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Impossibility of the Law Court to suspend acts issued by National Bank of Moldova – unconstitutional
On 1 October 2013 the Constitutional Court delivered its judgment on the constitutionality of Article 11 para. (4) of Law No. 548-XIII of 21 July 1995 on the National Bank of Moldova and Articles 21 para. (3) and 23 para. (3) of the Law on the Administrative Litigation No. 793-XIV of 10 February 2000 (Complaint No. 26a/2013).
Circumstances of the case
At the origin of the case lies the complaint submitted to the Constitutional Court on 6 June 2013 under Articles 135, para. (1), lett. a) of the Constitution, 25 lett. g) of the Law on the Constitutional Court and 38, para. (1), lett. g) of the Constitutional Jurisdiction Code, by the MP, Mr Serghei Sîrbu, to review the constitutionality of the provisions of Article 11 para. (4) of Law No. 548-XIII of 21 July 1995 on the National Bank of Moldova and Articles 21 para. (3) and 23 para. (3) of the Law on the Administrative Litigation No. 793-XIV of 10 February 2000.
The author of the complaint alleged, in particular, that the impossibility of the court to suspend acts of the National Bank of Moldova and establishing the term of 3 months for examining applications for summons against it, constitutes a violation of Articles 1, 6, 20, 26, 53, 54, 66, 114, 115 of the Constitution.
The Constitutional Court ruled on the complaint in the following composition:
Mr Alexandru TĂNASE, President,
Mr Aurel BĂIEŞU,
Mr Igor DOLEA,
Mr Petru RĂILEAN, judges
Conclusions of the Court
Hearing the reasoning of the parties and examining the case file, through the art. 6 of the Constitution, the Court held that the functioning of any democratic society incessantly requires as an essential premise in fulfilling the rule of law the need for creating an institutionalized system of control able to "censor" the activity of public authorities at all levels, so that the power does not become the prerogative at the discretion of those who exercise it.
Similarly, the Court held that the Constitution provides, beside the rights and freedoms of citizens, the right of person prejudiced in any of his/her rights by a public authority through an administrative act or failure to solve a complaint within the legal term, to obtain the acknowledgement of the claimed right, cancellation of the act and payment of damages (Article 53 para. (1)).
The Court noted that the possibility of a person to use in court of law all procedures necessary for his/her defense is an effective remedy to ensure a fair trial, and this principle emerges from art. 20, para. (1) of the Constitution according to which any individual person shall be entitled to obtain effective reparation from the part of competent courts of law against actions infringing upon his/her legitimate rights, freedoms and interests.
The Court noted that in order to ensure a fair trial, Article 21 of the Law on Administrative Litigation gives the right to the person to request from the administrative court the suspension, while submitting the claim, of the contested administrative act.
The Court stated that the suspension of the administrative act is a form of assuring action, which is a proceeding measure that provides the possibility of fulfilling the demands, and it’s of a real contribution to the further carrying out of the adopted judgment and represents an effective way of protecting the subjective rights of the parties involved.
Simultaneously, the Court observed that contrary to the rules invoked, Art. 21 para. (3) of Law on Administrative Litigation provides that, until the final settlement of the case, the enforcement of the acts of the National Bank of Moldova can not be suspended.
Analyzing the contested provisions, the Court noted that in its previous jurisprudence (Judgment No. 24 of 15 November 2011 on the plea of unconstitutionality of Articles 38 para. (3), (6), (7) and 3812 paragraph (2) of the Law No. 550-XIII of 21 July 1995 on financial institutions, as amended and supplemented) ruled under a plea of unconstitutionality on similar issues only in terms of bank liquidation. Therefore, similar to the challenged rules, the provision contained in Article 38 para. (7), lett. b) of the Law on Financial Institutions No. 550-XIII of 21 July 1995 provides the impossibility of the court of law to suspend the acts imposed by the National Bank in the process of liquidation of a bank.
Thus, in the context of the Judgment No. 24 of 15 November 2011, the Court reiterated that in certain sensitive domains or which have a major importance for society, such as the stability of the banking system, the state enjoys a broad margin of appreciation. That discretion includes the right of the state to establish distinctive regulations from other similar domains of regulation.
