The Constitutional Court terminated legal proceedings in a case on the right of an insolvency procedure administrator to appeal against a court decision regarding dismissal of the administrator based on court’s initiative
On 25 September 2012, the Constitutional Court adopted decision to terminate legal proceedings in the case No. 2012-08-01 “On Compliance of Section 363.28 Indent 9 of the Civil Procedure Law insofar as It Denies the Possibility to Appeal Against a Court Decision regarding Dismissal of the Administrator from Insolvency Procedure Based on Court’s Initiative According to Section 22 (2) Indent 7 of the Insolvency Law and Compliance of Section 17 (1) Indent 6 of the Insolvency Law with Article 92 and Article 106 of the Satversme of the Republic of Latvia”.
Contested Norms
Section 363.28 Indent 9 of the Civil Procedure Law, in the wording that was effective up to 1July 2012, provided the following: “The Court’s decision regarding review of an application and a complaint shall not be subject to appeal.”
Section 17 (1) Indent 6 of the Insolvency Law provides: “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 the following cases: [..] 6) the court has removed the administrator on the grounds of Section 22, Paragraph two, Clause 7 of this Law.”
Legal Norms of a Higher Legal Force
Article 92 of the Satversme: “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.”
Article 106 of the Satversme: “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.”
The Facts
The applicant Mr Nauris Durevskis is a certified insolvency procedure administrator. In the application, he indicates that he has been dismissed from the position of an insolvency procedure administrator in the frameworks of an insolvency procedure based on a court decision. It is stated in the application that the court adopted the decision regarding the dismissal of the administrator based on its own initiative and it is not committed to hearing the administrator’s opinion. According to the Contested Norm of the Civil Procedure Law, it is not possible to appeal against such a court decision, which prohibits the right of the Applicant to reviewing a case on its merits.
Nonetheless, the contested norm of the Insolvency Law establishes mandatory consequences of the court decision, namely, the Latvian Association of Certified Administrators of Insolvency Process (Latvijas Sertificēto maksātnespējas procesa administratoru asociācija) has the duty to issue an administrative act on termination of validity of an administrator’s certificate. Without such a certificate, the Applicant does not have the right to continue holding the office of an insolvency procedure administrator.
On 21 June 2012, the Saeima [Parliament] of the Republic of Latvia adopted amendments to the Civil Procedure Law by amending, among the rest, the contested norm of the Civil Procedure Law by supplementing it with the following text: “Court decision on dismissal of an administrator according to Section 22 (1) Indent 1, 2, 3, 4 or 7 of the Insolvency Law shall be subject to appeal by submitting an ancillary complaint. The ancillary complaint shall be reviewed by the regional court within 15 days.”
The Saeima indicates that these amendments have eliminated all legal deficiencies referred to in the application because they permit an administrator to appeal against a court decision dismissing him or her from the office. It is established in Transitional Provisions of the Civil Procedure Law that these amendments shall also be applied to administrators that the court has dismissed from the office in the period from 1 November 2010 to 1 July 2012.
Court Findings and the Ruling
The Constitutional Court concluded that the Saeima has eliminated all factors that served as the basis for submitting of the constitutional complaint [4].
The right to appeal against the court decision dismissing an administrator from the office according to Para 57 of Transitional Provisions of the Civil Procedure Law applies also to those administrators who have been dismissed from the office before the amendments were introduced into Section 363.28 Indent 9 of the Civil Procedure Law. The applicant has exercised the particular right and submitted an ancillary complaint regarding the court decision, according to which he has been dismissed from the office of an insolvency procedure administrator. Consequently, all circumstances that would require continuing legal proceedings have been eliminated [5].
When assessing the contested norm of the Insolvency Law, the Constitutional Court indicated that this norm may not be assessed separately from Section 363.28 Indent 9 of the Civil Procedure Law, namely, both these norms are mutually related and shall be assessed in conjunction. Consequently, in this respect, the case is initiated insofar to establish whether legal consequences established in Section 17 (1) Indent 6 of the Insolvency law can be applied based on a decision of the first instance court that is not subject to appeal. Therefore continuation of legal proceedings in the present case insofar as it related with assessment of compliance of Section 17 (1) Indent 6 of the Insolvency Law with Article 92 and Article 106 of the Satversme is impossible [6].
Consequently, the Constitutional Court decided to terminate legal proceedings in the case No. 2012-08-01 “On Compliance of Section 363.28 Indent 9 of the Civil Procedure Law insofar as It Denies the Possibility to Appeal Against a Court Decision regarding Dismissal of the Administrator from Insolvency Procedure Based on Court’s Initiative According to Section 22 (2) Indent 7 of the Insolvency Law and Compliance of Section 17 (1) Indent 6 of the Insolvency Law with Article 92 and Article 106 of the Satversme of the Republic of Latvia”.
The Judgment of the Constitutional Court is final and not subject to appeal.
Linked case: 2012-08-01