FOURTH SECTION

CASE OF MIRACLE EUROPE KFT v. HUNGARY

(Application no. 57774/13)

JUDGMENT

STRASBOURG

12 January 2016

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Miracle Europe Kft v. Hungary,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
	Vincent A. De Gaetano, President,
	András Sajó,
	Boštjan M. Zupančič,
	Paulo Pinto de Albuquerque,
	Krzysztof Wojtyczek,
	Egidijus Kūris,
	Gabriele Kucsko-Stadlmayer, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having deliberated in private on 1 December 2015,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1.  The case originated in an application (no. 57774/13) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian company, Miracle Europe Kft (“the applicant”), on 5 September 2013.
2.  The applicant was represented by Mr D. Karsai, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent, Ministry of Justice.
3.  The applicant alleged, in particular, that the court designated to hear its case was not a ‘tribunal established by law’ for the purposes of Article 6 § 1 of the Convention.
4.  On 20 February 2015 this complaint was communicated to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.
THE FACTS
I.  THE CIRCUMSTANCES OF THE CASE
5.  The applicant is a limited liability company registered under Hungarian law, with its seat in Budapest.
6.  In a dispute concerning a construction project envisaged in public procurement, in January 2012 the applicant company brought an action in damages against a university.
7.  The President of the territorially competent Budapest High Court requested the National Judicial Office (“NJO”) to reassign the case to another court of the same jurisdictional level. In the request the President provided particulars about the case to be reassigned and indicated the data and the circumstances which prevented the adjudication, within a reasonable time, of this case, deemed to be of high importance, by relying on, in particular, the case-load of judges hearing civil cases, significantly exceeding the national average.
8.  The President of the NJO examined the case-load statistics of the Budapest High Court, including the volume of highly important and priority cases and the workload of judges hearing civil cases. She found that, in view of the short statutory time-limits, the adjudication of the case within a reasonable time could only be ensured by reassigning the case to another court.
9.  By requesting information from the President of the Zalaegerszeg High Court, the President of the NJO also examined the case-load and the operational conditions, including staff and facilities, of the Civil Division of the Zalaegerszeg High Court. On the basis of this information, the President of the NJO was satisfied that the reassignment of the case to the Zalaegerszeg High Court would not impose a disproportionate burden on that court.
10.  For the sake of judicial economy as appreciated above, on 16 February 2012 the President of the NJO case assigned the case to the Zalaegerszeg High Court (decision no. 29/2012. (II.16.) OBHE), acting within the powers conferred upon her by the law.
11.  The Zalaegerszeg High Court heard the case and dismissed the claim on 5 June 2012. That decision was confirmed by the Pécs Court of Appeal on 18 September 2012, a ruling served on 12 October 2012. The latter’s territorial competence to hear the appeal was a consequence of the case having been assigned to the Zalaegerszeg High Court.
12.  Meanwhile, on 17 September 2012 the National Judicial Council issued decision no. 58/2012 on “the guidelines to be observed in respect of case reassignment”.
13.  On 7 September 2013 the Kúria upheld the decisions of the High Court and the Court of Appeal in review proceedings.
The courts held in essence that the applicant company’s perception according to which the university had unlawfully backed out of the investment contract (namely, the construction of a dormitory) was nothing more than a misconception of the law and a tendentious interpretation of the circumstances, and that the facts of the case did not reveal any compensation liability on the respondent’s side, for want of unlawfulness.
14.  Meanwhile, on 13 December 2012 the applicant filed a constitutional complaint. It counted – and complied with – the statutory sixty-day time-limit to do so from the service of the final decision in the case, i.e. from 12 October 2012. It claimed firstly that the domestic courts had reached their decisions in an arbitrary manner and, secondly, that it was deprived of a “tribunal established by law”, since by decision no. 29/2012. (II.16.) OBHE the President of the NJO had reassigned the case from the originally competent court to the Zalaegerszeg High Court.
15.  The constitutional complaint was declared inadmissible on 10 June 2013 (decision no. 3123/2013. (VI. 24.) AB). The Constitutional Court held that the case as a whole did not reveal any arbitrariness or unfairness as such. As regards the specific complaint about the reassignment, it held that this issue was severable from the main procedure. It was of the view that the sixty-day statutory time-limit had run, in that respect, from the very reassignment decision of 16 February 2012 – rather than from 12 October 2012 as construed by the applicant – and for that reason this part of the motion was time-barred.
16.  On 2 December 2013 the Constitutional Court adopted decision no. 36/2013. (XII.5.) AB in the matter of reassignment, in pursuit of constitutional complaints originating in cases other than that of the applicant. It held that the regulations which entitled the President of the NJO to reassign cases among courts (notably, sections 62 and 63 of Act no. CLXI of 2011 on the Organisation and Administration of Courts, as in force between 1 January and 16 July 2012, see paragraph 20 below) had been unconstitutional and in violation of Article 6 of the Convention. According to the Constitutional Court, the right for one’s “natural” (lawful) judge flows from the right to have one’s case examined by a court “established by law” and requires that a case be heard by a judge belonging to the court with competence and territorial jurisdiction and designated by the pre-established objective rules of case assignment of that court. In the Constitutional Court’s view, the impugned regulations, which had conferred responsibility for the reassignment of cases, at least in the material period, entirely on the President of the NJO, had been in breach of those principles. Moreover, it had violated the requirement of the appearance of impartiality. The Constitutional Court also held that the lack of a remedy against the decision of the President of the NJO had violated the Fundamental Law, as well as Article 13 of the Convention.
