CEDH · CASELAW;CLIN;ENG — 11 février 2025

.s3ABFC313 { font-size:10pt } .sD4B5322E { margin-top:12pt; margin-bottom:12pt; text-align:justify } .sBB9EE52A { font-family:Arial } .sA241FE93 { margin-top:0pt; margin-bottom:18pt; text-align:justify; page-break-after:avoid; border-bottom:0.75pt solid #000000; padding-bottom:1pt } .s2EF62ED2 { margin-top:0pt; margin-bottom:0pt; font-size:12pt } .s4DDA3AA3 { font-family:Arial; font-weight:bold; font-style:italic } .s29100277 { font-family:Arial; font-weight:bold } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .s8F2B0B1B { margin-top:12pt; margin-bottom:12pt; page-break-after:avoid; font-size:12pt } .s65B66A85 { margin-top:12pt; margin-bottom:12pt } .s97EB40D9 { margin-top:12pt; margin-bottom:14pt; page-break-after:avoid } .sA36B60A1 { font-family:Arial; font-style:italic } .s5F48796F { margin-top:12pt; margin-bottom:0pt; text-align:justify } .s7ED160F0 { text-decoration:none } .s3DC36BA9 { font-family:Arial; text-decoration:underline; color:#0069d6 } .s8B6C6D43 { margin-top:0pt; margin-bottom:0pt; border-bottom:1pt solid #000000; padding-bottom:1pt } .sDF790F1E { margin-top:12pt; margin-bottom:0pt; text-align:center } Legal summary March 2025 Kotnik and Jukič v. Slovenia (dec.) - 56605/19 and 25424/23 Decision 11.2.2025 [Section I] Article 35 Article 35-1 Exhaustion of domestic remedies Failure to exhaust new domestic remedy, introduced after the Pintar and Others v.   Slovenia judgment and the lodging of the applications, in respect of national bank’s extraordinary measures cancelling shares and bonds: inadmissible Facts – The Bank of Slovenia took extraordinary measures in 2013 and 2014 in respect of the major Slovenian banks which resulted in the cancellation of all shares or subordinated bonds held in those banks without any compensation being afforded. The bonds of the first applicant and the shares of the second applicant were cancelled pursuant to those decisions. Moreover, interest payments (“coupon payments”) were refused to the first applicant before the relevant bonds were cancelled. In 2020 the Act on the Judicial Protection Procedure for Former Holders of Eligible Liabilities of Banks was adopted but never implemented; it was suspended and then revoked in constitutional review proceedings following a relevant judgment by the Court of Justice of the European Union (“CJEU”) on a request for a preliminary ruling by the Constitutional Court. In 2021 the Court found in Pintar and Others v.   Slovenia a violation of Article 1 of Protocol No. 1 with respect to a number of former holders of cancelled shares or bonds, including the present applicants. In particular, the Court found that the interference had not been accompanied by sufficient procedural guarantees; it did not examine whether the extraordinary measures had complied with the other requirements of that provision. Under Article   46, the Court noted that it was essential for the former holders of cancelled bonds or shares to have access as soon as possible to a legal avenue enabling them to effectively challenge the interference with their right of property. It also noted that thousands of former holders were affected by the measures in question. The new Act on the Judicial Protection Procedure for Former Holders of Eligible Liabilities of Banks (“the 2024 Remedy Act”) came into force in June 2024, and several steps have been taken by the domestic authorities to implement it. An application was lodged in October 2024 by the first applicant and thirteen other former holders for a review of the constitutionality and legality of the above Act, in particular, of several of its sections; these proceedings are still pending. An application made in the context of those proceedings for the suspension of the implementation of some of those provisions was dismissed. The applicants complained of a violation of their property rights by the Bank of Slovenia’s decisions and the continuous lack of an effective remedy. In that regard they submitted that the respondent State had failed to comply with the judgment in Pintar and Others . The first applicant also complained that his right to interest payments on his bonds had been retroactively revoked. Law – Article   35 §   1: When the applicants had lodged their applications in 2019 and 2023 respectively, domestic law did not provide an effective remedy in respect of the impugned cancellation of their respective coupon interest payments and shares. However the 2024 Remedy Act allowed former holders to bring legal actions against the Bank of Slovenia and provided that the State would be liable for any damages awarded;   established the right of former holders to access documentation, which had been confidential