Can a state-owned company be a “victim” of human rights violations?
10 July 2012
Transpetrol v Slovakia, Application no. 28502/08 – read judgment
The facts of this case can be stated very briefly, since the main (and most interesting) question before the Curt was whether the applicant company constituted a “victim” of a human rights violation under the Convention.
The applicant s a joint-stock company trading in oil. In the past, including at the time of the contested judgment of the Constitutional Court, the state owned 51% of the shares in the applicant company. The remaining shares were owned by private parties. At present all of the shares in the company are owned by the state.
The application before the Court concerned the fairness of proceedings before the Constitutional Court regarding the ownership of shares in the company. The applicant company complained that the proceedings were contrary to its rights under Article 6(1) (fair trial) of the Convention and Article 1 of Protocol No. 1 (peaceful enjoyment of possessions). The complaint was dismissed under Article 34 as being inadmissible (incompatible ratione personae, i.e. the status of the applicant). For the purposes of clarity, here is the relevant text of Article 34:
The Court may receive applications from any person, non-governmental organisation or group of individuals claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto.
The Court’s reasoning
Article 34 requires that the applicant must be a “victim” in order to complain about a violation of its rights. The applicant company had features of both a “governmental” and a “non-governmental organisation”. How can a governmental body have rights – in other words, be a victim of a violation (carried out by the government)? On the one hand, it was a commercial joint-stock company operating exclusively under the private-law regime, governed by the Commercial Code, with no privileges or special rights or rules concerning enforcement of judgments against it. It was subject to the jurisdiction of the ordinary courts and did not participate in the exercise of any governmental power.
Whilst it may have been partly owned by private entities in the past, the state had always been a majority shareholder and at present was the sole shareholder of the applicant company. On account of its strategic importance for the national economy the applicant company used to be excluded by law from privatisation. It had been recognised in the domestic law as having the character of a “natural monopoly” and had an unrivalled market position in Slovakia.
Rather than weighing those elements against each other, the Court was of the opinion that the decisive considerations for the determination of the applicant company’s eligibility for “victimhood” under Article 34 of the Convention lay in the assessment of the factual context of the application and the practicalities of share ownership that underlay it. The question of ownership of shares in the applicant company primarily concerned the rights and interests of other shareholders rather than the rights and interests of the applicant company itself. The Court found no indication that the application strived to further interests other than those that were concurrently interests of the State. In particular, the State had joined the applicant company as an intervener for the defendant in separate proceedings involving the determination of essentially the same issues as those in the proceedings contested in the instant application. Those circumstances reflectedthe unity of interests of the applicant company and the Government.
Rights and victims
At first blush, this talk about government or public entities having rights seems nonsensical. How can the wielder of power be hurt by it? But the debate over a similar issue – whether public bodies should be rights bearers (ie victims) has been debated for some time in domestic courts. The question has been settled, for the time being anyway, by the House of Lords ruling in the 2003 case of Aston Cantlow. That case established that state agencies cannot themselves enjoy Convention rights for the simple reason that the Convention rights (whose protection is of course furthered by the Human Rights Act) are, under the Convention, directed at the state which has the obligation to secure these rights for everyone.
On the other hand it is possible, even in Strasbourg, that a public authority might be recognised under Article 34 as a victim’s representative, and thereby be heard on the victim’s behalf, by the Court of Human Rights. In one of its earlier decisions, the Commission (as it was then) set out the requirements as follows:
An applicant can only claim to be a victim of a violation of one of the rights and freedoms recognised by the Convention if there is a sufficiently direct link between the applicant and the damage which he considers that he has sustained as a result of the alleged breach
This decision confirmed that a public authority or indeed any association may in certain circumstances represent victims but only if they can be identified and there is proof of their consent.
In general, Strasbourg inadmissibility decisions, which in effect deny standing under Article 34 to public authorities of various sorts, suggest that the concept of a ‘governmental’ organisation implied by Article 34 includes bodies principally exercising public functions even if they also have private powers, or private shareholders.
This is not the place to go into the bewildering taxonomy of “standard” public authorities, “functional public authorities”, and those public authorities exercising state functions as defined by British Gas v Foster, some of whom are allowed to be rights bearers and others not. The subject is amply and philosophically discussed in publications by Professors Dawn Oliver, Carol Harlow et al. The truth of the matter is, if a body is purely a creation of statute, it has no existence behind or predating that statute, and therefore has no grievance to complain about beyond its statutory purpose, or, as Laws J (as he was then) put it more elegantly in Fewings [1995] 1 All E.R. 513, such a body cannot act other than on the basis of a proper, purposive, understanding of its powers and, in exercising its powers, it must always act on its best conception of the public interest, a public authority having “no axe to grind beyond its public responsibility”.
It has been argued that the exclusionary force of Article 34 no longer reflects the ” heterogeneous, multi-layered, nature of modern government”, that the “unargued and implicit conception of state and government” behind the rule should be updated and refined, so that various kinds of intra-government disputes may be enriched by human rights discourse.
The real question is, would we really welcome such a scenario? Surely not. Giving public authorities across the spectrum more weapons for their arsenal may add to the kaleidoscopic variety of their litigation, but it would not be a healthy development for good governance and efficient allocation of resources.
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