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DECIDES:
1. The notification submitted by Mr. Lilian Carp, Member of the Parliament of the Republic of Moldova is admitted.
2. Law no. Is declared unconstitutional. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012.
3. The provisions of the Insolvency Law no. 149 of June 29, 2012 in the wording prior to Law no. 252 of December 16, 2020.
4. This decision is final, may not be subject to any appeal, shall enter into force on the date of its adoption and shall be published in the Official Gazette of the Republic of Moldova.
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DECISION
FOR THE CONTROL OF CONSTITUTIONALITY
Law no. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012
(informing the debtor about the submission of the application until the application of insurance measures by the insolvency court)
(notification no. 15a / 2021)
Chisinau
July 13, 2021
On behalf of the Republic of Moldova,
The Constitutional Court, judging in its composition:
Ms Liuba ȘOVA, President of the sitting,
Mr Nicolae ROȘCA,
Mr Serghei ȚURCAN,
Mr Vladimir ȚURCAN, Judges,
with the participation of Mr. Marcel Lupu, legal assistant,
Having regard to the notification lodged on 28 January 2021,
Having regard to the matter referred to it in public,
Having regard to the documents and works of the file,
Deliberating in the Council Chamber,
Delivers the following judgment:
PROCEDURE
1. At the origin of the case is the notification submitted to the Constitutional Court on January 28, 2021, based on articles 135 par. (1) lit. a) of the Constitution, 25 let. g) of Law no. 317 of 13 December 1994 on the Constitutional Court and 38 para. (1) lit. g) of the Code of constitutional jurisdiction no. 502 of June 16, 1995, by Mr. Lilian Carp, Member of the Parliament of the Republic of Moldova.
2. On 14 May 2021, the author of the notification submitted to the Constitutional Court a supplement to the mentioned notification.
3. The author requests the Court to verify the constitutionality of Law no. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012.
4. By the decision of the Constitutional Court of June 1, 2021, the referral was declared admissible, without prejudice to the merits of the case.
5. In the process of examining the referral, the Constitutional Court requested the opinions of the Parliament, the President of the Republic of Moldova, the Government and the Union of Authorized Administrators.
6. The author of the complaint, Mr Lilian Carp, Member of the Parliament of the Republic of Moldova, was present at the public hearing of the Court. The Parliament was represented by Mr Radu Radu, Senior Consultant in the Representation Service at the Constitutional Court and in law enforcement bodies, within the General Legal Directorate of the Parliament's Secretariat. The Government was represented by Andrei Ciornîi, Head of the Legal Department of the Ministry of Economy and Infrastructure, and Vasile Vulpe, Head of the Economic Policy and Business Department of the Ministry of Economy and Infrastructure.
IN FACT
7. On 15 December 2020, Mr Denis Ulanov, Member of the Parliament of the Republic of Moldova, registered in the Secretariat of the Parliament, as a legislative initiative, draft law no. 514 regarding the amendment of the Insolvency Law no. 149/2012. Through project no. 514, the author proposed the following:
(1) the modification of the notion of creditor, in the sense that he is the person who can prove the “incontestability” of the claim;
(2) the creditor must also attach to the application the copy of the irrevocable court decision or the copy of the irrevocable arbitral award, or the copy of the irrevocable court decision on the recognition of the foreign judgment or arbitral award, or the decision by law. at that time;
(3) the extension of the term in which the insolvency court must resolve the application, from three days to 20 days;
(4) establishing the obligation of the insolvency court to send to the debtor a copy of the introductory application, until the issuance of the conclusion of admission of this application, in order to submit the reference.
8. On 16 December 2020, during the plenary sitting of the Parliament, the parliamentary opposition (factions of the Action and Solidarity Party, the Dignity and Truth Platform, the Democratic Party of Moldova, the PRO-Moldova Parliamentary Group) left the Parliament's sitting room at approximately 3 p.m. : 05 - 15:06, thus disagreeing, inter alia, with the agenda of Parliament's sitting [see transcript of Parliament's plenary sitting of 16 December 2020, pp. 51, 54, 56].
9. During the plenary sitting of the Parliament, at approximately 19:34, Mr Denis Ulanov proposed, in addition, the inclusion of draft law no. 514 regarding the amendment of the Insolvency Law no. 149/2012 in the agenda of the sitting, ie when the factions forming the parliamentary opposition were not in the sitting room (see the video recording of the sitting of the Parliament, minute 6.00.33 [1]).
10. The President of the Parliament asked whether the Committee on Legal Affairs, Appointments and Immunities had examined the draft. The President of the Commission replied that "during the break the Committee on Legal Affairs met, examined this draft and there is a report". On a proposal from the President of Parliament, that draft was included in the agenda of the plenary sitting by a majority of the Members present (see the transcript of Parliament's plenary sitting of 16 December 2020, p. 122).
11. Subsequently, at the same plenary sitting, at approximately 20:20, Mr Denis Ulanov introduced the draft law [2]. At approximately 20:22, the chairman of the Committee on Legal Affairs, Appointments and Immunities presented the Commission's report on the draft law.
