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You are here: BAILII >> Databases >> European Court of Human Rights >> DOMBO BEHEER B.V. v. THE NETHERLANDS - 14448/88 [1993] ECHR 49 (27 October 1993)
URL: http://www.bailii.org/eu/cases/ECHR/1993/49.html
Cite as: 18 EHRR 213, [1993] ECHR 49, (1994) 18 EHRR 213

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In the case of Dombo Beheer B.V. v. the Netherlands*,

The European Court of Human Rights, sitting, in

accordance with Article 43 (art. 43) of the Convention for the

Protection of Human Rights and Fundamental Freedoms ("the

Convention")** and the relevant provisions of the Rules of Court,

as a Chamber composed of the following judges:

Mr R. Ryssdal, President,

Mr R. Bernhardt,

Mr L.-E. Pettiti,

Mr B. Walsh,

Mr S.K. Martens,

Mr I. Foighel,

Mr R. Pekkanen,

Mr M.A. Lopes Rocha,

Mr G. Mifsud Bonnici,

and also of Mr M.-A. Eissen, Registrar, and Mr H. Petzold, Deputy

Registrar,

Having deliberated in private on 23 April and

22 September 1993,

Delivers the following judgment, which was adopted on the

last-mentioned date:

_______________

Notes by the Registrar

* The case is numbered 37/1992/382/460. The first number is the

case's position on the list of cases referred to the Court in the

relevant year (second number). The last two numbers indicate the

case's position on the list of cases referred to the Court since

its creation and on the list of the corresponding originating

applications to the Commission.

** As amended by Article 11 of Protocol No. 8 (P8-11), which came

into force on 1 January 1990.

_______________

PROCEDURE

1. The case was referred to the Court by the European

Commission of Human Rights ("the Commission") on 26 October 1992,

within the three-month period laid down by Article 32 para. 1 and

Article 47 (art. 32-1, art. 47) of the Convention. It originated

in an application (no. 14448/88) against the Kingdom of the

Netherlands lodged with the Commission under Article 25 (art. 25)

on 15 August 1988 by a limited liability company possessing legal

personality under Netherlands law (besloten vennootschap),

Dombo Beheer B.V.

The Commission's request referred to Articles 44 and 48

(art. 44, art. 48) and to the declaration whereby the Netherlands

recognised the compulsory jurisdiction of the Court (Article 46)

(art. 46). The object of the request was to obtain a decision

as to whether the facts of the case disclosed a breach by the

respondent State of its obligations under Article 6 para. 1

(art. 6-1).

2. In response to the enquiry made in accordance with

Rule 33 para. 3 (d) of the Rules of Court, the applicant company

stated that it wished to take part in the proceedings and

designated the lawyer who would represent it (Rule 30). On

1 March 1993 the President gave him leave to use the Dutch

language (Rule 27 para. 3).

3. The Chamber to be constituted included ex officio

Mr S.K. Martens, the elected judge of Netherlands nationality

(Article 43 of the Convention) (art. 43), and Mr R. Ryssdal,

the President of the Court (Rule 21 para. 3 (b)). On

30 October 1992, in the presence of the Registrar, the President

drew by lot the names of the other seven members, namely

Mr L.-E. Pettiti, Mr B. Walsh, Mr I. Foighel, Mr R. Pekkanen,

Mr M.A. Lopes Rocha, Mr G. Mifsud Bonnici and Mr B. Repik

(Article 43 in fine of the Convention and Rule 21 para. 4)

(art. 43). With effect from 1 January 1993 Mr R. Bernhardt,

substitute judge, replaced Mr Repik, whose term of office had

come to an end owing to the dissolution of the Czech and Slovak

Federal Republic (Articles 38 and 65 para. 3 of the Convention

and Rules 22 para. 1 and 24 para. 1) (art. 38, art. 65-3).

4. As President of the Chamber (Rule 21 para. 5),

Mr Ryssdal, acting through the Registrar, consulted the Agent of

the Netherlands Government ("the Government"), the applicant's

lawyer and the Delegate of the Commission on the organisation of

the proceedings (Rules 37 para. 1 and 38). Pursuant to the

orders made in consequence, the Registrar received the

applicant's memorial on 1 March 1993 and the Government's

memorial on 4 March 1993. The Secretary to the Commission

informed the Registrar that the Delegate would submit her

observations at the hearing.

5. On 1 March 1993 the Commission produced certain documents

from its file which the Registrar had sought from it at the

applicant company's request.

6. In accordance with the President's decision, the hearing

took place in public in the Human Rights Building, Strasbourg,

on 21 April 1993. The Court had held a preparatory meeting

beforehand.

There appeared before the Court:

(a) for the Government

Mr K. de Vey Mestdagh, Ministry of Foreign Affairs, Agent,

Mr J.L. de Wijkerslooth de Weerdesteijn,

landsadvocaat,Counsel,

Mr P.A.M. Meijknecht, Ministry of Justice, Adviser;

(b) for the Commission

Mrs J. Liddy, Delegate;

(c) for the applicant

Mr D.W. Byvanck, advocaat en procureur, Counsel.

The Court heard addresses by Mr de Wijkerslooth de

Weerdesteijn for the Government, Mrs Liddy for the Commission and

Mr Byvanck for the applicant, and also replies to a question put

by one of its members.

AS TO THE FACTS

I. The particular circumstances of the case

7. The applicant (hereinafter "Dombo") is a limited

liability company under Netherlands law; it is the continuation

of a public limited company (naamloze vennootschap) originally

founded in 1958. It has its registered office in Nijmegen. At

the material time, its business included holding shares in

several other companies, for which it provided management; these

subsidiary companies engaged in commercial activities. The

shares in Dombo were held by a foundation (stichting) which

issued certificates of shares; these were apparently all held by

a Mr H.C. van Reijendam.

The company's management also included Mr van Reijendam;

he was the sole managing director from 1963 until his dismissal

(see paragraph 15 below), except for a short period between

4 February 1981 and 23 March 1981 during which he was suspended

as managing director and temporarily replaced by a Mr C.U. and

a Mrs van L.

8. At the material time, Dombo banked with the Nederlandsche

Middenstandsbank N.V. (hereinafter "the Bank") through its branch

office in Nijmegen. The manager of that office was a Mr van W.;

under the Bank's company statutes his position was not that of

managing director of the Bank itself and his powers to represent

the Bank, which included allowing credit up to a certain maximum,

were strictly circumscribed.