The Constitutional Court did not prescribe any particular legal consequence of this decision for the ongoing procedures concerned by re-assignment. Consequently, the Constitutional Court’s decision did not invalidate any reassignment decisions taken previously (see paragraphs 19 and 24 below).
II.  RELEVANT DOMESTIC LAW
17.  The Act on the Transitional Provisions of the Fundamental Law provided as follows:
Section 11
“(3) In order to guarantee the right to trial within a reasonable timeframe, as provided in Article XXVIII(1) of the Fundamental Law, the President of the National Judicial Office may assign any case to a court at an equal level but outside the normal court’s jurisdiction, if the caseload across courts is not balanced.
(4) In order to guarantee the right to trial within a reasonable timeframe, as provided in Article XXVIII(1) of the Fundamental Law, the Public Prosecutor, as the leader and manager of the Office of the Prosecutor based on Article 29 of the Fundamental Law, may assign any case to a court at an equal level but outside the normal court’s jurisdiction, if the caseload across courts is not balanced. This does not impact the right of the President of the National Judicial Office as granted in paragraph (3) and the right of the prosecution to assign a case to any court within their jurisdiction.”
18.  The Fundamental Law, as in force between 1 April and 1 October 2013, provided as follows:
Article 27
“(4) In the interest of the enforcement of the fundamental right to a court decision within a reasonable time and a balanced distribution of caseload between the courts, the President of the National Judicial Office may designate a court, for cases defined in a cardinal Act and in a manner defined also in a cardinal Act, other than the court of general competence but with the same jurisdiction to adjudicate the case.”
19.  The Constitutional Court Act provides as follows:
Section 45
“... (3) The annulment of a legal provision does not ... concern the [previously] created legal relationships or the rights and obligations flowing from them.
(4) The Constitutional Court may depart from [the previous paragraph] when deciding on the annulment of a legal provision contrary to the Fundamental Law or on the inapplicability of the annulled legal provision in general, or in concrete cases, if this is justified by the protection of the Fundamental Law, by the interest of legal certainty or by a particularly important interest of the entity initiating the proceedings.”
20.  Act no. CLXI of 2011 on the Organisation and Administration of Courts provides as follows:
Section 8
“(1) No one may be deprived of his lawfully appointed judge.
(2) A lawfully appointed judge is the judge assigned to a specific case under the work schedule of the court having competence and jurisdiction in the case.”
Section 62
“(1) The President of the National Judicial Office may exceptionally designate a court other than the territorially competent one (provided that the two have the same competence) to deal with a case, if the case – or a group of cases received by the [originally competent] court in a given period – cannot be heard within a reasonable time in any other way on account of the exceptional and disproportionate workload of the [originally competent] court, provided that such a designation does not impose a disproportionate burden on the designated court.
(2) Such a designation can be initiated by the president of the court of appeal or of the high court or by the Attorney General within 15 days from the receipt of the case.
(3) In the motion to initiate the designation, the reasons for which the case ... cannot be heard within a reasonable time must be outlined, together with such information on staffing and case influx as proves the exceptional and disproportionate workload of the [originally competent] court.”
Section 63
“(1) [By relying on the principles determined by the National Judicial Council (Országos Bírói Tanács)] the President of the NJO shall, within 8 days from receipt of the motion, examine whether in light of the case flow, the personnel and other data and of the specific features of the case affected by the reassignment, the motion is well-founded and shall examine to which court the case may be reassigned. The President of the NJO shall consult the court to which the case is reassigned – in criminal cases the Chief Public Prosecutor, if the motion has been filed not by the Chief Public Prosecutor – and may request data or opinion from any court; such requests shall be complied with immediately.
(2) The President of the NJO shall, within 8 days from receipt of the opinions and data referred to in subsection (1) decide on the reassignment by refusing the motion in case it is ill-founded or by reassigning the case to another court in case the motion is well-founded. In the decision, the President of the NJO shall explain how the principles determined by the NJO were applied.
(3) A party affected by the reassignment may file an appeal against the decision on the reassignment within 8 days from the publication of the decision on the courts’ official website and on the central website.
(4) ... The appeal shall be adjudicated by the Kúria in non-litigious proceedings within 8 days. ...
(5) ... If the decision on the reassignment is not in conformity with those rules of this Act which govern the reassignment of cases, the Kúria shall quash the decision. A decision on the reassignment of a case may not be modified by the Kúria.” 
21.  Constitutional Court decision no. 36/2013. (XII.5.) AB of 2 December 2013 (adopted by seven votes to seven with the casting vote of the President) contains the following passages:
“[32] According to Article XXVIII (1) of the Fundamental Law and Article 6 § 1 of the Convention, everyone is entitled to a hearing by a tribunal established by law. The requirement of a tribunal “established by law” incorporates the right to a lawful judge, ... [who is] the judge belonging to the court with competence and jurisdiction and designated by the pre-established objective rules of case-assignment of that court. ...
[34] ... The designation of a court for the trial – and this entirely at the discretion of the President of the NJO – resulted in the violation of the right to a lawful judge, flowing from Article XXVIII (1) of the Fundamental Law that enshrines the requirement of a fair trial ...
[38] ‘... The requirement of timeliness is only one of the elements of a fair trial and its enforcement cannot be taken to the extreme; it cannot prevail over other elements of fair trial and, most importantly, cannot be applied to the detriment of other fundamental rights’ [Constitutional Court decision no. 20/2005. (V.26.) AB]. ...