12. Following the presentation of the report of the Committee on Legal Affairs, Appointments and Immunities at approximately 20:25, the bill was put to the vote at first reading and, at approximately 20:26, the President of Parliament proposed that it be voted on at second reading [ 3]. Following the counting of votes, the President of Parliament announced that the draft law had been voted on in second reading by 53 Members (see transcript of Parliament's plenary sitting of 16 December 2020, pp. 142-145).
13. Law no. 252 of December 16, 2020 on amending the Insolvency Law no. 149/2012 was promulgated by Decree of the President of the Republic of Moldova no. 1930 of December 22, 2020, was published in the Official Gazette of the Republic of Moldova no. 360-371 of December 25, 2020 and entered into force on January 25, 2021.
RELEVANT LEGISLATION
14. The relevant provisions of the Constitution are the following:
Article 1
State of the Republic of Moldova
„[…]
(3) The Republic of Moldova is a state governed by the rule of law, democratic, in which human dignity, his rights and freedoms, the free development of the human personality, justice and political pluralism are supreme values and are guaranteed. "
Article 5
Democracy and political pluralism
"(1) Democracy in the Republic of Moldova is exercised in the conditions of political pluralism, which is incompatible with dictatorship and totalitarianism.
[…]. ”
Article 9
Fundamental principles regarding property
"(1) The property is public and private. It consists of material and intellectual goods.
(2) Property may not be used to the detriment of human rights, freedoms and dignity.
(3) The market, free economic initiative, fair competition are the basic factors of the economy "
Article 20
Free access to justice
"1. Everyone has the right to an effective remedy by the competent courts against acts which violate his rights, freedoms and legitimate interests.
(2) No law may restrict access to justice. "
Article 46
The right to private property and its protection
"1. The right to private property and claims on the State shall be guaranteed.
(2) No one may be expropriated except for a cause of public utility, established according to law, with fair and prior compensation.
(3) The lawfully acquired property may not be confiscated. The lawfulness of the acquisition is presumed.
(4) The goods intended, used or resulting from crimes or contraventions may be confiscated only in accordance with the law.
(5) The right of private property obliges to the observance of the tasks regarding the protection of the environment and the assurance of the good neighborhood, as well as to the observance of the other tasks that, according to the law, belong to the owner.
[…]. ”
Article 54
Restriction on the exercise of certain rights or freedoms
"(1) Laws that would suppress or diminish the fundamental rights and freedoms of man and citizen cannot be adopted in the Republic of Moldova.
(2) The exercise of rights and freedoms may not be subject to restrictions other than those provided by law, which correspond to unanimously recognized rules of international law and are necessary in the interests of national security, territorial integrity, economic well-being, public order, in order to prevent disturbances. and crimes, the protection of the rights, freedoms and dignity of others, the prevention of the disclosure of confidential information or the guarantee of the authority and impartiality of justice.
[…]
4. The restriction must be proportionate to the situation which gave rise to it and may not affect the existence of a right or freedom. "
Article 73
Legislative initiative
"The right of legislative initiative belongs to the deputies in the Parliament, to the President of the Republic of Moldova, to the Government, to the People's Assembly of the Gagauzia Autonomous Territorial Unit."
Article 74
Adoption of laws and decisions
"1. Organic laws shall be adopted by a majority of the Members elected, after at least two readings.
[…]. ”
Article 126
The economy
„(1) The economy of the Republic of Moldova is a market economy, socially oriented, based on private property and public property, engaged in free competition.
(2) The state must ensure:
a) the regulation of the economic activity and the administration of the public property that belongs to it under the conditions of the law;
b) the freedom of trade and entrepreneurial activity, the protection of fair competition, the creation of a favorable framework for the capitalization of all factors of production;
c) protection of national interests in economic, financial and foreign exchange activity;
d) stimulating scientific research;
e) rational exploitation of the land and other natural resources, in accordance with national interests;
f) restoration and protection of the environment, as well as maintaining the ecological balance;
g) increasing the number of jobs, creating the conditions for increasing the quality of life;
h) the inviolability of investments of natural and legal persons, including foreigners. "
15. The relevant provisions of Law no. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012 are the following:
Unique article. - Insolvency Law no.149 / 2012 (Official Gazette of the Republic of Moldova, 2012, no.193–197, art.663), with subsequent amendments, is amended as follows:
1. In Article 2, the word "indisputable" shall be inserted in the concept of "creditor" after the words "provable".
2. In Article 20, paragraph 2 is supplemented by point (d):
"d) the copy of the irrevocable court decision or the copy of the irrevocable arbitral award or the copy of the irrevocable court decision on the recognition of the foreign court decision or arbitral award, or the decision (decision) of the body empowered by enforcement law at that time. "
3. In Article 21, paragraph 2 shall read as follows:
"(2) The insolvency court shall resolve the application, by issuing a decision, within 20 days from the filing."
4. In Article 28, paragraph 1 shall read as follows:
"(1) Until the issuance of the conclusion of admission of the introductory request for examination, within 3 working days from the receipt of the introductory request submitted by the creditor, the insolvency court shall send the debtor the copy request to present its procedural position . "
16. The relevant provisions of the Insolvency Law no. 149 of June 29, 2012 are the following:
Article 21
Admission of the introductory request for examination
„(1) The insolvency court is obliged to admit for examination the introductory application submitted by the creditor in compliance with the provisions of the Code of Civil Procedure and of this law.
