CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 20 septembre 2011

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display:inline-block } .sF6A12959 { width:33%; height:1px; text-align:left } .s85226119 { margin-top:0pt; margin-bottom:0pt; text-align:justify; font-size:10pt } .sC36A6361 { font-family:Arial; color:#000000 }       FOURTH SECTION           CASE OF SHESTI MAI ENGINEERING OOD AND OTHERS v.   BULGARIA   (Application no. 17854/04)           JUDGMENT       STRASBOURG   20 September 2011     FINAL   20/12/2011   This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Shesti Mai Engineering OOD and Others v. Bulgaria , The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:   Nicolas Bratza, President ,   Lech Garlicki,   Ljiljana Mijović,   Sverre Erik Jebens,   Zdravka Kalaydjieva,   Nebojša Vučinić,   Vincent A. De Gaetano, judges , and Lawrence Early, Section Registrar , Having deliberated in private on 30 August 2011, Delivers the following judgment, which was adopted on that date: PROCEDURE 1 .     The case originated in an application (no. 17854/04) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 3 May 2004. The application was originally lodged by Shesti Mai Engineering OOD, a Bulgarian limited liability company, and Mr Krasimir Kostov Evtimov, a Bulgarian national (Shesti Mai Engineering OOD being wholly owned by Mr Evtimov and his wife, Mrs Kalina Nikolova Stoycheva). They complained, in particular, that the State had interfered with the affairs of a company in which they held shares and with their rights as shareholders in that company. In a letter of 7 July 2004 seven Bulgarian nationals, Mr Georgi Ferdinandov Mitev, Ms Kalina Nikolova Stoycheva (Mr Evtimov’s wife), Mr Stefan Borisov Stefanov, Ms Lilyana Nikolova Galeva, Ms Neli Mitkova Alexandrova, Ms Nikolina Slaveva Amzina and Mr Ivan Boyanov Bozhilov, and three Bulgarian limited liability companies, Motorengineering OOD, Nov Bryag OOD (a company wholly owned by Ms Stoycheva) and Vitex AD, expressed their wish to join the application. 2.     The applicants were represented by Ms S. Margaritova ‑ Vuchkova and Mr K. Kirilov, lawyers practising in Sofia. The Bulgarian Government (“the Government”) were represented by their Agents, Ms N. Nikolova and Ms   S.   Atanasova, of the Ministry of Justice. 3.     The applicants, who were all shareholders in a limited liability company, complained of interference with their shareholdings and about a number of proceedings in which they had tried to protect themselves against the effects of that interference. 4.     On 31 March 2009 the Court (Fifth Section) decided to give notice of the application to the Government. It was also decided to examine the merits of the application at the same time as its admissibility (Article 29 § 1 of the Convention). 5 .     On 18 May 2009 the Court received a declaration by one of the applicants, Mr Georgi Ferdinandov Mitev, dated 24 April 2009, in which he expressed his wish to withdraw his complaints, because after the application had been lodged he had transferred all his shares in the above ‑ mentioned company to the second applicant, Mr Krasimir Kostov Evtimov (see paragraph 14 in fine below). 6 .     In their submissions, sent on 21 December 2009 in reply to the Government’s observations on the admissibility and merits of the application, the applicants raised further complaints concerning the fairness and the length of proceedings brought by the applicant companies Motorengineering OOD and Vitex AD in April 2000 and of impartiality on the part of the courts dealing with those proceedings (see paragraphs 35 ‑ 39 below). 7.     Following the re ‑ composition of the Court’s sections on 1 February 2011, the application was transferred to the Fourth Section. THE FACTS I.     THE CIRCUMSTANCES OF THE CASE 8 .     The applicant companies, Shesti Mai Engineering OOD, Motorengineering OOD, Nov Bryag OOD and Vitex AD, are based in Sofia, Varna, Burgas and Gabrovo respectively. The other applicants, Mr   Krasimir Kostov Evtimov, Mr Georgi Ferdinandov Mitev, Ms Kalina Nikolova Stoycheva, Mr Stefan Borisov Stefanov, Ms Lilyana Nikolova Galeva, Ms Neli Mitkova Alexandrova, Ms Nikolina Slaveva Amzina and Mr Ivan Boyanov Bozhilov, were born in 1946, 1955, 1953, 1956, 1945, 1960, 1947 and 1960 respectively and live in Sofia. A.     The company in which the applicants were shareholders 9 .     At the material time all applicants were shareholders in Mezhdunaroden Tzentar po Firmeno Upravlenie AD (“ Международен център по фирмено управление АД ” – “MTFU”), a limited liability company active in the field of professional training. When it was formed in 1989, the company had a share capital of 3,000,000 old Bulgarian levs (“BGL”) [1] , divided into three thousand shares of BGL 1,000 each. Three thousand new shares with a nominal value of BGL 1,000 each were authorised and issued in 1990, the company’s capital thus reaching BGL   6,000,000. In 1998 the nominal value of the shares was increased to BGL 10,000 each, the company’s share capital thus reaching BGL   60,000,000 (which became BGN 60,000 after the July 1999 currency revalorisation – see the footnote below). 10 .     