The European Court of Human Rights (“ECHR”) recently acknowledged a complaint by Delta Bakery (the “judgment”) and confirmed that the Czech Competition Authority (Úřad pro ochranu hospodářské soutěže, “CCA”) violated Article 8 of the European Convention on Human Rights (“Convention”) when entering the Delta Bakery premises without first obtaining a warrant.

The legality of the dawn raid, i.e. an unannounced inspection by the CCA of the business premises of Delta Bakery held on 19 November 2003, was the subject of a long-running dispute. The CCA performed the dawn raid within administrative proceedings initiated for alleged violations of competition rules by Delta Bakery and other bakeries. During the dawn raid, Delta Bakery refused to cooperate and was penalised with a procedural fine (the “procedural decision”).

At the end of the administrative proceedings, all parties to the proceedings were fined (the “core decision”). Delta Bakery appealed against the core decision to the Chairman of the CCA, who upheld the core decision. Subsequent appeals of Delta Bakery to the Regional Court and Supreme Administrative Court were also dismissed. Even the Czech Constitutional Court confirmed the right of the CCA to enter business premises without obtaining a prior judicial warrant, i.e. only on legal authorisation.

However, the ECHR considered this approach as illegal in the sense of the Convention. The judgment questioned either already past or future dawn raids either in the Czech Republic or elsewhere in the EU, performed either by competition authorities or any other administrative bodies acting solely on the basis of relevant law.

Even if not the first of its kind, the judgment was surprising for the Czech Republic. Until this judgment came into force, CCA inspectors could enter the business premises of a company undergoing inspection simply on the basis of their empowerment to do so set by the Czech Act for the Protection of Competition (“Act”). A warrant, i.e. precedent judicial permission for a dawn raid to be performed, has never been required for a dawn raid on a business premises throughout the entire period during which the CCA has been legally empowered to conduct such raids A warrant is explicitly required by the Act only for an inspection of private premises.

The ECHR had already found in other cases that dawn raids without a warrant issued by the relevant competition authority were illegal (Deutsche Bahn, Colas). However, the EU General Court did not accept such a one-sided approach. In relation to the dawn raids conducted by the European Commission (“EC”), which also performs its dawn raids without prior judicial approval, the EU General Court held in the case of Deutsche Bahn that the mere lack of such a prior judicial authorisation would not necessarily result in the unlawfulness of an inspection. With reference to the case law of the ECHR, the EU General Court pointed out that the absence of prior judicial authorisation is counterbalanced by subsequent judicial review.

In the Czech Republic, we currently lack a sufficient and immediate instrument of judicial review of an intervention by an administrative body, such as a dawn raid performed by the CCA or any other administrative body. First, the CCA does not perform dawn raids on the basis of an administrative decision. Consequently, there is no legal possibility to challenge such a step by the CCA. Secondly, supported by the latest case law, in an action against the decision of an administrative body on an infringement (core decision) and an action against an unlawful action of an administration body, the former prevails. This means that parties to the proceedings currently only have an opportunity to challenge a dawn raid in their appeal against the core decision. Such defence is not sufficient from the point of the ECHR.

In the case at hand, Delta Bakery obviously was in a different situation. At the time of that particular dawn raid, Delta Bakery had an opportunity to appeal to the Court on the basis of an action according to Section 82 of the Czech Administrative Code. Such possibility was confirmed by the Supreme Administrative Court when deciding on the procedural decision. However, Delta Bakery did not pursue this legal instrument.

Therefore, the judgment shall be definitely challenged before the Committee of the ECRH, as the decision is not definite. Both parties are entitled to appeal against the judgment to the Committee within a three-month period.

Nevertheless, the issue of insufficient subsequent judicial review in the Czech Republic will require either a change in the applicable laws, a different interpretation of recent legal instruments or another solution. However, one thing is clear: obtaining prior warrants is both the most complicated and slowest approach.