THE FACTS Whereas the facts presented by the Applicants' solicitors Messrs. ..., in London may be summarised as follows: The Applicants are British nationals living in England. They are holders as follows of 4 and 3/4 per cent debenture stock 1968/78 of the United Steel Companies Limited, a corporation incorporated under the laws of the United Kingdom: Mr. A £ ...; Mr. B £ ...; Mr. C £ ...; Mrs. D £ ...; Under the Iron and Steel Act, 1953, an agency, the Iron and Steel Holding and Realisation Agency, was established to realise and thus denationalize the undertaking and property of the British Steel Industry which had been nationalised by the Iron and Steel Act, 1949. In exercise of its powers under the 1953 Act, this agency first of all subscribed for the stock issued in 1953 in the amount of £ 10,000,000 at £ 98 per cent. The funds for the subscription were provided by the Treasury and the account was under the control and management of the Treasury. By an offer for sale dated the 24th February, 1961, the agency sold the stock to the British public at £ 81 per cent. The following is a summary of the provisions as to the redemption of the stock: (a) The company was bound to repay the stock at par on the 31st December, 1978. (b) The company was bound to apply in each year, starting in 1959, £ 200,000 either in the redemption at par of £ 200,000 of stock selected by drawing or by the purchase of the stock in the market (such stock counting at par or at the cost of purchase). (c) The company had a right to redeem the stock at any time on or after the 31st December, 1968, at a premium of £ 2 per cent between the 31st December, 1968 and 31st December, 1970, at a premium of £ 1 per cent between the 1st January, 1970 and the 31st December, 1976, and thereafter at par. (d) The company was free to purchase the stock in the market. (e) If the stock became payable by reason of the company's default, it was payable at a premium of £ 2 per cent. Each of the Applicants (except Mr. A) bought his or her stock from the agency upon the terms of the offer for sale. Mr. A bought his stock in the market on the faith of the terms of the offer for sale in March, 1964. By the Iron and Steel Act of 22nd March, 1967, the stock will be compulsorily acquired on the vesting date appointed by the competent minister, i.e. 28th July, 1967. The "main purpose" of the Act as stated in the accompanying explanatory memorandum is "to bring into public ownership the principal companies concerned with the production of steel in Great Britain. On ...November, 1966, the Applicants' solicitors wrote to the Minister of Power arguing that under the principles of English law and under Article 1 of the Protocol to the Convention, the Government was precluded from depriving the stockholders of their right to hold the stock until redemption date. On .. January, 1967, the Treasury Solicitor's Department to which the letter had been transmitted replied that, according to Section 28 (1) of the 1953 Act, the Iron and Steel Holding and Realisation Agency was not to be regarded as the "servant or agent of the Crown", and that the Agency had only acted as the seller of the debentures but had not itself issued them. As to the question of compensation, the reply points out that the Iron and Steel Act fixes the compensation value of these debentures by reference to the average of the prices at which they have been bought and sold by investors over the period of sixty-one months to April, 1966. On the Government's calculation this price is estimated to be £ 80. 18. 0. as against the current Stock Exchange price of about £ 76. 10. 0. In the House of Lords, both at the Committee stage on the 27th February, and at the Report stage on the 9th March, 1967, an amendment was moved and, on the second occasion, carried to remove the Stock and other similar debenture stocks from the Bill. In the House of Commons on the 21st March, 1967, this amendment was negatived and debenture stocks were restored to the Bill for nationalisation. Complaints Whereas the Applicants claim that the proposed acquisition of their stock against their will and at the price proposed in the Act when they are entitled to hold the stock until due redemption under the Trust Deed is an infringement of Article 1 of the Protocol to the Convention on the following grounds: (a) The agency was a body set up by the British Government as stated above, it subscribed for the stock with moneys provided by the Government, it sold the stock to the Applicants and in these circumstances for the British Government to deprive the holders of the stock of their holdings infringes the following principle of the English law and general justice: "If a party enters into an arrangement which can only take effect by the continuance of an existing state of circumstances, there is an implied engagement on his part that it shall do nothing of his own motion to put an end to that state of circumstances under which alone the arrangement can be operative." (b) Applying that principle to the present case the agency on behalf of the British Government to the extent provided in the Iron and Steel Act, 1953, and in order to give effect to the policy of the British Government sold the stock to the Applicants and others upon the terms of the trust deed and the offer for sale. The implied engagement of the Government was that it would do nothing of its own motion to prevent stockholders from enjoying their full contractual rights against the company. (c) A departure from this principle and indeed any acquisition by nationalisation of the Applicant's stock could only be justified, if at all, under the Protocol as being in the general interest. While the Government has asserted such an interest, no grounds for this interest have been given nor are any apparent for the reasons given below. (d) Holders of debenture stock such as the stockholders, do not own the company. The shareholders do. The stockholders are creditors. The Government could therefore achieve the main purpose of the Act, namely to bring the company into public ownership merely by the acquisition of the shares. Debenture stocks represent debts and should be honoured, unless it was necessary to acquire debenture stocks in order to reorganise the industry. The word "necessary" appears in Article 1 to the Protocol and is the right test. In Parliament it was urged by the Opposition that it was not necessary to acquire debenture stocks. The rights of debenture stockholders depend on the terms of the trust deeds constituting them, but in every case known to the Opposition the stocks become payable if the company goes into liquidation. Under English law, a company has a statutory right to go into liquidation and if all the shares were owned by the corporation set up under the Act, the necessary resolution could be passed in a few days. Every conceivable kind of reorganisation can be carried out in a liquidation. Accordingly no reorganisation would be held up if the debenture