Constitutional Court

KI195/19, Applicant: Banka për Biznes, Constitutional review of Decision Ae. No. 287/18 of the Court of Appeals of 27 May 2019 and Decision I.EK. No. 330/2019 of the Basic Court in Prishtina, Department for Commercial Matters, of 1 August 2019

KI195/19, Judgment of 7 April 2021, published on 2 June 2021

Keywords: Individual referral, right to fair and impartial trial, res judicata, admissible referral, violation of constitutional rights 

The circumstances of the present case are related to a Loan Agreement and the subsequent Collateral Agreement, of 2003 based on which, “Nita Commerc” received a loan of 269,800.00 euro from the Applicant, namely the Bank, with a repayment period of twelve (12) months. Considering that the obligations of “Nita Commerc” to the Bank were not performed based on the agreement between the parties, in 2006, the court proceedings were initiated, which resulted in one criminal proceeding and three contested proceedings. Since the beginning of the court proceedings, the Bank claimed that “Nita Commerc” did not fulfill its obligations, requesting the confirmation of the debt in the amount of 150,000 euro and the respective interest. “Nita Commerc” challenged these allegations, stating, among other things, that the Bank’s employees made unauthorized interference in its bank account, resulting in double payments in the amount of 74,000 euro. The District Commercial Court in Prishtina, by Judgment [VIII. C. No. 207/06] of 23 November 2006, approved the statement of claim of the Bank, obliging “Nita Commerc”  to pay the main debt of 150,000 euro and the relevant interest. The latter, based on the relevant expertise, had also examined the allegations of “Nita Commerc” regarding the unauthorized interference of the Bank’s employees in its bank accounts, rejecting them as ungrounded. The abovementioned Judgment of the District Commercial Court in Prishtina, was upheld twice by the Supreme Court, by Judgments [Ae. No. 2/2007] of 17 September 2009 and [Rev. E. nr. 20/2009] of 17 March 2010. 

However, in December 2009, “Nita Commerc” initiated new court proceedings against the Bank. This time, “Nita Commerc” filed a lawsuit regarding the amount of 74,360.00 euro, which it claimed that the Bank had misappropriated as a result of unauthorized interference of its employees in its bank account. The District Commercial Court in Prishtina by the Decision [IV. C. No. 1/2010] of 12 May 2010 dismissed the lawsuit based on Article 391 of the Law on Contested Procedure, classifying it as res judicata.

In addition, in December 2009 and May 2010, respectively, “Nita Commerc” initiated two other court proceedings. The first was initiated through a criminal report against the Bank, namely its director and employees A.Sh., M.B. and Sh.K., whom it accused of unauthorized interference in its bank account and misappropriation of the amount of 79,786.00 euro. Whereas, the second, was initiated by a lawsuit for “not allowing the execution” of the Decision [E. No. 406/09] of 11 November 2009 of the Municipal Court in Malisheva, which allowed the execution of the Judgment [C. No. 207/2006] of 23 November 2006 of the District Commercial Court in Prishtina.

Regarding the criminal proceedings, the criminal report of 17 May 2010 of “Nita Commerc” on 4 June 2013, had resulted in the Decision to initiate investigations against defendants A.Sh., M.B. and Sh.K., by the Serious Crimes Department of the Basic Prosecution, under suspicion of committing the criminal offense of misappropriation in office, as established in the Provisional Criminal Code of Kosovo. Also, based on the case file, it results that the Basic Prosecution in Ferizaj, filed the Indictment only against persons A.Sh. and M.B. The Indictment was filed against both, but the latter was modified by the State Prosecutor, withdrawing the Indictment with respect to the person M.B. On 31 March 2016, the Serious Crimes Department of the Basic Court, by the Judgment [PKR. No. 209/2015], acquitted the person A.Sh. of charges. This Judgment was subsequently upheld by the Court of Appeals. Whereas, regarding the lawsuit for “not allowing the execution” of 19 May 2010, “Nita Commerc”, submitted another submission to the Basic Court in Gjakova, requesting the modification of this lawsuit to a lawsuit for compensation of damage, now in the amount of 98,019.43 euro . The Basic Court in Prishtina terminated the contested procedure until the criminal case was completed. Two additional financial expertise were subsequently conducted and it was confirmed that “there has been no duplication of banking operations”. Therefore, the Basic Court in Prishtina, after reviewing the relevant evidence and expertise, by the Decision [I.EK. No. 424/14] of 2 November 2018, decided that the case under review was res judicata.