On 6 April 1990 MTFU entered into an agreement with the Ministry of Finance whereby it acquired the right to use for its professional training business, for a period of fifty years, a training centre consisting of buildings and adjoining land in the village of Bistritsa, close to Sofia. In consideration for the acquisition, MTFU, apart from agreeing to pay BGL 6,078,000 for the right of use (according to the applicants, at that time that sum was equal to the training centre’s fair market value), also undertook to carry out at its own expense reconstruction of and improvements to the premises. It was, however, stipulated that, should the right of use be terminated, the State would remain the owner of the whole property. 11 .     By a decision of the Council of Ministers of 21 May 1990, the MTFU was formally granted the right of use of the training centre, under the terms laid down in the above ‑ mentioned agreement. Several months later the MTFU made the appropriate payment for the right of use. 12 .     Between 1990 and 1999 MTFU carried out major renovation and reconstruction works, enlarging the existing buildings of the training centre, constructing new ones and developing the centre’s infrastructure. 13 .     In 1997 MTFU’s revenue from its professional training business was 390,000 United States dollars (USD), and in 1998 it increased to USD   452,300. Its revenue for the first seven months of 1999 was USD   291,470. In July 1999 the company had one hundred and ten employees. Until that time, the applicant Mr Evtimov had served as its executive director. 14 .     In July 1999 the applicants together held 49.83% of MTFU’s capital, or 2,990 shares in total. Their shareholdings broke down as follows: (i)     Shesti Mai Engineering OOD – 250 shares; (ii)     Motorengineering OOD – 50 shares; (iii)     Nov Bryag OOD – 240 shares; (iv)     Vitex AD – 50 shares; (v)     Mr Krasimir Kostov Evtimov – 610 shares; (vi)     Mr Georgi Ferdinandov Mitev – 600 shares; (vii)     Ms Kalina Nikolova Stoycheva – 390 shares; (viii)     Mr Stefan Borisov Stefanov – 200 shares; (ix)     Ms Lilyana Nikolova Galeva – 100 shares; (x)     Ms Neli Mitkova Alexandrova – 100 shares; (xi)     Ms Nikolina Slaveva Amzina – 100 shares; and (xii)     Mr Ivan Boyanov Bozhilov – 300 shares. On an unspecified date after 2004 Mr Mitev transferred all his shares to Mr Evtimov. 15 .     In the meantime, in 1992 MTFU went into liquidation. However, in 1995 a general meeting of its shareholders resolved to discontinue the winding ‑ up procedure. By decision no. 6 of 28 July 1995 the Sofia City Court entered that resolution in the register of companies. On 3 August 1996 a general meeting of MTFU’s shareholders adopted new articles of association, which provided that the company would be managed by a board of directors, instead of the managing and supervisory boards which had hitherto existed. However, the meeting did not elect members of the new board of directors. B.     Decision no. 9 of 21 July 1999 and the change of control over MTFU 16 .     Between 20 and 22 July 1999 Mr B.S., acting on behalf of a company, Minstroy Holding AD (“Minstroy”), asked the Sofia City Court ( Софийски градски съд ) to enter in the register of companies Minstroy’s election as MTFU’s new managing director, as “resolved” by MTFU’s board of directors on 20 July 1999. 17 .     On 21 July 1999 Judge R.P. of the company division of the Sofia City Court, acting on her own initiative and sitting in private, issued decision no. 9 concerning MTFU. Referring to Article 192 § 2 of the Code of Civil Procedure (see paragraph 53 below) and noting that decision no. 6 of 28 July 1995 (see paragraph 15 above) had not specified who the members of the board of directors of MTFU were, she stated: “Undoubtedly, that was an obvious error. ... It should be corrected by rectifying decision no. 6 ... and entering a board of directors [in the register].” Accordingly, the judge entered the names of five members of a new board of directors into the register of companies. All of them, save for Mr   Evtimov, were legal persons. 18 .     The next day, 22 July 1999, Judge R.P. issued decision no. 10. Citing a “resolution” of the newly registered board of directors of 20 July 1999 (see paragraph 16 above), she erased Mr Evtimov as executive director of MTFU, and registered in his place Minstroy, represented by Mr B.S. 19 .     On 26 July 1999 Mr B.S. and other representatives of Minstroy took control of MTFU’s premises and evicted its erstwhile management, including Mr Evtimov, by force. On 27 July 1999 Mr B.S., in his capacity as representative of the new managing director, issued an order barring Mr   Evtimov from entering the company’s premises. 20 .     The new management called and conducted two general meetings of MTFU’s shareholders, which took place on 30 September and 15 November 1999. The applicants, as well as some other shareholders, were denied access to those meetings. As a result, they were attended by shareholders representing only 8% of MTFU’s capital. The meetings elected new members of MTFU’s board of directors and a new executive director. The general meeting of 30 September 1999 also resolved that the executive director would “cancel all existing shares and share warrants and issue a new share register and new share warrants”. The applicants submitted that their names were left out of the share register of MTFU drawn up pursuant to that resolution. 