15 January 2014 the applicant company brought proceedings in the Budapest Administrative and Labour Court challenging the ranking decision. The applicant company also sought an interim injunction suspending the enforcement of that decision. It argued that its striking-off would have an irreversible effect.
8.  The Budapest Administrative and Labour Court received the petition on 17 January 2014. However, it received the case file from the Office only on 3 April 2014.
9.  On 5 May 2014 the court granted the request for the interim injunction and ordered the suspension of the enforcement of the ranking decision.
10.  The Office appealed against the decision. The Budapest Regional Court upheld the injunction. The second-instance court – in line with the reasoning of the first-instance court – emphasised that under the applicable law it could not be ensured that full restitutio in integrum could be achieved in the case of a decision in the applicant company’s favour.
11.  On 19 March 2015 the Budapest Administrative and Labour Court quashed the ranking decision and remitted the case to the Office.
3.  Striking-off decision
12.  On 15 February 2014 the Office struck the applicant company off the (old) register (the striking-off decision).
4.  Judicial review proceedings concerning the striking-off decision and the related interim injunction
13.  On 13 March 2014 the applicant company brought proceedings in the Budapest Administrative and Labour Court seeking the revocation of the striking-off decision. Furthermore, the applicant company requested an interim injunction suspending that decision. On 5 June 2014 the court granted the interim injunction.
14.  The Office appealed unsuccessfully and the decision suspending the striking-off decision became final and binding on 1 December 2014.
15.  On 4 November 2014 the court adjourned the proceedings regarding the striking-off decision, pending the outcome of the parallel proceedings relating to the ranking decision (see paragraph 7 above). Following the quashing of the ranking decision (see paragraph 11 above), the court, on an unspecified date, also quashed the striking-off decision and ordered new proceedings before the administrative authority.
5.  The second ranking decision
16.  Following certain organisational changes, with effect from 5 September 2014, the Ministry for National Development assumed responsibility for maintaining the register of liquidators. As of 14 November 2015, its specific organisational unit, namely the Authority Maintaining the Register of Liquidators (hereinafter “the Authority”), assumed the tasks related to the administrative procedure concerning the maintenance of the register of liquidators.
17.  Based on the instructions of the Budapest Administrative and Labour Court in its decisions quashing the ranking decision and the striking-off decision (see paragraphs 11 and 15 above), the Authority instituted a new procedure in which the applicant company again failed to obtain the necessary score. On 26 July 2016 the Authority rendered a decision refusing to enter the applicant company on the register of liquidators (hereinafter “the second ranking decision”).
6.  Judicial review proceedings concerning the second ranking decision
18.  The applicant company brought administrative proceedings before the Budapest Administrative and Labour Court against the second ranking decision. On 13 June 2017 the court quashed that decision and remitted the case to the Authority. The court found that the impugned decision was unlawful since the Authority had relied solely on the opinion of the Evaluation Committee, which was in its view insufficient.
19.  Subsequently, the Authority lodged a petition for review with the Kúria. On 10 October 2018 the Kúria quashed the decision of 13 June 2017 and remitted the case to the Budapest Administrative and Labour Court. In its view, the lower court had failed to examine whether the opinion of the Evaluation Committee was necessary to decide the case.
20.  In the meantime, on 24 November 2017, that is before the Kúria’s decision (see paragraph 19 above), the Authority being informed of the Budapest Administrative and Labour Court’s remittal (see paragraph 18 above) rendered a new decision refusing to add the applicant company to the register of liquidators, finding that it ranked 141. However, following the Kúria’s decision, the Authority revoked this decision on 21 November 2018.
21.  According to the latest information received from the applicant company on 15 February 2019, the proceedings are currently pending before the Budapest Administrative and Labour Court.
B.  Relevant domestic law
22.  Section 5 of Governmental Decree 114/2006. (V. 12.) on the Register of Liquidators provides:
“...
(2) Simultaneously with the final decision in the proceedings concerning the establishment of the new register of liquidators, a decision shall be rendered on the deletion of those liquidators who have not been selected ... The date of the deletion shall coincide with the date of the establishment of the new register of liquidators [15 February 2014].”
23.  Act III of 1952 on Civil Procedure, in so far as relevant, provides:
Section 330
“...
(2) If the action contains a request for the suspension of enforcement, the administrative body at first instance shall forward the action and [case file] to the administrative body at second instance within three days, and the latter shall forward it to the court within eight days.
(3) If the action is to be brought against the administrative body acting at first instance, the provisions of subsection 2 pertaining to the second-instance administrative body shall apply.”
Section 332
“...
(2a) The action ... shall not have suspensive effect as regards enforcement of the decision. However, the claimant may request in the action that enforcement be suspended. Enforcement may not be carried out from the time the body carrying out the enforcement gains knowledge of the request [for suspension] until the matter is resolved ...”
