Case of European Court of Human Rights, December 16, 1999 (case LIE AND BERNTSEN v. NORWAY)

President:Mr C.L. Rozakis
Actor:LIE AND BERNTSEN
Defense:Norway
Resolution Date:December 16, 1999
 
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SECOND SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 25130/94

by Randolf LIE and Tomm BERNTSEN

against Norway

The European Court of Human Rights (Second Section) sitting on 16 December 1999 as a Chamber composed of

Mr C.L. Rozakis, President,

Mr M. Fischbach,

Mrs V. Strážnická,

Mr P. Lorenzen,

Mr A.B. Baka,

Mr A. Kovler, judges,

Mr S. Evju, ad hoc judge,

and Mr E. Fribergh, Section Registrar;

Having regard to Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 23 July 1994 by Randolf Lie And Tomm Berntsen against Norway and registered on 13 September 1994 under file no. 25130/94;

Having regard to the report provided for in Rule 49 of the Rules of Court;

Having regard to the observations submitted by the respondent Government on 3 October 1996, 1 April and 15 September 1997 and the observations in reply submitted by the applicants on 23 and 25 November 1996, 22 March, 2 June and 21 September 1997 and 18 April 1998;

Having regard to the first applicant's additional complaint, submitted on 18 April 1998, concerning the alleged lack of impartiality of the Norwegian courts in the compensation proceedings;

Having deliberated;

Decides as follows:

THE FACTS

The first applicant, Mr Randolf Lie is a Norwegian citizen, born in 1936, and lives at Sandsli, Norway. The second applicant, Mr Tomm Berntsen, also a Norwegian citizen, was born in 1954 and lives in Alicante, Spain. The first applicant is represented by Mr Ole Reinert Berg-Olsen, a lawyer practising in Bergen, Norway. The second applicant is represented by Mr Birger Nilsen, a lawyer practising in Oslo, and by Mr Tyge Trier, a lawyer practising in Copenhagen, Denmark.

The facts of the case, as submitted by the parties, may be summarised as follows.

  1. Particular circumstances of the case

1. Background

In 1981 the applicants, together with two other persons, founded a limited liability company, Videoproduksjon A/S, which in 1983 was renamed VIP Scandinavia A/S (hereinafter referred to as VIP). The first applicant was Chairman of the company board during most of the period between the summer of 1983 and July 1987; between June and December 1986 he was a board member and the managing director. The second applicant was the managing director and a board member during a large part of the period between the autumn of 1983 and March 1987. In addition, the applicants were major shareholders in VIP.

The company's trade consisted of acquiring media rights within television and home video industry. It developed into becoming a large-scale holder of film rights for television, cinemas and hotels in various countries. Until the end of 1984, its business was largely concentrated on this kind of activities. While the company experienced a considerable expansion in its trade, its share capital increased from NOK 50,000 in 1981 to NOK 70 million in 1987. To a large extent, new emissions of shares were used as a means to acquire capital for the purchase of other firms and to cover the running of the company and its financial costs. Approximately 30 emissions of shares took place from 1981 to 1987.

In January 1986, VIP merged with the company Media Vision A/S, increasing the number of employees from 50 to 1,500. From being a relatively small company VIP became a mother company of a large diversified corporation with more than 100 subsidiary companies involved in a number of different types of activities.

In March 1987, VIP failed to present within the prescribed time-limit the accounts for 1986. Following the discovery of a large unexpected deficit, debt settlement proceedings were opened in July 1987.

2. Criminal Investigation

On 20 October 1987 the State Prosecutor for Hordaland ordered the Bergen police to open an investigation into alleged criminal activity within VIP and certain other companies involved. On 10 November 1987, the police interrogated the applicants for the first time. The investigations, which lasted three and a half years, concerned suspicion that the applicants were guilty of serious fraud (Articles 270 and 271 of the Penal Code) and of serious breach of trust (Articles 275 and 276) inter alia in relation to the issuing and sales on the

stock market of 76,200 invalid VIP shares in order to meet the company's financial needs; the issuing of 120,000 invalid VIP shares and their transfer to a bank, subsequently replaced as security by 120,000 equally invalid shares; partial implementation of an agreement to the effect that 170,000 of the applicants' own VIP shares were sold to Media Vision A/S illegally at a fixed and too high a price. Furthermore, they were suspected of serious embezzlement (Article 255 and 256) in relation to NOK 1.5 million profits derived from an agreement concluded by the applicants without the board's knowledge giving them a right to repurchase VIP shares at a fixed price. The applicants were moreover suspected of a number of other offences, including various violations of the accounting legislation, insider trading (second applicant only) and tax evasion,