21 .     In view of an interim injunction issued by the Sofia District Court ( Софийски районен съд ) (see paragraph 25 below), on 30 September 1999 the Sofia City Court postponed the registration of the resolutions taken at the first general meeting. After the injunction was set aside (see paragraph   26 below), on 29 November 1999 the Sofia City Court resumed the registration proceedings and by decisions nos. 11 and 12 of 29   November and 13 December 1999 entered the changes in the register of companies. 22 .     On 15 November 1999 shareholders of MTFU representing 71.3% of the share capital of MTFU, who opposed the actions of the new management and who had been denied access to the general meetings called by that management, held a “parallel” general meeting. They passed a number of resolutions and elected a new board of directors. On 2 December 1999 the Sofia City Court refused to enter those particulars in the register of companies, noting that the meeting had not been called by the board of directors featuring in the register of companies, and that there was no evidence that it had been regularly conducted. It seems that an appeal by the applicants against that refusal was held to be inadmissible by the Sofia Court of Appeal ( Софийски апелативен съд ). 23 .     Between July 1999 and May 2000 Mr Evtimov and other applicants lodged a number of complaints with the prosecuting authorities, the Ministers of Justice and Economics and other State authorities, asking them to take measures to protect the rights of MTFU’s shareholders. C.     Proceedings brought by the applicants 1.     By Shesti Mai Engineering OOD 24 .     In September 1999 Shesti Mai Engineering OOD brought a claim against MTFU, represented by its new management, under Article 431 § 2 of the Code of Civil Procedure 1952 (“the Code”) (see paragraph 51 below). It sought to have decisions nos. 9 and 10 of 21 and 22 July 1999 (see paragraphs 17 and 18 above) set aside. It also sought, making reference to Article 498 of the Code (see paragraph 51 in fine below), to have the corresponding entries in the register of companies annulled. It argued that the decisions were null and void because (i) in 1995 there had been no resolution of MTFU’s shareholders to elect a new board of directors and (ii)   such a body had only been envisaged for the first time in MTFU’s new articles of association, adopted in 1996 (see paragraph 15 above). There had therefore been no grounds to correct errors in decision no. 6 of 28 July 1995. Furthermore, the Sofia City Court had accepted that MTFU’s new board of directors had validly elected a managing director on 20 July 1999, a day before that board had been entered in the register of companies and had thus acquired capacity to act. Lastly, the Sofia City Court had disregarded the requirements of Article 192 § 2 of the Code (see paragraph   53 below) because it had acted on its own initiative and had not held a hearing. 25 .     At the request of Shesti Mai Engineering OOD, on 21 September 1999 the Sofia District Court, finding that there was a risk that the rights which the company might acquire under a future judgment could be frustrated, granted an interim injunction. It suspended the enforcement of decisions nos. 9 and 10 of the Sofia City Court, barred the new board of directors and executive director of MTFU from taking any managerial decisions and from disposing of company assets, and ordered that the general meeting of MTFU’s shareholders scheduled for 30 September 1999 (see paragraph 20 above) be postponed. 26 .     On appeal by one of the members of MTFU’s new management, the Sofia City Court set aside the injunction in a final decision of 3 November 1999. It held that there was no genuine risk that the enforcement of any future judgment would be frustrated, because, if Shesti Mai Engineering OOD’s claim was allowed and decisions nos. 9 and 10 were annulled, that development could be entered in the register of companies. It also held that it was impossible to suspend the enforcement of decisions nos. 9 and 10, because they had already led to changes in the register of companies. It went on to say that by barring MTFU’s new board of directors and executive director from taking managerial decisions and disposing of company assets, the injunction had in effect rendered nugatory decisions nos. 9 and 10 and the changes which they had brought about in MTFU’s registration details, which was inacceptable in interim proceedings. Lastly, the court held that it was not appropriate to prevent a general meeting of shareholders from taking place in connection with a claim for the annulment of pre ‑ existing entries in the register of companies. Shesti Mai Engineering OOD tried to challenge that decision, but on 15 October 1999 the Sofia Court of Appeal declared its appeal inadmissible. 27 .     