Constitutional Court

KI195/20, Applicant: Aigars Kesengfelds, owner of the non-bank financial institution “Monego”, Constitutional review of Judgment ARJ-UZVP. No. 42/2020 of the Supreme Court of 25 June 2020

KI195/20, Judgment, rendered on 29 March 2021

Keywords: individual referral, legal person, non-bank financial institution, manifestly erroneous or arbitrary application of the law, reasoned court decision, admissible referral, in accordance with Article 31 of the Constitution 

The circumstances of the present case are related to the revocation of the Applicant’s license as a non-bank financial institution, by the Central Bank of Kosovo (CBK) by Decision [No. 77-32/2019] of 6 December 2019. Revocation of the license by the CBK relied on the reasoning that the Applicant applied effective interest rates for loans significantly higher than the effective rate presented in the business plan submitted to the CBK.

Against the Decision of the CBK, the Applicant in the administrative procedure filed a statement of claim for annulment of the decision and at the same time based on paragraphs 2 and 6 of Article 22 of the Law on Administrative Conflicts (LAC) submitted a request for postponement of execution of the Decision of the CBK. The Basic Court rejected his request for postponement of the execution of the Decision by applying the criteria of paragraphs 2 and 6 of Article 22 of the LAC, in which case it found that the Applicant had not proved that (i) the execution of the Decision until the merits of the case are decided before the courts would bring him great and irreparable harm and that (ii) postponement of the execution of the Decision would not be contrary to the public interest. As a result of his appeal against the second Decision A. No. 3029/2019, of 3 February 2020 of the Basic Court, the Court of Appeals upheld the finding of the Basic Court regarding the non-fulfillment of the criteria of Article 22 of the LAC for postponing the execution of the CBK Decision, and by adding the application of Article 76 of the Law on the CBK rejected the Applicant’s appeal as ungrounded. Finally, following the Applicant’s request for extraordinary review of the court decision, namely the Decision of the Court of Appeals, submitted to the Supreme Court, the latter rejected his request as ungrounded and upheld the finding of the Court of Appeals.

The Applicant challenges the findings of the Supreme Court alleging a violation of Article 31, in conjunction with Article 6 of the ECHR; Article 32 [Right to Legal Remedies] and Article 54 [Judicial Protection of Rights] of the Constitution in conjunction with Article 13 (Right to an effective remedy) of the ECHR; as well as Article 46 [Protection of Property] of the Constitution in conjunction with Article 1 (Protection of property) of Protocol no. 1 of the ECHR; and Articles 7, 8 and 10 of the UDHR. In essence, as to the allegation of violation of his right to fair and impartial trial, the Applicant complains about the applicability of Article 76 of the Law on the CBK, by the regular courts stating that the latter (i) have applied Article 76 of the Law on the CBK in a clearly erroneous manner; and (ii) have not reasoned their decisions.

When assessing the admissibility of the Referral, the Court found that the Applicant (i) is an authorized party, because he submitted the Referral in the capacity of a legal person in order to protect the rights guaranteed by the Constitution; (ii) has specified the fundamental rights and freedoms guaranteed by the Constitution which it alleges to have been violated; (iii) has submitted his referral within the time limit; (iv) taking into account the fact that the subject matter of the case is an assessment of the decisions of the regular courts, rendered in the pre-trial procedure, the Court applying the criteria established through its case law, based on the case law of the European Court of Human Rights (hereinafter: the ECtHR) found that Article 31 of the Constitution in conjunction with Article 6 of the ECHR is applicable in its case; and consequently concluded that (v) that the Applicant’s Referral also meets the admissibility criteria set out in paragraph (1) of Rule 39 of the Rules of Procedure.

The Court, after assessing the Applicant’s allegations, applying the standards of case law of the Court and that of the ECtHR, concluded as follows:

Regarding the Applicant’s allegation of violation of his right to fair and impartial trial, as a result of erroneous interpretation of the law by the regular courts, stated that the basis for reviewing the request for postponement of the execution of the CBK Decision, before the Basic Court was Article 22 of the LAC, paragraphs 2 and 6. Consequently, the Court considered that the findings and conclusions of the regular courts are not arbitrary because in this preliminary procedure they rely primarily on their assessment of meeting the criteria, established in Article 22, paragraphs 2 and 6 of the LAC and consequently the referral of Article 76 of the Law on the CBK by the Court of Appeals, has not prevented this court and then the Supreme Court to find that they have not met the criteria established in Article 22 of the LAC for postponing the execution of the Decision.

Secondly, with regard to the Applicant’s allegation of violation of his right to fair and impartial trial, as a result of the non-reasoning of the court decision, the Court stated that based on the circumstances of the present case, the review or approval of the allegation of the Applicant of erroneous application of Article 76 of the Law on the CBK as grounded, would not change the result in his case due to the fact that the subject matter of the Applicant’s Referral in the pre-trial proceedings before the regular courts was the postponement of the execution of the CBK Decision and the assessment by the latter whether the criteria set out in Article 22 of the LAC were met.

In conclusion, the Court, with respect to the allegation of a violation of Article 31 of the Constitution, in conjunction with Article 6 of the ECHR (i) due to erroneous application of the law and (ii) lack of reasoning of the court decision, the Court finds that challenged Judgment ARJ-UZVP. No. 42/2020, of 25 June 2020, of the Supreme Court does not constitute a violation of Article 31 of the Constitution, in conjunction with Article 6 of the ECHR.

Whereas, regarding the allegations of violation of Article 32 of the Constitution, Article 54 of the Constitution, in conjunction with Article 13 of the ECHR; and Article 46 of the Constitution, in conjunction with Article 1 of Protocol no. 1 of the ECHR, as well as Articles 7, 8 and 10 of the UDHR, the Court considered that the Applicant relates the latter to the allegations of violation of Article 31 of the Constitution, consequently the Court found the latter as ungrounded on Constitutional basis as defined in Article 39 (2) of the Rules of Procedure.