stocks were left outstanding. In so far as their continued existence did not impede any reorganisation they would be paid off in due course. In so far as they did impede any reorganisation which was considered in the future they could be easily disposed of and paid off by a reorganisation in liquidation. The Government declined to answer these arguments in any detail but merely asserted that the rights of the stockholders would enable them to go to court to stop certain reorganisations and could delay or prevent reorganisations. This answer was rested on assertion rather than logical argument because it does not bear examination as a matter of English law. A company can go into liquidation. This is a cheap and quick process where all the shares are owned. In every case known to the Opposition or indeed to the Applicants, debenture stocks become immediately repayable on liquidation. If they are repaid, the holders cease to be creditors and have no standing to make any application to the court. Every reorganisation of a company which can be carried out while a company is a going concern can be carried out while it is in liquidation. The British Government never argued the contrary giving chapter and verse. (e) A further argument applicable to the stock is that under the trust deed constituting it, the stock is repayable at the option of the company at the end of 1968. Acting under the powers conferred on him by Section 9 (5) of the Act, the Minister has appointed the 28th July, 1967 to be the vesting date, that being the date upon which all securities of the steel companies are to vest in the corporation established under the Act. This corporation has to consider what reorganisation to make. This must be a long process. It is therefore unlikely that in any event the stock would be required to be disposed of before it becomes repayable in the ordinary course. It is, therefore, unnecessary to acquire the stock. In the circumstances, it is not necessary, nor could the British Government reasonably deem it to be necessary, to acquire the stock in order "to control the use of property in accordance with the general interest" within the meaning of Article 1 of the Protocol. History of Proceedings Whereas the proceedings before the Commission may be summarised as follows: The Application dated 1st February, 1967, was received by the Secretariat of the Commission on 3rd February, 1967, and entered on the same date in the special register provided for by Rule 13 of the Commission's Rules of Procedure. On 9th March, 1967, the President acting on behalf of the Commission decided proprio motu to give precedence to the case under Rule 38, paragraph (1), of the Rules of Procedure. On 5th April, 1967, the case was submitted to a group of three members for a preliminary examination in accordance with Rule 34 of the Rules of Procedure. On 8th April, 1967, the Commission examined the Application and decided to adjourn its decision on admissibility pending confirmation by the Applicants' solicitors that the Iron and Steel Bill had been enacted in the meantime. This information and the final text of the Act were received on 10th April, 1967, and a further statement was submitted by the Applicants' solicitors on 10th May, 1967. A new preliminary examination on the basis of these submissions was carried out by a group of three members on 8th and 26th May, 1967. On 29th May, 1967, the Commission resumed its examination of the case and adopted the present decision. THE LAW Whereas it is necessary first to recall the precise terms of Article 1 of the Protocol (P1-1) to the Convention which forms the basis of the Applicants'complaints: "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. Whereas the compulsory acquisition of the Applicants' debenture stock is a deprivation of possessions and not a control of their use; whereas, therefore, the second paragraph on which the Applicants base their allegation that this measure was not "necessary in the general interest" is not applicable to the present case; Whereas the said compulsory acquisition is covered by the Iron and Steel Act 1967 (see Schedules 1 and 4, section 59 (1), to the Act) and therefore in accordance with "the conditions provided for by law" within the meaning of the second sentence of the first paragraph of Article 1 (Art. 1); Whereas the qualification "except in the public interest" is one of the clauses of exception in the Convention similar to those in Articles 8 to 11 (Art. 8, 9, 10, 11) and whereas the Commission in determining whether measures taken by a High Contracting Party are properly covered by such clauses, has always stated that a "margin of appreciation" should be given to the High Contracting Party concerned, although it remains for the competent bodies under the Convention to investigate such measures and determine whether they are, in fact, consistent with the Convention; whereas the Commission refers in this respect to its decisions concerning applications under Articles 8, 9 and 10 (Art. 8, 9, 10) of the Convention (see for Article 8 (Art. 8), Applications Nos. 911/60, Yearbook, Volume IV, page 218, 1449/62, Yearbook, Volume VI, page 266, 2306/64, Collection of Decisions, Volume 21, page 33; for Article 9 (Art. 9), Application No. 1068/61, Yearbook, Volume V, page 284; for Article 10 (Art. 10), Applications Nos. 753/60, Yearbook, Volume III, page 318, 1167/61, Yearbook, Volume VI, page 218); Whereas, with regard to the question whether the compulsory acquisition of the Applicants' debenture stock was a measure taken in the public interest the Commission observes that: (i) the Iron and Steel Act 1967 was, as is not contested by the Applicants, enacted by the legislature for the purpose of serving a public interest, namely the establishment of a sound economic basis for the British Iron and Steel industry, (ii) the reversal by the House of Commons of the House of Lords amendments on the very measure in issue shows that it was the view of the legislature that this measure was essential for the implementation of the policy of the Act and therefore in the public interest, (iii) debenture stocks have been included also in previous acts of nationalisation, for example, the Iron and Steel Act 1949 and the Transport Act 1947. Whereas, in view of these circumstances, the Commission is of the opinion that, in adopting the provisions of the Iron and Steel Act 1967 affecting the Applicants' rights as debenture holders, the United Kingdom has not exceeded the margin of appreciation as to what measures were "in the public interest"; Whereas, consequently, the examination of the case does not disclose any appearance of a violation of the rights and freedoms set forth in the Convention and Protocol and, in particular, in Article 1 of the Protocol (P1-1) and it follows that the Application is manifestly ill-founded within the meaning of Article 27, paragraph (2) (Art. 27-2), of the Convention. Now therefore the Commission declares this Application inadmissible.