On 21 June 2000 the Sofia City Court allowed Shesti Mai Engineering OOD’s claims under Articles 431 § 2 and 498 of the Code. On 10 July 2002 and 3 November 2003 respectively its judgment was upheld by the Sofia Court of Appeal and the Supreme Court of Cassation ( Върховен касационен съд ). The courts were satisfied that the company had standing to bring the claims, because it had shown that it was a shareholder in MTFU on the basis of its share warrants and MTFU’s share register. In particular, the Sofia Court of Appeal found that “those pieces of evidence are unequivocal – they show that the claimant company has acquired and is holding shares in the defendant company”. 28 .     The courts went on to find that the failure in 1995 to enter a board of directors of MTFU in the register could not have been regarded as an obvious error. The Sofia City Court held: “Under Article 192 § 2 of the [Code], the court is only competent, on its own initiative or pursuant to a request by the parties, to correct an obvious error in its judgment ... It follows that the court is not competent to enter new circumstances [in the register].” Therefore, Judge R.P. had not been authorised to act on her own initiative in order to make the entries that she had made on 21 July 1999, and decision no. 9 that she had issued was invalid. In relation to that, the Supreme Court of Cassation held: “An entry in the register of companies which has not been made at the request of a person authorised by law to make such a request should be regarded as inadmissible.” 29 .     Accordingly, the courts, by reference to Article 498 of the Code (see paragraph 51 in fine below), annulled the entries in the register of companies made with respect to decision no. 9. 30 .     The courts made no rulings in relation to decision no. 10. Shesti Mai Engineering OOD did not seek to have their judgments supplemented in that regard. 2.     By Mr Evtimov 31 .     On 28 July 1999 Mr Evtimov also brought a claim against MTFU, represented by its new management, under Article 431 § 2 of the Code and section 71 of the Commerce Act (see paragraphs 51 and 56 below), seeking a declaration that decisions nos. 9 and 10 were null and void. He further sought, under Article 498 of the Code (see paragraph 51 in fine below), to have the entries in the register of companies made pursuant to those decisions annulled. His arguments were similar to those raised by Shesti Mai Engineering OOD (see paragraph 24 above). 32 .     On 4 February 2000 the Sofia City Court stayed the proceedings, citing the opening of criminal proceedings for abuse of office against Mr   Evtimov in his former capacity of executive director of MTFU. On 10   February 2000 Mr Evtimov appealed against the stay, arguing that the matters cited by the Sofia City Court had no connection with his claim. On 24 March 2000 the Sofia Court of Appeal allowed the appeal and the proceedings were resumed. 33 .     The Sofia City Court gave judgment on 4 December 2001. On 17   March 2003 and 9 March 2004 it was upheld, respectively, by the Sofia Court of Appeal and the Supreme Court of Cassation. Based on MTFU’s share register and share warrants presented by Mr Evtimov, the courts were satisfied that he was a shareholder in the company. They went on to hold, for reasons similar to those given in the proceedings brought by Shesti Mai Engineering OOD, that decision no. 9 had entered details in the register pertaining to actions which had not taken place. However, this time they considered it inadmissible to examine in the same proceedings an application under Article 498 of the Code, saying that such an application was, in principle, to be examined in non ‑ contentious proceedings. 34 .     The courts made no ruling in relation to decision no. 10 and Mr   Evtimov’s application under Article 498 in respect of it. He did not seek to have their judgments supplemented in that regard. 3.     By Motorengineering OOD and Vitex AD 35 .     In April 2000 the two applicant companies brought a claim under Article 431 § 2 of the Code, seeking the annulment of decisions nos. 9, 10, 11 and 12 of the Sofia City Court (see paragraphs 17, 18 and 21 above). They further sought, under Article 498 of the Code (see paragraph 51 in fine below), to have the corresponding entries in the register of companies annulled. 36 .     On 20 June 2000 the proceedings were stayed pending the outcome of the proceedings brought by Shesti Mai Engineering OOD (see paragraphs 24 ‑ 30 above). Following a request by Motorengineering OOD and Vitex   AD of 16 February 2006, they were resumed on 21 March 2006. 37 .     On 12 May 2006 the Sofia City Court dismissed the claims. On appeal, on 5 October 2007 the Sofia Court of Appeal partly quashed the City Court’s judgment, and held that the applicant companies no longer had an interest in seeking the annulment of decision no. 9, because that decision and the corresponding entries in the register of companies had already been annulled in the proceedings brought by Shesti Mai Engineering OOD. It remitted the remainder of the case, concerning decisions nos. 10, 11 and 12, for re ‑ examination. 38 .     