An agreement existed between Dombo and the Bank under

which Dombo and its subsidiaries enjoyed credit in current

account, i.e. the possibility of overdrawing on accounts held

with the Bank. In August 1980 this credit facility amounted to

500,000 Netherlands guilders (NLG), with an additional temporary

overdraft facility of up to NLG 250,000. This agreement had been

formalised in a written confirmation of an oral agreement to that

effect and in a contract dated 11 August 1980 under which the

Bank opened a joint account (compte-jointovereenkomst) in the

name of Dombo and its subsidiaries, who assumed responsibility

jointly and severally for meeting their obligations to the Bank.

9. A dispute arose between Dombo and the Bank concerning the

development of their financial relationship during the period

between December 1980 and February 1981. In the ensuing civil

proceedings both parties gave renderings of the facts which

differed materially on significant points.

10. Dombo's account may be summarised as follows.

(a) In early December 1980 the Bank, through the manager of

its Nijmegen branch, Mr van W., agreed orally to raise the

maximum of the credit available to Dombo by NLG 1,600,000 to a

total of NLG 2,100,000. As Mr van Reijendam had explained to

Mr van W., Dombo required this extension to take over the

commercial operations of a certain limited liability company, O.,

which had gone bankrupt; action was needed urgently. This oral

agreement was to be formalised later; at this point, however,

Mr van Reijendam did agree in writing to stand surety himself for

Dombo and its subsidiaries to the amount of NLG 350,000.

Following this alteration of the agreement of 11 August 1980

Dombo opened an account with the Bank earmarked for its

activities in connection with the O. takeover and the Bank

provided letters of credit on a number of occasions.

(b) In early January 1981 Dombo was offered the opportunity

to take over two other limited liability companies, T. and D.,

which had run into financial difficulties. To finance these

takeovers Dombo required another extension of the credit limit;

this was discussed between Mr van Reijendam and Mr van W.

Following these discussions the Bank made Dombo an offer in

writing dated 22 January 1981 to raise the maximum credit to

NLG 5,000,000. In anticipation of this extension, the Bank paid

out NLG 350,000 in connection with the takeover of T. and D. and

subsequently agreed to a withdrawal by Mr van Reijendam of

another NLG 100,000 for the same purpose. Mr van W. required

security for these sums in the form of a mortgage and made

Mr van Reijendam sign a blank power of attorney. The Bank made

use of that document to have a deed drawn up by a notary

mortgaging all immovable property belonging to Dombo, its

subsidiaries and Mr van Reijendam personally. This mortgage was

surety for a credit of NLG 1,600,000, i.e. it further secured the

extension of the credit referred to in sub-paragraph (a) above.

(c) On 28 January 1981 the Bank, through Mr van W.,

unexpectedly and inexplicably withdrew its confidence in

Mr van Reijendam, called on him to resign and froze all Dombo's

accounts without warning, this in spite of the fact that its

total debit balance was then NLG 783,436.06 and therefore well

within the agreed limit of NLG 2,100,000.

11. The Bank's rendering of the facts may be summarised as

follows.

(a) The Bank acknowledged that Dombo had asked for a higher

credit limit in connection with the takeover of the commercial

activities of the company O. It had agreed in principle but had

required certain additional information to be provided by Dombo,

including its annual statement for the previous year (1979);

these had never been received and an agreement to raise the

existing credit facilities as claimed by Dombo had therefore

never been reached. However, in connection with the takeover of

the activities of the O. company (which it approved of in

principle) and the urgent need for funds, the Bank had been

prepared to enable Dombo to act in anticipation of the extension

of the credit facilities by providing letters of credit on a

number of occasions. Mr van Reijendam had been asked to stand

surety for these himself to the amount of NLG 350,000. By the

end of January 1981 the sum for which the Bank had bound itself

amounted to NLG 848,000. The Bank pointed out that there was a

difference between a letter of credit and a credit under a

current account agreement; the former implied only occasional and

short-term risk, whereas the latter involved more permanent,

long-term risk.

(b) The Bank acknowledged also the second request for an

extension of the credit facilities for the takeover of the

companies T. and D. In this connection, Mr van Reijendam had

indicated that others would stand surety for at least

NLG 2,000,000. Relying on that statement, the Bank had written

to Dombo on 22 January 1981 that it agreed in principle to an

extension of the credit facilities to NLG 5,000,000, subject

however to certain conditions regarding annual statements and

securities. No annual statements had been forthcoming, nor any

securities either, and so the Bank had written to Dombo on

19 March 1981 withdrawing the offer.

The Bank acknowledged the transfer of NLG 350,000 but

denied having been aware of the purpose for which that sum was

intended. It claimed that Mr van Reijendam had misled it in this

regard. This also applied to the withdrawal of the NLG 100,000.

The Bank had referred to this deception in its letter of

19 March 1981 and stated that in consequence it would annul the

credit agreement (which it had nevertheless continued to honour)

if Mr van Reijendam were to take up his position as manager of

Dombo again (see sub-paragraph (c) below).

The Bank claimed that it had required the mortgages as

surety for the letters of credit referred to in sub-paragraph (a)

above and the withdrawal of the above-mentioned sums of

NLG 350,000 and 100,000. The mortgages had been established

under a power of attorney drawn up by a notary who - as the

document itself showed - had read it aloud before Mr van

Reijendam signed it. The Bank denied that there had been a blank

power of attorney.

(c) The Bank denied categorically that it had frozen Dombo's

accounts on 28 January 1981. In any case, withdrawals from these

accounts had by then exceeded the agreed maximum of NLG 750,000,

the balance being NLG 784,657.75 in debit. It had, however, made

it clear that it no longer had confidence in Mr van Reijendam

after the above-mentioned deception had come to light. The

Bank's doubts concerning his suitability to continue managing

Dombo were later confirmed when Mr van Reijendam was suspended

as managing director with effect from 4 February 1981 and shortly

afterwards committed to a mental institution under a court order.