(2) The insolvency court shall resolve the application, by issuing a decision, within 20 days from the filing.
[…]
(5) By the conclusion recorded in par. (2), the insolvency court shall order the debtor to be observed by appointing a provisional administrator and shall apply measures to secure the creditors' claims.
[…] ”
[Art. 21 para. (2) in the wording of Law no. 252 din 16.12.2020]
Article 24
Arrangement of insurance measures
'1. After receiving the application for examination, the insolvency court shall take the necessary measures to prevent the change in the state of the debtor's assets during the period before the insolvency proceedings were instituted.
2. In addition to the insurance measures provided for in the Code of Civil Procedure, the insolvency court shall apply the following insurance measures:
a) appoints a temporary administrator;
b) at the motivated request of the creditors or of the provisional or ex officio administrator, orders the lifting of the debtor's right of administration, which consists in the right to conduct his activity, to manage his goods and to dispose of them;
c) seizes the debtor's assets and his commercial correspondence;
d) suspends the individual pursuits of the creditors and the forced executions on the debtor's assets, as well as the prescription of the right to request the forced execution of their claims against the debtor;
e) prohibits the alienation by the debtor of his assets or decides that they can be alienated only with the express consent of the provisional administrator.
[…] ”
Article 28
Reference to the application
"(1) Until the issuance of the decision admitting the introductory request for examination, within 3 working days from the receipt of the introductory request submitted by the creditor, the insolvency court shall send the debtor the copy request to present its procedural position by submitting the reference .
2. No later than 10 days after receipt of the copy of the application, the debtor shall submit to the insolvency court a reference to the application, by which he disputes or acknowledges the existence of the state of insolvency. In reference, the debtor can overturn the presumption of insolvency by presenting evidence confirming that he has fulfilled his pecuniary obligations or that there is a civil action in connection with this obligation, filed until the filing of the application, or that the obligation can be extinguished by compensation with an obligation. in an amount equal to or greater. If he objects to the state of insolvency and if the objections are subsequently recognized by the insolvency court as unjustified, the debtor no longer has the right to request a restructuring procedure.
[…] ”
[Art. 28 para. (1) in the wording of Law no. 252 din 16.12.2020]
IN LAW
A. ADMISSIBILITY
17. By its decision of 1 June 2021, the Court upheld the observance in the present case of the conditions for the admissibility of a referral, laid down in its settled case-law.
18. In accordance with Articles 25 letter g) of the Law on the Constitutional Court and 38 para. (1) lit. g) of the Code of Constitutional Jurisdiction, the deputies have the prerogative to notify the Constitutional Court.
19. The Court held that the object of the notification was Law no. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012. In accordance with Article 135 para. (1) lit. a) of the Constitution, the control of the constitutionality of laws belongs to the competence of the Constitutional Court.
20. The contested law has not previously been subject to constitutional review.
21. The complainant argued that the contested law contravenes Articles 1 [state of the Republic of Moldova and the rule of law], 5 [democracy and political pluralism], 9 [fundamental principles of property], 20 [free access to justice], 26 [right to defense ], 54 [restriction on the exercise of certain rights or freedoms], 73 [Member's right to legislative initiative], 74 [adoption of laws and decisions] and 126 [economy] of the Constitution.
22. As regards the effect of Articles 1, 5, 73 and 74 of the Constitution, the Court found that those articles were relied on in connection with an infringement of the procedure for the adoption of the contested law.
23. The complainant asks the Court to verify the procedural aspect of the adoption of the contested law in the light of the following violations committed by Parliament:
a) the draft contested law was registered at the Secretariat of Parliament on 15 December 2020 and adopted in two readings on 16 December 2020;
b) the right of the deputies to present in 30 days proposals to the draft law for examination in the first reading was violated;
c) the right of the deputies to present amendments within 10 days after the adoption of the draft law in the first reading was violated; d) in the second reading the draft law was not submitted for debate.
24. In its case-law, the Court has held that parliamentary autonomy is the expression of the rule of law and democratic principles and that it can operate exclusively within the limits laid down by the Basic Law. Thus, regulatory autonomy cannot be exercised in a discretionary and abusive manner, in breach of Parliament's constitutional powers or mandatory rules on parliamentary procedure.
The discretion enjoyed by Parliament on the basis of parliamentary autonomy must be compatible with the principles of "representative democracy" and "supremacy of the Constitution". Parliamentary autonomy can be validly exercised in accordance with these principles. It cannot be absolutized, because the supremacy of the Constitution is a general value, the observance of which is mandatory, including for the legislative authority, which cannot adopt legislative acts and approve parliamentary procedural rules contrary to the provisions or principles of the Constitution. Parliamentary autonomy does not legitimize the establishment of norms that violate the letter and spirit of the Constitution.
When establishing rules on parliamentary procedures for examining bills and amendments, a parliamentary majority must strike a balance between, on the one hand, parliamentary autonomy and, on the other, the principle of representative democracy. This presupposes that the parliamentary majority must ensure a fair and adequate treatment of parliamentary minorities, without abusing its dominant position (see JCC no. 28 of 19 November 2020, §§ 18-20).