On 29 October 2008 the Sofia City Court gave judgment, which the Sofia Court of Appeal upheld on 6 July 2009. The courts held that the annulment of decision no. 9 did not have retrospective effect and that the annulment of the entries in the register made pursuant to that decision had accordingly taken effect only after the judgment of 3 November 2003, which had concluded the proceedings brought by Shesti Mai Engineering OOD. Therefore, decisions nos. 10, 11 and 12, made before that annulment and based on the entry in the register made on 21 July 1999, were not invalid. It also noted that Motorengineering OOD and Vitex AD, in so far as they alleged that the general meetings of the shareholders whose resolutions had been registered with decisions nos. 11 and 12 had not been duly convened and conducted, could have challenged those resolutions under section 74 of the Commerce Act 1991 (see paragraph 56 below), but had failed to do so within the applicable time ‑ limits. Accordingly, their claims were dismissed. 39 .     It is unclear whether Motorengineering OOD and Vitex AD sought permission to appeal on points of law to the Supreme Court of Cassation. D.     The disciplinary proceedings against Judge R.P. 40 .     Following a number of complaints made by Mr Evtimov, in the beginning of 2000 the Inspectorate of the Ministry of Justice reviewed Judge R.P.’s actions in relation to decision no. 9 (see paragraph 17 above) and concluded that she had breached the relevant rules of procedure in many respects. On the basis of these conclusions, on 22 May 2000 the Minister of Justice proposed to the Supreme Judicial Council ( Висш съдебен съвет ) that disciplinary proceedings against the judge be opened. This was done, and in a decision of 6 October 2000 the Council’s disciplinary panel gave Judge R.P. a disciplinary warning. It found that in issuing decision no. 9 she had impermissibly acted on her own initiative and not pursuant to a request by the company, had committed a number of procedural violations, and had distorted the evidence in the case file and made perverse findings of fact. Her actions, which had been deliberate and not due to a mere lack of professional experience, had amounted to a breach of her professional obligations. In the panel’s view, Judge R.P. had “in fact created” a new board of directors of MTFU. However, as she had not committed other violations and had not “sought to prejudice the interests of third parties”, there were grounds to impose the most lenient disciplinary punishment – a reprimand. E.     Developments after 1999 concerning MTFU 1.     Concerning the training centre 41 .     On 12 May 2000 the Council of Ministers revoked its decision of 21   May 1990 whereby it had granted to MTFU the right of use of the training centre in Bistritsa (see paragraph 11 above). The new decision was based on paragraph 6 of the transitional and concluding provisions of the State Property Act 1996, which limited the duration of existing contracts concerning the right of use of State property to ten years (see paragraph 59 below). The Council of Ministers also decided that MTFU would be reimbursed the respective part of the consideration that it had paid in 1990 (see paragraphs 10 and 11 above). 42 .     On 8 June 2000 the regional governor of Sofia ordered MTFU to vacate the property. However, following a Constitutional Court decision whereby paragraph 6 of the transitional and concluding provisions of the State Property Act 1996 was found to contradict the Constitution (see paragraph 60 below), on 10 April 2001 the governor revoked his order. 43 .     In 2007 MTFU brought an application for judicial review, seeking to have the Council of Ministers’ decision of 12 May 2000 declared null and void, on the grounds that it had been issued on the basis of a legal provision which had subsequently been declared unconstitutional. On 25 June 2009 a three ‑ member panel of the Supreme Administrative Court ( Върховен административен съд ) dismissed the application, noting that the decision of the Constitutional Court did not have retrospective effect. Therefore, at the time when it had been adopted, the disputed decision had had a sound legal basis. 44 .     On appeal by MTFU, by a final judgment of 15 December 2009 a five ‑ member panel of the Supreme Administrative Court, with one judge dissenting, reversed and allowed the claim, declaring the Council of Ministers’ decision null and void. It noted, inter alia , that MTFU’s right of use had been extinguished by operation of law with the adoption of paragraph 6 of the transitional and concluding provisions of the State Property Act 1996. Therefore, the Council of Ministers had not been competent to decide on the matter. 45 .     The Court has not been informed of the practical consequences of those developments and, in particular, whether MTFU continued to use the training centre after 2000. 2.     Other developments 46 .     Further changes in MTFU’s management and board of directors were made between 2000 and 2003. In 2001 and 2003 the new management also brought about an amendment of the company’s articles of association. 47 .     