The norm pertaining to the right of insolvency administrator to appeal against a court’s decision, by which the administrator is dismissed from the insolvency proceedings, complies with the Satversme
On 12 March 2015 the Constitutional Court passed a judgement in Case No. 2014-23-01 “On Compliance of Section 3638 (8) of Civil Procedure Law (in the wording that was in effect until 31 October 2010), insofar it Applies to the Right of the Insolvency Administrator to Appeal against a Court’s Decision, by which the Administrator is Dismissed from the Insolvency Proceedings, with Article 92 of the Satversme.”
A court’s decision on dismissing an administrator from insolvency proceedings is not the kind of ruling with regard to which the legislator would be obliged to ensure the possibility of appeal.
The Contested Norm
The contested norm was effective until 31 October 201 and provided, inter alia, that the court’s decision on examination of an application and a complaint, inter alia, on the dismissal of the administrator from performing the duties in the insolvency proceedings on the basis of an application, was not subject to appeal.
The Norm of 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 aright to commensurate compensations. Everyone has a right to the assistance of counsel.”
In view of the arguments presented in the application, the Constitutional Court examined the compliance of the contested norm with the first sentence of Article 92 of the Satversme. [10]
The Facts
The case has been initiated with regard to the constitutional complaint submitted by Gatis Krasovskis, expressing the opinion that the contested norm places disproportional restrictions upon his fundamental rights; moreover, it is alleged that the restriction has no legitimate aim. With regard to the applicant, the court has adopted a decision in two insolvency proceedings on dismissing him from performing the duties of the administrator in insolvency proceedings. According to the contested norm, this decision is not subject to appeal. It is alleged that this situation is incompatible with the right to a fair court.
Court Findings and Ruling
On the content of the right to a fair court
The Constitutional Court referred to a finding expressed in its previous rulings: the legislator enjoys broad discretion in adopting procedural laws. The right to a fair court, established in Article 92 of the Satversme, does not envisage the appeal of all cases and their examination by a higher instance. The legislator, within the limits of its discretion, which follows from the Latvian legal system and the international standards of human rights binding upon the State, may decide the categories of cases, the rulings in which are not subject to appeal. [10]
The Constitutional Court recognised that in examining, whether the decision on dismissing and administrator, is a kind of ruling, the appeal against which to a higher instance should be ensured, must verify:
- whether fair legal proceedings were ensured to the person in that instance court, which adopted the respective ruling;
- what is the nature of the category of cases, in the framework of which the ruling was adopted, what is the legislator’s aim in regulating the cases belonging to this category. [11]
On Legal Proceedings
The Constitutional Court recognised that fair legal proceedings were ensured to the administrator in that instance court, which adopted the decision on dismissing him from the insolvency proceedings. The law envisaged procedure for summoning the administrator to the court hearing at which the issue of dismissing him from the insolvency proceedings was examined, and the administrator had the possibility to provide explanations to the court orally. [12, 14]
On the Nature of Cases regarding Insolvency Proceedings
The Constitutional Court recognised that cases regarding insolvency proceedings was a special category of cases. Cases regarding insolvency proceedings are specific and may differ from cases to be examined according to general civil procedure. If a court recognises that one of the grounds defined in Insolvency Law has set in, then the administrator is dismissed from the particular insolvency proceedings. This decisions by the court facilitated reaching the aim of Insolvency Law (facilitating restoration of debtor’s solvency and protecting the creditors’ interests). Whereas the administrator, who was dismissed by the court, has no subjective right to continue performing the duties of the administrator in the particular insolvency proceedings. [13, 14]
The Constitutional Court, by finding that the law ensured to the administrator fair legal proceedings and that the administrator had no subjective rights to continue performing the duties of the administrator in the particular insolvency proceedings, established that the court’s decision, included in the contested norm, regarding dismissal of an administrator was not the kind of ruling with regard to which the legislator would have the obligation to ensure the possibilities of appeal. Thus, the Constitutional Court recognised 3638 (8) of Civil Procedure Law 9 (in the wording that was effective until 31 October 2010), insofar it applied to the right of the insolvency administrator to appeal against a court’s decision, by which the administrator was dismissed from the insolvency proceedings, as being compatible with Article 92 of the Satversme. [14]
On the Legislator’s Discretion
The Constitutional Court noted that the legislator, within the limits of its discretion, may adopt also such legal regulation that would allow the administrator to appeal against a court’s decision, by which he is dismissed from the insolvency proceedings. [14] The regulation of Civil Procedure Law, which is currently in force, envisages that in some cases the court’s decisions on dismissing an administrator can be appealed against. [1.4]
The judgement by the Constitutional Court is final and not subject to appeal, it enters into force on the day of its official publication.
Linked case: 2014-23-01