25. The Court also noted that in Opinia amicus curiae no. 1020/2021 of 23 March 2021, CDL-AD (2021) 016), the Venice Commission mentioned that it is clear that a constitutional court can exercise procedural control of the legislation with reference to the precise rules on the adoption of laws, provided by the Constitution. Many constitutional courts go further and interpret the principles generally contained in the Constitution as presupposing precise procedural rules.
A constitutional court may disregard the provisions of Parliament's Rules of Procedure, if it deviates from such rules, which are expressly provided for in the Constitution or which may be inferred from the general principles set out in the Constitution. If the Constitutional Court finds that a precise rule contained in Parliament's Rules of Procedure is imposed by one of the constitutional principles, it may declare a law unconstitutional because it does not comply with those principles and the rules of Parliament's Rules as well. However, Parliament's Rules of Procedure often develop precise details on the basis of what the constitutional principles require, or rather choose one of the various possible solutions to implement the constitutional principle.
Article 1 para. (3) of the Constitution provides that "the Republic of Moldova is a rule of law, democratic [...]". One of the central elements of the rule of law [the rule of law] is legal certainty. Legal certainty does not preclude a change in the rules of the political process, but any such change must be made in a clear and transparent manner and not on an ad hoc basis. Following that reasoning, it can be concluded that non-compliance with a precise rule laid down by Parliament's Rules of Procedure, without prior amendment of that rule, is contrary to the principle of legal certainty and is therefore unconstitutional.
This logic allows the Constitutional Court to give direct effect to provisions ignored by Parliament in a particular case. Consequently, although Parliament may have broad autonomy if it decides to explicitly amend Parliament's Rules of Procedure and does so through the appropriate procedure, the Constitutional Court may be stricter if Parliament simply ignores one of its own important rules for adoption of a law.
Also, according to the Commission, the Constitutional Court can give effect to Parliament's Rules of Procedure, but only on condition that it can demonstrate that a breach of a provision of Parliament's Rules of Procedure would also amount to a breach of one of the fundamental constitutional principles on the law-making procedure. see §§ 32-34 and 39 of the said Opinion) [JCC no. 14 of 27 April 2021, § 30].
26. In this context, in order to ensure an effective remedy against procedural defects committed by Parliament in the adoption of laws, the Court has extended its jurisdiction to examine compliance with the parliamentary rules expressly laid down in the Constitution and the resulting rules in implicitly, from the Constitution (see JCC no. 14 of 27 April 2021, § 31).
27. With regard to the impact of Articles 1 and 5 of the Constitution, the Court noted that, although the requirement for the participation of the parliamentary opposition in the debate on bills is not expressly laid down in the Constitution, it can be inferred from Article 1 para. (3) of the Fundamental Law, which provides that political pluralism is a supreme value, guaranteed by the Constitution, and of Article 5 para. (1) of the Supreme Law, which provides that democracy in the Republic of Moldova is exercised in conditions of political pluralism (see JCC No. 14 of April 27, 2021, § 32). In Decision no. 14 of 27 April 2021, § 33, the Court held that the deprivation of members of the parliamentary opposition of the right to ask questions and speak in plenary is procedural flaws admitted to the adoption of the contested law which interfere with Articles 1 para. . (3) and 5 para. (1) of the Constitution.
28. Unlike the factual circumstances that formed the basis of Decision no. 14 of 27 April 2021, in the present case, the Court held that Members of the parliamentary opposition were not restricted from the right to ask questions and to speak in plenary, because they had left the plenary in protest [ see transcript of Parliament's plenary sitting of 16 December 2020, pp. 51, 54]. Thus, the Court cannot ascertain the incidence of Articles 1 and 5 of the Constitution.
29. With regard to the incidence of Article 73 of the Constitution, which provides that the right of legislative initiative belongs to Members of Parliament, the President of the Republic of Moldova, the Government, the People's Assembly of the Gagauzia Autonomous Territorial Unit, the author alleges that Members to submit proposals to the concept of the draft law for examination at first reading within 30 days and the right of Members to table amendments within 10 days after the adoption of the draft law at first reading.
In this respect, in Decision no. 28 of 19 November 2020, § 29, the Court held that the right to table amendments seeks to achieve the same purpose - legislation, as does the right to legislative initiative guaranteed by Article 73 of the Constitution. Thus, the Court has ruled that Members may table amendments to draft laws on the basis of their right of legislative initiative (paragraph 3 of the operative part and § 34 of JCC no. 28 of 19 November 2020). Similarly, the Court noted that Members' right to submit proposals to the concept of the draft law for consideration at first reading also pursues the purpose of the legislation.
This right is therefore guaranteed by Article 73 of the Constitution (JCC no. 14 of 27 April 2021, § 38). Given that the defects alleged by the complainant limited the legislative activity of some Members, the Court held that they interfered with the prerogative guaranteed by Article 73 of the Constitution. In order to see whether the defects in question affect the constitutionality of the contested law, the Court allowed this end of the referral for substantive examination.
30. The complainant stated that, at second reading, the contested law had not been debated, which affects the constitutional principle of the parliamentary debate on draft laws.
31. In this respect, the Court noted that the requirement to debate draft laws results from Article 74 para. (1) of the Constitution, which provides that organic laws are adopted […] after at least two readings.