Following five decisions rendered in this contested procedure, two of which qualified the dispute between the parties as an “adjudicated matter” based on point d) of Article 391 of the Law on Contested Procedure, acting on the appeal of “Nita Commerc”, the Court of Appeals, by the Decision [Ae. No. 287/18] of 27 May 2019, challenged in the circumstances of the present case, ordered the remand of the case for reconsideration on merits to the Basic Court, emphasizing that the relevant dispute cannot qualify as res judicata. The Applicant’s request addressed to the State Prosecutor to initiate a request for protection of legality against this Decision was rejected. Based on the aforementioned Decision of the Court of Appeals, on 1 August 2019, by the Decision [I. EK. No. 330/19], the Basic Court, rejected the request of the Bank that the challenged issue be considered as an “adjudicated matter” and proceeded with the examination of the merits of the case.

The Applicant before the Court challenges these two Decisions, of the Court of Appeals and of the Basic Court, , claiming that they were rendered in violation of his fundamental rights and freedoms guaranteed by Article 31 [Right to Fair and Impartial Trial] of the Constitution in conjunction with Article 6 (Right to a fair trial) of the European Convention on Human Rights, stating that in the circumstances of his case the principle of legal certainty has been (i) violated; and (ii) the right to a reasoned court decision.

In assessing the relevant Applicant’s allegations, the Court first elaborated on the general principles deriving from its case-law and that of the European Court of Human Rights, regarding the principle of legal certainty, namely, the principle of finality of final decisions, clarifying, inter alia, that (i) one of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, inter alia, that once the courts have finally decided a case, their decision should not be called into question and become subject to further consideration; (ii) no party has the right to request a review of a final and binding court decision merely for the purpose of obtaining a rehearing and a fresh determination of the case, in particular through an “appeal in disguise”; and (iii) departures from such a principle are possible only if justified by the circumstances of a “substantial and compelling character”.

Whereas, based on these principles and their application in the circumstances of the present case, the Court examined whether (i) there are already res judicata decisions regarding the dispute between the parties; (ii) the case under consideration before the Court of Appeals contained ad personam and material scope limitations; and (iii) the reopening of proceedings which may have already reached res judicata status by the Court of Appeals may be justified through the circumstances of a “substantial and compelling character”.

The Court found that the challenged Decisions of the Court of Appeals and the Basic Court, reopened the proceedings which had already reached the status of res judicata, by the Judgment [VIII. C. No. 207/06] of 23 November 2006 of the District Commercial Court in Prishtina, as confirmed by two Judgments of the Supreme Court, Judgment [Ae. No. 2/2007] of 17 September 2009 and Judgment [Rev. E. No. 20/2009] of 17 March 2010; Decision [IV. C. No. 1/2010] of 12 May 2010 of the District Commercial Court; and Decision [I. EK. No. 424/14] of 2 November 2018 of the Basic Court. The Court emphasized that despite certain differences in the three contested proceedings, the case before the Court of Appeals had no ad personam and material scope limitations, namely all civil proceedings concerned exactly the same parties, the same legal relations and the same circumstances, which were essential to the settlement of the dispute.

The Court also found that in the circumstances of the present case, the reopening of these proceedings was not justified by circumstances of a “substantial and compelling character”. In this context, the Court emphasized that the reasoning of the Court of Appeals, by the challenged Decision, that the conduct of a criminal procedure in parallel with the contested procedure prevented the qualification of the respective civil case as res judicata, emphasizing that “so far the epilogue of this criminal procedure is not known”, is incorrect because until the moment when the Court of Appeals rendered the challenged Decision, the entire criminal procedure ended by two Judgments in criminal proceedings which had acquitted the accused, namely the Bank employees of criminal liability, which “Nita Commerc” and the relevant Prosecution claimed to be holding.

Therefore, taking into account the abovementioned remarks and the proceedings in entirety, the Court found that the Decision [Ae. No. 287/18] of 27 May 2019 of the Court of Appeals and the Decision [I. EK. No. 330/19] of 1 August 2019 of the Basic Court, are contrary to the principle of legal certainty embodied in Article 31 of the Constitution in conjunction with Article 6 of the European Convention on Human Rights, because they have reopened court decisions that had the status of res judicata, without any justification of a “substantial and compelling character”. As such, both are contrary to Article 31 of the Constitution and Article 6 of the European Convention on Human Rights and, therefore, invalid.