[41] In its decision no. 166/2011. (XII.20.) AB concerning, among other issues, the principle of nullum iudicium sine lege, the Constitutional Court emphasised (having regard to the case-law of the [European] Court [of Human Rights] that ‘the reassignment of a particular group of cases from a court proceeding under the general jurisdiction rules to the jurisdiction of another court may only be compatible with the Convention if the substantive and procedural rules and preconditions of such a reassignment are laid down by the lawmaker in transparent, pre-determined, clear and objective parameters leaving no (or minimal) room for discretion and ensuring that the actual decision is taken by the own institutions of the independent, impartial court system.’ ...
[43] Therefore, the Constitutional Court held that the [impugned provisions] were also incompatible with Article 6 § 1 of the Convention.
[61] Since in the present case the lawmaker did not allow appeal against a decision which affected the fundamental rights of the persons concerned (in particular, their rights to a fair trial, as explained above), the Constitutional Court held that the provision was unconstitutional and also violated an international treaty, in that it was neither compatible with Article XXVIII (7) of the Fundamental Law nor with Article 13 of the Convention.
[62] As a matter of principle, a declaration of unconstitutionality results, by the force of law, in the non-applicability of [the impugned provisions] in the cases which were at the origin of the Constitutional Court’s proceedings. For this reason, the Constitutional Court did not have to rule on this question separately.”
22.  On 17 September 2012 the National Judicial Council decided (Resolution no. 58/2012. (IX.17.) OBT) that only the courts whose workload exceeded the national average from three perspectives conjointly (number of cases per judge, the proportion of cases pending over two years and the proportion of high-profile/priority cases) were entitled to request reassignment.
23.  The Government submitted three cases, in which the Kúria decided on appeals against reassignments.
Decision no. Kpkf.37.584/2012/2 contains the following passages:
“... [The law] specifies reassignment as an exceptional institution which may only affect courts having the same competence in respect of cases making the effective and timely adjudication of court proceedings pending before a court difficult, due to their complexity.
In the decision affected by the remedy, the President of the NJO may, and did, take into account only courts having the same competence and fitting the forum system. ... Thus the decision ... did not create a so-called separate court for the adjudication of the individual case which might have resulted in a fundamental breach of the right to a lawfully appointed court.
... Based on numbers and statistical data it can be established that the “high-priority” caseload of judges of the Budapest High Court is several times higher than at other tribunals.
Since the challenged decision was taken prior to the assignment of the case to the judge actually adjudicating the case, ... the defendant’s right to his “natural” judge could obviously not be limited by the decision of the President of the NJO. Following the reassignment, the assignment of the case to the judge proceeding in the case took place according to the pre-arranged work schedule accessible to clients.”
24.  The summary of case no. Bkk.I.519/2014., published by the Kúria on 16 May 2014, contains the following passages:
“... [A]bove all, the question to decide was whether the ordinary court, whose jurisdiction is based on an already repealed provision that had been found, by the Constitutional Court, unconstitutional and in breach of [the Convention], can itself conclude that the unconstitutional provision had not been applicable in the ongoing proceedings, even if neither the Constitutional Court nor the lawmaker specified a consequence of that kind. ... Annulation of a law [by the Constitutional Court] ... does not prejudice legal relationships and ensuing rights and obligations established before or on the day of the decision’s publication – except when the Constitutional Court explicitly orders the review of the criminal ... proceedings. ... In the absence of any specific Constitutional Court instructions in this respect, the declaration of unconstitutionality of the (already repealed) provisions that made possible for the President of the NJO to designate the competent court does not affect the validity of the decisions adopted on the basis of those provisions.”
25.  Decision no. Bkk.III.494/2014/4. of the Kúria, adopted on 23 April 2014, contains the following passages:
“[The Kúria shall decide on the question of jurisdiction] if two courts both refuse to hear the case for want of jurisdiction, but they do not consider the other court competent reciprocally and it is only one of them who deems the other one competent. ... According to section 20 (3) of the Code of Criminal Procedure, a court shall be designated by the Kúria to hear/try the case if the circumstances defining the jurisdiction are unclear. ... In that case, jurisdiction will be based on the decision of the Kúria. ... In the present case, the Kúria adopted its decision [assigning the case to the court designated previously by the President of the NJO] with regard to [the principle of pre-emption]. The former assignment decision of the President of the NJO and the decision of the Constitutional Court are both immaterial in this procedural situation. ... The existence of a procedural act may only be set aside ... if the invalidation was explicitly directed on it. ... Thus, the fact that the [court designated by the President of the NJO] already conducted a part of the proceedings cannot be ignored; it forms the basis for the application of the principle of pre-emption.”
III.  WORK OF the European Commission for Democracy through Law (“the Venice Commission”)
26.  Document CDL-AD(2012)001 contains the following passages:
“The Commission fully acknowledges the need to establish an efficient and operational administration of justice. However, the Commission has serious doubts about the reform model chosen, which concentrates these very large competences in the hand of one individual person, the President of the newly established National Judicial Office (NJO).
States enjoy a wide margin of appreciation when establishing a system for the administration of justice and a variety of models exist in Europe. However, in none of the member states of the Council of Europe have such important powers been vested in a single person, lacking sufficient democratic accountability. In countries where the Minister for Justice appoints judges, the Minister is directly accountable to Parliament, has a shorter mandate and tends to be personally involved only in the most important cases.