The Public Prosecutor of Hordaland began to acquaint himself with the case as soon as he received the first recommendation from the police in September 1990. Only when he received the last such recommendation in May 1991 could he gain a complete picture of the case. He then decided that it was too complex to be dealt with by his office and in July 1991 transferred the case to Økokrim (the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway). This is a separate central police and prosecuting authority, set up in 1989 - in order to bring together a broad range of expertise for the investigation of complex cases of economic crime - and fully operative since 1991.

In the course of the investigations, the police heard 81 witnesses and collected some 30-shelf metres of documents, in part by seizure, in part by voluntary means. The official case documents extended to some 5-shelf metres. Altogether 11 persons were charged; of whom 3 were finally indicted. At the time, the VIP case was the most extensive case of economic crime ever investigated by the Norwegian police.

3. Criminal Proceedings

On 16 December 1992 an indictment was served on the applicants. In January 1993 the charges concerning insider trading were dropped. A second indictment was served on 8 November 1993. In January 1994 it was decided not to pursue charges relating to tax evasion and violation of accounting legislation. Those concerning serious embezzlement were also dropped. According to the Government, in some instances this was motivated by the state of the evidence, but in most instances it was done in order to simplify and expedite the proceedings. The indictments were replaced by other indictments on 27 January 1994 by which the applicants were charged inter alia with fraud contrary to Articles 275 and 276 of the Penal Code.

On 13 April 1994 the Bergen City Court (Bergen Byrett) scheduled the case to be examined as from 15 August 1995. The main hearing opened on 21 August 1995 and involved a total of thirty-six court days. The applicants were heard as well as twenty-seven witnesses.

In decisions of various dates between 20 October 1993 and 26 January 1994 Økokrim, the Ministry of Justice and the City Court refused the second applicant's requests for reimbursement of his travel and subsistence expenses - amounting to NOK 973,664 in connection with travelling from Spain to Norway. Moreover, Økokrim refused his requests for photocopies of the case documents being sent to his address in Spain.

By judgment of 28 November 1995 the City Court acquitted the applicants with respect to some of the charges against them but convicted them of violations of Articles 270 and 271 of the Penal Code and of various provisions of the Limited Liability Companies Act 1976 (Aksjeloven - Law of 4 June 1976 no. 59) on account of the issuing and sales of shares without the required authority from the company's governing board. Pursuant to Article 52 (1) of the Penal Code it deferred the issue of sentencing pending a probationary period of two years. The latter conclusion, which meant that no sentence would be imposed provided that the applicants did not re-offend within the prescribed period, was based on the City Court's finding of violation of Article 6 § 1 of the Convention. It observed that, since the entire case had lasted from 20 October 1987 until 28 November 1995, approximately a period of eight years, the requirement in Article 6 that proceedings be concluded within a "reasonable time" had been violated. The applicants were not ordered to pay any costs.

The Prosecution appealed against the City Court's judgment, contesting principally its findings as to sentencing and, in the alternative, the applicants' acquittals on certain charges. In their cross-appeal the applicants challenged their convictions by the City Court.

By judgment of 14 March 1997, Gulating High Court (lagmannsrett), sitting with Mr Justice Pedersen, Mr Justice Lunde and Ms Justice Midtgaard, together with 4 lay judges, acquitted the applicants of the charges of serious breach of confidence under Article 276, cf. 275, of the Penal Code but convicted them of various charges under Articles 270 and 271 and a number of provisions of the Limited Liability Companies Act. It sentenced them to three and a half years' imprisonment of which three years were suspended with a probationary period of three years. They were not ordered to pay costs.

As regards sentencing, the High Court's judgment included the following reasons:

"The High Court has concluded that the time elapsed - approximately 10 years before a final judgment can be expected - is too long, and that the time spent prior to the date in the summer of 1993 when the summary of evidence was made available and the final...

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