COMPLAINTS
24.  The applicant company complained that Article 6 of the Convention had been violated in relation to the tender process and ensuing proceedings. It also complained of being struck off the register of liquidators with irreversible effect, in violation of domestic rules concerning the processing of injunction requests and in view of the failure of the administrative authorities to rectify the situation once the court injunction had been granted.
25.  The applicant company further complained under Article 1 of Protocol No. 1 that it had been unlawfully deprived of its possessions because the tender process had been non-transparent and arbitrary. It complained, in particular, about being struck off the register of liquidators, submitting that this had served no public interest and had in any event been disproportionate.
THE LAW
26.  The Court notes that the applicant company raised its complaints under Article 6 and Article 1 of Protocol No. 1. The Court, being master of the characterisation to be given in law to the facts of the case (see, among many authorities, Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 114 and 126, 20 March 2018), will examine all the above complaints solely under Article 1 of Protocol No. 1, which reads 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.”
A.  The parties’ submissions
27.  The Government argued that the impugned decisions were being contested in the domestic proceedings, which were still ongoing, and that effective remedies had thus not been exhausted.
28.  The applicant company argued that its loss of business was unlawful. As regards the injunctions, the applicant company argued that the Office had sent its request and/or case file to the competent court too late, thereby acting in bad faith, creating an irreversible situation and prejudicing the effectiveness of any remedy. It further argued that the new register should not have been finalised until the remedies against the ranking decision had been exhausted. Furthermore, since all the ranking decisions concerning the applicant company issued so far had been repealed, the ranking of other tenderers should not have become final. In the applicant company’s submission, it had suffered a continuous disadvantage since being removed from the register as it could not receive new assignments.
B.  The Court’s assessment
29.  The Court reiterates that States do not have to answer for their acts before an international body until they have had an opportunity to put matters right through their own legal system, and those who wish to invoke the supervisory jurisdiction of the Court in respect of their complaints against a State are thus obliged to first use the remedies provided by the national legal system (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 70, 25 March 2014, and Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 115, ECHR 2016). The Court cannot emphasise enough that it is not a court of first instance; it does not have the capacity, nor is it appropriate to its function as an international court, to adjudicate on large numbers of cases which require the finding of basic facts or the calculation of monetary compensation – both of which should, as a matter of principle and effective practice, be the domain of domestic jurisdictions (see Demopoulos and Others v. Turkey [GC] (dec.), nos. 46113/99 and 7 others, § 69, ECHR 2010).
30.  Nevertheless, the only remedies which Article 35 of the Convention requires to be exhausted are those that relate to the breaches alleged and at the same time are available and sufficient. The existence of such remedies must be sufficiently certain not only in theory but also in practice, failing which they will lack the requisite accessibility and effectiveness (see Akdivar and Others v. Turkey, 16 September 1996, § 66, Reports of Judgments and Decisions 1996-IV). In addition, in accordance with the “generally recognised principles of international law”, there may be special circumstances which absolve the applicant from the obligation to exhaust the domestic remedies at his or her disposal (see Selmouni v. France [GC], no. 25803/94, § 75, ECHR 1999‑V). However, the Court points out that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust domestic remedies (see Akdivar and Others, cited above, § 71, and Vučković and Others, cited above, § 74).
31.  Turning to the present case, the Court notes that the applicant company essentially complained about being struck off the register of liquidators as a result of receiving an insufficient score in the tender process and about the related proceedings (see paragraphs 24 and 25 above).
32.  The Court also observes that the applicant company confirmed in its submissions of 15 February 2019 that the judicial review proceedings concerning the second ranking decision were, following the Kúria’s decision of 10 October 2018 (see paragraph 19 above), still pending before the Budapest Administrative and Labour Court (see paragraph 21 above). It further notes that although the applicant company’s complaint relates also to the non‑implementation of the interim injunctions granted by the domestic court (see paragraphs 9, 10 and 13 above), this issue is intrinsically linked to the applicant company’s allegations of not being able to be included on the register of liquidators, even in the event of the positive outcome of the available remedies (see paragraphs 24, 25 and 28 above). Since those remedies have not yet been exhausted and the proceedings are currently pending before the first-instance court, the Court does not consider it appropriate to deal with the matter before it has been decided by way of a final domestic decision.
33.  Accordingly and without prejudice to the applicant company’s possibility of bringing new proceedings before this Court after exhausting domestic remedies, the Court finds the present application to be premature.
34.  Consequently, the application must be rejected, pursuant to Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 23 May 2019.
Andrea Tamietti Paulo Pinto de Albuquerque
Deputy RegistrarPresident

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