During the period from 4 February 1981 until 23 March 1981 the

Bank continued its dealings with Dombo under different

management, consisting of Mr C.U. and Mrs van L. It continued

to allow credit to finance the activities taken over from

the O. company. After Mr van Reijendam's return the Bank had

allowed Dombo every opportunity to reduce its debt; when it

became clear that Mr van Reijendam was not prepared to do so, it

had annulled the credit agreement with effect from

30 October 1981. Only then had it frozen the accounts.

II. Proceedings in domestic courts

12. On 11 March 1983, pursuant to a court order which it had

obtained for that purpose, Dombo seized certain moneys which it

still owed to the Bank and summoned the Bank before the Arnhem

Regional Court (arrondissementsrechtbank), claiming financial

compensation for the damage caused by the Bank's alleged failure

to honour its commitments.

13. After extensive argument in writing - in which each party

presented written pleadings three times and produced a

considerable number of documents and Dombo offered to produce

witnesses (in particular the managing directors, Mr C.U. and

Mrs van L., who had temporarily replaced Mr van Reijendam, to

prove that there had been negotiations at that time to raise the

credit limit from NLG 2,100,000 to NLG 2,600,000) - the Regional

Court delivered an interlocutory judgment on 2 February 1984

allowing Dombo to call witnesses to prove, firstly, that the Bank

had frozen Dombo's accounts on 28 January 1981 and, secondly,

that the existing credit arrangements had been extended by

NLG 1,600,000 in December 1980. In addition, it ordered the

appearance in person (comparitie) before one of its judges of

representatives of Dombo and the Bank able to give information

and empowered to agree to a friendly settlement.

14. The Bank appealed against this interlocutory judgment to

the Arnhem Court of Appeal (gerechtshof), arguing that Dombo's

claim should have been dismissed out of hand. According to the

Bank, Dombo had abandoned the original basis of its claim, and

the basis which it had in the meanwhile adopted for it obviously

could not support it. Besides, Dombo had no interest in the

claim and the Regional Court's requirement of evidence was in any

case too vague and one-sided.

After both parties had submitted a written statement and

produced new documents and, through their lawyers, pleaded their

cases orally (Dombo repeating its offer to provide evidence), the

Court of Appeal, in a judgment of 8 January 1985, refused to

accept the Bank's arguments and confirmed the judgment of the

Regional Court.

At the request of both parties, the Court of Appeal did

not refer the case back to the Regional Court but proceeded to

deal with the case itself. Accordingly, it ordered the hearing

of witnesses to go ahead on 13 February 1985 before one of its

own judges, Mr van E., but reserved the decision on the date of

the personal appearance of the parties' representatives until the

witnesses had been heard.

15. Dombo called a number of witnesses, including

Mr van Reijendam. Producing the minutes of a shareholders'

meeting dated 29 June 1984, it claimed that Mr van Reijendam had

been dismissed as managing director for reason of "lack of

funds". It further produced a document from which it appeared

that Mr van Reijendam had been registered as an unemployed person

seeking employment on 27 November 1984 and an extract from the

commercial register from which it appeared that another person

had been appointed managing director of Dombo on

10 December 1984.

16. The Bank objected to Mr van Reijendam being heard. It

based this objection on the rule that a party to the proceedings

could not himself be heard as a witness (see paragraphs 23 and

25-26 below). It claimed that Mr van Reijendam's dismissal did

not reflect the true state of affairs but had been effected only

to enable him to testify.

In a judgment of 12 February 1985 Judge Van E. upheld

this objection and refused to hear Mr van Reijendam. He had

become convinced that both Mr van Reijendam's dismissal as

managing director of Dombo and the appointment in his place of

another person were shams (schijnhandelingen) which served no

other purpose than to enable Mr van Reijendam to testify in the

instant proceedings. He pointed out that Mr van Reijendam had

been present at the oral pleadings before the Court of Appeal on

30 October 1984 and had not protested when Dombo's lawyer

referred to him as Dombo's managing director. He added that in

his view the motives alleged for the dismissal were implausible.

The other six witnesses produced by Dombo were heard on

13 and 20 February 1985. One of them, Mr C.U., was heard on both

dates. This witness had been Dombo's financial affairs manager

from the middle of 1977 until May 1980 and had since retained

links with Dombo as an external adviser. During November and

December 1980 he had "been very closely involved" with the

running of Dombo and this had led to his appointment as statutory

managing director after the suspension of Mr van Reijendam on

4 February 1981 (see paragraph 11, sub-paragraph (c), above).

On 13 February Mr C.U. stated, inter alia, that he had been

present at several meetings of the parties between November 1980

and 28 January 1981 and that, although he could not recall the

exact words used, he had heard Mr van W. say something like,

"Then for the time being we will take a credit of NLG 1,600,000

as a starting-point". When examined for the second time at

Dombo's request, he corrected his statement to the extent that

besides the original credit facility of NLG 500,000 a new

facility had been agreed to the amount of NLG 1,600,000 in

connection with takeovers (mainly of the activities of the

O. company, a small part being intended for the takeover of the

T. company). There had been several discussions, in which this

witness had taken part, about the amount to which the credit was

to be extended.

17. In the exercise of its right to have its own witnesses

heard in reply (contra-enquête), the Bank called two of its

employees, one of whom was the manager of its Nijmegen branch

office, Mr van W.

Dombo objected to the hearing of Mr van W., stating the

view that at all stages of the credit relationship, and also in

the instant proceedings, he had been and remained the formal

representative of the Bank; to hear him as a witness at this

point, when Mr van Reijendam had not been so heard, would upset

the fair balance that should exist between parties in civil

proceedings.

18. By a decision delivered orally on 13 March 1985

Judge Van E. dismissed Dombo's objection. He considered first

and foremost that Mr van W. was a competent witness in the

instant case since he was not a party to the proceedings either

formally or in fact and went on to state that it could not follow

from the fact that Dombo was put at a disadvantage because

Mr van Reijendam was not heard as a witness while Mr van W. was

so heard that Mr van W. was no longer a competent witness.

The Court of Appeal judge proceeded to hear the Bank's

witnesses immediately.

After the witnesses had been examined, both parties

submitted extensive written pleadings in which they analysed the

witnesses' statements. Dombo submitted a large number of

additional documents, including written statements by persons not

heard as witnesses; the Bank also submitted further documents.

Dombo then submitted pleadings in response to those of the Bank.

19. The Court of Appeal delivered its final judgment on

11 March 1986. It first examined the witnesses' statements in

detail. As far as the statements of the witness Mr C.U. were

concerned (see paragraph 16 above), it observed that these

contradicted each other on a significant point, namely the figure

to which it had been agreed to extend the credit facility, and

added that this discrepancy, for which no explanation had been

given, adversely affected the convincingness of the statements

of this witness. The Court of Appeal then examined a number of

written depositions submitted by Dombo. Two of these were

rejected because they were not signed. With regard to a

deposition signed by Mr van Reijendam, the Court attributed the

same value to it as to a statement made by Dombo itself.