Even if most of the competences of the President of the NJO do not relate to decision-making in individual cases, many of the powers listed above are closely related to the position of the judge who makes these decisions. The President of the NJO is not only a strong court “administrator”, he or she also intervenes very closely in judicial decision making through the right of transferring cases to another court, his or her influence on individual judges and on the internal structure of the judiciary.
In contrast, the President of the NJO has abundant competences and, hence, is the main actor in judicial administration. However, the mere fact that only judges are eligible as President of the NJO, does not make the latter an organ of judicial self-government. Instead, this would imply that the judges have a decisive vote in his/her election. Since the President of the NJO is elected by Parliament, i.e. an external actor from the viewpoint of the judiciary, it cannot be regarded as an organ of judicial self-government.
Allocation of cases
The allocation of cases is one of the elements of crucial importance for the impartiality of the courts. With respect to the allocation of cases, the Venice Commission - in line with Council of Europe standards - holds that “the allocation of cases to individual judges should be based on objective and transparent criteria established in advance by the law. According to the ECtHR’s case-law, the object of the term “established by law” in Article 6 ECHR is to ensure “that the judicial organisation in a democratic society [does] not depend on the discretion of the Executive, but that it [is] regulated by law emanating from Parliament”. Nor, in countries where the law is codified, can the organisation of the judicial system be left to the discretion of the judicial authorities, although this does not mean that the courts do not have some latitude to interpret the relevant national legislation. Together with the express words of Article 6 ECHR, according to which “the medium” through which access to justice under fair hearing should be ensured must not only be a tribunal established by law, but also one which is both “independent” and “impartial” in general and specific terms [...], this implies that the judges or judicial panels entrusted with specific cases should not be selected ad hoc and/or ad personam, but according to objective and transparent criteria.
The order in which the individual judge (or panel of judges) within a court is determined in advance, meaning that it is based on general objective principles, is essential. It is desirable to indicate clearly where the ultimate responsibility for proper case allocation is being placed. In national legislation, it is sometimes provided that the court Presidents should have the power to assign cases among the individual judges. However, this power involves an element of discretion, which could be misused as a means of putting pressure on judges by overburdening them with cases or by assigning them only low-profile cases. It is also possible to direct politically sensitive cases to certain judges and to avoid allocating them to others. This can be a very effective way of influencing the outcome of the process.
Furthermore, Section 76.4.b AOAC enables the President of the NJO to designate another court based on the vague criterion of “adjudicating cases within a reasonable period of time”. This relates to Articles 11.3 and 11.4 of the Act on Transitional Provisions of 30 December 2011, which were adopted on the constitutional level in order to overcome the annulment of a similar provision on the legislative level by Constitutional Court judgment no. 166/2011 of 20 December 2011. The Constitutional Court had found that provision contrary to the European Convention on Human Rights. The fact, that some courts in Hungary are so small that the designation of such a court would effectively amount to the designation of a single judge or a special chamber, further adds to this. Even though the reasonable time requirement is part of both Article XXVIII Fundamental Law and Article 6.1 ECHR, it is not absolute, but forms a field of tension with the often conflicting right to a fair trial with respect to the fact that having and exercising more procedural rights necessarily goes hand in hand with a longer duration of the proceedings. Taking into account the importance of the right to a lawful judge for a fair trial, the state has to resort to other less intrusive means, in particular to provide for a sufficient number of judges and court staff. Solutions by means of arbitrary designation of another court cannot be justified at all.
In order to prevent the risk of an abuse of the power to allocate and to bring the provisions in line with Article 6 ECHR, the Venice Commission recommends that the Hungarian authorities use other mechanisms for the distribution of cases, especially those outlined by the Venice Commission as follows: “In order to enhance impartiality and independence of the judiciary it is highly recommended that the order in which judges deal with the cases be determined on the basis of general criteria. This can be done for example on the basis of alphabetical order, on the basis of a computerised system or on the basis of objective criteria such as categories of cases. The general rules (including exceptions) should be formulated by the law or by special regulations on the basis of the law, e.g. in court regulations laid down by the presidium or President. It may not always be possible to establish a fully comprehensive abstract system that operates for all cases, leaving no room to decisions regarding allocation in individual cases.
There may be circumstances requiring a need to take into account the workload or the specialisation of judges. ... The criteria for making such decisions by the court President or presidium should, however, be defined in advance on the basis of objective criteria. Workload statistics provide objective statistical data, but they are not sufficient as a basis for the decision on transferral, since they do not contain criteria for the selection of certain cases for transferral or for the selection of the individual receiving court. In order to prevent any risk of abuse, court Presidents and the President of the NJO should not have the discretion to decide which cases should be transferred or to select the ‘sending’ or ‘receiving’ courts. In addition, any such case allocation should be subject to review in order to take into account possible harsh situations where persons without the means to come to a court that is far away from their home town.
There may therefore be a basis for an objective system (even though it seems that in the present case, the nine cases were not assigned to one of the least burdened courts). The real problem lies in the selection of some cases, which are transferred, and in the lack of any justification, why it was just these cases that were selected. The Commission delegation was indeed informed that one of the cases transferred was a highly sensitive one of alleged political corruption.”