In October and November 2001 MTFU’s management increased the company’s share capital to BGN 195,000 (before the increase it was BGN   60,000 – see paragraph 9 above) by authorising and issuing new shares. The shares were subscribed for by shareholders who had until then held 8% of the capital (see paragraph 20 above). None of the applicants was offered or allowed to subscribe for any of the new shares. In 2006 and 2008 the share capital of MTFU was again increased through the issuance of new shares, reaching BGN 1,251,500. The applicants were unable to subscribe for any of those new shares. 48 .     According to MTFU’s annual report for 2008, three companies – none of them among the applicant companies – together held 99.1% of its shares. It is unclear who held the remaining 0.9%. At the end of 2008 the company had two employees. In 2007 and 2008 it did not declare any profit to the tax authorities. It appears that by that time it no longer carried out activities in the field of professional training. II.     RELEVANT DOMESTIC LAW A.     The register of companies 49 .     The register of companies contains information about companies, including the members of their managing bodies, the amount of their share capital, and the opening and termination of winding ‑ up procedures (at the material time, the register was provided for by section 3(1) of the Commerce Act 1991 ( Търговски закон )). It is accessible to the public (at the material time, as provided for by section 5 of the same Act). Particulars entered in the register are deemed to have been notified to third parties from the date they are entered (per, at the material time, Article 493 § 1 of the Code of Civil Procedure 1952). In their dealings with a company, bona fide third parties (that is, third parties who have no actual knowledge of the actual state of the company’s internal affairs) can rely on the information in the register, even if the information presented in the register relates to underlying circumstances which in reality do not exist (per, at the material time, Article 493 § 2 of the same Code). In addition, some transactions and resolutions, such as amendments of the articles of association, increases or decreases in share capital, and the appointment or dismissal of members of the management bodies of limited liability companies ( акционерни дружества ) take effect only after they have been entered in the register (section 231(3) and (4) of the Commerce Act 1991). 50 .     At the material time, the register was kept by the territorially competent regional courts (for Sofia, the Sofia City Court) (section 3(1) of the Commerce Act 1991), and entries in it were made pursuant to decisions by those courts, in which there were special company divisions. The registration decisions were given in non ‑ contentious proceedings governed by Articles 424 ‑ 35 and 489 ‑ 501 of the Code of Civil Procedure 1952, in force until the end of February 2008. The proceedings could be initiated only by persons acting on behalf of the company, liquidators, or, in some very specific circumstances not relevant to the present case, by State authorities (Article 494). The procedure as a rule did not require a hearing (Article 496 § 1). Decisions granting a request to make the requested entries were not subject to appeal (Article 431 § 1) and were to be put into effect immediately (Article 497). 51 .     If a court decision making an entry in the register aggrieved any third parties, they could bring contentious proceedings, directing their claim against the person who benefited from the registration, and seek the annulment of the registration decision (Article 431 § 2). Such claims were examined under the general procedure applicable to civil proceedings through the three levels of the court system. If the courts allowed a claim for a judicial declaration that an entry in the register was inadmissible or void, or that the details registered did not correspond to actions which had in fact been taken, the registering court had to erase the entry of its own motion or pursuant to a request by an interested party (Article 498). B.     Other relevant provisions of the Code of Civil Procedure 1952 52 .     At the relevant time, interim measures could be sought by a prospective or actual claimant under Articles 308 ‑ 22 of the Code of Civil Procedure 1952, in force until the end of February 2008. A claimant had to establish that, failing such measures, the enforcement of the rights that he or she might obtain under a future court decision could be frustrated or seriously hampered. 53 .     A final judgment or decision could not be revoked or amended by the court which had given it, except on the court’s own initiative or pursuant to a request by the parties, where it contained an obvious error. Before correcting the error by means of a decision, the court had to inform the parties and hold a hearing (Article 192 §§ 1 and 2 of the same Code). 54 .     Article 217a of the Code entitled parties to civil proceedings to make complaints about delays in the proceedings. Such complaints were to be examined by the president of the higher court, who could order specific measures to be taken in order to speed up the proceedings. C.     The Commerce Act 1991 55 .     