FOURTH SECTION

PARTIAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 18489/02 
by Erkki Olavi KINOS and Erkki SAHA 
against Finland

The European Court of Human Rights (Fourth Section), sitting on 6 September 2005 as a Chamber composed of:

Sir Nicolas Bratza, President
 Mr G. Bonello
 Mr M. Pellonpää
 Mr K. Traja
 Mr L. Garlicki
 Mr J. Borrego Borrego, 
 Ms L. Mijović, judges
and Mrs F. Elens-Passos, Deputy Section Registrar,

Having regard to the above application lodged on 28 April 2002,

Having deliberated, decides as follows:

THE FACTS

The applicants, Mr Erkki Kinos and Mr Erkki Saha are Finnish nationals who were born in 1926 and 1931 respectively and live in Humppila.

A.  The circumstances of the case

The facts of the case, as submitted by the applicants and as they appear from the documents, may be summarised as follows.

The applicants were members of the Board of the Savings Bank of Humppila. On 31 December 1993 the Finnish Savings Bank – SSP Oy (which later became the Property Management Corporation Arsenal (Omaisuudenhoitoyhtiö Arsenal-SSP Oy, Egendomsförvaltningsbolaget Arsenal –SSP Ab; “Arsenal-SSP” hereinafter) instituted civil proceedings against six defendants, including the applicants. Arsenal-SSP sought damages amounting to 59,610,000 Finnish Marks (FIM; corresponding to 10,025,733 euros (EUR)) plus 16 per cent interest as from 31 January 1993 for allegedly granting credit negligently in 1988-1989 and for subsequent credit losses allegedly caused by the defendants in their capacity as members of the board, managing director or delegates in the management of the Savings Bank of Humppila (which in 1989 merged into the Savings Bank of Lounais-Häme, and in 1992 into the Finnish Savings Bank – SSP Oy, later replaced by the Arsenal-SSP).

On 7 March 1994 the applicants were summoned.

Apparently on 25 April 1994 the District Court (käräjäoikeus, tingsrätten) of Forssa ordered a seizure, which was upheld by the Court of Appeal (hovioikeus, hovrätten) of Turku on 3 October 1994.

In their written submissions to the District Court the applicants requested the court to declare the action inadmissible or to dismiss the claims on the grounds of alleged defects in the application for a summons and on the grounds that, due to the merger, the plaintiff did not have standing to lodge the action. It was contended, in any case, that the former Finnish Savings Bank had not transferred its claims to the Arsenal-SSP in the merger and had not issued a valid decision to institute the proceedings for damages.

The defendants also requested the dismissal of the claims as the Savings Bank of Humppila had granted them a discharge from liability concerning the year 1988 and the Savings Bank of Lounais-Häme concerning the year 1989. They maintained that the provisions of the old Savings Bank Act (säästöpankkilaki, sparbankslag; 541/69) of 1969 covered the years 1988-1989 and were interpreted in such a way that the discharge from liability prevented the board of trustees (isännistö, principalerna) from lodging subsequent claims for damages. The applicants further maintained that a special limitation period (section 133 of the Savings Bank Act of 1990) of three years for instituting damage actions had expired and thus the action should be dismissed.

The applicants contested all allegations of negligence and breach of law and guidelines. They alleged, inter alia, that they had not been granted loans without adequate security and without ascertaining the clients’ solvency. Neither was there any damage as the bank had not gone into bankruptcy. They further claimed that the plaintiff has not acted even handedly as it had not brought actions against all persons in similar situations.

On 8 November 1994 the District Court dismissed some of the defendants’ grounds for declaring the case inadmissible in a preliminary decision. It held, inter alia, that the purported discharge from liability did not prevent the institution of proceedings as an action might be brought if the board of trustees had not been presented with adequate and correct information. It found that in the present case the applicants had not shown that the information about the acts on which the claims were based presented to the board of trustees was adequate and correct as required. It further held that section 133 of the Savings Bank Act could not be applied retroactively and thus the plaintiff’s possible right to damages had not expired.

