Notification on the published Judgment KI 185/21

The Constitutional Court of the Republic of Kosovo today published the Judgment in Case KI 185/21, submitted by the “CO COLINA” L.L.C., whereby was requested the constitutional review of Law no. 06/L-155 on the Prohibition of Games of Change and Judgment of the Supreme Court of Kosovo [ARJ. UZVP. no. 83/2021] of 7 September 2021.

The circumstances of the present case are related with the termination of the exercise of the Applicant’s sports betting activity, which was exercised based on the licenses issued by the Tax Administration of Kosovo in accordance with Law no. 04/L-080 on the Games of Chance. Based on the latter, the last license issued to the Applicant to exercise this activity was valid from 8 August 2018 to 7 August 2019. However, on 10 May 2019 entered into force Law no. 06/L-155 on the Prohibition of Games of Chance, based on which all games of chance in the territory of the Republic of Kosovo were closed and prohibited. As a consequence, and to implement the aforementioned Law, the Directorate of Games of Chance within the Tax Administration of Kosovo had notified the Applicant for the revocation of its business license, with immediate effect, namely from 10 May 2019, meaning before its expiration on 7 August 2019. Against the Notice of revocation of the license and after the rejection of the complaint by the Tax Administration of Kosovo, the Applicant filed a lawsuit for administrative conflict with the Basic Court, requesting annulment of the Notice of revocation of the license with the claim that, among others, (i) as a result of revoking the license before the expiration deadline, its right to property was violated based on Article 46 [Protection of Property] of the Constitution; (ii) that the Notice was based on the Law on the Prohibition of Games of Chance, alleging that the latter was in violation of the Constitution; and (iii) proposed to the Basic Court that if it had doubts related to the constitutionality of this Law, to refer it to the Constitutional Court through the “incidental control” procedure based on paragraph 8 of Article 113 [Jurisdiction and Authorized Parties] of the Constitution. The Applicant, in parallel with the filing of the above-mentioned lawsuit, also addressed to the Constitutional Court alleging that the Law on the Prohibition of Games of Chance directly affected its rights and was in contradiction with Article 46 of the Constitution, requesting the repeal of the it. The Constitutional Court, in case KI136/19, had declared the referral of the Applicant inadmissible, finding that it is premature, due to the fact that the Applicant had initiated the judicial procedures regarding the Notice of revocation of the license.

In the course of the proceedings before the regular courts, the Basic Court rejected the lawsuit of the Applicant as ungrounded regarding the revocation of the license by the Tax Administration of Kosovo, reasoning that (i) the revocation of the license was lawful since it was based on Law on Prohibition of Games of Chance; (ii) in the administrative conflict procedure, the Basic Court has jurisdiction only to assess the legality of the act but not the violation of constitutional rights of the Applicant; and (iii) despite the allegations of the Applicant for the unconstitutionality of the Law based on which his license was revoked before the expiration of the deadline, it did not address to the Constitutional Court through the “incidental control”, to request constitutional review of the challenged provision. The Court of Appeals and the Supreme Court upheld the reasoning of the Basic Court.

The Applicant addressed to the Constitutional Court again, requesting constitutional review of (i) the Law on the Prohibition of Games of Chance; and (ii) the decisions of regular courts, alleging that the right to peaceful enjoyment of property according to Article 46 [Protection of Property] of the Constitution and Article 1 (Protection of Property) of Protocol No. 1 of the European Convention on Human Rights has been violated, as a result of the revocation of the valid license and work permit, namely the immediate prohibition of economic activity. In addition, the Applicant alleged violation of the right to a fair and impartial trial 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, reasoning that (i) regular courts should have assess its allegations for the violation of the right to property as a result of the challenged Law and the subsequent Notice of TAK; or (ii) in case of doubt, to address to the Constitutional Court to request constitutional review of the constitutionality of the Law on the Prohibition of Games of Chance.