27.  Document no. CDL(2009)055 contains the following passages:
“68. Many European constitutions contain a subjective right to a lawful judge. As a rule, the guarantee is worded in a negative way, such as in the Constitution of Belgium: “No one can be separated, unwillingly, from the judge that the law has assigned to him.” (Article 13) or Italy: “No one may be removed from the normal judge predetermined by law”. Other constitutions state the “right to the lawful judge” in a positive way such as the Constitution of Slovenia: “Everyone has the right to have any decision regarding his rights, duties and any charges brought against him made without undue delay by an independent, impartial court constituted by law. Only a judge duly appointed pursuant to rules previously established by law and by judicial regulations may judge such an individual.”
THE LAW
I.  ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
28.  The applicant complained that it did not have a fair hearing in that the court which had been designated to hear its action could not be regarded as an independent and impartial tribunal established by law. It relied on Article 6 § 1 of the Convention, which reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”
29.  The Government contested that argument.
A.  Admissibility
30.  The Government argued that the application was inadmissible for failure to exhaust domestic remedies. In particular, the applicant had failed to file a motion for bias against the judges to whom its case had been assigned, if it had any doubts as to their impartiality.
31.  The applicant argued that a motion for bias was not a remedy with a bearing on the objectivity of the reassignment or on the ensuing appearance of lack of impartiality on the part of the assignee court.
32.  The Court agrees with the applicant’s position, observing that the key issue in the case was not the impartiality of the assignee judges. The question of a motion for bias cannot, therefore, be considered pertinent in this context.
33.  Furthermore, the Government claimed that the applicant had not exhausted domestic remedies in that its constitutional complaint, in its part going to the reassignment matter, had been introduced belatedly.
The applicant contested this view, calling into question the effective character of the constitutional complaint as a remedy.
34.  The Court recalls that the only remedies which Article 35 § 1 of the Convention requires to be exhausted are those that relate to the breaches alleged and at the same time are available and sufficient. The existence of such remedies must be sufficiently certain not only in theory but also in practice, failing which they will lack the requisite accessibility and effectiveness; it falls to the respondent State to establish that these conditions are satisfied (see, among other authorities, McFarlane v. Ireland [GC], no. 31333/06, § 107, 10 September 2010). The application of the rule must make due allowance for the fact that it is being applied in the context of machinery for the protection of human rights that the Contracting Parties have agreed to set up. Accordingly, the Court has recognised that Article 35 must be applied with some degree of flexibility and without excessive formalism and that the rule of exhaustion is neither absolute nor capable of being applied automatically. In reviewing whether it has been observed it is essential to have regard to the particular circumstances of each individual case (see Akdivar and Others v. Turkey, 16 September 1996, § 65, Reports of Judgments and Decisions 1996 IV). An applicant who has availed himself of a remedy capable of redressing the situation giving rise to the alleged violation, directly and not merely indirectly, is not bound to have recourse to other remedies which would have been available to him but the effectiveness of which is questionable (see Manoussakis and Others v. Greece, 26 September 1996, § 33, Reports 1996-IV, and Anakomba Yula v. Belgium, no. 45413/07, § 22, 10 March 2009).
35.  In the present case, the Court observes that the applicant pursued a constitutional complaint which included the issue of reassignment as a question of the constitutional right to a fair hearing. Assuming that this was an effective remedy in the circumstances, the Court is therefore satisfied that the applicant had brought to the attention of the authorities its alleged grievance, thereby securing an opportunity for them to redress the issue. When arguing non-exhaustion, the Government have not pointed to any relevant legal provision or jurisprudence according to which the reassignment issue was a matter mandatorily to be severed from the fairness of the main procedure. The Court therefore considers that the applicant could reasonably expect that a comprehensive constitutional complaint introduced within the statutory time-limit counted from the service of the second-instance decision which includes the reassignment aspect will be entertained by the Constitutional Court as a whole, offering a reply to all the issues with bearing on the fairness of the procedure. For the Court, the fact that the Constitutional Court eventually severed the reassignment decision from the main procedure and sanctioned a different time-limit in that respect was not foreseeable in the least and cannot be reproached to the applicant with the benefit of hindsight.
36.  In light of the above, the Court is of the view that the application cannot be rejected for non-exhaustion of domestic remedies.
The Court further finds that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention and that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B.  Merits
1.  The applicant’s submissions
37.  The applicant submitted that the domestic courts had reached their decisions in an arbitrary manner since they had erred in facts, law and deductions.
38.  With regard to the independency and impartiality of the tribunal, the applicant observed that the objectivity and transparency of the procedure had not been ensured, because the reassignment of the case had occurred at the discretion of the President of the NJO. Because the rules on reassignment were not sufficiently clear, the court hearing the applicant’s case was not “tribunal established by law”. The case was not particularly complex, so it would not have created an excessive workload for the original court had it stayed with that one.
39.  Furthermore, the fact that the legal basis for the reassignment was eventually declared unconstitutional (see paragraph 16 above) proved that there was no “tribunal “established by law” in the present case.
2.  The Government’s submissions
40.  The Government submitted that the Zalaegerszeg High Court was a “tribunal established by law” as being part of the ordinary court system in Hungary. The reassignment of a case from a court with general territorial competence to another was a well-known legal institution both in Hungarian and other European laws. Reassignments were to be applied only in exceptional cases as a temporary measure with a view to alleviate the serious regional imbalances between the workloads of courts and to eliminate excessive backlogs hindering the conclusion of judicial proceedings within a reasonable time. They took place between courts and not between judges. The assignment of a case to a judge (or to a judicial formation) at the assignee court remained subject to the generally applicable rules governing the allocation of cases, determined by the president of the assignee court in accordance with the law. Therefore, due to the designation of the assignee court in accordance with the law and due to the subsequent allocation of the case to the assignee judge in accordance with the generally applicable rules, the judge having actually proceeded in the applicant’s case became a “lawful judge” for the purposes of domestic law.