The rights of shareholders in limited liability companies ( акционерни дружества ) are governed by the Commerce Act 1991. Shareholders are entitled to vote at a general meeting of shareholders, which is competent to, inter alia , amend the company’s articles of association, increase or decrease the company’s share capital and elect members of the company’s boards (sections 181(1) and 221(1), (2) and (4)). They are also entitled to dividends and parts of the company’s assets upon a winding ‑ up (section 181(1)). 56 .     Section 71 of the same Act provides that any shareholder can bring a claim to protect his or her rights if they have been violated by a company body. Under section 74(1), any shareholder may apply to the courts to set aside a resolution of the general meeting of shareholders if it is unlawful or in breach of the company’s articles of association. The application must be made no later than three months after the meeting (section 74(2)). 57 .     The Act also governs the duties of the members of the boards of limited liability companies. Board members must act in the best interest of the company (section 237(2), as in force at the material time). A new subsection 6 of section 237, added in June 2003, specifies that that duty equally applies to individuals who represent legal persons who are members of a company’s board. Board members are jointly and severally liable for any damage that they cause to the company through their fault (section   240(2)). A new section 240a, added in June 2003, makes it possible for shareholders holding at least 10% of a company’s share capital to bring derivative claims against board members. D.     Interpretative decision no. 1 of 2002 58 .     In order to settle differences in the courts’ case ‑ law concerning legal challenges against resolutions of company bodies and their registration in the register of companies, on 6 December 2002 the General Meeting of the Civil Divisions of the Supreme Court of Cassation issued interpretative decision no. 1 of 2002 (тълк. реш. № 1 от 6 декември 2002 г. по тълк. д. № 1/2002 г., ОСГК на ВКС). It, inter alia : (a) clarified the circumstances in which resolutions of a general meeting of shareholders can be considered null and void and the circumstances in which they are merely liable to be annulled; (b) made clear that resolutions which are null and void can be challenged indefinitely, whereas resolutions which are merely voidable must be challenged by a shareholder under section 74(1) of the Commerce Act 1991 and within the time ‑ limit set by section 74(2) (see paragraph 56 above); (c) held that resolutions of a general meeting of shareholders can be challenged only under section 74, not under section 71 of the Commerce Act 1991, and that claims under section 71 can be directed against resolutions of a company’s board; (d) held that the annulment of a resolution of a company’s board or of a general meeting of its shareholders under, respectively, sections 71 or 74 does not have retrospective effect; (e)   held that defects in the resolutions of company bodies cannot be challenged in proceedings under Article 431 § 2 of the Code of Civil Procedure 1952 (see paragraph 51 above), because claims under that provision concern only defects in the registration of such resolutions in the register of companies; (f) specified that a claim under Article 431 § 2 can be brought by a person who considers that the judicial proceedings leading to an entry in the register were flawed or that invalid information has been entered in the register, and that the effect that such a claim would seek to achieve is the rectification of the register under Article 498 of the Code (see paragraph 51 in fine above); (g) held that if a registering court has registered a company resolution which has not in fact been passed, the annulment of its decision does not have retrospective effect vis ‑ à ‑ vis third parties, but does have such effect as regards the relations between the company and its shareholders; (h) held that if a registering court has registered a company resolution which is later declared null and void, the judicial declaration of nullity is to be entered in the register but has no retrospective effect, either as between the company and its shareholders or between the company and third parties; (i) held that it is not open to the courts to grant interim injunctions in relation to claims under section 74 of the Commerce Act 1991. E.     Right of use of State property 59 .     Until 1996 the legal regime of State property was governed by the Property Act 1951 ( Закон за собствеността ) and regulations adopted in 1975, which did not restrict the duration of the right of use of such property. Such a restriction was introduced with the adoption of the State Property Act 1996 ( Закон за държавната собственост ), which superseded the above ‑ mentioned enactments. Section 56(1) of that Act provides that the right of use of State property can be granted only for a period of up to ten years. 60 .     Paragraph 6 of the transitional and concluding provisions of the State Property Act 1996 specified that this temporal restriction would also be applicable to cases where the right of use of State property had been granted before the Act’s entry into force. In a decision of 10 April 2001, the Constitutional Court found that paragraph 6 ran counter to the provisions of the Constitution of 1991 protecting the right to property (реш. № 7 от 10   април 2001 г. по к. д. № 1 от 2001 г., обн., ДВ, бр. 38 от 17 април 2001 г.). F.     