Slovenia in Successful Defense Before the European Court of Human Rights

November 6, 2006

Cleary Gottlieb represented Slovenia in proceedings brought by three Croatian individuals before the European Court of Human Rights. The dispute arose out of Yugoslavia’s collapse. It concerns the distribution among the successor States of Yugoslavia’s liability for foreign-currency deposits with commercial banks. The Court had declared the individuals’ applications admissible in October 2003, but on November 6, the Court decided to strike the applications from its list of cases.

The Croatians made foreign-currency deposits with Ljubljanska Banka Zagreb prior to Yugoslavia’s dissolution. As a result of the collapse of the Yugoslav banking system, the Yugoslav banks could not pay their foreign-currency depositors. The applicants claimed that Slovenia as a successor State had assumed Yugoslavia’s liability for their deposits and that Slovenia’s failure to reimburse them would violate their right to property. Slovenia accepted liability for deposits made on Slovenian territory, but not for deposits in other successor States. The Court decided to strike the case on the grounds that two of the applicants had received payment from assets located in Croatia. As regards the third applicant, who received no payment, the Court found that, in cases in which liability for a former State’s debt is disputed by the successor States, a debtor should seek redress where other debtors have been successful, in this case the Croatian courts.