41.  Furthermore, the Government pointed out that in contrast to the case of DMD GROUP, a.s., v. Slovakia (no. 19334/03, 5 October 2010), the applicant’s case had not been reassigned from one judge to another, but from one court to another, whose competence differed solely in respect of territorial competence; the reassignment was not made by the assignee court but by an independent third party, namely the President of the NJO who had acted not as an agent of the executive, but as head of the judiciary. In any case, the remedies available in the proceedings against the decision given by the assignee court had guaranteed a full review of the case by the Kúria (in review proceedings) and, eventually, by the Constitutional Court (in proceedings instituted for the alleged unconstitutionality of the decision).
42.  Regarding decision no. 36/2013. (XII.5.) AB of the Constitutional Court, the Government pointed out that it was a ruling on complaints filed in a different context, namely in relation to criminal cases, which therefore could not be applied to the present case – civil, or rather economical, in nature.
43.  In the Government’s view, there was no indication that the decision given in the case was in any manner affected by the reassignment of the action. In any case, the final review of the procedure was conducted by the Kúria – which would have been the last instance either way.
44.  Lastly, the Government submitted that, in application of the impugned reassignment rule, thirteen cases were reassigned in 2011, and forty-two cases in 2012. All but one requests for reassignments were filed by the President of the Budapest High Court, which had the biggest workload among all Hungarian courts. Two requests had been rejected by the President of the NJO because the conditions for reassignment were not met. Since February 2013 no case had been reassigned. Since the legislature’s intention had been to enact reassignment as a provisional and exceptional measure, the relevant statutory provisions were repealed as of 1 August 2013 by Act No. CXXXI of 2013.
3.  The Court’s assessment
(a)  General principles
45.  The Court firstly reiterates that “the right to a fair trial holds so prominent a place in a democratic society that there can be no justification for interpreting Article 6 § 1 restrictively” (see Perez v. France [GC], no. 47287/99, § 64, ECHR 2004 I).
46.  In cases under Article 6 of the Convention, the Court often examines individual aspects of a fair trial that the applicant complains of, and a breach of such a specific right may result in a breach of the right to a fair trial (see Kinský v. the Czech Republic, no. 42856/06, § 83, 9 February 2012). Nevertheless, in many instances it takes into account the “proceedings as a whole”. Thus the Court may find a breach of Article 6 § 1 of the Convention if the proceedings taken as a whole did not satisfy the requirements of a fair hearing even if each procedural defect, taken alone, would not have convinced the Court that the proceedings were “unfair” (see Barberà, Messegué and Jabardo v. Spain, 6 December 1988, § 89, Series A no. 146; and Mirilashvili v. Russia, no. 6293/04, § 165, 11 December 2008).
47.  Under Article 6 § 1 of the Convention, a tribunal must always be “established by law”. This expression reflects the principle of the rule of law, which is inherent in the system of protection established by the Convention and its Protocols (see, for example, Jorgic v. Germany, no. 74613/01, § 64, ECHR 2007‑III).
48.  “Law”, within the meaning of Article 6 § 1 of the Convention, comprises not only legislation providing for the establishment and competence of judicial organs (see, inter alia, Lavents v. Latvia, no. 58442/00, § 114, 28 November 2002), but also any other provision of domestic law which, if breached, would render the participation of one or more judges in the examination of a case irregular (see Gorguiladzé v. Georgia, no. 4313/04, § 68, 20 October 2009; and Pandjikidzé and Others v. Georgia, no. 30323/02, § 104, 27 October 2009). This includes, in particular, provisions concerning the independence of the members of a tribunal, the length of their term of office, impartiality and the existence of procedural safeguards (see, for example, Coëme and Others, cited above, § 99; and Gurov v. Moldova, no. 36455/02, § 36, 11 July 2006).
49.  In other words, the phrase “established by law” covers not only the legal basis for the very existence of a “tribunal” but also compliance by the tribunal with the particular rules that govern it (see Sokurenko and Strygun v. Ukraine, nos. 29458/04 and 29465/04, § 24, 20 July 2006) and the composition of the bench in each case (see Buscarini v. San Marino (dec.), no. 31657/96, 4 May 2000).
50.  In principle, a violation by a tribunal of domestic legal provisions relating to the establishment and competence of judicial organs gives rise to a violation of Article 6 § 1. The Court may therefore examine whether the domestic law has been complied with in this respect. However, having regard to the general principle that it is, in the first place, for the national courts themselves to interpret the provisions of domestic law, the Court finds that it may not question their interpretation unless there has been a flagrant violation of domestic law (see, mutatis mutandis, Coëme and Others, cited above, § 98 in fine; and Lavents, cited above, § 114).
51.  The Court further observes that, according to its case-law, the object of the term “established by law” in Article 6 of the Convention is to ensure “that the judicial organisation in a democratic society does not depend on the discretion of the executive, but that it is regulated by law emanating from Parliament” (see Zand v. Austria, no. 7360/76, Commission’s report of 12 October 1978, Decisions and Reports (DR) 15, pp. 70-80). Nor, in countries where the law is codified, can the organisation of the judicial system be left to the discretion of the judicial authorities, although this does not mean that the courts do not have some latitude to interpret relevant domestic legislation (see Coëme and Others, cited above, § 98; Savino and Others v. Italy, nos. 17214/05, 20329/05 and 42113/04, § 94, 28 April 2009; and Fruni v. Slovakia, no. 8014/07, § 134, 21 June 2011).