32. The Court noted that the constitutional text “after at least two readings” is not limited to the observance of a formal condition for the adoption of a law, i.e. vote on the law twice, but considers that, in the two readings, Parliament must examine in a plenary debate the content of the law in question. The Court therefore held that the constitutional text "after at least two readings" contained both a procedural element and a substantial element. The procedural element assumes that Parliament must vote in two readings on the draft organic law.
On the other hand, the substantive element presupposes that, before the vote, Parliament must debate the content of the draft organic law. Debates are the essence of parliamentarism and give Members, by virtue of their representative mandate, the opportunity to politically challenge opinions, arguments and ideas. In this context, Members must be given the practical and effective opportunity to formulate their position on the draft law. The non-fulfillment of any mentioned element makes the text “after at least two readings” of article 74 par. (1) of the Constitution (JCC no. 14 of 27 April 2021, § 35).
33. In the present case, it follows from the arguments of the author of the complaint that the substantive element of the text “after at least two readings” of Article 74 para. (1) of the Constitution. The Court therefore held that Article 74 para. (1) of the Constitution.
34. In addition to the criticisms concerning non-compliance with the procedure for the adoption of the contested law, the complainant also raised criticisms of intrinsic unconstitutionality.
35. In that regard, the author argued that, by amending Article 20 para. (2) lit. d) of the Insolvency Law, the creditor must attach to the introductory application a copy of the irrevocable court decision or copy of the irrevocable arbitral award, or the copy of the irrevocable court decision on the recognition of the court decision or the decision of the foreign arbitral tribunal, or the decision enforceable law at that time. According to the author of the exception, this provision violates creditors' access to justice.
36. The Court notes that identical provisions previously existed in the Insolvency Law and have also been subject to constitutional review.
Thus, in Decision no. 125 of 30 October 2018, the Court noted the existence of an explanatory judgment of the Plenum of the Supreme Court of Justice (ie Decision no. 2 of 24 March 2014 on the application in judicial practice of the Insolvency Law), which in point 4.2 states that the proof of claim to the debtor's patrimony is made by documents confirming the debtor's obligations to the creditor, the size of debts to these obligations, other documents justifying the claim and it is not mandatory that the claim be proved only by copy of the irrevocable court decision or copy of the irrevocable arbitral award , either by copying the irrevocable court decision regarding the recognition of the foreign court decision or arbitral award, or by the decision (decision) of the body empowered by the enforcement law at that time.
The Court found that the Supreme Court had clarified the issues relating to the annexation of documents to the application and highlighted the alternative nature of the documents to be annexed to the application. It is essential that creditors prove their claim against the debtor's assets (§§ 19-21).
37. Therefore, the arguments concerning the criticism of the intrinsic unconstitutionality of the changes made in Article 20 para. (2) lit. d) of the Insolvency Law are unfounded.
38. The complainant also criticized the amendments to Article 2 of the Insolvency Law which have as their object the amendment of the concept of creditor, in the sense that he is the person who can prove the 'indisputability' of the claim. The Court found that the complainant did not substantiate the contrary of this rule with any constitutional article. Thus, the Court could not reasonably identify any criticism of intrinsic unconstitutionality concerning this end of the referral.
39. The complainant mentioned that, through the amendments made to Articles 28 para. (1) and 21 para. (2) of the Insolvency Law, a rule was established according to which the insolvency court will be obliged to notify the debtor about the submission of the application until the conclusion of the admission of the application, giving him time to formulate the reference and inform the court of the position the debtor in relation to the creditor's requirements.
Given that the creditor who signed the application must attach to the application a copy of an enforceable judicial act (Article 20 (2) (d)) on which he bases his claim, but also to prove the prior notification of the debtor, so as provided by Article 19 of Law no. 149/2012, the Court noted that this legislative solution of prior information to the debtor on the submission by the creditor of an application, until the admission / receipt of the application by the insolvency court, and, respectively, until the application of appropriate insurance measures may affect the property interests of the creditor who submitted the application.
40. The Court notes that, according to the case law of the European Court on the right to a fair trial and the right to respect for property, where the debtor is a private plaintiff, the State has an obligation to provide the necessary assistance to the creditor in enforcing judgments, for example by - an enforceable title or bankruptcy proceedings (Kesyan v. Russia, 19 October 2006, §§ 79-80; Anokhin v. Russia (Dec.), 31 May 2007).
In the case of Sychev v. Ukraine, 11 October 2005, §§ 54-56, the Court concluded that the non-enforcement of a judgment was due to the failure of the State to establish an effective system for the enforcement of judgments handed down against the insolvent company.
41. In other words, the legal provisions governing insolvency proceedings must provide creditors with guarantees capable of ensuring the enforcement of claims, in particular where such claims result from irrevocable judgments. The Court will therefore examine whether the contested rules unjustifiably restrict the exercise of creditors' right to the collection of claims.
42. The Court therefore notes the impact of Articles 20 [free access to justice] and 46 [right to private property] of the Constitution on the amendments made to Articles 28 para. (1) and 21 para. (2) of the Insolvency Law. Although Article 46 has not been expressly relied on by the author of the complaint, the fact itself does not prevent the Court from retaining it, if it is clear from the arguments before it.
Moreover, the complainant alleged the alleged violation of Article 9 of the Constitution, which concerns the fundamental principles of property. In its case law, the Court has held that it is sovereign in its jurisdiction over constitutional review.
