ECHR: Bulgarian insolvent bank CCB was denied right to fair trial

The European Court for Human Rights (ECHR) has ruled that Bulgaria’s Corporate Commercial Bank (CCB), which collapsed and had its licence withdrawn in 2014, was denied the right to a fair trial with regard to attempts to review the licence withdrawal, but the court stopped short of making any binding recommendation regarding reparations or preventing a repeat violation.

CCB, also known as KTB by its abbreviation in Bulgarian, was the country’s fourth-largest lender by assets when it asked to be put under special supervision of the Bulgarian National Bank (BNB) on June 20 2014, following a bank run.

An audit several months later found that the bank held mainly impaired assets, requiring a write-down of 4.22 billion leva (about 2.16 billion euro), which led to the lender losing its banking licence in November 2014.

Attempts by its former shareholders and directors to obtain a judicial review of the central bank’s decision to withdraw the licence were repeatedly rejected by Bulgarian courts, which ruled that only the BNB-appointed administrators had the right to seek such a review.

“Ultimately, KTB had been represented by individuals dependent on the BNB and had not been able to put forward its case, in violation of Article 6 § 1 of the [European] Convention [on Human Rights],” ECHR said in its ruling.

ECHR found that not only did Bulgaria deny the bank a judicial review given how Bulgarian courts applied the relevant legislation, but there “had been no judicial or other legal safeguards against the decision to withdraw KTB’s licence.”

But the court went to point out that it “expressed no opinion on whether the decision to withdraw KTB’s licence had been correct in terms of Bulgarian law, or whether it had been in the general interest or had struck a fair balance between that general interest and KTB’s right to the peaceful enjoyment of its possessions.”

The ruling said that while reopening proceedings would be “in principle an appropriate way of redressing the breach”, the judgment should not necessarily lead to “the annulment of that decision and a reversal of its effects rather than in an award of compensation.”

It went on to say that any subsequent proceedings should be organised in “a way which would give KTB an effective opportunity to contest the findings which prompted the BNB to withdraw its licence.”

ECHR dismissed KTB’s claims of 5.3 billion leva, or about 2.7 billion euro, in pecuniary damages and 270 000 euro in legal costs.

The ECHR ruling, delivered by a panel of seven judges, was unanimous. It was adopted on July 5 and made public on August 30. The full ruling is available, in English, here.

(For full coverage of the CCB situation from The Sofia Globe, click here. Logo and corporate motto of Corporate Commercial Bank – “our clients are dear to us” – from a CCB advert. Screengrab from

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The Sofia Globe staff

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