The Court of Appeal went on to hold:

"The Court of Appeal is of the opinion that the evidence

required from Dombo has not been provided. The

statements of the witnesses [D., H. and O.] are not

definite enough for this purpose and the statement of

[C.U.] and the notarial statement made by [S.] - whose

experience, as considered, dates only from after

12 May 1981 - are contradicted by those of the witnesses

[Van W. and K.]. The fact that no written evidence is

available of such an important agreement as that referred

to by Dombo, as would normally be expected, compels the

Court of Appeal to take a strict view of the evidence,

and this should also be taken into account.

It was established during the proceedings that between

December 1980 and January 1981 the [Bank] in effect

consented to extend the credit facilities to Dombo in

various forms in larger amounts than Dombo was entitled

to by virtue of any written agreement, but this does not

necessarily mean that Dombo was entitled to the credit

facilities for that reason alone, in the sense that the

[Bank] would not be justified in applying a kind of

temporary embargo on the facilities for reasons of its

own. Although the ease with which the [Bank] allowed

[Dombo] to exceed considerably the credit limit

officially in force provides food for thought, it can be

explained by the negotiations between the parties, which

came to light during the proceedings, concerning the

establishment of a substantially higher credit limit, in

which - as was also common ground between the parties -

the sum of NLG 2,600,000 was mentioned.

It is clear from the statement of the witness

[Van W.] - and Dombo did not contest this again after the

examination of that witness - that at the end of January

1981 the then managing director of Dombo, by misleading

the witness, twice succeeded in drawing considerable sums

over and above what was already to be regarded as

officially a substantial overdraft on Dombo's

consolidated accounts. This amount could reasonably

provide the [Bank] with grounds for temporarily 'shutting

off the flow of credit' to Dombo."

The Court of Appeal further held that since the agreement

had not been proved, it was not necessary to examine the question

whether the Bank had in fact frozen Dombo's accounts in breach

of it and it went on to dismiss Dombo's claim.

20. In June 1986 Dombo filed an appeal on points of law

(cassatie) to the Supreme Court (Hoge Raad). Paragraph 2 of its

(quite extensive) statement of grounds of appeal (middel van

cassatie) was particularly directed against Judge Van E.'s

decisions to uphold the objections to hearing Mr van Reijendam

as a witness for Dombo and reject those against hearing

Mr van W. as a witness for the Bank. This paragraph argued,

inter alia:

"Furthermore, the decisions of the Court of Appeal,

(also) if considered in relation to one another, are

incorrect in view of Article 6 (art. 6) of the

[Convention], which guarantees everyone a fair hearing of

his case in the determination of his civil rights and

obligations. After all, this provision implies (inter

alia) that the parties should be able to fight each other

with equal means ('equality of arms') and that every

party to civil proceedings should have the opportunity to

present his case to the court in circumstances which do

not place him at a substantial disadvantage vis-à-vis the

opposing party."

21. The Advocate-General (advocaat-generaal), in her advisory

opinion (conclusie) of 8 January 1988, formulated the opinion

that Dombo was right to argue that "according to current legal

opinion" a person who "could be identified with a party" should

be allowed to testify. In support of this view she referred to

the new law of evidence in civil procedure, which had by then

been accepted by Parliament (see paragraph 27 below). As an

additional argument in favour of this proposition she pointed to

Article 6 para. 1 (art. 6-1) of the Convention, on which Dombo

could in her view properly rely. In this connection she argued,

inter alia:

"In the present case the point was that [Mr van W.] was

able to present his view of what was (or was not, as the

case may be) agreed or discussed between himself and

Mr van Reijendam in December 1980 to the court

extensively (his statement comprises four pages in the

official record and two pages in the judgment of the

Court of Appeal), while Mr van Reijendam was not allowed

to give his version of the events himself. Yet the

success of Dombo's action depended on that."

She went on to advise allowing Dombo's appeal.

22. The Supreme Court dismissed the appeal on

19 February 1988. It rejected Dombo's arguments based on

"current legal opinion", considering that the law of evidence in

force was based on the exclusion of parties as witnesses in their

own case so that it was not possible to anticipate the entry into

force of the new law, which had an entirely different structure.

It likewise rejected the complaint based on Article 6 para. 1

(art. 6-1) of the Convention; this was based, according to the

Supreme Court, on the argument that the Court of Appeal had

violated the principle that "the procedural rights of both

parties should be equivalent". This line of argument, in the

opinion of the Supreme Court,

"... fails to recognise that in assessing the

convincingness of the content of witnesses' statements,

the judge with competence to determine questions of fact

is free to consider the nature and degree of involvement

of a witness with a party in proceedings and that he must

also judge a witness's statement in the light of what the

opposing party has put forward in its written pleadings

or when appearing before the court in person".

III. Relevant domestic law and practice

A. Parties as witnesses, in general: the former law

23. Prior to the entry into force of the new rules of

evidence in civil cases on 1 April 1988 (see paragraph 27 below)

evidence in civil procedure was governed by the Civil Code

(Burgerlijk Wetboek - CC) and the Code of Civil Procedure

(Wetboek van Burgerlijke Rechtsvordering - CCP), both of which

dated from 1838 and were largely based on the corresponding

French codes.

The former law, which applied at the time of the

proceedings in issue, did not lay down in so many words that a

person was not allowed to testify in a case to which he was a

party. It was nevertheless generally accepted that, in the words

of the Supreme Court, "one of the principles of the Netherlands

law of civil procedure is that a person who is formally or

substantively a party to litigation cannot be heard as a witness

in his own case" (judgment of 1 February 1963, NJ (Nederlandse

Jurisprudentie, Netherlands Law Reports) 1964, 157). This view

was based on, inter alia, Article 1947 para. 1 CC, according to

which relatives by blood or by marriage in a direct line, spouses

and former spouses of parties to proceedings were disqualified

from being witnesses.

The rule that an actual party was not allowed to give

evidence himself was repeatedly confirmed and strictly applied

by the Supreme Court, as reflected by, inter alia, its judgments

of 22 May 1953, NJ 1953, 647; 1 February 1963, NJ 1964, 157;

5 January 1973, NJ 1973, 106, and the judgments referred to below

in paragraph 25.