With regard to the constitutional review of the Law on the Prohibition of Games of Chance, the Court considered that, according to its case law and that of the European Court of Human Rights, to challenge a law directly before the Constitutional Court, among others, is it is necessary that the Applicant be directly affected by the law in question and that there is no intermediate act, namely enforcement measure by the public authority related to the law in question. In this regard,referring to its decision of 2019 regarding the Applicant, namely the Resolution on Inadmissibility in case KI136/19, the Court reiterated that in the specific case there was an enforcement measure related to the Law in question, namely the Notice of the Tax Administration, whereby the Applicant’s license was revoked before the expiration of its deadline, and which the Applicant challenged before the regular courts. Therefore, under these circumstances, the Court noted that in the absence of a party authorized to challenge the constitutionality of the law directly to the Constitutional Court, it cannot examine the constitutionality of the Law on Games of Chance, but only the constitutionality of the decisions court related to the revocation of the license of the Applicant.

In the context of constitutional review of the decisions of the regular courts, the Court found that they were rendered in violation of (i) Article 46 of the Constitution in conjunction with Article 1 of Protocol No. 1 of the European Convention on Human Rights; and (ii) Article 31 of the Constitution in conjunction with Article 6 of the European Convention on Human Rights.

With regard to the violation found in relation to Article 46 of the Constitution in conjunction with Article 1 of Protocol No. 1 of the European Convention on Human Rights, the Court noted that, according to its case law and that of the European Court of Human Rights, in assessing the above-mentioned violations, it must first establish whether through the challenged acts, namely the decisions of regular courts (i) there was any “interference” on the right to peaceful enjoyment of property in the circumstances of the Applicant, and if this was the case, to assess whether the relevant “interference” is (ii) “determined by law”; (iii) followed a “legitimate aim”; and (iv) is “proportional”. In this context, the Court noted that upon the revocation of the valid license through the Notice of the Tax Administration of Kosovo, there was “interference” on the right to property of the Applicant, because based on the case law of the European Court of Human Rights, “license” constitutes “property” for the purposes of Article 46 of the Constitution and Article 1 of Protocol No. 1 of the European Convention on Human Rights. Furthermore, the Court also clarified that “interference”, which had resulted as a consequence of the decisions of regular courts, (i) was “determined by law”, namely the Law on the Prohibition of Games of Chance; and (ii) followed a “legitimate aim”, however (iii) it was not “proportional”, because the Applicant, based on the case law of the European Court of Human Rights, among others, had a legitimate expectation that during the period for which it had a valid license and work permit based on the previous Law on Games of Chance, it would be able to exercise its economic activity and peacefully enjoy its property.

Whereas, with regard to the violation found in relation to Article 31 of the Constitution in relation to Article 6 of the European Convention on Human Rights, the Court, among others, emphasized that contrary to the guarantees embodied in the above-mentioned articles, the regular courts (i ) had not applied the constitutional guarantees when assessing the legality of the revocation of the valid license of the Applicant, namely the relevant allegations for violation of the right to property as guaranteed by the Constitution; and moreover, (ii) they did not provide adequate reasoning concerning the non-referring of the case to the Constitutional Court for constitutional review of the challenged Law, despite the continuous requests of the Applicant.

Finally, and with regard to the effect of this Judgment, the Court noted that, in the interest of legal certainty, this Judgment shall produce legal effect only between the parties to the proceedings and cannot produce a retroactive legal effect regarding other natural and legal persons who may have exercised the activity of games of chance based on the Law on Games of Chance. The Court further emphasized that the Applicant can, in proceedings before the regular courts, claim fair compensation for the violation of constitutional rights found through this Judgment, including possible compensation for the duration that the Applicant had a valid license, namely from the 10 May 2019, when the effect of the revocation of the license began, until 9 August 2019, when the license of the Applicant to exercise its activity expired, based on the prior law, namely the Law on Games of Chance.

Finally, based on the clarifications provided in the published Judgment, the Court concluded that the Judgment [ARJ. UZVP. no. 83/2021] of the Supreme Court, of 7 September 2021, regarding the Judgment [AA. no. 242/2021] of the Court of Appeals, of 8 June 2021, and the Judgment [A. no. 1861/21] of the Basic Court in Prishtina, of 9 February 2021, are not in compliance with (i) Article 46 [Protection of Property] of the Constitution in conjunction with Article 1 of Protocol no. 1 (Protection of property) of the European Convention on Human Rights; and (ii) 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, and that, as such, they shall be annulled.

Note:

This press release was prepared by the Secretariat of the Court for informational purposes only. The full text of the decision has been served to the parties involved in the case, is published on the Court’s website and will be published on the Official Gazette within set deadlines.
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