The Court cannot be compelled, when examining the constitutionality of a text of law, to analyze the criticized provisions only in the light of the constitutional norms invoked by the author, but is free to analyze them in relation to the relevant constitutional provisions for resolving the complaint. this meaning (see JCC No. 17 of 23 June 2020, § 58; JCC No. 27 of 13 November 2020, § 18; JCC No. 2 of 12 January 2021, § 24).The Court therefore noted the scope of Articles 20 and 46 of the Constitution.
43. As regards the effect of Articles 26 and 126 of the Constitution, the author of the complaint did not state that the contested law did not comply with them. Therefore, the Court did not retain them for a substantive analysis.
44. Therefore, at the stage of examining the application, the Court will examine whether the contested law complies with the requirements of the procedure for the adoption of laws laid down in Articles 73 and 74 of the Constitution. The Court will also examine the amendments made to Articles 21 para. (2) and 28 para. (1) of the Insolvency Law in reference to Articles 20 and 46 of the Constitution.
B. BOTTOM OF THE CASE
A. Arguments of the author of the notification
45. The complainant states that the contested law was adopted by the Parliament in breach of the procedure for the adoption of laws. The draft contested law was registered at the Secretariat of the Parliament on 15 December 2020 and adopted in two readings on 16 December 2020. According to the complainant, this violated the right of deputies to submit proposals to the concept of the draft law for examination in 30 days first reading and violated the right of Members to table amendments within 10 days of the adoption of the draft law in first reading. The author of the complaint also stated that in the second reading the draft law was not debated.
46. The complainant therefore stated that the infringements in question were contrary to Articles 73 and 74 of the Constitution.
47. Also, with regard to the substantive criticism, the complainant argued that the changes made to Articles 21 para. (2) and 28 para. (1) of the Insolvency Law, which establishes the rule according to which the insolvency court is obliged to inform the debtor about the submission of the application until the issuance of the decision admitting the application, giving him time to formulate the reference, may lead to diminution of assets by the debtor , to the detriment of the patrimonial interests of the creditor.
B. Arguments of the authorities
48. The President of the Republic emphasized in his written opinion that, in its legislative work, Parliament must comply with the mandatory rules for the examination of draft laws. The contested law was adopted with serious procedural violations.
49. The President of the Republic also stated that increasing the time-limit for settling an application from three days to 20 days could undermine the effectiveness of the procedure for settling claims in insolvency proceedings. Also, according to the amendments made to the Insolvency Law, the court will have to inform the debtor about the submission of the application, giving him enough time to be able to reduce his assets. Through such actions, the creditor could be unable to recover his claims.
50. Finally, the President stated that the assessment of the constitutionality of the contested law fell within the exclusive jurisdiction of the Constitutional Court.
51. In its view, the Parliament pointed out that the stage of admitting the application is a preliminary step to initiating insolvency proceedings. Parliament also noted that the insolvency court may apply insurance measures after the conclusion of the admission for examination of the application.
52. The Parliament concluded, in its view, that the arguments put forward in the complaint were unfounded.
53. According to the Government, the contested law was adopted contrary to the legal procedures relating to the drafting, approval and examination of normative acts. Also, considering that the Insolvency Law was substantially amended by Law no. 141 of July 16, 2020, in force since September 14, 2020, the contested law was adopted in violation of Article 64 para. (3) of the Law on normative acts, according to which the proposals regarding the amendment of a normative act are not presented, as a rule, earlier than six months from the date of entry into force of the respective act.
The Government emphasized that Law no. 141 of July 16, 2020 was adopted in order to implement good practices regarding the insolvency procedure.
54. The Government supported the complainant's request and stated that the contested law established a rule according to which the insolvency court was obliged to notify the debtor of the filing of the application until the decision to admit the application was issued, giving him time to file. reference.
According to the Government, this regulation is contrary to the general principles of civil proceedings, which prohibit the performance of any procedural acts until the case has been registered. This legislative solution can also affect the rights of creditors, since bad credit debtors have the opportunity to reduce their debt mass after submitting an application.
55. The opinion presented by the Union of Authorized Administrators of Moldova states that the increase of the deadline for solving the introductory request, combined with the obligation of the court to inform the debtor about the submission of the application, until its resolution, creates premises for diminishing the debtor's assets. Thus, in the Union's view, the contested law does not comply with the constitutional provisions and principles relied on by the complainant.
C. Findings of the Court
The extrinsic criticism of constitutionality (alleged violation of Articles 73 and 74 of the Constitution)
56. According to Article 60 para. (1) of the Constitution, the Parliament is the supreme representative body of the people of the Republic of Moldova and the sole legislative authority of the state. In view of this, the Constituent Assembly did not confer on another authority the power to regulate the structure, organization and functioning of Parliament, but established that these matters could be regulated autonomously only by Parliament by a Regulation, which it must regulate. adopted by an organic law [see articles 64 par. (1) and 72 para. (3) lit. c) of the Constitution].
Parliament is sovereign in regulating the procedure for adopting laws. However, Parliament's sovereignty is not absolute, as it is limited by constitutional principles in this area. In this sense, both in the regulation of parliamentary procedures and in their application, i.e. when adopting normative acts, Parliament must ensure the right balance between the principle of parliamentary autonomy and other principles incidental to parliamentary procedures, which are expressly established or which can be clearly deduced from the Constitution (JCC no. 14 of 27 April 2021, §§ 52, 53).
