Constitutional Court

KI118/18, Applicant: Eco Construction l.l.c., Constitutional review of Decision Ac. No. 5706/17 of the Court of Appeals of Kosovo, of 15 March 2018

KI 133/17, Resolution adopted on 10 September 2019, published on 21 October 2019

Keywords: individual referral, penalty interest, enforcement procedure, inadmissible referral

The Applicant challenged the constitutionality of Decision [Ac. No. 5706/17] of 15 March, 2018 of the Court of Appeals regarding the Order [P. No. 698/16] of 11 December 2017 of the Private Enforcement Agent, alleging that the challenged Decision violated his fundamental rights and freedoms guaranteed by Articles 31 [Right to Fair and Impartial Trial] and 54 [Judicial Protection of Rights] of the Constitution and Article 6 of the European Convention on Human Rights.

In the present case, the Applicant entered into a construction contract with another company “Chelsea Point L.L.C” at the relevant Notary Office. In the meantime, the Applicant initiated enforcement proceedings against “Chelsea Point L.L.C” for failure to fulfill all contractual obligations. However, the Applicant and “Chelsea Point L.L.C” later agreed to draft a new contract specifying: (i) that the unpaid debt could be replaced by immovable property for the performance of additional construction work on the relevant immovable property within 6 (six) months from the signing of this contract; (ii) that upon the transfer of immovable property owned by the Applicant, the debt would be considered paid in its entirety; (iii) the enforcement proceedings initiated by the Applicant would be suspended provided that all the terms of this contract were complied with; and (iv) the contract in question represents their sole agreement that invalidates any prior agreement that might be contrary to the provisions of this contract. With allegation that the contractual conditions had not been met, the Applicant initiated another enforcement proceeding against “Chelsea Point L.L.C”, proposing to the Private Enforcement Agent to assign the expertise to calculate the unfinished works and the calculation of the penalty interest. The expertise to calculate the unfinished works was assigned and the relevant debt was settled, while the expertise for calculating the penalty interest was rejected on the grounds that the new contract signed between the parties had not determined the payment of the penalty interest. Therefore, the Private Enforcement Agent determined the end of the enforcement proceedings. This position of the Private Enforcement Agent, later and after the Applicant’s appeal, was also upheld by the Court of Appeals.

Based on the case law of the ECtHR, in the circumstances of the present case, the Court assessed the Applicant’s allegations and held that the Applicant’s allegations were built on a question of legality and which, in principle, is not within the jurisdiction of the Court. The latter, however, emphasized that there were exceptions to this general principle and they are applicable if a court has “has applied the law in a manifestly erroneous manner” in a specific case and which may have resulted in “arbitrary conclusions” or “manifestly unreasonable” for the Applicant. The Court noted that, in the circumstances of the present case, the Applicant did not substantiate before the Court that this is the case.

The Court noted that the Private Enforcement Agent and the Court of Appeals, by the relevant Order and Decision, stated that the penalty interest was not determined in the new contract, and as a result was rejected, furthermore that the conditioning of the stay of the enforcement proceedings in the new contract was met with the collection of debt for unfinished works by the debtors, as assessed by expertise provided by the Private Enforcement Agent.

Finally, having regard to the allegations raised by the Applicant and the facts presented by him, the Court, also based on the standards established in its case law in similar cases and the case law of the ECtHR, found that the Applicant has not proved and sufficiently substantiated his allegation of a violation of his fundamental rights and freedoms guaranteed by Article 31 of the Constitution in conjunction with Article 6 of the ECHR. Therefore, the Referral on constitutional basis was declared inadmissible as manifestly ill-founded.