Constitutional Court

KI09/20, Applicant: “SUVA Rechtsabteilung”, Constitutional review of Judgment [E. Rev. No. 28/2019] of 1 August 2019 of the Supreme Court of the Republic of Kosovo

KI09/20, Judgment, decided on 28 April 2021

Keywords: individual referral, legal person, insurance company, right to subrogation, interest rate of penalty interest, a reasoned court decision, divergence in case law, admissible referral, in accordance with Article 31 of the Constitution 

The circumstances of this case are related to an accident that occurred in 2013, and which was caused by the insured of the Company “Siguria”, while the insured M.A. of the Applicant had suffered material damage. On 12 March 2014, the Applicant filed a request for reimbursement from the Company “Siguria”, and considering that no agreement was reached, he filed a lawsuit with the Basic Court on 17 June 2015, by which he sought compensation for material damage within the right to subrogation. The Basic Court, by Judgment [III. Ek. No. 249/2015] of 12 October 2017, approved the Applicant’s request as grounded and set the penalty interest at a rate of 12% based on Article 26 of Law No. 04/L-018 on Compulsory Insurance in conjunction with Article 382, ​​paragraph 2 of the LOR. The Court of Appeals by the Judgment [Ae. No. 265/2017], of 5 February 2019 rejected the appeal of the Company “Siguria”, as ungrounded and upheld the Judgment of the Basic Court. Whereas, the Supreme Court, by the Judgment [E. Rev. No. 28/2019] of 1 August 2019, approved the revision of the Company “Siguria” as grounded regarding the penalty interest, and based on paragraph 2 of Article 382 of the LOR determined as an obligation for the Company to pay the penalty interest “at the rate of 8% per year” from 12 March 2014 until the final payment of the debt. In the context of the latter, the Supreme Court, inter alia, reasoned that the interest rate approved by the first and second instance court in the amount of 12% “legally does not apply in debt regress disputes, but only for delays in processing claims of injured persons for compensation of damages in out-of-court proceedings as provided in Article 26 of the Law on Compulsory Insurance”. According to the Supreme Court, the penalty interest in the amount of 12% is provided only for the non-processing  and the delay in processing the requests of the injured persons and in case of not giving the advance to the injured person. Consequently, the Supreme Court concluded that the Applicant is entitled only to the simple interest at the rate of 8%, determined by paragraph 2 of Article 382 of the LOR.

The Applicant challenges the abovementioned findings of the Supreme Court, specifying that: (i) Article 26, paragraph 6 of the Law on Compulsory Insurance does not specify in which cases simple interest and in which cases qualified interest are applied; (ii) paragraph 6 of Article 26 of the Law also does not stipulate that the rate interest of penalty interest is otherwise determined in relation to the claim for compensation under the right of subrogation in relation to “direct” claims by the injured parties”; (iii) that the Supreme Court has applied paragraph 6 of Article 26 of the Law selectively, namely it has applied this provision only with respect to the moment when the penalty interest for Compulsory Insurance (which according to the Applicant constitutes lex specialis) begins to apply, while in relation to the amount of penalty interest, it has excluded the application of paragraph 6 of Article 26 of the Law on Compulsory Insurance by applying Article 382, ​​paragraph 2 of the LOR (which for the Applicant constitutes lex generalis); and as a conclusion (iv) the Supreme Court deviates from the case law regarding the interest rate on penalty interest in identical cases. The Applicant alleges violation of Article 31 of the Constitution, in conjunction with Article 6 of the ECHR as a result of (i) non-reasoning of the court decision, and (ii) violation of the principle of legal certainty in the context of lack of consistency, namely divergence of the case law of the Supreme Court.

During the assessment of the admissibility of the Referral, the Court found that the Applicant meets the admissibility criteria set out in paragraph 1 of Rule 39 of the Rules of Procedure. The latter cannot be declared inadmissible on the basis of the requirements set out in paragraphs 2 and 3 of Rule 39 of the Rules of Procedure.

The Court, after assessing the Applicant’s allegations on merits, applying the standards of the case law of the Court and that of the ECtHR regarding the reasoning of the court decisions and the consistency of the case law of the Court, concluded as follows:

First, with regard to the allegation related to the non-reasoning of the court decision, the Court found that Judgment [E. Rev. No. 28/2019] of 1 August 2019, of the Supreme Court does not contain violation of Article 31 of the Constitution, in conjunction with Article 6 of the ECHR, and has sufficiently reasoned its decision.

Secondly, with regard to the principle of legal certainty in the context of lack of consistency, namely divergence of the case law of the Supreme Court, the Court, after elaborating the basic principles and criteria of the ECtHR in this regard, applied the latter in the circumstances of the present case, and found that in the case law of the Supreme Court there are no “profound and long-standing differences”  regarding the application of legal provisions related to the interest rate of default interest applicable in cases of compulsory liability insurance, and consequently found that the principle of legal certainty has not been violated, and that the Judgment [E. Rev. No. 28/2019] of 1 August 2019 was not rendered in violation of the fundamental rights and freedoms of the Applicant guaranteed by Article 31 of the Constitution in conjunction with Article 6 of the ECHR.

In conclusion, the Court, with regard to the alleged violation of Article 31 of the Constitution, in conjunction with Article 6 of the ECHR, found that the challenged Judgment [E. Rev. No. 28/2019] of 1 August 2019, of the Supreme Court is in compliance with Article 31 of the Constitution, in conjunction with Article 6 of the ECHR.