On 20 January 1997 the District Court delivered its judgment, dismissing the claims in respect of the applicants. It accepted one of the claims in respect of K., one of the defendants, finding that he had acted negligently in granting loans without adequate security. The District Court ordered him to pay damages amounting to FIM 3,584,300 (EUR 602,839). It ordered that the seizure in respect of the applicants be revoked when the judgment gained legal force. It further ordered the plaintiff to reimburse the applicants’ legal expenses.

All parties appealed to the Court of Appeal of Turku, the applicants only in relation to the seizure.

On 23 December 1998 the Court of Appeal issued its judgment, upholding the judgment of the District Court in respect of the applicants.

On 7 June 1999 the Supreme Court (korkein oikeus, högsta domstolen) granted the plaintiff and K. leave to appeal.

On 1 November 2001 the Supreme Court issued its judgment, largely quashing the Court of Appeal’s judgment. It held that K. had caused the plaintiff damage amounting to FIM 1,200,000 (EUR 201,827). It further held the applicants jointly and severally liable with the other defendants for the said damage amounting to FIM 720,000 (EUR 121,096) plus interest as from 7 March 1994. It quashed the Court of Appeal’s judgment as regards the legal expenses and held the applicants liable, jointly and severally with the other defendants, to reimburse the plaintiff’s legal expenses in an amount of FIM 1,250,000 (EUR 210,236) plus interest.

On 27 November 2001 the applicants requested the plaintiff to agree to reduce the damages and legal expenses.

COMPLAINTS

The applicants complain under Article 6 of the Convention that the length of the civil proceedings was excessive as they lasted almost eight years.

Without invoking any Article, they also complain about the domestic courts’ finding that their discharge from liability was not valid and maintain that the judgments were not adequately reasoned in that regard.

They further complain under Article 14 of the Convention about unequal treatment by the Government Guarantee Fund in instituting proceedings against several Savings Banks.

THE LAW

1. The applicants complain under Article 6 of the Convention about the length of the civil proceedings, which started on 31 December 1993 and ended on 1 November 2001. Article 6, insofar as relevant, reads as follows:

“1.  In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time ...”

The Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.

2. The applicants complain about the domestic courts’ finding that the purported discharge from liability was not valid and that the judgments were not adequately reasoned in that regard.

As regards the domestic courts’ conclusions drawn from the interpretation of the judicial meaning of the discharge from liability the Court recalls that, in accordance with Article 19 of the Convention, its task is to ensure the observance of the obligations undertaken by the Parties in the Convention. In particular, it is not competent to deal with an application alleging that errors of law or fact have been committed by domestic courts, except where it considers that such errors might have involved a possible violation of any of the rights and freedoms set out in the Convention. The Court refers on this point to its established case-law (Schenk v. Switzerland, judgment of 12 July 1988, Series A no. 140, p. 25, § 45).

The Court further notes that that interpretation and application of domestic law is primarily a matter for the assessment of the national courts. The examination of the case-file does not disclose any appearance of a violation of a fair trial in these respects or as regards the reasoning of the judgment. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

3.  The applicants complain under Article 14 of the Convention (prohibition of discrimination in enjoyment of Convention rights) about unequal treatment by the Government Guarantee Fund, in particular in comparison with another settlement case.

Leaving aside the question of whether the actions of the Government Guarantee Fund may be regarded as attributable to the State, the Court notes that the applicants have not substantiated this complaint. It follows that this complaint is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention

For these reasons, the Court unanimously

Decides to adjourn the examination of the applicants’ complaint concerning the length of the civil proceedings;

Declares the remainder of the application inadmissible.

Françoise Elens-Passos Nicolas Bratza 
   Deputy Registrar President

KINOS AND SAHA v. FINLAND DECISION


KINOS AND SAHA v. FINLAND DECISION