24. However, it did not follow that it was impossible for the

courts to hear parties in person. The courts had the following

possibilities at their disposal:

(a) The "decisive oath" and the "supplementary oath" involved

hearing a party to proceedings on oath.

(i) One party might call upon the other to confirm on

oath the truth of a certain disputed fact. If

the other party took the oath, then proof to the

contrary was no longer admissible; if he refused,

then the contrary statement was accepted as the

truth. This was the "decisive oath" (beslissende

eed) (Articles 1967-1976 CC).

(ii) The court also had the possibility of ordering,

of its own motion or at the request of a party,

that one or other of the parties should take the

"supplementary oath" (aanvullende eed). It could

impose such an oath on the party which was, in

its view, the most appropriate for the purpose,

provided that the statements to which the oath

was to relate were neither proved nor entirely

unsubstantiated (Articles 1977 and 1978 CC).

It was in particular the supplementary oath on which

parties not infrequently relied when there was a possibility that

their evidence would be insufficient; they would ask the court

for permission to supplement their evidence in this way if the

court were to hold it to be insufficient on its own.

(b) The courts also had three possible ways of hearing

parties which did not involve putting them on oath:

(i) By means of an "examination on points in issue"

(verhoor op vraagpunten) of one party at the

request of the other (Articles 234-247 CCP). The

party requesting such an examination had to file

his questions beforehand; however, the court was

entitled to ask additional questions occasioned

by the examination, as was the party who had

requested it.

(ii) By ordering, of its own motion or at the request

of either party, the personal appearance of the

parties for the purpose of obtaining information

(comparitie tot het geven van inlichtingen)

(Article 19a CCP). In principle, such an order

was for the appearance of both parties.

(iii) In the event of oral pleadings (pleidooien).

Article 20 CCP allowed parties to present their

cases themselves, but this was very rare;

however, parties were frequently present at the

oral pleadings and the court could make use of

the opportunity to question them

(Article 144 para. 2 CCP).

It was commonly assumed that statements made in these

three instances did not constitute evidence in support of the

position of the party that made them.

B. Legal persons

25. If a party to proceedings was a legal person, then the

rule disqualifying a party as a witness applied to any natural

person who was to be identified with the legal person concerned.

A natural person was identified with a legal person if he

had acted in the proceedings as its representative (as appears

from, inter alia, the Supreme Court's judgments of 27 June 1913,

NJ 1913, p. 865; 28 April 1916, NJ 1916, p. 786; 19 January 1922,

NJ 1922, p. 319; 17 January 1969, NJ 1969, 251), or if he was

empowered by law or by its statutes to act as its legal

representative (see, inter alia, the Supreme Court's judgments

of 9 January 1942, NJ 1942, 302; 12 January 1973, NJ 1973, 104;

26 October 1979, NJ 1980, 486; 18 November 1984, NJ 1984, 256).

26. Whether or not a person was qualified to be a witness had

to be determined in the light of the situation obtaining when he

was to make his statement. Under this general rule it was

usually assumed that a former director of a legal person, who

would have been prevented from giving evidence while he retained

his position, qualified as a witness following his dismissal

(see, inter alia, the Supreme Court's judgment of 28 June 1985,

NJ 1985, 888). However, this was not the case if the person

concerned had not genuinely lost his position within the legal

person and where his dismissal had to be construed as a sham

(schijnhandeling) (see, inter alia, the Supreme Court's judgment

of 18 November 1983, NJ 1984, 256, and its judgment in the

present case of 19 February 1988, published with an annotation

in NJ 1988, 725).

C. Parties as witnesses: the new law

27. The law of evidence in civil proceedings was extensively

amended by the Act of 3 December 1987, Staatsblad (Official

Gazette) 590, which entered into force on 1 April 1988.

The Bill on which the new law is based dates from as long

ago as 1969. One of the reasons why it took so long for this

Bill to become law was the controversy surrounding the question

whether the above principle - i.e. that parties should not be

allowed to testify -should be abandoned or whether,

alternatively, it should be accepted that parties might be heard

as witnesses. During the parliamentary proceedings this remained

the subject of heated debate both in Parliament and outside it,

but it was eventually decided to abandon the old practice.

Article 190 CCP now allows parties to give evidence as witnesses

in their own case. Accordingly, the decisive and supplementary

oaths referred to in paragraph 24, sub-paragraph (a), above have

ceased to exist.

It appears from the drafting history of this legislation

that those cases "in which insufficiency of evidence on the part

of one party leads to legal inequality" especially led to the

conclusion that "the arguments in favour of allowing parties to

testify should be given more weight than the fear of bias and

problems of assessment, which incidentally are just as likely to

occur in the case of other statements by witnesses". As an

example of such legal inequality it was mentioned "that a party

who is a natural person who is disqualified as a witness may be

confronted with (for instance) a party who is a legal person,

which is in a position to bring forward 'third parties', although

the credibility of these witnesses is just as doubtful in view

of their close connections with that party or the proceedings.

... [I]t is difficult to see why one individual should be allowed

to make a statement under oath in court about matters in which

he had a part while the other person involved should not. This

even applies regardless of any insufficiency of evidence in the

sense that no other evidence is available ..." (Parlementaire

Geschiedenis Nieuw Bewijsrecht, Parliamentary Drafting History

of the New Law of Evidence, pp. 189-90)

It should be observed that differences continue to exist

between a witness who is a party to the proceedings in question

and a witness who is not. For present purposes, it is sufficient

to note that pursuant to Article 213 para. 1 CCP the statement

of a witness who is party to the proceedings "concerning the

facts to be proved by him cannot provide evidence to his

advantage, unless the statement supplements incomplete evidence".

PROCEEDINGS BEFORE THE COMMISSION

28. Dombo applied to the Commission on 15 August 1988. It

alleged that the refusal of the courts to hear its director (or

former director) as a witness while the manager of the branch

office of its opponent was so heard placed it at a disadvantage

vis-à-vis its opponent and so constituted a breach of the

principle of "equality of arms" enshrined in Article 6 para. 1

(art. 6-1) of the Convention.