57. Given Parliament's sovereignty in matters of legislation, the Court notes that its power to review the constitutionality of parliamentary proceedings is limited. In this area, the Court must show judicial deference to Parliament's role as an autonomous legislator. In this respect, the Court can verify the constitutionality of a law from a procedural point of view only if at its adoption Parliament has affected any essential element of the legislative process, which is expressly enshrined in the Constitution or can be clearly deduced from a constitutional principle (JCC no. 14 of April 27, 2021, § 54).
58. In the present case, the Court notes that the complainant considers that the contested law was adopted in breach of the principle of parliamentary debate on draft laws and the right of Members to table amendments.
59. The Court has previously held that, in the context of legislative procedures, Parliament must provide Members with the opportunity to examine the content of the draft law through an exchange of views. This stage of the legislative process is necessary because it gives MPs the opportunity to understand the essence of the proposed bill for consideration and helps build society's confidence that the law has been widely discussed until adoption (see JCC No. 14 of April 27, 2021, §§ 35, 57).
60. In examining the referral, the Court notes that the draft law was registered with Parliament's Secretariat on 15 December 2020. On 16 December 2020, at the plenary sitting of Parliament, the draft was voted on in two readings. About a day passed from the registration of the project to the Secretariat of the Parliament until its voting in two readings. It took about a minute from the presentation in plenary of the report of the Committee on Legal Affairs, appointments and immunities to the contested law to its two-reading vote (see §§ 9-12 above).
61. The Court notes that, in the present case, the time allowed by the Parliament to formulate proposals and amendments to the contested draft law was insufficient.
62. The Court reiterates that Parliament may set deadlines for tabling amendments. However, the deadlines in question must be reasonable in order to allow Members to analyze the content of the draft law and make amendments. Given that, in the present case, the Parliament did not provide a reasonable time-limit for formulating amendments to the contested draft law, its actions do not fall within its discretion in organizing parliamentary proceedings (see JCC No 14 of 27 April). 2021, § 67). Consequently, the Member did not have the opportunity to exercise his right to amend effectively.
63. Therefore, because in adopting the contested law the Parliament did not strike the right balance between the right of Members to amend amendments to bills and the principle of parliamentary autonomy, the Court finds that the contested law is contrary to Article 73 of the Constitution.
64. The Court also notes the sufficient nature of its above findings, which exempt it from continuing its analysis in the light of Article 74 of the Constitution, in terms of the extrinsic unconstitutionality of the contested law.
The intrinsic criticism of constitutionality (alleged violation of Articles 20 and 46 of the Constitution)
65. Although findings of non-compliance with parliamentary procedures could exempt the Court from substantially examining the contested provisions, the Court will also examine this end of the referral in order to strengthen its reasoning and to provide guidance to the legislature on any change of the law.
66. Article 21 para. (2) of the Insolvency Law (in the wording of Law no. 252 of December 16, 2020) provides that the insolvency court resolves the introductory request by issuing a decision, within 20 days from the filing. Paragraph 5 of the same article provides that, by concluding the admission of the application, the insolvency court shall order the debtor to be observed, appoint a provisional administrator and apply measures to secure the creditors' claims.
67. After receiving the application for examination, the insolvency court shall apply the necessary measures to prevent the change in the state of the debtor's assets in the period before the insolvency proceedings were instituted (Article 24 para. (1) of the Insolvency Law]. In addition to the insurance measures provided by the Code of Civil Procedure, the insolvency court applies the following insurance measures:
a) appoints a provisional administrator;
b) at the motivated request of the creditors or of the provisional or ex officio administrator, orders the lifting of the debtor's right of administration, which consists in the right to conduct his activity, to manage his goods and to dispose of them;
c) seizes the debtor's assets and his commercial correspondence;
d) suspends the individual prosecutions of the creditors and the forced executions on the debtor's assets, as well as the prescription of the right to request the forced execution of their claims against the debtor;
e) prohibits the alienation by the debtor of his assets or decides that they can be alienated only with the express consent of the provisional administrator [article 24 par. (2) of the Insolvency Law].
68. The Court notes that the legislature provided, in Article 21 para. (5) of the Insolvency Law, that the insurance measures are applied by concluding the admission of the introductory request for examination, and at article 24 par. (1) of the Law, the legislator mentions that the insurance measures are applied after receiving the introductory request for examination.
From the corroboration of the norms mentioned between them, but also with those provided by the Code of Civil Procedure, the Court concludes that from a terminological point of view the procedure of admission / receipt of the introductory application by the insolvency court are equivalent legal proceedings in which the judge for examination, it verifies it in terms of meeting the legal conditions of form and substance, accepts it for trial, establishes the observation period, appoints a provisional administrator and applies the appropriate insurance measures.
69. Article 28 para. (1) of the Insolvency Law (in the wording of Law no. 252 of 16 December 2020) establishes that, until the issuance of the decision admitting the application for examination, within 3 working days from the receipt of the application submitted by the creditor, the court of insolvency will send the debtor the copy request to present his procedural position by submitting the reference.
