On 20 February 2018 the ECtHR issued a decision in the case Vujović and Lipa D.O.O. v. Montenegro (application no. 18912/15), concluding that there had been a violation of Article 6 § 1 (right to effective access to the courts of appeal in civil cases when set up by the contracting State) of the European Convention on Human Rights.
Facts of the case
Mr Milorad Vujović is the founder, the sole owner, and the executive director of the limited liability construction company registered in Montenegro, Lipa D.O.O.
On 1 July 2013 an insolvency creditor X requested the Commercial Court in Podgorica to open insolvency proceedings in respect of Lipa D.O.O. which was represented by the Mr Vujović and a lawyer duly authorised by the latter. On 27 December 2013 the Commercial Court opened insolvency proceedings in respect of Lipa D.O.O. and, inter alia, appointed an insolvency administrator.
The company, through its lawyer, lodged an appeal against the Commercial Court decision. The Court rejected the appeal as having been submitted by an unauthorised person, given that the lawyer had not been appointed by the insolvency administrator.
Later the applicants lodged a constitutional appeal that was dismissed by the Constitutional Court for “not having been lodged by a party to the domestic proceedings or by a person authorised to appeal on behalf of the person whose rights and freedoms were violated”.
Judegment of the ECtHR
The ECtHR found that the Convention does not compel the Contracting States to set up courts of appeal in civil cases. However, where such courts do exist, the guarantees of Article 6 must be complied with, inter alia, by ensuring to litigants an effective access to the courts for the determination of their “civil rights and obligations”.
The right of access to the courts is not absolute but may be subject to limitations. In laying down such limitations, the Contracting States enjoy a certain margin of appreciation. Nonetheless, the limitations applied must not restrict the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6 § 1 if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved.
In the case at stake, the Court observed that section 33 of the Insolvency Act of the applicable law does not explicitly provide for a duty of an insolvency administrator to lodge an appeal. Moreover, section 40 of the same Insolvency Act provides that the insolvency administrator is entitled to remuneration only once the insolvency proceedings are concluded, thus indeed raising a question as to whether he or she has an interest in appealing against the opening of insolvency proceedings.
The right of access to a court as enshrined in Article 6 implies, among other things, the possibility for a person whose civil rights have been interfered with to bring proceedings directly and independently and not via third parties. In the case at stake, however, the applicants could not have appealed directly and independently against the decision which directly affected them but only through an insolvency administrator.
In conclusion, the Court considered that the applicants’ loss of the possibility of using a remedy which they had reasonably believed to be available, amounted to a disproportionate hindrance. There had accordingly been a violation of Article 6 § 1 of the Convention