29. On 3 September 1991 the Commission declared the

application (no. 14448/88) admissible. In its report of

9 September 1992 (made under Article 31) (art. 31), it expressed

the opinion, by fourteen votes to five, that there had been a

violation of Article 6 para. 1 (art. 6-1). The full text of the

Commission's opinion and of the dissenting opinion contained in

the report is reproduced as an annex to this judgment*.

______________________________

* Note by the Registrar: for practical reasons this annex will

appear only with the printed version of the judgment (volume 274

of Series A of the Publications of the Court), but a copy of the

Commission's report is available from the registry.

_______________

AS TO THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 PARA. 1 (art. 6-1)

30. The applicant company complained about the refusal by the

national courts to allow its former managing director,

Mr van Reijendam, to give evidence, whereas the branch manager

of the Bank, Mr van W., who had been the only other person

present when the oral agreement was entered into, had been able

to testify. In its contention, the national courts had thereby

failed to observe the principle of "equality of arms", in breach

of its right to a "fair hearing" as guaranteed by

Article 6 para. 1 (art. 6-1), which reads:

"In the determination of his civil rights and obligations

..., everyone is entitled to a fair ... hearing ..."

This view was subscribed to by the Commission but

contested by the Government.

31. The Court notes at the outset that it is not called upon

to rule in general whether it is permissible to exclude the

evidence of a person in civil proceedings to which he is a party.

Nor is it called upon to examine the Netherlands law of

evidence in civil procedure in abstracto. The applicant company

does not claim that the law itself was in violation of the

Convention; besides, the law under which the decisions complained

of were given has since been replaced. In any event, the

competence of witnesses is primarily governed by national law

(see, as recent authorities and mutatis mutandis, the Lüdi v.

Switzerland judgment of 15 June 1992, Series A no. 238, p. 20,

para. 43, and the Schuler-Zgraggen v. Switzerland judgment

of 24 June 1993, Series A no. 263, p. 21, para. 66).

It is not within the province of the Court to substitute

its own assessment of the facts for that of the national courts.

The Court's task is to ascertain whether the proceedings in their

entirety, including the way in which evidence was permitted, were

"fair" within the meaning of Article 6 para. 1 (art. 6-1) (see,

inter alia and mutatis mutandis, the judgments referred to above,

loc. cit.).

32. The requirements inherent in the concept of "fair

hearing" are not necessarily the same in cases concerning the

determination of civil rights and obligations as they are in

cases concerning the determination of a criminal charge. This

is borne out by the absence of detailed provisions such as

paragraphs 2 and 3 of Article 6 (art. 6-2, art. 6-3) applying to

cases of the former category. Thus, although these provisions

have a certain relevance outside the strict confines of criminal

law (see, mutatis mutandis, the Albert and Le Compte v. Belgium

judgment of 10 February 1983, Series A no. 58, p. 20, para. 39),

the Contracting States have greater latitude when dealing with

civil cases concerning civil rights and obligations than they

have when dealing with criminal cases.

33. Nevertheless, certain principles concerning the notion of

a "fair hearing" in cases concerning civil rights and obligations

emerge from the Court's case-law. Most significantly for the

present case, it is clear that the requirement of "equality of

arms", in the sense of a "fair balance" between the parties,

applies in principle to such cases as well as to criminal cases

(see the Feldbrugge v. the Netherlands judgment of 26 May 1986,

Series A no. 99, p. 17, para. 44).

The Court agrees with the Commission that as regards

litigation involving opposing private interests, "equality of

arms" implies that each party must be afforded a reasonable

opportunity to present his case - including his evidence - under

conditions that do not place him at a substantial disadvantage

vis-à-vis his opponent.

It is left to the national authorities to ensure in each

individual case that the requirements of a "fair hearing" are

met.

34. In the instant case, it was incumbent upon the applicant

company to prove that there was an oral agreement between it and

the Bank to extend certain credit facilities. Only two persons

had been present at the meeting at which this agreement had

allegedly been reached, namely Mr van Reijendam representing the

applicant company and Mr van W. representing the Bank. Yet only

one of these two key persons was permitted to be heard, namely

the person who had represented the Bank. The applicant company

was denied the possibility of calling the person who had

represented it, because the Court of Appeal identified him with

the applicant company itself.

35. During the relevant negotiations Mr van Reijendam and

Mr van W. acted on an equal footing, both being empowered to

negotiate on behalf of their respective parties. It is therefore

difficult to see why they should not both have been allowed to

give evidence.

The applicant company was thus placed at a substantial

disadvantage vis-à-vis the Bank and there has accordingly been

a violation of Article 6 para. 1 (art. 6-1).

II. APPLICATION OF ARTICLE 50 (art. 50)

36. According to Article 50 (art. 50) of the Convention,

"If the Court finds that a decision or a measure taken by

a legal authority or any other authority of a High

Contracting Party is completely or partially in conflict

with the obligations arising from the ... Convention, and

if the internal law of the said Party allows only partial

reparation to be made for the consequences of this

decision or measure, the decision of the Court shall, if

necessary, afford just satisfaction to the injured

party."

A. Pecuniary and non-pecuniary damage

37. In its memorial the applicant company sought compensation

for pecuniary and non-pecuniary damage without specifying exact

amounts. In subsequent documents setting out its claims in

greater detail, Dombo stated that it did not consider them to be

ready for decision. In its view, it was necessary for the

pecuniary damage suffered as a result of the Bank's actions

complained of and the damage resulting from the dismissal of its

claims by the national courts to be assessed by accountants; such

an assessment would also provide an indication of the extent of

the non-pecuniary damage suffered.

38. The applicant company requested the Court primarily to

award a sum by way of an advance on the amount to be paid

eventually by the Government, sufficient for financial experts

to be commissioned to carry out the above-mentioned assessment

of losses. In the alternative, it requested the award of a sum

by way of special legal assistance, sufficient for the same

purpose. In the further alternative, it requested the Court to

defer consideration of its Article 50 (art. 50) claim so as to

give it the opportunity to obtain the required funds elsewhere.

39. The Government commented, firstly, that it was by no

means certain that the national courts would have found for the

applicant company if Mr van Reijendam had been heard and,

secondly, that it would be incorrect to hold the Government

responsible for the prejudice suffered by the applicant company,

which was in any case primarily the consequence of the Bank's

actions.

The Delegate of the Commission suggested that the Court

take into account some loss of opportunities by way of pecuniary

damage and the feeling of unequal treatment by way of

non-pecuniary damage and award a sum on an equitable basis.

