A Case regarding the Competence of Arbitration Court to Determine Jurisdiction regarding a Dispute
On 17 March 2014 the 1st Panel of the Constitutional Court initiated a case “On Compliance of Section 495(1) of the Civil Procedure Law with the first sentence in Article 92 of the Satversme of the Republic of Latvia”.
The Contested Norm
The contested norm envisages that an arbitration court itself decides as to the jurisdiction regarding a dispute, also in cases where one of the parties disputes the existence or being in effect of the arbitration court agreement.
The Norm of Higher Legal Force
The first sentence in Section 92 of the Satversme: “Everyone has the right to defend his or her rights and lawful interests in a fair court”.
The Facts
The case was initiated having regard to the constitutional complaint submitted by Ltd. “Hipotēku bankas nekustamā īpašuma aģentūra”, noting that the applicant had had a civil law dispute with another company. The dispute was heard by an arbitration court. The applicant maintains that it had not signed an agreement on examining the dispute at an arbitration court; therefore the particular dispute is not subject to adjudication by an arbitration court.
The applicant had turned to a court of general jurisdiction, filing a petition to recognise the agreement (on adjudicating the dispute at an arbitration court) as being invalid. However, the claim was rejected at all court instances. The rejection was founded upon the contested norm.
The applicant holds that the contested norm restricts a person’s rights and accessibility of court in situations, where a a person wishes to contest the existence or the validity of an arbitration court agreement; moreover, the restriction to the right is incompatible with the principle of proportionality.
Legal Proceedings
The Constitutional Court has asked the Saeima to provide a reply on the facts of the case and legal substantiation by 20 May 2014.
The term for preparing the case is 17 August 2014. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-09-01