and previously not accessible, relating to the Bank of Slovenia’s 2013 and 2014 decisions; and   provided for the potential creation of a settlement scheme through which former holders might recover 60% of their established financial losses. Accepting such repayment under the compensation scheme was voluntary; a former holder would be able to refuse payment and seek full compensation in court proceedings in which the burden of proof regarding, inter alia , the justifiability of the emergency measures would rest on the government. The Act also provided for the possibility of collective legal actions and a pilot procedure aimed at rendering the process more effective and accessible. The process of establishing liability for any financial losses incurred by the former holders appeared to be a complex one, involving multiple procedural steps and the steps required to be taken by the authorities had so far been followed within the stipulated time frame. Key procedural steps were subject to time-limits and legal actions brought under the 2024 Remedy Act were to be afforded priority treatment. Those time-limits, along with other elements (such as access to relevant data and the reversal of the burden of proof), suggested that the proceedings could, in principle, serve as an effective legal avenue for the former holders. The 2024 Remedy Act had been enacted following extended scrutiny by the Constitutional Court and the CJEU of the previous laws governing the issue, had been in force since June 2024, and was currently being implemented. Moreover, application for a review of constitutionality only concerned a few of its provisions whilst the request for the suspension of the implementation of some of them had been dismissed. In so far as the interest rates were concerned the constitutional proceedings on that matter were still pending, thus any complaint related to it was premature. In view of the foregoing and without prejudice to the pending proceedings, the Court considered that in order to comply with Article   35 §   1 of the Convention the applicants and other former holders should in principle exhaust the remedy provided in the 2024 Remedy Act and any directly related accessible and effective remedies before the Constitutional Court. In addition, the first applicant’s complaint did not concern the cancellation of his bonds as such but rather the refusal of his claim for the payment of the coupon interest. However, he had not pointed to any provisions in the 2024 Remedy Act that would prevent him from claiming damages in that respect within the proceedings outlined in that Act which applied to former holders’ claims for compensation arising from the effects of the Bank of Slovenia’s 2014 decision. Given the domestic courts’ position that the applicant’s coupon interest (along with the bonds in question) had been cancelled as a result of the above decision, it was reasonable to assume that any such claim would fall under the scope of the 2024 Remedy Act. Furthermore, in the present case, several factors justified the application of the exception to the general rule linking the assessment of the exhaustion of domestic remedies to the date on which the applications had been lodged with the Court. The purpose of the remedies introduced by the 2024 Remedy Act was to provide a legal avenue to former holders as required by the Pintar and Others judgment. It was open to present applicants to initiate proceedings under that Act. Accordingly, the applications had to be dismissed for failure to exhaust domestic remedies, both in so far as they related to the lack of an effective legal avenue and to the substantive justifications for the interference with the applicants’ right under Article   1 of Protocol No.   1, which had been left open in Pintar and Others. Should the applicants be ultimately unsuccessful with their applications for remedies at domestic level, it would be open to them to lodge a fresh application with the Court within a period of four months after the exhaustion of all effective domestic remedies. The Court’s approach as to the potential effectiveness of the remedy in question would be altered should the conduct of the proceedings under the 2024 Remedy Act and the domestic case-law suggest non-compliance of the remedy with Convention requirements or in case of excessive delays in the implementation of that Act. Conclusion : inadmissible (failure to exhaust domestic remedies). (See Pintar and Others v.   Slovenia , 49969/14 et al., 14   September 2021, Legal Summary )   © Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court. To access legal summaries in English or French click here . For non-official translations into other languages click here .