40. The Court considers that the question of these claims is

ready for decision.

The applicant company's various claims for compensation

for pecuniary and non-pecuniary damage - which have to be decided

under a single head - are based on the assumption that it would

have won its case if the national courts had allowed

Mr van Reijendam to testify. The Court could not accept this

assumption without itself assessing the evidence. The testimony

of Mr van Reijendam before the Arnhem Court of Appeal could have

resulted in the existence of two opposing statements, one of

which would have to be accepted against the other on the basis

of supporting evidence. It is not for the European Court of

Human Rights to say which should be accepted. This part of the

claim for just satisfaction must accordingly be dismissed.

B. Costs and expenses

41. The applicant company claimed reimbursement of NLG 12,948

for lawyers' fees and expenses in the proceedings before the

Arnhem Court of Appeal. The applicant company further claimed

a total of NLG 48,244.51 less the amounts paid and payable in

legal aid for legal assistance before the Strasbourg

institutions.

The Delegate of the Commission did not comment. The

Government expressed no opinion other than to remark that they

found the amount of time spent on the case by the applicant

company's lawyer - 133 hours - "somewhat staggering".

42. The Court notes that like the claim for compensation, the

claim for reimbursement of costs and expenses incurred in the

proceedings before the Arnhem Court of Appeal is based on the

assumption that the applicant company would have won its case if

Mr van Reijendam had been heard (see paragraph 40 above). This

claim must therefore be dismissed for the same reasons.

43. As for costs and expenses incurred in the proceedings

before the Strasbourg institutions, the Court considers it

reasonable, making an assessment on an equitable basis, to award

the applicant company NLG 40,000 under this head less

16,185 French francs paid in legal aid.

However, the Court does not consider it appropriate to

require the payment of interest as the applicant company

requested.

FOR THESE REASONS, THE COURT

1. Holds by five votes to four that there has been a

violation of Article 6 para. 1 (art. 6-1);

2. Holds unanimously that the respondent State is to pay to

the applicant company, within three months, 40,000 (forty

thousand) Netherlands guilders for costs and expenses

incurred in the Strasbourg proceedings, less 16,185

(sixteen thousand one hundred and eighty-five) French

francs to be converted into Netherlands currency at the

rate of exchange applicable on the date of delivery of

this judgment;

3. Dismisses unanimously the remainder of the claim for just

satisfaction.

Done in English and in French, and delivered at a public

hearing in the Human Rights Building, Strasbourg, on

27 October 1993.

Signed: Rolv RYSSDAL

President

Signed: Marc-André Eissen

Registrar

In accordance with Article 51 para. 2 (art. 51-2) of the

Convention and Rule 53 para. 2 of the Rules of Court, the

dissenting opinion of Mr Martens, joined by Mr Pettiti, and the

joint dissenting opinion of Mr Bernhardt and Mr Pekkanen are

annexed to this judgment.

Initialled: R. R.

Initialled: M.-A. E.

DISSENTING OPINION OF JUDGE MARTENS,

JOINED BY JUDGE PETTITI

1. There are two reasons why I find myself unable to agree

with the Court's judgment.

What Dombo is complaining of is the application by the

Netherlands courts of a rule under the domestic law of evidence

in civil proceedings whereby "a person who is formally or

substantively a party to litigation cannot be heard as a witness

in his own case"1.

_______________

1. As to this rule, see paragraph 23 of the Court's judgment.

_______________

In my opinion, (A) this rule is not as such incompatible

with the Convention, in particular with the concept of fair

trial, and (B) neither does its application in concreto violate

the principle of equality of arms.

A.

2. The Court starts its reasoning by noting that it "is not

called upon to rule in general whether it is permissible to

exclude the evidence of a person in civil proceedings to which

he is a party" (paragraph 31 of the judgment), and it therefore

declines to examine in abstracto whether the above rule of the

Netherlands law of evidence in civil proceedings is compatible

with the Convention. However, the Court could not avoid

addressing these questions, because the Netherlands courts'

refusal to hear Mr van Reijendam's testimony was the inevitable

result of applying the relevant rule of evidence2.

_______________

2. Although in proceedings originating in an individual

application the Court generally considers itself precluded from

reviewing in abstracto whether the law of the State Party

concerned is in conformity with the Convention, it has recognised

that there are exceptions to this rule. One such exception is

where it is not really possible to distinguish between the rule

and its application or, as the Court usually puts it, where the

decision or measure complained of "was in fact the

result of" the rule's application. See, as the most recent

authority, the Philis v. Greece judgment of 27 August 1991,

Series A no. 209, p. 21, para. 61.

_______________

The Court restricts itself to ascertaining whether the

proceedings between Dombo and the Bank "in their entirety,

including the way in which evidence was permitted, were 'fair'

within the meaning of Article 6 para. 1 (art. 6-1)". Its

decisive argument for answering this question in the negative is

that since

"[d]uring the relevant negotiations Mr van Reijendam and

Mr van W. acted on an equal footing, both being empowered

to negotiate on behalf of their respective parties, [i]t

is ... difficult to see why they should not both have

been allowed to give evidence." (see paragraph 35 of the

judgment)

However, under a law of evidence such as that in force in

the Netherlands at the relevant time it cannot be maintained that

Mr van Reijendam and Mr van W. acted "on an equal footing".

Mr van W. was merely an employee representing his employer,

whereas Mr van Reijendam was to be identified with Dombo, being

at the material time not only its sole managing director but also

- indirectly - its only shareholder3. Since the above rule is

based on the irrefutable presumption that testimony given by "a

witness in his own case" is not to be trusted, the difference in

the roles of Mr van W. and Mr van Reijendam provided a decisive

and sufficient explanation "why they should not both have been

allowed to give evidence".

_______________

3. See paragraph 7 of the Court's judgment.

_______________

In other words, in all situations in which a party to

civil proceedings has to rely mainly if not exclusively on his

own declarations to refute assertions made by his opponent and

corroborated by witnesses, the aforementioned rule of the

Netherlands law of evidence in civil proceedings necessarily

places that party at a disadvantage vis-à-vis his opponent; and

it is this consequence which, in the Court's opinion, justifies

the conclusion that the principle of equality of arms has been

violated. This means that the Court does not condemn the rule's

application in concreto but the rule itself.