According to paragraph 2 of the same article, no later than 10 days after receipt of the copy of the application, the debtor shall submit to the insolvency court a reference to the application, by which he disputes or acknowledges the existence of insolvency. In reference, the debtor can overturn the presumption of insolvency by presenting evidence confirming that he has fulfilled his pecuniary obligations or that there is a civil action in connection with this obligation, filed until the filing of the application, or that the obligation can be extinguished by compensation with an obligation. in an amount equal to or greater than.
If he does not agree with the declaration of insolvency and if the objections are subsequently recognized by the insolvency court as unjustified, the debtor is no longer entitled to request the initiation of the restructuring procedure.
70. The Court notes that the amendments made to these articles established the obligation of the insolvency court to notify the debtor of the submission of the application by the creditor for submission of the reference, until the conclusion of the admission of this application and, respectively, until verification of the meeting of the formal and substantive conditions and taking over the case in its own procedure. The time limit within which the insolvency court may decide on the admission, restitution or refusal to receive the application has also been extended.
71. The Court observes that, pending the amendments in question, the insolvency court was required to rule within three days of the filing on the admission of the creditor's application for examination. Subsequently, within two days of the adoption of the decision admitting the application, the court sent a copy of the debtor's application, requesting the submission of a reference within 10 days of receiving the application. In other words, the debtor was notified of the submission of the application only after its admission for examination and after the application of insurance measures.
72. The Court notes that the new legislative solution adopted by the legislator is a deficient one, because:
(i) it establishes the obligation of the insolvency court to take procedural actions until the case is received / admitted in its own procedure;
(ii) inform the debtor of the filing of an application against him pending the application of insurance measures;
(iii) set a longer deadline for the insolvency court to grant the application. Those provisions could jeopardize the enforcement of claims in insolvency proceedings and could be used contrary to the patrimonial interests of creditors. This legislative solution does not ensure an efficient procedure for enforcing claims against the insolvent debtor.
73. Thus, there is a consensus on this issue at EU level. According to point 36 of the preamble of Regulation no. 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings, the court competent to open a main insolvency proceeding should be empowered to order the application of provisional and precautionary measures from the time the application for the opening of the proceedings is submitted.
Conservation measures ordered both before and after the opening of the insolvency proceedings are important to ensure the efficiency of the insolvency proceedings.
74. The Court notes that the efficiency of insolvency proceedings is important for respecting the constitutional right to property of creditors (Article 46 of the Constitution), and in cases where the claim results from a judgment, the efficiency of insolvency proceedings is also important for respecting creditors' rights. to a fair trial (Article 20 of the Constitution).
75. In this regard, the European Court noted that States have a positive obligation to implement an effective system, both in practice and in law, to ensure the enforcement of final judgments between private persons (Fuklev v. Ukraine, June 7, 2005, § 84). Measures taken by national authorities for enforcement must be adequate and sufficient to ensure enforcement (Ruianu v. Romania, 17 June 2003, § 66).
76. In its case-law, the European Court has also stated that the restriction on the administration and management of the assets of a bankrupt company pursues the purpose of ensuring the right of creditors to enforce claims. Therefore, that restriction pursues a legitimate aim, namely the protection of the rights of others (see Luordo v. Italy, 17 July 2003, § 68).
77. The Court concludes that the legislative measure in question has diminished the effectiveness of the insolvency proceedings and does not correspond to the State's positive obligation to provide creditors with legal mechanisms capable of ensuring the recovery of debts. Therefore, the amendments operated by Law no. 252 of December 16, 2020 to articles 21 par. (2) and 28 para. (1) of the Insolvency Law are contrary to Articles 20 and 46 of the Constitution.
78. In the context of declaring the law in question unconstitutional, the Court will order the invigoration of the provisions of the Insolvency Law no. 149 of June 29, 2012 in the wording prior to Law no. 252 of December 16, 2020.
The Court mentions that this solution is based on the constitutional provisions of Article 134 para. (3) on the role of the Constitutional Court as guarantor of the supremacy of the Constitution and of article 140 of the Constitution, which establishes that the decisions of the Constitutional Court are generally binding. In its case law, the Court has proceeded in a similar manner in other cases aimed at reviewing the constitutionality of amending normative provisions, establishing that the solution of unconstitutionality leads to the revival of legal provisions in the wording prior to their amendment (see JCC No. 27 of 31 October 2019 and HCC No. 17 of June 10, 2021).
For these reasons, based on articles 135 par. (1) letters a) and 140 of the Constitution, 26 of the Law on the Constitutional Court, 6, 61, 62 letters a) and 68 of the Code of Constitutional Jurisdiction, Constitutional Court
DECIDES:
1. The notification submitted by Mr. Lilian Carp, Member of the Parliament of the Republic of Moldova is admitted.
2. Law no. Is declared unconstitutional. 252 of December 16, 2020 regarding the amendment of the Insolvency Law no. 149/2012.
3. The provisions of the Insolvency Law no. 149 of June 29, 2012 in the wording prior to Law no. 252 of December 16, 2020.
4. This decision is final, may not be subject to any appeal, shall enter into force on the date of its adoption and shall be published in the Official Gazette of the Republic of Moldova.
Chairman of the meeting Liuba ȘOVA
Chisinau, July 13, 2021
HCC no. 19
File no. 15a / 2021