52.  “The notion of separation of powers between the executive and the judiciary ... has assumed growing importance in the case-law of the Court” (see Stafford v. the United Kingdom [GC], no. 46295/99, § 78, ECHR 2002‑IV). At the same time, “neither Article 6 nor any other provision of the Convention requires States to comply with any theoretical constitutional concepts regarding the permissible limits of the powers’ interaction” (see Kleyn and Others v. the Netherlands [GC], nos. 39343/98, 39651/98, 43147/98 and 46664/99, § 193, ECHR 2003‑VI).
53.  In order to establish whether a tribunal can be considered “independent” within the meaning of Article 6 § 1, regard must be had, inter alia, to the manner of appointment of its members and their term of office, the existence of safeguards against external pressure and the question whether the body presents an appearance of independence (see Findlay v. the United Kingdom, 25 February 1997, § 73, Reports 1997-I; and Brudnicka and Others v. Poland, no. 54723/00, § 38, ECHR 2005-II). In this latter connection, what is at stake is the confidence which such tribunals in a democratic society must inspire in the public and, above all, the parties to the proceedings. In deciding whether there is a legitimate reason to fear that a particular court lacked independence or impartiality, the standpoint of the party to the proceedings is important without being decisive. What is decisive is whether the party’s doubts can be held to be objectively justified (see, amongst others, Morris v. the United Kingdom, no. 38784/97, § 58, ECHR 2002-I; and Miroshnik v. Ukraine, no. 75804/01, § 61, 27 November 2008, with further references). In this respect, even appearances may be of a certain importance or, in other words, “justice must not only be done, it must also be seen to be done” (see De Cubber v. Belgium, 26 October 1984, § 26, Series A no. 86).
54.  Moreover, as a rule, impartiality denotes the absence of prejudice or bias. According to the Court’s settled case-law, the existence of impartiality for the purposes of Article 6 § 1 must be determined according to: (i) a subjective test, where regard must be had to the personal conviction and behaviour of a particular judge – that is, whether the judge held any personal prejudice or bias in a given case; and (ii) an objective test, that is to say by ascertaining whether the tribunal itself and, among other aspects, its composition, offered sufficient guarantees to exclude any legitimate doubt in respect of its impartiality (see, among other authorities, Fey v. Austria, 24 February 1993, §§ 28 and 30, Series A no. 255; and Wettstein v. Switzerland, no. 33958/96, § 42, ECHR 2000-XII).
55.  There is no watertight division between subjective and objective impartiality, as the conduct of a judge may not only prompt objectively held misgivings as to his or her impartiality from the point of view of the external observer (the objective test) but may also go to the issue of his or her personal conviction (the subjective test) (see Kyprianou v. Cyprus [GC], no. 73797/01, § 119, ECHR 2005‑XIII). Thus, in some cases where it may be difficult to procure evidence with which to rebut the presumption of the judge’s subjective impartiality, the requirement of objective impartiality provides a further important guarantee (see Pullar v. the United Kingdom, 10 June 1996, § 32, Reports 1996‑III).
56.  Finally, the concepts of independence and objective impartiality are closely linked and, depending on the circumstances, may require joint examination (see Sacilor-Lormines v. France, no. 65411/01, § 62, ECHR 2006‑XIII).
(b)  Application of those principles in the present case
57.  At the outset, the Court would emphasise that the paramount importance of judicial independence and legal certainty for the rule of law calls for particular clarity of the rules applied in any one case and for clear safeguards to ensure objectivity and transparency, and, above all, to avoid any appearance of arbitrariness in the assignment of particular cases to judges (see Iwańczuk v. Poland (dec.), no. 39279/05, 17 November 2009; and DMD GROUP, a.s., cited above, § 66).
58.  The Court considers that where the assignment of a case is discretionary in the sense that the modalities thereof are not prescribed by law, that situation puts at risk the appearance of impartiality, by allowing speculation about the influence of political or other forces on the assignee court and the judge in charge, even where the assignment of the case to the specific judge in itself follows transparent criteria. The order in which the individual judge or panel in charge of a certain case within a court is determined in advance, that is, an order based on general and objective principles, is essential for clarity, transparency as well as for judicial independence and impartiality. An element of discretion in the allocation or reassignment of cases could be misused as a means of putting pressure on judges by for instance overburdening them with cases or by assigning them only low-profile ones. It is also possible to direct politically sensitive cases to certain judges and to avoid allocating them to others. Therefore, the Court shares the Constitutional Court’s opinion (see paragraph 21 above), according to which:
“the reassignment of a particular group of cases from a court proceeding under the general jurisdiction rules to the jurisdiction of another court may only be compatible with the Convention if the substantive and procedural rules and preconditions of such a reassignment are laid down by the lawmaker in transparent, pre-determined, clear and objective parameters leaving no (or minimal) room for discretion and ensuring that the actual decision is taken by the own institutions of the independent, impartial court system”.
59.  The Court will next examine the individual aspects of a fair trial (see Kinský, loc. cit.). It notes the applicant’s submissions about the assignee court not being a tribunal “established by law” and about the impact of the discretionary assignment of the case on the independence and impartiality of that court.