3. I very much doubt, however, whether that condemnation is

justified. The rule that a person who is a party to civil

proceedings cannot be heard as a witness in his own case is

evidently based on the view that such testimony is intrinsically

untrustworthy. Moreover, it apparently dates from an era when

the oath to be sworn by witnesses was seen as having so great a

(religious) significance that it was deemed imperative to protect

a party to civil litigation from perjury and the other party from

the possibility that the judge might feel compelled to give

credit to the declarations of his opponent because they were made

under oath. For a long time the rule that nemo in propria causa

testis esse debet was generally accepted and formed part of the

law of evidence in civil procedure in all European States4.

Since the second half of the last century it has been set aside

in a number of countries5. Considerations of procedural

expediency may no doubt be advanced to justify such a reform, but

the rule still applies in a good number of European States - such

as Belgium, France, Italy, Switzerland, Spain and Turkey - which

apparently prefer to maintain the traditional distrust of

allowing a litigant to testify in his own case.

_______________

4. See H. Nagel, 'Die Grundzüge des Beweisrechts im europäischen

Zivilprozess' (Baden-Baden, 1967), pp. 86 et seq.

5. See Nagel, op. cit., and in Festschrift für Walther J.

Habscheid (1989), pp. 195 et seq.

_______________

Against this background I think that it is very difficult

to condemn the rule as being incompatible with the basic

principles of fair procedure. In any event one should not do so

without taking into account the other opportunities afforded by

the national law of evidence for hearing a party to civil

proceedings in person and without any argument other than that

it is "difficult to see why" a party should not be allowed to

give evidence on his own behalf.

B.

4. As I have already noted, the Court sets out to determine

whether the proceedings between Dombo and the Bank "in their

entirety, including the way in which evidence was permitted, were

'fair' within the meaning of Article 6 para. 1 (art. 6-1)". The

Court then suggests that among the "principles concerning the

notion of a 'fair hearing' in cases concerning civil rights and

obligations" "the requirement of 'equality of arms'" is the most

significant one as regards the present case. The Court goes on

to say that in such proceedings "equality of arms" implies "that

each party must be afforded a reasonable opportunity to present

his case - including his evidence - under conditions that do not

place him at a substantial disadvantage vis-à-vis his opponent".

The latter choice of words is not particularly fortunate,

since it might be understood as indicating that the concept of

"equality of arms" has substantive implications, in that it

should also entail adapting substantive rules of procedure, such

as the rules of evidence, in order to guarantee both parties

substantively equal chances of success; whereas in relation to

litigation concerning civil rights and obligations, the concept

of "equality of arms" can only have a formal meaning: both

parties should have an equal opportunity to bring their case

before the court and to present their arguments and their

evidence6.

_______________

6. See, most recently, G. Baumgärtel, 'Ausprägung der

prozessualen Grundprincipien der Waffengleichheit und der fairen

Prozessführung im zivilprozessualen Beweisrecht', Festschrift

Franz Matscher, Vienna, 1993, pp. 29 et seq., with further

references.

_______________

I take it, however, that the Court is of the same view

and has only introduced this form of words as a test for

determining when both parties cannot be said to have had equal

opportunities to present their arguments and their evidence.

In my opinion Dombo was indeed afforded such an

opportunity.

5. Both parties had ample - and equal - opportunities to

present their case in writing and both parties had ample - and

equal - opportunities to present their evidence. Both sides

submitted documents and called witnesses7.

_______________

7. See paragraphs 12-18 of the Court's judgment.

_______________

It is true that the Bank was able to bring as a witness

its negotiator (Mr van W.), whilst Dombo did not have the

opportunity to call its negotiator, Mr van Reijendam. There are,

however, good grounds for holding that this did not place Dombo

"at a substantial disadvantage vis-à-vis" the Bank.

Firstly, under Netherlands law the courts are completely

free in their assessment of the evidence of witnesses. Thus, the

domestic courts were free to take into account the fact that

Mr van W. was professionally involved with the Bank and therefore

had a certain interest in the outcome of the proceedings8.

Similarly they would have been free to ignore statements made by

Mr van Reijendam had he been permitted to testify. Consequently,

the mere fact that Mr van W. was able to testify, whilst

Mr van Reijendam was not cannot be said to have resulted in a

substantial disadvantage for Dombo9.

_______________

8. This argument was stressed by the Netherlands Supreme Court:

see paragraph 21 of the Court's judgment.

9. Analysis of the judgment of the Arnhem Court of Appeal (see

paragraph 19 of the Court's judgment) reveals that this court

carefully weighed the evidence on both sides and that it was

mainly persuaded to find against Dombo not because of the

testimony of Mr van W. but by "the fact that no written evidence

[was] available of such an important agreement" as one that

raised a credit facility from NLG 500,000 to NLG 2,100,000.

_______________

Moreover, had the Arnhem Court of Appeal found that

Dombo's version of the facts, although not completely proved by

the evidence submitted, was the more probable of the two, it

could have decided in favour of Dombo subject to Mr van

Reijendam's confirming Dombo's version of the facts on oath10.

It is true that courts only ordered a "supplementary oath" if

they regarded the person who was to take it as trustworthy; and

it is also true that because of Mr van Reijendam's manoeuvring

in order to be allowed to give evidence as a witness, the Arnhem

Court of Appeal would not have been likely to regard him as

possessing that quality. But that is immaterial, not only in

view of the maxim "nemo auditur..." but also because the present

argument only concerns Dombo's opportunities as a matter of law.

_______________

10. Mr van Reijendam, being identified with Dombo, could swear

a "supplementary oath" on its behalf - see paragraphs 24 (a) (ii)

and 25 of the Court's judgment.

_______________

6. For these reasons I have voted that there has been no

violation.

JOINT DISSENTING OPINION OF JUDGES BERNHARDT AND PEKKANEN

We have voted against the violation of Article 6 para. 1

(art. 6-1) in the present case. In our opinion, equality of arms

in civil proceedings requires the equality of chances and

possibilities to submit the relevant material to the court

concerned. In proceedings with a legal person as a party, any

individual representing that person may be identified under

national procedural law with the legal person and therefore

excluded from the formal status of a witness. In our opinion,

what is decisive is that the parties enjoy in fact and in law

equality of arms before the national court. We are convinced

that Dombo Beheer, the applicant in this case, enjoyed this

equality of arms. In this respect we refer to paragraph 5 of the

dissenting opinion of Judge Martens.



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