UN HRC registers case Paksas v. Lithuania, 2155/2012

On 06/06/2012 the United Nations Human Rights Committee registered the case of my client Rolandas Paksas, impeached President of Lithuania, versus Lithuania. The President was impeached on 06/04/2004. On 25/05/2004 the Lithuanian Constitutional Court prohibited him to stand for elections for life. This lifelong prohibition also covers the right to be nominated Prime Minister or minister (he is twice former Prime Minister).

We partially won this case before the European Court of Human Rights on 06/01/2011, but the Strasbourg judges interpreted that the European Convention of Human Rights covers only the right to stand for parliamentary elections. Moreover, they did not find a violation of presumption of innocence and of the principle of impartiality during the national proceedings. Therefore, the former President took a decision to continue before the UN HRC.

ECJ upholds freezing of the Melli Bank funds, C-380/09 P

On 03/03/2008 the United Nations Security Council issued Resolution 1803 (2008) calling on “all States to exercise vigilance over [...] Bank Melli [...] in order to avoid such activities contributing to the proliferation sensitive nuclear activities, or to the development of nuclear weapon delivery systems” (§ 17). On 23/06/2008, under Common Position 2008/479/CFSP the EU Council froze the Melli Bank plc funds. The latter is owned by the Melli Bank Iran (بانک ملی ایران‎) that is owned by the Iranian Government (§ 19).

The Melli Bank raised a number of points of law before the EU General Court and, on appeal C-380/09 P, before the ECJ:

1. The Melli Bank maintained that the grammatical structure of legal acts requires giving specific and individualized reasons for freezing its funds (§§ 34-35). The UK based Melli Bank did not participate in nuclear proliferation. The ECJ replied that the fact that the EU Council has the discretion as to by whom the entity is “owned” does not mean that the EU Council also has discretion to assess whether that entity plays a part in nuclear proliferation (§ 42).
2. The Melli Bank pointed that the UN Resolution calls to “exercise vigilance” and not “freeying of funds”. Thus, the EU measure is disproportional (§ 47). The ECJ replied that the UN and the EU are “distinct legal orders” (§ 54), and that the EU freezing serves the “terms and objectives” of the UN vigilance (§ 55). Finally, it cannot be inferred from the UN Resolution that there is no need to freeze the funds (§ 57).
3. The Bank proposed that the proportional measures could be of prior authorization and supervision by an independent agent and of total prohibition of transactions with Iran. The ECJ replied that this argument was mentioned for the first time at the hearing, and therefore could not be taken into consideration (§ 59).
4. According to the Melli Bank the EU General Court changed the burden of proof by requiring the Bank to demonstrate that measures alternative to freezing would be entirely effective (§ 47). The judges reply that a “lack of evidence” does not fall to be reviewed by the ECJ (§ 59).
5. The Melli Bank argues that the competition law entitles it to make submissions to the EU institutions while consideration of the measures (§ 67), that freezing of funds is comparable to criminal penalty, and therefore there is a breach of the presumption of innocence (§ 69). The ECJ interprets that the fact of being “owned” by Iran is a sufficient ground, and it is not “necessary to carry out further review”.

ECHR supports an insolvent borrower attacked by his bank, and strikes "unless" judgements

Mr Félix Chatellier (case 34658/07) was a shareholder of company R. that faced certain difficulties in 1990s. Therefore, he borrowed under his personal name about EUR 762 000 (FRF 5 000 000) from the B. bank in 1993. However, due to the insolvency, the Bordeaux Tribunal of Commerce ordered him to pay EUR 625 654.10 under the annual interest of 10,4 % in 2004. The French fiscal authorities claimed EUR 292 926, and the monthly revenue of his household at the respective time was EUR 2 600 (§§ 7, 11, 14).

Mr Chatellier appealed the judgement, however the bank made an application for “unless judgement”, and the case preparing judge (conseiller de la mise en état) rejected the appeal due to non-payment of the sum ordered by the Bordeaux Tribunal of Commerce. The Bordeaux judges believed that the fact that he allegedly had not paid EUR 292 926 showed that he had certain savings or some hidden money (§ 15).

Why do I talk about this case?

1) The ECHR unanimously rejected this reasoning in declaring the coverage of civil/fiscal cases by the presumption of innocence, which plays a role here because Article 6(1) of the Convention implies it (§ 43).

2) The ECHR imposes the duty of formal proofs for adoption of an “unless” judgement (§ 42). Thus, Strasbourg reduces the scope of use of these judgements.

3) One may observe a political victory of a lower incomes person against a bank.