The Constitutional Court initiated a case on the right of an insolvency administrator to appeal against a court decision resignating the administration on court’s initiative
On 18 April 2012, the First Panel of the Constitutional Court initiated a case “On Compliance of Section 363.28 Indent 9 of the Civil Procedure Law insofar as It Prohibits the Possibility to Appeal Against a Court Decision Resignating an Administration from the Insolvency Procedure on Court’s Initiative Based on Section 22 (2) Indent 7 of the Insolvency Law, and Section 17 (1) Indent 6 of the Insolvency Law with Article 92[1]. and 106.[2] of the Satversme of the Republic of Latvia”.
Contested Norms
Section 363.28 Indent 9 of the Civil Procedure Law establishes that a court decision regarding review of an application and a claim shall not be subject to appeal.
Section 17 (1) Indent 6 of the Insolvency Law provides that The operation of an administrator’s certificate shall terminate on the expiry of the validity thereof or by taking a decision regarding the termination thereof in case if the court has removed the administrator on the grounds of Section 22, Paragraph two, Clause 7 of this Law.
The Facts
When performing duties of an administrator in one of insolvency procedures, the Applicant – a certified insolvency administrator Mr Nauris Durevskis lodged an application before a court on approval of a bankruptcy procedure. The court rejected the application and, based on Section 22, Paragraph two, Clause 7 of the Insolvency Law, removed the administrator at a particular insolvency procedure by asking the Insolvency Admisitration to appoint another candidate. Moreover, the court announced a subordinate decision where it ruled to transfer copies of materials to a prosecutor’s office to decide on initiation of a criminal procedure on alledged exceeding of service authority and unpermitted participation in property transactions by the administrator. None of the court decisions are subject to appeal.
In cases when a court has resignated an administrator based on Section 22, Paragraph two, Clause 7 of the Insolvency Law, the Latvian Associaton of Certified Administrators of Insolvency Process is committed to adopting of an obligatory administrative act – a decision on terminaiton of an administrator’s certificate.
According to the Applicant, such procedure prohibits examining the matter on its merits, infringes the right of a person to a fair trial, whilst the legitimate aim of the restrictions is not proportional.
Likewise, the Applicant holds that the Contested Norms infringe the right of a person to freely choose his or her employment.
Legal Proceedings
The Saeima was asked to provide, before 18 June 2012, a reply on the facts of the case and legal justification thereof.
The term of preparation of the matter – 18 September 2012.
[1] Article 92 of the Satversme of the Republic of Latvia: “Everyone has the right to defend his or her rights and lawful interests in a fair court. Everyone shall be presumed innocent until his or her guilt has been established in accordance with law. Everyone, where his or her rights are violated without basis, has a right to commensurate compensation. Everyone has a right to the assistance of counsel.”
[2] Article 106 of the Satversme of the Republic of Latvia: “Everyone has the right to freely choose their employment and workplace according to their abilities and qualifications. Forced labour is prohibited. Participation in the relief of disasters and their effects, and work pursuant to a court order shall not be deemed forced labour.”
Linked case: 2012-08-01