The Court also noted that the rule contained in Article 38 para. (7), lett. b) of the Law on Financial Institutions, declared constitutional by Judgment No. 24 of 15 November 2011, refers only to acts of the National Bank issued in the process of liquidation of a bank.
Simultaneously, the Court noted that the norm contained in Art. 21 para. (3) of the Law on Administrative Litigation and art. 11 para. (4) of the Law on the National Bank of Moldova has a much extended applicability including subsequent acts imposed by the National Bank of Moldova for the process of liquidation of the banks and all acts related to monetary and currency policy, to special management of the bank, to the evaluation and supervision of the shareholders, as well as to the withdrawing licenses of the financial institutions.
The Court held that the right to request the court of law the suspension of the administrative act is a real safeguard against the abuse of administrative authority whose acts of authority benefit from the enforceable nature.
Simultaneously, in order to avoid unjustified abuses from the applicant, the judge has the possibility to determine on the extent and the real and irreversible character of the prejudice, which is invoked by the applicant due to its imminent happening. In this context, the Court noted that the interim measures, applied in each case separately examined by the court of law, are related to the essence of the scope of the action. The court of law will order that interim measure that maintains the status quo during the examination of the case in circumstances where there is a plausible risk of irreparable damage.
The Court held that by the norm contained in Art. 21 para. (3) of the Law on Administrative Litigation and art. 11 para. (4) of the Law on the National Bank of Moldova, Parliament introduced a differential treatment between acts issued by the National Bank and the acts issued by the rest of the public authorities, except of the acts related to the liquidation of the bank, which can not represent a reversible process after losing confidence by depositors. In instant case, the primary purpose is the protection of creditors' rights and the guarantee of a proper administration of the bank which is under liquidation.
The Court also noted that, unlike the liquidation of a bank, not all acts of the National Bank lead, under the challenged provisions, to an irreversible process. Moreover, in the context of the supra mentioned, the suspension of those provision is not a rule imposed by the court of law, but represents a measure of exception, after the examination of each individual case brought to court settlement. On the requirement of suspension, the court of law shall act diligently, taking into account the need to protect the interests of depositors, to keep the deposit secrecy and to avoid the excessive risk in the financial system.
The Court held that, according to Article 114 of the Constitution, justice is carried out in the name of law only by the courts of law, it shall have the fullness of procedural powers for a fair settlement of the case, without establishing some unjustified limitations of the actions, which are to be taken for the achievement of the final purpose of the judgment that does not become just an illusory one.
Additionally, referring to the period of 3 months of examining the summonses against the National Bank, the Court noted that under the provisions of Article 115 par. (4) of the Constitution, the structure of the law courts, their ambit of competence and legal proceedings are laid down by organic law. Therefore, establishing the rules of deployment of the process before the courts is an exclusive prerogative of the legislator, which can establish, taking in consideration some particular circumstances, special regulations of procedure.
Therefore, the Court held that, under Art. 115 para. (4) of the Constitution, establishing rules of deployment of the process before the courts is a prerogative of the legislator and the norm contained in Art. 23 para. (3) of the Law on Administrative Litigation represents a norm of suitability and not of constitutionality.
However, given the complexity of litigations involving financial institutions, the Court held as a principle that both the national and the international legal framework are prescribing the examination of the cases by the law court within a reasonable time for settlement, which resulted in issuing an address to the Parliament.
Judgment of the Court
Starting from the reasoning invoked above, the Constitutional Court partially upheld the complaint of the MP, Mr. Serghei Sîrbu, and declared unconstitutional the provisions of Article 11 para. (4) of Law No. 548-XIII of 21 July 1995 on the National Bank of Moldova and Article 21 (3) of the Law on the Administrative Litigation No. 793-XIV of 10 February 2000, except for provisions regarding the acts required by the National Bank of Moldova in the process of withdrawing the bank license and liquidation of the bank.
Furthermore, The Court ceased the process of constitutional review of the Article 23, paragraph (3) of the Law on Administrative Litigation No. 793-XIV of 10 February 2000.
The Judgment of the Constitutional Court is final, cannot be appealed, shall enter into force on the date of passing, and shall be published in the Official Journal of the Republic of Moldova.