State liability for damage 61 .     Section 1(1) of the State Responsibility for Damage Caused to Citizens Act 1998 (on 12 July 2006 its name was changed to the “State and Municipalities Responsibility for Damage Act” – “the SMRDA”) provides that the State and municipalities are liable for damage suffered by private persons as a result of unlawful acts or omissions by State or municipal bodies or civil servants, committed in the course of an administrative action. Section 4 provides that compensation is due for all damage which is the direct and proximate result of the unlawful act or omission. THE LAW I.     PRELIMINARY POINT 62.     On 24 April 2009 Mr Georgi Ferdinandov Mitev declared that he wished to withdraw his complaints (see paragraph 5 above). In view of that, the Court considers, in accordance with Article 37 § 1 (a) of the Convention, that it is no longer justified to continue the examination of the application in so far as it concerns Mr Mitev. Moreover, noting that the issues raised by his complaints were also raised by those of the remaining applicants, the Court, in accordance with Article 37 § 1 in fine , finds that respect for human rights does not require it to continue examining the application in so far as it concerns Mr Mitev (see, mutatis mutandis , Özgür Gündem v. Turkey , no. 23144/93, §§ 34 and 36, ECHR 2000 ‑ III; Stec and Others v. the United Kingdom (dec.) [GC], nos. 65731/01 and 65900/01, §   32, ECHR 2005 ‑ X; and Ivanov and Others v. Bulgaria , no. 46336/99, §   32, 24 November 2005). Accordingly, this part of the application shall be struck out of the list. II.     ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 63 .     The applicants complained that, by issuing decisions nos. 9 and 10, as well as all subsequent decisions registering resolutions of the “illegitimate” board of directors of MTFU and the general meetings of shareholders called by that board, and by refusing to register the resolution of the general meeting conducted by the applicants and other shareholders on 15 November 1999, the Sofia City Court had acted in breach of their rights under Article 6 § 1 of the Convention to a fair trial and an impartial tribunal. They further complained that by issuing those decisions the Sofia City Court had acted in an arbitrary fashion and had allowed persons who had had nothing to do with the company to take control over it, wreck it, and dramatically dilute the applicants’ shareholding in it, all of which had seriously breached their rights under Article 1 of Protocol No. 1. The ensuing failure of the courts and of other authorities to react effectively and in a timely manner to that situation had allowed it to persist for a number of years. 64.     In the circumstances of the case, and noting that the gist of the applicants’ grievance concerns the effect of the State’s actions and omissions on their shareholding in MTFU, the Court considers that the complaint should be examined solely under Article 1 of Protocol No. 1 (see, mutatis mutandis , Forminster Enterprises Limited v. the Czech Republic , no.   38238/04, § 59, 9 October 2008). That provision 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.     Admissibility 1.     Victim status 65.     The Government submitted that Shesti Mai Engineering OOD and Mr   Evtimov could not claim to continue to be victims of a violation, because they had obtained the annulment of decision no. 9 and of the corresponding entries in the register of companies. 66.     The applicants submitted that those developments had not wiped out the consequences of decision no. 9. Its annulment had not automatically brought about the invalidation of all subsequent actions taken by the company bodies installed by it, and the applicants had been placed in a situation requiring them to seek the annulment of all those actions and their registration in the register of companies. In any event, that was not possible, because, under the Bulgarian courts’ settled case ‑ law, the annulment of resolutions of company bodies did not have retrospective effect. Thus, the successful outcome of the proceedings brought by Shesti Mai Engineering OOD and Mr Evtimov had had “zero legal effect”. 67.     The Court observes that a decision or measure favourable to an applicant is not in principle sufficient to deprive him or her of his or her status as a victim unless the national authorities have acknowledged, either expressly or in substance, and then afforded redress for, the breach of the Convention (see, among many other authorities, Scordino v. Italy (no. 1) [GC], no. 36813/97, § 180, ECHR 2006 ‑ V). 68.     In the present case, the question whether the annulment of decision no. 9 and of the corresponding entries in the register of companies, albeit favourable to the applicants, afforded them sufficient redress is closely related to the substance of the complaint under Article 1 of Protocol No. 1 (see, mutatis mutandis , Bennich ‑ Zalewski v.