60.  The Court observes the Government’s argument about the imbalance between the workloads of courts in Hungary (see paragraph 40 above) and recognises the need for organisational measures that enable the administration of justice to avoid undue delays. Such measures, however, have to be of a kind that satisfies the requirements of the right to a fair hearing.
61.  The competence of the assignee court to hear the applicant’s case was determined by a decision of the President of the NJO, who has extensive powers over administrative issues and to some extent over the personal status of members of the judiciary, and who was elected by Parliament and not within a system of judicial self-government. The Court refers to the opinion of the Venice Commission according to which the mere fact that only judges are eligible to be elected President of the NJO does not render the latter an organ of judicial self-government (see paragraph 26 above). Moreover, the Court cannot overlook the fact that until 17 September 2012 there had been no criteria at all in place that could, in principle, contribute to an objective reassignment (see paragraph 12 above). Although the National Judicial Council determined the applicable principles on that date, it did not provide any criteria for the selection of the individual cases to be reassigned, but granted discretion to the President of the NJO in the choice between eligible assignee courts. In any event, the introduction of the selection criteria was immaterial in the present case, since the assignee High Court had given judgment earlier, on 5 June 2012; and by 18 September 2012 the Pécs Court of Appeal, whose competence had also been determined by the assignment of the case to the Zalaegerszeg High Court, terminated the appeal procedure.
62.  While the reorganisation of judicial work in general terms – that is, according to verifiable criteria and without selecting particular cases – can be accepted by the Court, by contrast the reassignment of the applicant’s case took the form of an individual decision, which concerned that file exclusively (see paragraph 10 above) (compare and contrast, DMD GROUP, a.s., cited above, § 69). In this respect, the Court would underline that in the instant application, it is not the lawful existence of a court which is at issue but the lawfulness of the allocation of a case to that court.
63.  For the Court, the discretionary nature of the reassignment manifested itself in the fact that there were neither ascertainable reasons nor criteria as to which cases were to be transferred. This situation was ultimately capable of creating the appearance of lack of independence and impartiality and did not offer the foreseeability and certainty that is required in order for a court to be considered “established by law”.
64.  Similar was the conclusion of the Constitutional Court which established in its decision no. 36/2013. (XII.5.) AB (see paragraph 16 above) that the provisions on reassignment, namely sections 62 and 63 of Act no. CLXI of 2011 on the Organisation and Administration of Courts, as in force between 1 January and 16 July 2012, had been unconstitutional. Although that conclusion was reached in the context of constitutional complains originating in criminal proceedings, the Constitutional Court’s findings were not limited to the reassignment of criminal trials in the sense that sections 62 and 63 had provided legal basis for reassignments in civil and criminal cases alike.
65.  It is true that no direct domestic legal consequences emerged from the Constitutional Court’s decision in the applicant’s case (see paragraphs 16 in fine, 19 and 24 above). For the Court, however, remains the fact that the legal provisions ultimately underlying the reassignment of the applicant’s case were unconstitutional – and were found to be so by the Constitutional Court for reasons (see paragraph 21 above) which the Court agrees with. Indeed, the constitutional criticism of the impugned measure casts serious doubts on the Zalaegerszeg High Court being a “tribunal established by law” in the applicant’s case. The Court would add at this juncture that the failure of the domestic authorities to attach adequate legal consequences to the declaration of unconstitutionality affecting litigants in the applicant’s position sits uncomfortably with the requirement of the effective protection of Convention rights including the ones enshrined in paragraph 1 of Article 6.
66.  The Court further considers that the above-mentioned inherent defects of the proceedings, resulting from the discretionary reassignment of the case, could not be corrected by the subsequent appeal or review. The first-instance procedure, carried out by the assignee court – which reassignment was, for the above reasons, irreconcilable with the notion of a fair hearing – must have had a decisive impact on the entire proceedings and irretrievably affected the applicant – especially since, subsequently, the territorial competence of the appeal court also flowed from this assignment (see paragraph 11 above). Again, the Court would stress that the discretionary reassignment of the applicant’s litigation was open to concerns in terms of domestic constitutionality.
67.  In sum, the Court is of the view that the case was not heard by a “tribunal established by law”. There has accordingly been a violation of Article 6 § 1 of the Convention.
The Court further considers that in view of the findings as to the principal legal issue of the application, it is unnecessary to consider the applicant’s other submissions made under Article 6 § 1.
II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION
68.  Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
A.  Damage
69.  The applicant claimed 36,212,049 euros (EUR) in respect of pecuniary and EUR 30,000 in respect of non-pecuniary damage.
70.  The Government contested these claims.
71.  The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. On the other hand, it considers that the applicant must have suffered some non-pecuniary damage and awards it, on the basis of equity, EUR 6,000 under this head.
B.  Costs and expenses
72.  The applicant also claimed EUR 14,000 plus VAT for the costs and expenses incurred before the Court. This sum corresponds to 70 hours of legal work billable by its lawyer at an hourly rate of EUR 200 plus VAT.
73.  The Government contested this claim.
74.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 5,000 for the proceedings before the Court.
C.  Default interest
75.  The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1.  Declares the application admissible;

2.  Holds that there has been a violation of Article 6 § 1 of the Convention;

3.  Holds,
(a)  that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:
(i)  EUR 6,000 (six thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(ii)  EUR 5,000 (five thousand euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;
(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

4.  Dismisses the remainder of the applicant’s claim for just satisfaction.
Done in English, and notified in writing on 12 January 2016, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
	Fatoş Aracı	V. De Gaetano
	Deputy Registrar	President